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Bitcoin price hit $19,469 for the first time since December 2017, but there are crucial factors that might prevent BTC from hitting a new all-time high.

The price of Bitcoin (BTC) hit $19,469 on Coinbase, reaching its highest point since its December 2017 peak. Although the dominant cryptocurrency is close to surpassing its record high, there are some warning signs to take note of.

Three potential reasons Bitcoin faces the possibility of a pullback at $20,000 are a bull trap, overhead resistance and an overcrowded derivatives market.

BTC/USD 15-minute chart. Source: TradingView.com

A potential bull trap scenario

A pseudonymous cryptocurrency trader known as “Bitcoin Jack,” who called the Bitcoin bottom in March, laid out a potential bull trap scenario.

The term “bull trap” refers to a technical pattern wherein late buyers or long holders get trapped as the price of the asset drops.

A potential Bitcoin price trend. Source: Bitcoin Jack

If Bitcoin rejects from the $19,200 to $19,300 area, the trader suggested that a potential pullback is likely. He noted that the $16,000 level would remain a compelling macro support level.

Referring to Bitcoin Jack’s potential price trend projection, a trader known as “NekoZ” emphasized that such a trend is possible. He wrote:

“Seeing dips down to 12k is scary as my levels are consolidation between 16-18k. But yeah very possible, resistances don’t get broken typically on the first try. Which is shown from previous PA along the way up.”

$20,000 is a major resistance level for Bitcoin

If Bitcoin passes $20,000, it would enter price discovery as it searches for a new ceiling. Above $20,000, there is no historical data or evidence to suggest that BTC would top out at a certain price.

BTC could theoretically rise to various targets many industry executives and analysts have shared throughout the past year. Most predictions range anywhere between $25,000 to $100,000 for the ongoing cycle.

Hence, there would be significant interest from sellers to aggressively defend Bitcoin from moving past $20,000.

The funding rate is extremely high

Sellers could find it compelling to add to their positions below $20,000 due to the high funding rates.

Across major cryptocurrency exchanges, the funding rate for the Bitcoin perpetual swap contract ranges from 0.05% to 0.1%. This means that buyers or long contract holders are paying short-sellers a large part of their positions as fees.

Considering that funding rates are highly positive, short-sellers could find it compelling to aggressively short the sub-$20,000 region.

An active OTC market is a variable

Still, on-chain data show that the over-the-counter (OTC) market is active. This typically suggests that whales, high-net-worth investors and institutions could be purchasing Bitcoin.

BTC Fund Flow Ratio hit a three-year low. Source: CryptoQuant

CryptoQuant CEO Ki Young Ju said that while some corrections could occur, $20,000 would likely be overtaken. Ki said:

“OTC markets are still active. $BTC Fund Flow Ratio hit the three-year low a few days ago. Only 3% of transactions are used for exchange deposits/withdrawals on the network. We might have corrections, but I think it would eventually break 20k.”

Author: Joseph Young

Source: Coin Telegraph: 3 reasons why Bitcoin price faces a major hurdle at $20,000

Analysts explain where Bitcoin is headed next after it breaks $17,500 and continues to see an explosive uptrend.

The price of Bitcoin (BTC) exceeded $17,400 in a strong intraday rally. On Coinbase, BTC even came close to the $17,700 mark, setting a new two-year high. As BTC glides through the multiyear resistance above $17,000, analysts are divided on its short-term outlook. Some say that BTC is primed for a pullback as whale deposits begin increasing. Others believe there is little resistance until $20,000 and that an all-time high is likely before the next deep correction.

The momentum of Bitcoin in the past month has been particularly impressive due to two key reasons. First, during previous bull cycles, as long-time trader Peter Brandt explained, BTC saw up to nine corrections. But in the ongoing rally, BTC has seen merely two 10% corrections. Second, Bitcoin has consistently recovered from areas where corrections were expected, such as on Nov. 16 when it hit $14,774 on Binance.

