Cryptocurrency forecast: signals of institutional investors
- VFX Blog
- For beginners
After the article on how to analyze the actions of large traders on the cryptocurrency market, or as market makers are also called, let's try to understand how institutional investors act. They have more money and can set long-term trends or quickly reverse the current one. Opening deals in their direction is an excellent option for how to make money on crypto options.
In the cryptocurrency market, institutional investors are most informatively represented by the Tether platform, which issues USDT tokens pegged to the US dollar, and the Grayscale investment fund trusts. Despite a relatively small share of investments (just over $ 100 billion) - cryptocurrency options free signals statistics show that movements of these capitals in the form of Tether emission often occur before major trends or reversals in the digital currency market.
Tether is good because it works directly with large OTC services in China, buying up 68% of the USDT token issue. He "leaves" in large batches of several hundred million dollars per transaction.
The moment of release of a large issue can be traced in the Whale-alert service. Be careful when trading using crypto options trading signals: the strategy should take into account the fact of the release of new coins, and not any transactions.
The market begins to grow steadily literally the next day after the issue was printed. It is worth reacting to the issue of lots from 200-500 million USDT per day. Anything below this threshold may not trigger growth in the cryptocurrency market. Sometimes, especially when the price of digital assets is falling, the issue causes an increase for one or two days. A trader using cryptocurrency options copy trading should only trade short term options. The volume of new Tethers may not be enough to create a full-fledged trend!
Grayscale is the largest investment fund that has been issuing trust units backed by real cryptocurrency for 7 years. The company has licensed 14 crypto trusts in the United States, which are available only to professional investors who are ready to invest at least $25 thousand for six months or a year without the right to withdraw funds.
An alternative option for retail investors is to buy shares of these trusts or open a crypto option on the OTC market, issued for the amount of cryptocurrency purchased with the investment of institutional clients. Grayscale has received three SEC Licenses to issue shares in three trusts: Bitcoin, Ethereum, and Litecoin. In 2021, 22 AltCoins were added to them, including ZCash, Monero, Polkadot, etc.
The company conducts completely legal business, publishing reports on Twitter every day, skipping only the days when there is no receipt/expenditure of funds.
You can track the actions of market makers by the last column of daily changes. If they are above 5% for BTC and 10% for other cryptocurrencies, the trader should think about opening a Call-option. As in the case of the Tether analysis, such a position should be constantly monitored on cryptocurrency options software for profit/loss and closed when the trend reverses.
Features of analysis of the actions of institutional investors
Despite the obvious relationship between the increase in large deposits and sales, which immediately affect the rate of cryptocurrencies as a whole or an individual asset, any analysis strategy cannot be 100% reliable. The reason for the failure of the crypto option free signals part is the long-term investment of market makers, when they enter the market and close transactions in parts, so as not to cause a large drop in quotes.
The analysis of wallets gives fairly general trend directions that should be "repeated", hoping to conduct several transactions, and not enter the entire deposit. The described signals of Tether and Grayscale funds are more accurate in this regard, as you can see for yourself – statistics on them are available in social networks, on specialized sites, forums and live Forex trading room.
The simplest method of analysis is combining USDT and Bitcoin charts from the popular CoinMarketCap website. The first step is to go to the Tether USD page. Our interest will not be the exchange rate, but the capitalization (issue). It is recommended to select a time range of no more than the last 7 days. We choose the same period for Bitcoin – here we look not at the capitalization, but the price movement. No 60 second cryptocurrency options!
On the screenshot we have made a combination of graphs, it is convenient to do using two browsers and auto crypto signals. The above shows the weekly strong fall of BTC, which stopped a day after the rapid market of more than $1 billion USDT, released in one day.
The chart of changes in the capitalization of the Grayscale fund and the associated behavior of the Bitcoin exchange rate can be found on the Bybt cryptocurrency exchange. Note how institutional investors quickly stopped buying Bitcoin earlier this year, which happened to the exchange rate after stopping their investment volume increases for the longest period in history.
None of the above signals is valid for Put-option, especially on cryptocurrency options copy trading. The cryptocurrency has a feature of high inertia of an uptrend, and market makers, like institutional investors, only close part of their positions, often making mistakes in determining the top of the market.
Cryptocurrency is a large part of the market tool for medium-and long-term CALL-option, providing for constant additional investments and partial profit fixing at the moments of the predicted downtrend. Speculations from a fall do not make sense, given the high risk of loss and the much greater perspective of cryptocurrency options software signals for quotes growth.
Summarize… The considered topic of researching large volumes of cryptocurrency positions shows significant differences between crypto options trading signals and traditional approaches to Forex technical analysis. The transparency and openness of the blockchain allow the trader to obtain comprehensive information on any type of capital movement in the world of digital assets.
It is worth noting that these crypto trading signals are much more effective than technical indicators, whose signals are delayed or partially false. Analysis of institutional investors' actions is just one example of the approach to the forecast of cryptocurrency trends, which are influenced by the level of decentralization, the activity of code developers, features of technology, etc.