*Explained: What is WTI crude and why is it falling faster than Brent crude?*
Oil markets witnessed a historic moment on Monday when WTI crude for May delivery fell more than 100 percent, settling at around -$37/bbl indicating that producers would have to pay traders to take oil off them.
Difference between Brent and WTI Crude
WTI or Western Texas Intermediate is extracted from oil fields in the United States. It is primarily extracted in Texas, Louisiana and North Dakota and is then transported via pipeline to Cushing, Oklahoma for delivery. Cushing was a major spot for oil for decades, and has been the delivery spot for contracts and price settlements for WTI for more than 30 years. It contains 0.24% of sulfur. WTI futures contracts are traded on the New York Mercantile Exchange (NYMEX)
Brent crude is extracted from oil fields in the North Sea. ‘Brent Crude’ refers to a blend of four crude oils - Brent, Forties, Osberg, and Ekofisk which together are known as BFOE. It contains 0.37% of sulfur. Brent futures contracts are traded on the Intercontinental Exchange (ICE) in London.
Why did WTI futures fall so much?
Just like any other commodities, WTI has future contracts expiring every month. For WTI, the current month expiry was on April 21. Also, remember these contracts have to be settled physically.
This means the buyer of a futures contract will have to take delivery of physical crude, if he is still holding the contract at expiry. This delivery is to be taken at Cushing. There are also speculators who have not contracted for storage of the incoming crude. In a usual scenario, they would have easily sold the contract in the market.
However, considering the times we are in, there were no buyers for this contract due to sharp fall in oil demand in the US and also globally. Refiners do not have enough capacity to the store the crude, airlines and transport is shut. The storage at Cushing is nearly full and even transportation through pipeline does not look like a feasible option due to lack of demand. Hence, anyone who cannot take the actual delivery will sell it at whatever price they are getting it, even If it is negative.
Why does Brent not fall so much?
Brent futures expire on April 30. The sell off seen in WTI is not happening in Brent simply because Brent crude contracts settle in cash. Thus, any speculator can take them to their expiry without being forced to sell at any price, a “luxury” not available in WTI crude futures. Another reason is that Brent Brent essentially draws its oil from more than a dozen oil fields located in the North Sea. It is close to water and hence can be stored in tankers, while WTI, because of its landlocked nature, is quite far from the nearest water body. So transportation of WTI crude is an issue, more so in these times.
Why is Brent preferred over WTI?
WTI usually trades at discount to brent. WTI is the benchmark for oil prices in the US, while the rest of the world - and nearly two-thirds of all oil contracts traded - are on Brent. This makes Brent the global benchmark. The preference for Brent crude today stems from the fact that it may be a better indicator of global oil prices
Oil markets witnessed a historic moment on Monday when WTI crude for May delivery fell more than 100 percent, settling at around -$37/bbl indicating that producers would have to pay traders to take oil off them.
Difference between Brent and WTI Crude
WTI or Western Texas Intermediate is extracted from oil fields in the United States. It is primarily extracted in Texas, Louisiana and North Dakota and is then transported via pipeline to Cushing, Oklahoma for delivery. Cushing was a major spot for oil for decades, and has been the delivery spot for contracts and price settlements for WTI for more than 30 years. It contains 0.24% of sulfur. WTI futures contracts are traded on the New York Mercantile Exchange (NYMEX)
Brent crude is extracted from oil fields in the North Sea. ‘Brent Crude’ refers to a blend of four crude oils - Brent, Forties, Osberg, and Ekofisk which together are known as BFOE. It contains 0.37% of sulfur. Brent futures contracts are traded on the Intercontinental Exchange (ICE) in London.
Why did WTI futures fall so much?
Just like any other commodities, WTI has future contracts expiring every month. For WTI, the current month expiry was on April 21. Also, remember these contracts have to be settled physically.
This means the buyer of a futures contract will have to take delivery of physical crude, if he is still holding the contract at expiry. This delivery is to be taken at Cushing. There are also speculators who have not contracted for storage of the incoming crude. In a usual scenario, they would have easily sold the contract in the market.