However, calls for a pullback are also increasing as the market sentiment around Bitcoin heats up. Speaking to Cointelegraph, Ki Young Ju, CEO of crypto data provider CryptoQuant, said that the Exchange Whale Ratio indicates whale deposits into exchanges are rising. In the near term, this could apply selling pressure to BTC. Traders also say that the current highs of BTC near $20,000 may be front-run, leading to a correction before the level is hit.

A minor Bitcoin pullback?

When Bitcoin whales deposit BTC into exchanges, the trend typically shows an intent to sell from high-net-worth investors. According to CryptoQuant’s Tokens Transferred metric and Exchange Whale Ratio, deposits from both whales and general investors are starting to increase. This signifies that more investors are moving to exchanges to take profit on their BTC holdings. Ki said:

“Tokens Transferred (not entity-adjusted) on the Bitcoin network is increasing, indicating that whale wallets are moving their funds. And Fund Flow Ratio for all exchanges is decreasing, meaning that exchanges did not evoke these large transactions. […] I think massive OTC deals are still on-going. That’s one of the key reasons why I’m still long-term long on Bitcoin.”

The Exchange Whale Ratio is also hovering at a level that has historically led to a large price drop. Ki said that over the past few days, the ratio has been hovering above 85%, which puts Bitcoin in a risky position for a potential correction. Since there is virtually no resistance between $18,000 and the $20,000 peak, it would be reasonable to expect whales to take profit at around $17,000.

Whales seek liquidity for both buy and sell orders because they deal with larger volumes. Selling when the price of BTC is going up is ideal for whales, as it limits the potential downside volatility. Hence, there is a strong probability that whales will look to sell between $17,000 and $18,000 as the last stop before seeing a new all-time high. As Ki added:

“Looking at ‘Exchange Whale Ratio (72h MA)’, the BTC price is likely to face small corrections. […] When this is lower than 85%, the chances of the price continuing to rise is high. Between 85% and 90% indicates a correction, and above 90% suggests that a large drop in price can occur. We have some correction risk as this value goes above 85% lately.”

Some pseudonymous traders have also predicted that BTC will see a short-term top before it reaches a new record high. In the medium term, even if the momentum of BTC is strong, a trader known as “SalsaTekila” said a retest of a lower BTC support is expected. He pinpointed $12,000 as the potential area where the next deep correction could lead to. Considering the historical cycles of Bitcoin, the trader also said that a six-month correction would not be unusual.

A continuous bull rally until the year’s end

Atop the favorable technical structure of Bitcoin, the noticeable spike in daily volume in the cryptocurrency market buoys the bull’s case. On Nov. 17, Binance CEO Changpeng Zhao said the exchange saw an all-time high system load, which indicates that the demand for cryptocurrency trading is surging.

Arcane Research similarly found that Bitcoin spot volume has increased by 270% in the past month. The clear increase in the volume of the cryptocurrency market in general shows that genuine demand is behind the ongoing bull run. The Arcane Research weekly report reads:

“The daily volume on Thursday last week was the highest since the brutal crash in March, and the volume has stayed high over the past few days as well. This made the 7-day average go up to new highs this week. The bitcoin volume is up more than 270% over the past month.”

Yet despite all of the abovementioned positive factors, the mainstream is not involved in the ongoing rally. Google Trends shows that the popularity of the keyword “Bitcoin” is merely 16% of what it was during the 2017 peak. A recent Bloomberg report calls the recent uptrend a rally that “no one’s talking about.” These trends show that Bitcoin has significant room to grow until the year’s end.

But Matt Maley, an investor at Miller Tabak + Co. who recognizes the high institutional demand around Bitcoin, said whether individuals will return remains uncertain, as those who “got burned badly” in 2017 are likely “less excited” about BTC now. The way this would change is if Bitcoin breaks above its record-high at $20,000 and the FOMO — fear of missing out — around BTC returns. Hence, there is a high probability that if BTC hits a new all-time high, a broader rally could emerge.

