BlackRock, Mara Holdings Acquire Over 9K Bitcoin During Price Dip
Global investment firm BlackRock and fintech mining company Mara Holdings acquired over 9,000 Bitcoin (BTC). The acquisition comes as Bitcoin’s value dropped below $93,000 earlier today. It is worth noting that Bitcoin broke above $100,000 around the early hours of yesterday and finally reclaimed the level later in the day. BlackRock attracted cash inflows worth approximately $770.51 million to purchase approximately 7,750 BTC. On the other hand, Mara Holdings splashed roughly $139.5 million to procure about 1,423 Bitcoin. ???? Blackrock Buys 7750 #Bitcoin They hold over $50 Billion in Assets. Fastest growing ETF EVER! ???? pic.twitter.com/uJU9MLTlTb — Thomas | heyapollo.com (@thomas_fahrer) December 6, 2024 The purchases, reportedly valued at over $900 million, reflect a growing trend of institutional investors capitalizing on market volatility to expand their cryptocurrency portfolios. Aside from BlackRock and Mara holdings, Lookonchain, a renowned on-chain tracker, spotted a massive Bitcoin acquisition from a whale. The large investor’s address, labeled “bc1pg….u0pk3,” purchased 600 BTC valued at about $58.85 million. The on-chain tracker added that the whale spent roughly $127 million acquiring 1,300 BTC over the past two weeks. After $BTC dropped from $100,000, a whale seized the opportunity and bought 600 $BTC($58.85M)! Over the past 2 weeks, this whale has accumulated a total of 1,300 $BTC($127M).https://t.co/Ihi2UaKgpP pic.twitter.com/uhwYTpFCdm — Lookonchain (@lookonchain) December 6, 2024 Market Context and Timing Bitcoin’s price dropped below $93,000, triggered by regulatory uncertainty and profit-taking by short-term traders. The downturn created a strategic buying opportunity for institutions like BlackRock and Mara Holdings, which have consistently advocated for Bitcoin as a long-term investment. In crypto, such acquisitions during market corrections reinforce confidence in Bitcoin’s value proposition, especially as top economies grapple with inflation and currency volatility. Industry Implications The acquisitions by BlackRock and Mara Holdings could signal the beginning of a broader wave of institutional activity as 2024 comes to a close. Experts believe such moves may stabilize Bitcoin’s price and encourage other financial entities to consider similar investments. However, some critics argue that large institutional purchases could exacerbate market centralization, potentially reducing Bitcoin’s appeal as a decentralized asset. At the time of press, Bitcoin is changing hands at about $101,270, reflecting a slight recovery following the reported acquisitions. Additionally, BTC’s market capitalization exceeded $2 trillion. Market watchers will closely monitor whether the price stabilizes or experiences further volatility in the weeks ahead.
Strategies for Position Sizing in Crypto Trading
In the crypto market, swings can reach over 10% volatility daily. As a result, it is beneficial for you to master position sizing in your crypto trading which could be the key to survival and success. A study by the Blockchain Research Institute revealed that nearly 75% of crypto traders fail to manage risk effectively, leading to substantial losses. Position sizing simply means deciding how much of your capital to allocate to a trade. It can reduce risk while optimizing potential profits. Want to find out more? Continue reading. Recommended reading: Cryptocurrency Position Sizing Strategies for Investors Key Takeaways What is Position Sizing in Crypto Trading? Source: Freepik Position sizing in crypto trading refers to the process of determining how much of your capital to allocate to a single trade or investment. It is an important aspect of risk management which helps you to ensure that you do not overexpose yourself to the volatility of the market. In crypto trading, position sizing is especially crucial due to the asset class’s inherent price fluctuations. It can assist you to balance potential gains with manageable losses. Crypto trading involves several risks like market volatility, liquidity risk, regulatory uncertainty or even security threats, hacks, and fraud. Market volatility, in particular, can lead to sharp and unpredictable price movements, which may result in significant financial losses if not managed correctly. Liquidity issues can make it difficult to enter or exit trades at desired prices, while regulatory changes can impact the legality or availability of certain cryptocurrencies. Effective position sizing reduces these risks by limiting your exposure and reducing the chance of catastrophic loss. Trade Size Trade size refers to the specific amount of cryptocurrency or capital that you commit to a single trade. It is typically expressed as a percentage of the total portfolio or account value. For example, if you decide to risk 2% of your account on a trade, you will calculate the amount of the asset that corresponds to that percentage. Trade size is directly related to risk, as larger trades involve greater exposure, while smaller trades offer more conservative risk profiles. Factors Influencing Position Sizing in Crypto Trading Source: RHS Financial Here are some of