However, considering the times we are in, there were no buyers for this contract due to sharp fall in oil demand in the US and also globally. Refiners do not have enough capacity to the store the crude, airlines and transport is shut. The storage at Cushing is nearly full and even transportation through pipeline does not look like a feasible option due to lack of demand. Hence, anyone who cannot take the actual delivery will sell it at whatever price they are getting it, even If it is negative.
Why does Brent not fall so much?
Brent futures expire on April 30. The sell off seen in WTI is not happening in Brent simply because Brent crude contracts settle in cash. Thus, any speculator can take them to their expiry without being forced to sell at any price, a “luxury” not available in WTI crude futures. Another reason is that Brent Brent essentially draws its oil from more than a dozen oil fields located in the North Sea. It is close to water and hence can be stored in tankers, while WTI, because of its landlocked nature, is quite far from the nearest water body. So transportation of WTI crude is an issue, more so in these times.
Why is Brent preferred over WTI?
WTI usually trades at discount to brent. WTI is the benchmark for oil prices in the US, while the rest of the world - and nearly two-thirds of all oil contracts traded - are on Brent. This makes Brent the global benchmark. The preference for Brent crude today stems from the fact that it may be a better indicator of global oil prices
How could the OIL drop impact the other markets?
What we saw yesterday is something we never witnessed before, an insane drop of OIL futures to negative -$37 which is more than 300%.
The first thing that we can learn from it is that Bitcoin is definitely not the most volatile asset. If SEC still doesn't approve Bitcoin ETF while keeping OIL's, there's definitely another reason for not doing that.
The only question is, how many banks were long on OIL. A few banks being on the wrong side of the trade when it came to US mortgage-backed securities in 2008 triggered a severe global financial crisis.
This could trigger a world bank crisis bigger than 2008 especially because this is not only the US but the whole world.
When dozens of investment banks around the world start filing bankruptcy who is going to want to keep their savings in a bank especially when bail-ins are now legal?
I'm very curious about who was on the wrong side of yesterday's drop because the loss would be huge.
Don't be one of these who will say, the global financial system is crashing, long Bitcoin. Yes, all these factors are positive for Bitcoin in the long term but the current fear can easily negatively impact the price of Bitcoin and cause 5-10-15% drop in the market.
Distinguish trading and investing decisions when looking at fundamentals.
Whatever happens, everything they were saying about Bitcoin is happening to their favorable assets.
Keep holding Bitcoin!
What we saw yesterday is something we never witnessed before, an insane drop of OIL futures to negative -$37 which is more than 300%.
The first thing that we can learn from it is that Bitcoin is definitely not the most volatile asset. If SEC still doesn't approve Bitcoin ETF while keeping OIL's, there's definitely another reason for not doing that.
The only question is, how many banks were long on OIL. A few banks being on the wrong side of the trade when it came to US mortgage-backed securities in 2008 triggered a severe global financial crisis.
This could trigger a world bank crisis bigger than 2008 especially because this is not only the US but the whole world.
When dozens of investment banks around the world start filing bankruptcy who is going to want to keep their savings in a bank especially when bail-ins are now legal?
I'm very curious about who was on the wrong side of yesterday's drop because the loss would be huge.
Don't be one of these who will say, the global financial system is crashing, long Bitcoin. Yes, all these factors are positive for Bitcoin in the long term but the current fear can easily negatively impact the price of Bitcoin and cause 5-10-15% drop in the market.
Distinguish trading and investing decisions when looking at fundamentals.
Whatever happens, everything they were saying about Bitcoin is happening to their favorable assets.
Keep holding Bitcoin!
🎓#Commodities 🎓
🎓 $CL1! / USD - View Chart
🔸Signal Info: Light Crude Oil Futures
Exchange: NYMEX
Direction: Short
🔸Analysis: The price on oil is experiencing historical levels of volatility. What we are looking at here is a 30 minute chart with a fib scale drawing across the daily high and low. From $22.58 at the open down to 6.50 at the low.
The price spent less than 5 minutes down at that level before bouncing back up the the inner channel, and finding support at the 0.382 fib level.
We are going to attempt a short position at the confluence with the falling channel and the 0.5fib line.
The opportunities for gains and losses here are absolutely massive. This is however ultra levels of risk, and these positions should get monitored very closely. Even a 1% stop loss could be an excessive when trading at x50 or x100 leverage. Be careful and watch for confirmations and trends on the lower time frames.
