Bitcoin ‘Smart Money Indicator’ Revisits All-Time High, What’s Next?

Tony "The Bull" Severino

1 year ago

3 mins read

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The likes of Paul Tudor Jones and his hedge fund are now buying Bitcoin. Grayscale is scooping up over 150% of newly minted coins. Yesterday, a record number of Bitcoin futures contracts expired on the Chicago Mercantile Exchange better know as CME.

Interest from these “smart money” investors and traders is soaring, and now, a technical analysis indicator dubbed as the “smart money indicator” has revisited its all-time high set back in December 2017, adding more credence to the theory that institutions are finally getting into the first-ever cryptocurrency.

Bitcoin Smart Money Indicator Returns To All-Time High, Consolidating Ahead of Next Move

2017 put crypto on the map and made Bitcoin a household name.

It’s meteoric rise to $20,000 took the public by storm as they learned of the wealth generated by the first of its kind, futuristic, intangible asset that seemingly came out of nowhere.

The idea of getting rich quick yet again didn’t work, the bubble popped, and cryptocurrency valuations returns to more realistic levels.

A bear market has ensued now for over two full years.

During that time the economic growth and excess from 2017 have turned into a somber state of economic distress.

The investor mindset has changed and seeking out high risk, high reward bets has turned into seeking out safe havens and hedges against inflation.

The tone and narrative surrounding Bitcoin has also changed, from a get rich quick scheme into a hard, digital asset that exists outside the government’s control.

No longer is the asset only considered by techies and retail investing millennials, it is now being looked at by hedge funds, asset management firms, and more, ranging from the likes of Goldman Sachs to Paul Tudor Jones.

All fundamentals that look at the underlying health of the asset and its protocol are screaming buy. The block reward miners receive for securing the network has been halved.

Technicals also point to the asset’s long term trend resuming. The signals all point to the greatest bull run ever, and smart money is taking notice.

This is made evident by the On-Balance Volume indicator, affectionately called the smart money indicator, revisiting a level not seen since Bitcoin price traded at an all-time high.

And during the previous cycle, once Bitcoin reclaimed this level on the indicator, it never looked back.

Spotting Smart Money’s Moves With The On-Balance Volume Indicator

According to Investopedia, “On-balance volume provides a running total of an asset’s trading volume and indicates whether this volume is flowing in or out of a given security or currency pair.” Simply put, it is the cumulative total of volume.

The tool was developed by Joseph Granville to separate price action between “smart money” and institutional investors taking early positions, and retail investors chasing the trend.

Large deviations in an asset’s OBV while an asset’s price remains relatively stable can reveal that “smart money” is taking large positions carefully to prevent paying more for their position by causing an early breakout.

OBV continues to build up pressure until it is released and price finally follows.

What the On-Balance Volume indicator could be suggesting is that smart money is now buying at a rate similar to the retail frenzy and that took Bitcoin to $20,000. Meanwhile, Bitcoin is trading at less than half that price and has nowhere near the same level of FOMO.

As soon as this level breaks up, it could spark yet another wave of retail FOMO and the new Bitcoin bull market may finally soon be here.

Tony "The Bull" Severino

Tony "The Bull" Severino, CMT, is a distinguished figure in the cryptocurrency analysis sector, renowned for his in-depth technical expertise and innovative approach to market trends. As the Head of Research at NewsBTC, Tony leads a team dedicated to providing cutting-edge insights and forecasts, helping both novice and experienced traders navigate the complexities of the crypto market.
A seasoned Chartered Market Technician, Tony's prowess in identifying and capitalizing on market patterns is unmatched. His academic and professional journey in market analysis has firmly established him as a leading authority in technical trading strategies. Tony’s approach is heavily influenced by the principles of Elliott Wave Theory, a method known for its rigorous assessment of investor psychology and price movements.

Beyond his role at NewsBTC, Tony is the visionary founder of CoinChartist.io, an educational platform aimed at demystifying the nuances of cryptocurrency trading. CoinChartist.io serves as a valuable resource for traders seeking to enhance their technical analysis skills. The platform offers a range of learning tools and resources designed to empower traders with the knowledge to make informed trading decisions.

In addition to his educational initiatives, Tony is a prolific author and a dominant voice in the crypto community. He writes the CoinChartist VIP newsletter, a weekly dispatch that has become a staple among crypto enthusiasts, revered for its insightful analysis and actionable trading advice. This newsletter has consistently ranked as a best-seller on SubStack, boasting thousands of subscribers who rely on Tony’s expertise to guide their trading strategies.

Tony is also celebrated for his literary contributions to the field. He is the author of the highest-rated Crypto Trading Journal on Amazon.com, a testament to his ability to communicate complex trading concepts in an accessible manner. This journal is widely regarded as an essential tool for traders aiming to track their progress and refine their strategies.

Before his ascent in the financial analysis world, Tony honed his skills in journalism. His background in this field has endowed him with a unique ability to present intricate market dynamics in a clear and compelling manner, making his insights highly sought after by a broad audience that ranges from casual readers to professional traders.
His professional affiliations underscore his commitment to excellence and continuous learning. As a partner of Elliott Wave International and TradingView, Tony collaborates with other leading experts to enhance his knowledge and skills. His active membership in the CMT Association further aligns him with the highest standards of industry practices and ethics.

Tony’s nickname, "The Bull," aptly reflects his aggressive and optimistic outlook on the cryptocurrency markets. His forecasts often anticipate significant upturns, earning him a reputation for bullish predictions that have frequently led to lucrative outcomes for those who follow his advice.

In summary, Tony "The Bull" Severino, CMT, is more than just a technical analyst; he is a mentor, educator, and innovator whose influence in the cryptocurrency space continues to grow. His dedication to advancing the understanding of market forces and his commitment to providing high-quality, reliable analysis make him a pivotal figure in the world of cryptocurrency trading.