the factors that can influence your position-sizing strategies in crypto trading: Account Size The size of your account directly impacts how much capital can be allocated to individual trades. Larger accounts offer more flexibility in trade size, allowing for greater diversity and risk distribution. Smaller accounts require more careful calculation, as overexposure to a single trade can lead to rapid capital depletion. For example, if you have a $50,000 account, you might consider risking 1% of your capital per trade, which equates to $500. With more capital, you can afford larger trade sizes without risking too much. In contrast, if you have a $1,000 account, you may risk only $10 (1%) per trade. This forces you to make smaller trades to avoid overexposure. Risk Tolerance Risk tolerance is the level of risk you are comfortable taking on in each trade. This is influenced by factors like experience, financial goals, and psychological resilience. If you have a higher risk tolerance, you may opt for larger trade sizes, otherwise, you may limit your exposure to minimize potential losses. Market Volatility Take for instance, Ethereum has been experiencing extreme volatility with daily price swings of over 10%, you might decide to reduce your position size to 0.5% of your portfolio to minimize risk. Similarly, during periods of low volatility, you might increase your position size to 2% of your portfolio to take advantage of the more predictable price movements. Cryptocurrency markets are notoriously volatile, and prices can change in a short time. Higher volatility increases the risk of sudden, unexpected losses. In highly volatile markets, you may reduce position sizes to avoid excessive risk, whereas in stable markets, larger position sizes might be appropriate. Trading Strategy Different trading strategies require different approaches to position sizing. Say you are a day trader with a $20,000 account, you might only risk 0.5% per trade, allocating $100 per trade, given the quick market moves they rely on. On the other hand, if you are a swing trader you might be comfortable risking 2% of the same $20,000 account, or $400 per trade, since you intend to hold positions for a few days to capture larger price swings. Similarly, if you are a long-term investor, you might allocate 5% of your portfolio to a single asset, based on long-term confidence in that cryptocurrency’s growth trajectory. Methods of Position Sizing Source: Faster Capital Here are some of the methods for position sizing in crypto trading: Fixed Position Sizing Fixed position sizing is a method where you can use a consistent amount of capital for each trade, regardless of the size of your account, the level of risk involved or how much your account grows or shrinks. For example, if you decide to allocate $1,000 per trade, you will always invest $1,000, whether your account balance is $10,000 or $15,000. If your account drops to $5,000, you would still place $1,000 into every trade, which could expose you to higher risk if the market moves against them. So, even if your account grows to $20,000, you will still only invest $1,000, limiting potential profit opportunities. Percentage of Account Equity In this method, the trader risks a fixed percentage of their total account on each trade. This dynamic approach adjusts position size as the account balance changes. For example, if you decide to risk 2% of a $10,000 account on each trade, you would risk $200 per trade. If your account grows to $15,000, 2% would now be $300, increasing your position size proportionally. If the account drops to $8,000, 2% would equate to $160, reducing your position size to reflect the smaller account balance. Volatility-Based Position Sizing This method adjusts position size based on market volatility, ensuring smaller positions during volatile periods and larger positions during more stable market conditions. Volatility can be
How to Interpret Japanese Candlestick Patterns in Crypto Trading
Japanese candlestick patterns in crypto are a powerful tool for you if you want to predict price movements. Studies show that over 70% of crypto traders use candlestick patterns to inform their trading decisions, with patterns like the Doji, Hammer and Engulfing Candles serving as key indicators. You may be wondering how exactly to use this important tool to make profitable trades and not miss out on crucial opportunities. Continue reading to gain the insights you need. Read Also: Bearish Candlestick Patterns: A Full 2024 Guide for Traders Key Takeaways Japanese Candlestick Patterns in Crypto Trading Source: Freepik Japanese candlestick patterns trace their origins back to the 18th century when a rice trader named Munehisa Homma developed a system to analyze rice prices in Japan. Homma’s innovative approach captured not only price movements but also the emotions of market participants, showing the psychology behind trading. His techniques laid the groundwork for modern candlestick charting, which was later popularized in the West by Steve Nison in the 1990s. Today, candlestick patterns have become a universal tool across financial markets, including stocks, forex, and more recently, cryptocurrency trading. Japanese candlestick