🔸Current Price: $13.12
⬇️Short Entry: $14.95
🎯Take Profit: $13.11, $11.56
♦️Stop Limit: N/A
🎓 $CL1! / USD - View Chart
🔸Signal Info: Light Crude Oil Futures
Exchange: NYMEX
Direction: Short
🔸Analysis: The price on oil is experiencing historical levels of volatility. What we are looking at here is a 30 minute chart with a fib scale drawing across the daily high and low. From $22.58 at the open down to 6.50 at the low.
The price spent less than 5 minutes down at that level before bouncing back up the the inner channel, and finding support at the 0.382 fib level.
We are going to attempt a short position at the confluence with the falling channel and the 0.5fib line.
The opportunities for gains and losses here are absolutely massive. This is however ultra levels of risk, and these positions should get monitored very closely. Even a 1% stop loss could be an excessive when trading at x50 or x100 leverage. Be careful and watch for confirmations and trends on the lower time frames.
🔸Current Price: $13.12
⬇️Short Entry: $14.95
🎯Take Profit: $13.11, $11.56
♦️Stop Limit: N/A
TradingView
🎓#Commodities 🎓 $CL1! / USD 🎓 for NYMEX:CL1! by HashedPlutus
🔸 Signal Info: Light Crude Oil Futures
Exchange: NYMEX
Direction: Short
🔸Analysis: The price on oil is experiencing historical levels of volatility. What we are looking at here is a 30 minute chart with a fib scale drawing across the daily high and low.…
Exchange: NYMEX
Direction: Short
🔸Analysis: The price on oil is experiencing historical levels of volatility. What we are looking at here is a 30 minute chart with a fib scale drawing across the daily high and low.…
https://www.tradingview.com/x/pmAlnBS0/
MACD ticking down, Down for everything!
Hello all, here we go again with the bitcoin update for the daily time frame. Let's get into it!
The most important thing is that the price has already shown a rejection toward the crucial area here. This crucial area has been anticipated in the previous post. The median trend line of the channel and 1000 moving average are acting as a strong resistance whatsoever. Yesterday's drop from the $7300 to the low of $6800 is showing us the indication of the bears are losing a lot of strength.
The 2nd most important thing that we can see is that the MACD histogram has shown us a ticking down to near the 0 level. Once we see any sign of the histogram to tick below this 0 level which means entering the negative area, we might expect a further drop toward the next support area around $5000 region.
Looking at the above facts, we can conclude that there are a big possibility of the bears to attack the price to even lower region. The $5000 - Interim swing low will become the point of interest of most swing trader to enter their long position. But for now, it will be safer to accumulate your short position.
MACD ticking down, Down for everything!
Hello all, here we go again with the bitcoin update for the daily time frame. Let's get into it!
The most important thing is that the price has already shown a rejection toward the crucial area here. This crucial area has been anticipated in the previous post. The median trend line of the channel and 1000 moving average are acting as a strong resistance whatsoever. Yesterday's drop from the $7300 to the low of $6800 is showing us the indication of the bears are losing a lot of strength.
The 2nd most important thing that we can see is that the MACD histogram has shown us a ticking down to near the 0 level. Once we see any sign of the histogram to tick below this 0 level which means entering the negative area, we might expect a further drop toward the next support area around $5000 region.
Looking at the above facts, we can conclude that there are a big possibility of the bears to attack the price to even lower region. The $5000 - Interim swing low will become the point of interest of most swing trader to enter their long position. But for now, it will be safer to accumulate your short position.
Hashed Plutus (Crypto Signals, Technical Analysis, Education and News)
*Explained: What is WTI crude and why is it falling faster than Brent crude?* Oil markets witnessed a historic moment on Monday when WTI crude for May delivery fell more than 100 percent, settling at around -$37/bbl indicating that producers would have to…
Well to the people who didn't grasp the technical talk from the previous post, here is a more real world explaination.
