Hello crypto friends,
First let me explain for those to whom these facts might be new. So what is a Bitcoin Trust? It's a company that owns an amount of Bitcoin as an asset. Investors could buy shares of the trust, owning contracts that represent ownership of Bitcoins held by the trust.
You thought the only legal way for institutional investors to invest in Bitcoin are
BTC1!
CME Futures or Bakkt or ETF? Well in fact there already other instruments for them to invest in crypto.
Now let me introduce our hero. Do you remember that commercial "Drop Gold" that made a lot of noise in May 2019? By the way publication of this advertisement incidentally coincided with Bitcoin bull run from 3K to 14K. So the company standing behind it is Grayscale Bitcoin Trust with Barry Silbert as founder and CEO of Grayscale parent company - Digital Currency. And they have good reasons to spend money on advertising.
So what we know now is that Grayscale owns a lot of Bitcoins and they can sell shares of their trust on OTC (over-the-counter) market. As their asset is backed by Bitcoin only you might think that trust shares price should correlate with Bitcoin price on exchanges like Binance, Bitfinex, Coinbase etc. The answer is yes and no at the same time. One of the main reasons is price manipulation on unregulated exchanges, which creates unreadable chart patterns by standard technical analysis. OTC market is unregulated as well, but in crypro space it works a bit different. As Bitcoin OTC market participants are institutions which operate large sums of investors money, they need solid instruments. Here Grayscale comes into play.
By the way try to search "grayscale bitcoin trust shareholders" and you will be pleasantly surprised what venture capital funds and companies invest in crypto. Have you heard something about Rotshilds? ;)
So what interests us is a OTC:GBTC chart. Despite the fact that only Bitcoins are in the asset of the trust, chart is drawing a picture which is slightly different from the one we are used to seeing on our "favorite" exchanges:
In 2018 distribution zone formed a descending triangle on all exchanges. But on OTC:GBTC chart we see a descending wedge pattern.
In 2018 the descending wedge broke down and price began accumulation with a divergence on RSI. What is more wedge bottom line became resistance and was tested 2 times before the breakout:
The breakout of the accumulation zone in April 2019 resulted in local bull rally to 14K.
The same old pattern we see now but in smaller scale. Accumulation zone has a divergence on RSI as well. And resistance was tested twice:
Our maximum target is 0.786 Fibonacci retracement level.
What conclusions can we draw for ourselves by looking at this chart? The same we outlined in our previous idea:
But the reason we like OTC:GBTC chart is because it draws more accurate and precise patterns which can give us extra confirmations on future Bitcoin price movements.
What will happen next the price will tell.
This idea is not a financial advise, but you probably know that already ;)
First let me explain for those to whom these facts might be new. So what is a Bitcoin Trust? It's a company that owns an amount of Bitcoin as an asset. Investors could buy shares of the trust, owning contracts that represent ownership of Bitcoins held by the trust.
You thought the only legal way for institutional investors to invest in Bitcoin are
BTC1!
CME Futures or Bakkt or ETF? Well in fact there already other instruments for them to invest in crypto. Now let me introduce our hero. Do you remember that commercial "Drop Gold" that made a lot of noise in May 2019? By the way publication of this advertisement incidentally coincided with Bitcoin bull run from 3K to 14K. So the company standing behind it is Grayscale Bitcoin Trust with Barry Silbert as founder and CEO of Grayscale parent company - Digital Currency. And they have good reasons to spend money on advertising.
So what we know now is that Grayscale owns a lot of Bitcoins and they can sell shares of their trust on OTC (over-the-counter) market. As their asset is backed by Bitcoin only you might think that trust shares price should correlate with Bitcoin price on exchanges like Binance, Bitfinex, Coinbase etc. The answer is yes and no at the same time. One of the main reasons is price manipulation on unregulated exchanges, which creates unreadable chart patterns by standard technical analysis. OTC market is unregulated as well, but in crypro space it works a bit different. As Bitcoin OTC market participants are institutions which operate large sums of investors money, they need solid instruments. Here Grayscale comes into play.
By the way try to search "grayscale bitcoin trust shareholders" and you will be pleasantly surprised what venture capital funds and companies invest in crypto. Have you heard something about Rotshilds? ;)
So what interests us is a OTC:GBTC chart. Despite the fact that only Bitcoins are in the asset of the trust, chart is drawing a picture which is slightly different from the one we are used to seeing on our "favorite" exchanges:
In 2018 the descending wedge broke down and price began accumulation with a divergence on RSI. What is more wedge bottom line became resistance and was tested 2 times before the breakout:
The same old pattern we see now but in smaller scale. Accumulation zone has a divergence on RSI as well. And resistance was tested twice:
What conclusions can we draw for ourselves by looking at this chart? The same we outlined in our previous idea:
But the reason we like OTC:GBTC chart is because it draws more accurate and precise patterns which can give us extra confirmations on future Bitcoin price movements.
What will happen next the price will tell.
This idea is not a financial advise, but you probably know that already ;)
Trade active:
Expecting sideways price action in the next 1-2 weeks with testing the upper border of the falling wedge as a resistance.