patterns in crypto trading allow you to gauge the market, and whether bulls or bears are in control. You can use it to make informed decisions about entry and exit points, spot potential reversals and confirm the strength of a trend. Given the highly speculative nature of cryptocurrencies, the real-time interpretative power of candlestick patterns is particularly advantageous. Although there are several ways to visually represent price data, Japanese candlestick charts are unique due to their rich detail and intuitive format. Unlike line charts for example, which only display closing prices, or bar charts, which offer a less visual representation of price action, candlestick charts provide a fuller picture of the market. Each candlestick reveals four critical data points: open, close, high, and low prices for a specific time frame, all in a single graphic. The visual contrast between bullish and bearish candlesticks (typically represented by different colors) allows you to quickly interpret market conditions and spot potential trade opportunities. Basics of Japanese Candlestick Charts Source: CEX.IO University A Japanese candlestick is a visual representation of price movement within a specified time frame, conveying key information about the market’s dynamics at a glance. The structure of a candlestick is fundamental for interpreting patterns effectively. Here are some of the basics of Japanese candlestick charts: Body The body, or the rectangular portion of the candlestick, represents the range between the opening and closing prices of an asset during the selected time frame. A long body indicates significant price movement, suggesting strong buying or selling pressure, while a short body reflects indecision or consolidation in the market. Wicks (Shadows) The wicks, also known as shadows, are the thin lines extending above and below the body of the candlestick. They represent the highest and lowest prices reached during the time frame. A long wick suggests volatility, with the market testing higher or lower price levels, while a short wick indicates relatively stable price action. Data Points Each candlestick displays four crucial data points, the relationship between these prices forms the basis for interpreting candlestick patterns and market sentiment. Here are the data points: Bullish vs. Bearish Candlesticks Candlesticks are typically classified as bullish or bearish, depending on whether the price closed higher or lower than it opened during a particular time period. Color Coding in Crypto Charts Crypto chart platforms usually use specific colors to quickly distinguish between bullish and bearish candlesticks: Types of Japanese Candlestick Patterns in Crypto Here are some of the types of Japanese candlestick patterns in crypto: Single Candlestick Patterns Single candlestick patterns consist of one candle and are among the simplest yet most powerful formations in crypto trading. They can indicate market indecision, potential reversals, or the continuation of a trend. Here are some examples: Doji Source: CoinMarketCap A Doji forms when the opening and closing prices are almost equal, resulting in a very small or non-existent body. This pattern reflects market indecision, where neither bulls nor bears have gained control. Some important trends to look out for include: Hammer A Hammer appears at the bottom of a downtrend and signals a potential reversal. It has a small body and a long lower wick, indicating that although sellers pushed the price lower, buyers regained control by the close. The Inverted Hammer appears at the end of a downtrend and signals a potential reversal. It has a small body with a long upper wick, suggesting that buyers tried to push prices higher but met resistance from sellers. A Shooting Star is the bearish counterpart of the Inverted Hammer. It appears at the top of an uptrend, with a small body and a long upper wick, indicating that buyers pushed prices higher but sellers stepped in to drive the price down, signaling a potential bearish reversal. A Spinning Top has a small body with long upper and lower wicks, reflecting indecision in the market. This pattern can appear at the top or bottom of a trend and suggests that the market is losing momentum, signaling a potential reversal or consolidation. Read Also: Bullish Candlestick Patterns: Strategies for Successful Trading Double Candlestick Patterns Source: CoinMarketCap Double candlestick patterns involve two consecutive candles and can signal trend reversals or continuations depending on the shape and color of the candles. Here are some examples: Bullish Engulfing A Bullish Engulfing pattern occurs in a downtrend when a small bearish candle is followed by a larger bullish candle that completely engulfs the previous candle’s body. This pattern signals a strong shift in momentum from sellers to buyers and indicates a bullish reversal. Bearish Engulfing The Bearish Engulfing pattern forms in an uptrend when a small bullish candle is followed by a larger bearish candle that engulfs the previous candle. It suggests that sellers have taken control, signaling a potential bearish reversal. Tweezer Tops and Bottoms Tweezer patterns involve two candlesticks with equal highs or lows and