Drop me a DM @cryptopotatoes if you need any analysis
Drop me a DM @cryptopotatoes if you need any analysis
Hashed Plutus (Crypto Signals, Technical Analysis, Education and News)
These are my current biases on bitcoin. https://www.tradingview.com/x/wziqtHvN/
Nine minutes, that's all it took for daddy to give you the profits.
https://www.tradingview.com/x/1tozvXVP/
https://www.tradingview.com/x/1tozvXVP/
https://www.tradingview.com/x/85sMzmrE/
The power of Dollar Cost Averaging
Dollar cost averaging is a strategy in which an investor places a fixed dollar amount into a given investment (usually common stock) on a regular basis. The investment generally takes place each and every month regardless of what is occurring in the financial markets. As a result, when the price of a given investment rises, the investor will be able to purchase fewer shares. When the price of a particular security declines, the investor will be able to purchase more shares.
I give you some of my criteria whether the instrument is worth to do Dollar Cost Averaging or not and these are the criteria below :
1. The price meets its bottom of support
2. Have a good prospect in the future
3. Worth to buy with potential good return
4. Consolidation after the falling market
And based on those 4 criteria, I'll explain why I choose Ripple to put on my dollar cost averaging portfolio.
1. The price meets its bottom of support : Looking at the price right now where ripple is trending at. The price currently stands slightly above the white region which was the key support at 2017.
2. Have a good prospect in the future : I mean, you know Ripple, it's a decent project with solutions to our flawed financial system. And more important is that Ripple is having a good relationship with several big banks in the world such as BBVA, MUFG, and SEG are just several of the banks that has adopted Ripple.
3. Worth to buy with a potential good return : If we do averaging ripple at current level and assume that in upcoming years there will be a touch toward the previous swing high, I think that this investment of potential 1400% return is worth it!
4. Consolidation after the falling market : Currently the price is still moving below the yellow resistance trend line after a drop since the 2018 market. We just need 1 confirmation of the price to breaks out of current yellow resistance trend line and the price will sky rocket!
Doing the Dollar Cost Averaging is a good strategy to reduce the market timing risk. Once you are patient enough, this will become a very very very profitable strategy.
The power of Dollar Cost Averaging
Dollar cost averaging is a strategy in which an investor places a fixed dollar amount into a given investment (usually common stock) on a regular basis. The investment generally takes place each and every month regardless of what is occurring in the financial markets. As a result, when the price of a given investment rises, the investor will be able to purchase fewer shares. When the price of a particular security declines, the investor will be able to purchase more shares.
I give you some of my criteria whether the instrument is worth to do Dollar Cost Averaging or not and these are the criteria below :
1. The price meets its bottom of support
2. Have a good prospect in the future
3. Worth to buy with potential good return
4. Consolidation after the falling market
And based on those 4 criteria, I'll explain why I choose Ripple to put on my dollar cost averaging portfolio.
1. The price meets its bottom of support : Looking at the price right now where ripple is trending at. The price currently stands slightly above the white region which was the key support at 2017.
2. Have a good prospect in the future : I mean, you know Ripple, it's a decent project with solutions to our flawed financial system. And more important is that Ripple is having a good relationship with several big banks in the world such as BBVA, MUFG, and SEG are just several of the banks that has adopted Ripple.
3. Worth to buy with a potential good return : If we do averaging ripple at current level and assume that in upcoming years there will be a touch toward the previous swing high, I think that this investment of potential 1400% return is worth it!
4. Consolidation after the falling market : Currently the price is still moving below the yellow resistance trend line after a drop since the 2018 market. We just need 1 confirmation of the price to breaks out of current yellow resistance trend line and the price will sky rocket!
Doing the Dollar Cost Averaging is a good strategy to reduce the market timing risk. Once you are patient enough, this will become a very very very profitable strategy.
https://www.tradingview.com/x/OxSxSG6H/
Bitcoin : Breach the 1000 MA?
Hello all, I want to make this as quick as possible so let's get into it now!
Our last short doesn't go so well with this current spike to the upside, so I'll try to update again about the newest idea of bitcoin chart work. Bitcoin has tried so hard to breaks out of the 1000 moving average as the dynamic resistance on the daily time frame. But, it ends up to close below this resistance line. And considering the price has touched the yellow region which is the area of liquidation, this will be a difficult moment for the price and us, the trader to identify the new bias for short term.
Entering the yellow zone however will be a neutral zone. Although we can see the price has breaks above the median line of the channel, The risk remains high for us to open long position for now. There isn't plenty of room for the price to grow because of the upcoming resistances ahead and the fact of the liquidation zone usually produces a choppy movement of the price.
