Bitcoin gears up for another big move as Grayscale experiences best week ever

6 min readAug 18, 2020

Hi everyone,

In this edition, Grayscale’s recent TV advert resulted in the firm’s best performing week of all time, PlanB expects bitcoin to keep pushing to the 2017 all time high of $20,000, and bitcoin’s technical data suggests that another big bitcoin move is just around the corner.

Before we dive in, please know that this newsletter is for information purposes only and nothing said here is financial advice.

Let’s go.

Grayscale generates $217 million after TV advert

Bitcoin and cryptocurrency investment firm Grayscale experienced and incredibly favourable week following its fresh TV advertising campaign. The CEO, Barry Silbert tweeted on Friday that the firm has raked in $217 million just last week — the most it ever raised in 7 days.

The record came after Grayscale began broadcasting television adverts on the evolution of money into the age of digital currency — just one day after investment firm Galaxy Digital published a glorious full page advert in the Financial Times that read: “ Now is the time to invest in Bitcoin. “

Grayscale’s success is a testament to an evolving corporate race to capture the increasing swaths of new crypto investors as the re-invigorated market breaks into a bull trend that could last years.

Having said that, there’s something strangely ironic about advertising breakthrough digital currency technology on paper — but I’ll take it!

As bitcoin snoozes just under $12,000, securing a tentative valuation at around $11,800 — the creator of the highly touted bitcoin S2F (stock-to-flow) model, PlanB, has restated that the next bitcoin target is $20,000.

According to the pseudonymous analyst, his model shows bitcoin in a bullish phase that is currently targeting the 2017 all time high.

Just last night, he tweeted:

3rd red dot (currently $11850) above 2nd red dot (#bitcoin July close $11356) and above 1st red dot (June close $9132) .. next target: Dec 2017 ATH close $14K 🚀 pic.twitter.com/X9DePlaDTc
- PlanB 🔴 🔴 🔴 (@100trillionUSD) August 16, 2020

Last month, the famed analyst shared his four reasons why he bought bitcoin back in 2015, and one of them includes space exploration.

Technically speaking

Bitcoin dominance tests 60% again

Bitcoin dominance (calculated by tradingview), which calculates the percentage of the total cryptocurrency market capitalisation attributable to bitcoin, has continued to correct towards the 60th percentile level.

As the dominance slips though, the relative strength index (RSI) is indicating that a reversal is nigh. In fact, there is now a clear triple bullish divergence on this chart, signalling that capital flow back into bitcoin could be imminent.

Currently, many traders are trading altcoins against bitcoin pairs, partly due to the decentralised finance hype, but also because of bitcoin’s relative stages of price stability — during which time altcoin activity tends to increase. However, should bitcoin begin to gain ground against altcoins, it’s probable that capital will flow back into the king crypto.

On the flip-side, if bitcoin dominance continue to slide and close below 60%, then an extended “altcoin season” should be expected until further notice.

Interestingly enough, there’s a noticeable 2% discrepancy between Binance-owned Coin Market Cap & Trading View figures for this data, which might have given rise to yet another attempt at calculating bitcoin’s true market dominance.

In fact, according to bitcoindominance.com figures, the so-called “real bitcoin dominance” number stands at 76%. Notably, the index calculates bitcoin’s “market share among proof of work coins attempting to be money. It excludes all ICOs, stablecoins and other centralized projects.”

This is arguably a fair and welcomed attempt at segregating correct figures, given that centralised ethereum-based tokens are not in competition with bitcoin and offer no benefit over current fiat money systems.

At the onset, this way of data collection and presentation makes sense, but only time will tell if investors and traders will see it this way.

Bitcoin daily HTF: another hurrah?

Bitcoin managed to regain some ground after bouncing off the 20-daily EMA last week, with the $11,000 psychological support level holding strong.

At the time of writing, the number one digital asset is trading just under the $12,000 mark with many expecting an imminent make-or-break it moment that could send bitcoin at least $1,000 in either direction again.

Since the last newsletter, the number one crypto has also printed a hidden bullish divergence, such that the price is printing higher lows while the RSI (relative strength index) is printing lower lows. Briefly, such an indicator signals that despite increasing relative selling pressure, market participants purchased bitcoin at higher prices relative to the August 2nd lows. In turn, this could suggest an expectation of even higher prices within an unknown time-frame.

While anything can happen, the high-probability trade favours the bulls. During this entire run, altcoins, particularly ethereum have front-run bitcoin’s price action. Without delving too deeply into the reasons why, the same thing has happened yet again, with ethereum breaking out above the $400 psychological level to $430 last Thursday. Similarly, litecoin — often referred to as digital silver — has gained 14% since it bounced of the 20-daily EMA (alongside bitcoin).

If history is a guide, one would expect bitcoin to break $12,000 at any moment.

The levels to watch are $12,100 and $11,400, and should either price be broken decisively, one could expect a strong $1,000 plus move in the following days.

Monthly liquidations are still lopsided

Meanwhile, futures liquidations remain largely one-sided, as traders bidding up the price take profit or close their positions within this $11,000 — $12,000 range. While futures trading volumes do not dictate the general macro trend, they offer relevant insight into lower-time frames.

ETH/BTC triple bearish divergence

Technically, this pair is also signalling that capital might flow back into bitcoin, and sooner rather than later. While this analysis isn’t particularly useful for longer-term investors who have diversified their portfolio in crypto, it’s good to take note of trends and behaviours between different crypto-only trading pairs.

One could expect a strong correlation between bitcoin’s dominance and ETH/BTC movements. Since bitcoin dominance (calculated by trading view) indirectly informs ethereum-based altcoin buying and selling activity, a bounce in bitcoin’s dominance should be accompanied by a slide in this trading pair. This is interesting to take note of more than anything else though.

Ultimately, bitcoin’s next macro price target of $20,000 remains unchanged, but in the meantime, one might anticipate the price to move in the direction that would liquidate the most traders on BitMEX and Binance.

May your gains be high and your losses low.

Catch you next time.

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