I will wait for the price to show another confirmation to identify the next bias on the short term. Breaks above the yellow zone will leads the price to test potentially upper line of the channel with confluence zone of $9100 region. But breaks below the yellow support trend line will leads the price to $5000 for short term. Patience is the key for now.
Bitcoin : Breach the 1000 MA?
Hello all, I want to make this as quick as possible so let's get into it now!
Our last short doesn't go so well with this current spike to the upside, so I'll try to update again about the newest idea of bitcoin chart work. Bitcoin has tried so hard to breaks out of the 1000 moving average as the dynamic resistance on the daily time frame. But, it ends up to close below this resistance line. And considering the price has touched the yellow region which is the area of liquidation, this will be a difficult moment for the price and us, the trader to identify the new bias for short term.
Entering the yellow zone however will be a neutral zone. Although we can see the price has breaks above the median line of the channel, The risk remains high for us to open long position for now. There isn't plenty of room for the price to grow because of the upcoming resistances ahead and the fact of the liquidation zone usually produces a choppy movement of the price.
I will wait for the price to show another confirmation to identify the next bias on the short term. Breaks above the yellow zone will leads the price to test potentially upper line of the channel with confluence zone of $9100 region. But breaks below the yellow support trend line will leads the price to $5000 for short term. Patience is the key for now.
Hashed Plutus (Crypto Signals, Technical Analysis, Education and News)
https://www.tradingview.com/x/OxSxSG6H/ Bitcoin : Breach the 1000 MA? Hello all, I want to make this as quick as possible so let's get into it now! Our last short doesn't go so well with this current spike to the upside, so I'll try to update again about…
Bitcoin fail to breakout and puff it goes.
https://www.tradingview.com/x/7V52xB6w/
Beware of the liquidation zone
Hello all, welcome back again with the bitcoin technical analysis. This time, I'll start this new week with an analysis based on the price action and the dynamic resistance of moving average on bitcoin. This analysis will cover all the area of potential movement for bitcoin whether it will goes up or down.
Bitcoin in the last 3 days is having a very low volatility with a move less than 4% range in the last 3 days. This is however become a very low volatility and will be difficult for us to identify current bias in the market. Although the moves was very slow, we can see that the price is still trending above the 1000 moving average which always be my crucial area of resistance for bitcoin. At current condition, bitcoin's entering the yellow zone which acts as a liquidation zone fir bitcoin. There will be a lot of early short positions get liquidated at this zone and we must anticipate several long wicks to the upside.
If we're talking about the possibility in bitcoin, there is still a possibility for the upside movement toward the $9000 region or the upper line of the channel. The main reasons why we should see this as the potential upcoming movement is that the price has broken out of the median line of the channel and currently trending above the 1000 moving average. Beside those facts, we should see the MACD as the indicator to identify any momentum in the market. it's all on the histogram which shows us that there's still plenty of room for the price to grow to the upside. currently the histogram is still at around 87 level but I see the histogram tick to the upside toward the 200 level which was the previous high could be in.
At current condition, I will stay neutral and waiting for the play of the rising wedge inside this down trend channel. Yes I see a potential of the price of going up but I do believe that at current region, there is still a high number of the risk which will give you a higher number of getting liquidated with the long position.
For my next play, here is what I wait for :
1. The criteria of opening long position with the target of the $9000 :
- The confirmation of the price breaking out of the yellow zone as the liquidation zone
- The failure of this rising wedge with the price breaks out of the upper line of the rising wedge
2. The criteria of opening short position with the target of the $5000 :
- The confirmation of breaks down of lower line of this rising wedge which indicates that this rising wedge is valid
- the MACD histogram ticks down to the negative side showing the bears are taking any control of the market.
Beware of the liquidation zone
Hello all, welcome back again with the bitcoin technical analysis. This time, I'll start this new week with an analysis based on the price action and the dynamic resistance of moving average on bitcoin. This analysis will cover all the area of potential movement for bitcoin whether it will goes up or down.
Bitcoin in the last 3 days is having a very low volatility with a move less than 4% range in the last 3 days. This is however become a very low volatility and will be difficult for us to identify current bias in the market. Although the moves was very slow, we can see that the price is still trending above the 1000 moving average which always be my crucial area of resistance for bitcoin. At current condition, bitcoin's entering the yellow zone which acts as a liquidation zone fir bitcoin. There will be a lot of early short positions get liquidated at this zone and we must anticipate several long wicks to the upside.
If we're talking about the possibility in bitcoin, there is still a possibility for the upside movement toward the $9000 region or the upper line of the channel. The main reasons why we should see this as the potential upcoming movement is that the price has broken out of the median line of the channel and currently trending above the 1000 moving average. Beside those facts, we should see the MACD as the indicator to identify any momentum in the market. it's all on the histogram which shows us that there's still plenty of room for the price to grow to the upside. currently the histogram is still at around 87 level but I see the histogram tick to the upside toward the 200 level which was the previous high could be in.
At current condition, I will stay neutral and waiting for the play of the rising wedge inside this down trend channel. Yes I see a potential of the price of going up but I do believe that at current region, there is still a high number of the risk which will give you a higher number of getting liquidated with the long position.
For my next play, here is what I wait for :
1. The criteria of opening long position with the target of the $9000 :
- The confirmation of the price breaking out of the yellow zone as the liquidation zone
- The failure of this rising wedge with the price breaks out of the upper line of the rising wedge
2. The criteria of opening short position with the target of the $5000 :
- The confirmation of breaks down of lower line of this rising wedge which indicates that this rising wedge is valid
- the MACD histogram ticks down to the negative side showing the bears are taking any control of the market.
https://www.tradingview.com/x/ZDiMjrVD/
Weekly perspective : Here is why the $8000 region is important
A quick update about bitcoin perspective on the 1 week of time frame. There are 2 important support trend lines from this weekly bias. the first trend line is the yellow one which has been broken and the 2nd one is the white support trend line that is very major.
If we use this yellow trend line as our benchmark, we can see that there is a potential of break out strategy in play during this moves. The drop during the earlier of March 2020 could be the initial break out as the phase 1 of break out strategy. Current moves toward the upside could be the action of trying to test the previous broken support trend line that is now become resistance as well. And there is a coincidence, which the golden pocket zone is in align with this previous broken support around $8000 region.
The 2nd important thing is if we look at the MACD indicator as an oscillator indicator, we can see that the histogram is having a tick toward the upside and it's coming closer to the 0 level which it can turns into a positive side in the next few days or the next week's movement. Moving Average on the MACD is looking promising too with a potential of golden cross over to occur in the future.
Any other fundamental thing that I want to highlight is that the halving of bitcoin is coming closer with the estimation of the next 14 days. During the pre halving period, usually a lot of people are exciting to stack the bitcoin because they believe that after halving there will be a push toward the upside due to supply and demand rules.
I do believe a touch toward $8000 is still a valid scenario for short term in the next 1 or 2 weeks, but for long term I'll stay on my bearish bias and the spike toward the $8000 or even $9000 could be only artificial and manipulated
Weekly perspective : Here is why the $8000 region is important
A quick update about bitcoin perspective on the 1 week of time frame. There are 2 important support trend lines from this weekly bias. the first trend line is the yellow one which has been broken and the 2nd one is the white support trend line that is very major.
If we use this yellow trend line as our benchmark, we can see that there is a potential of break out strategy in play during this moves. The drop during the earlier of March 2020 could be the initial break out as the phase 1 of break out strategy. Current moves toward the upside could be the action of trying to test the previous broken support trend line that is now become resistance as well. And there is a coincidence, which the golden pocket zone is in align with this previous broken support around $8000 region.
The 2nd important thing is if we look at the MACD indicator as an oscillator indicator, we can see that the histogram is having a tick toward the upside and it's coming closer to the 0 level which it can turns into a positive side in the next few days or the next week's movement. Moving Average on the MACD is looking promising too with a potential of golden cross over to occur in the future.
Any other fundamental thing that I want to highlight is that the halving of bitcoin is coming closer with the estimation of the next 14 days. During the pre halving period, usually a lot of people are exciting to stack the bitcoin because they believe that after halving there will be a push toward the upside due to supply and demand rules.
I do believe a touch toward $8000 is still a valid scenario for short term in the next 1 or 2 weeks, but for long term I'll stay on my bearish bias and the spike toward the $8000 or even $9000 could be only artificial and manipulated