Author: Joseph Young

Source: Coin Telegraph: Bitcoin price blasts by $17.5K, but not all agree rally is sustainable

A Bitcoin whale placed a $100 million short on Nov. 15 after various on-chain data hints at a whale-induced BTC sell-off throughout the past week.

A Bitcoin (BTC) whale placed a $100 million short on Bybit, according to the pseudonyms trader CL. It comes after various on-chain data points toward a whale-driven sell-off throughout the past week.

Though the momentum of Bitcoin remains strong, there are many reasons that make $16,000 an attractive area for sellers.

There is significant liquidity at $16,000, primarily because it is a heavy resistance level. But the level has seen relatively high buyer demand, stablecoin inflows show. Hence, the battle between buyers and sellers at $16K makes it an area with high liquidity, which is compelling for sellers.

Bitcoin orderbook on futures exchanges. Source: CL, Exocharts

Increasing signs of whales taking profits

A seller aggressively sold Bitcoin on Bybit on Nov. 15. Order flows show that there were sell orders worth around $3.5 million on average consecutively over several hours.

Based on the abrupt large-scale sell order, CL suggested that this may result in two scenarios.

First, the seller could get engulfed and cause a squeeze, which might cause the BTC price to increase. Second, it could continue to apply selling pressure on BTC. The trader wrote:

“Approx 2 hours ago, someone aggressive sold almost ~100M on Bybit, a 3rd of the sells are opens, personally pretty curious to see what happens if this seller/shorter does get engulfed, or if he is let free.”
Meanwhile, other major exchanges have spotted large deposits over the last 24 hours. United States-based cryptocurrency exchange Gemini saw a 9,000 BTC deposit, according to the data from CryptoQuant.

Gemini BTC inflow mean. Source: CryptoQuant

Whales typically utilize exchanges with strict compliance and strong regulatory measures, which include platforms like Coinbase and Gemini.

Considering the large Bitcoin deposit into Gemini, which is worth $143 million, a pseudonymous researcher known as “Blackbeard” said it is time to be cautious.

Just weekend volatility?

As CL noted, Bitcoin’s current market structure is different from the previous cycle. For instance, when BTC was at $16,000 in 2017, the market was extremely overheated with extreme volatility. The trader said:

“Back in 2017, when we pumped from 10k, 15, into 20k, we had OKEx weekly futures trade in 1000$ contangos, now we’re here with quarterlies only 100$ above.”

This time around, the rally appears to be more sustainable and gradual. Bitcoin has continued to see a staircase-like rally over the past six months, which has allowed it to evolve into a prolonged uptrend.

Rather than a sudden spike followed by another steep uptrend, BTC has seen upside followed by consolidation, and so on.

As Cointelegraph reported earlier this month, various data, including Google Trends, show there is still little interest from retail investors unlike in late 2017. On the other hand, there is increasing evidence that Wall Street is starting to take notice.

Hence, there is a strong argument to be made that the ongoing rally is fundamentally different from 2017 despite the current “extreme greed” market sentiment. Notably, the available supply has decreased due to the recent halving, as well as dwindling reserves on exchanges over the past year.

The Bitcoin futures funding rates are also neutral at around 0.01%, which means the market is not as overheated or overcrowded as it was three years ago. This trend could make the downside limited, especially in the medium term.

Author: Joseph Young

Source: Coin Telegraph: A Bitcoin whale just shorted $100M BTC — Are big holders expecting a larger drop?

Bitcoin surged from $190 billion to around $280 billion in recent months, surpassing some big-name companies, including banks, by market capitalization.

In early September of this year, the market capitalization of Bitcoin (BTC) was hovering at around $190 billion when the BTC price was hovering around $10,000.

In the past two months, however, the price of Bitcoin rose from to over $15,000. With it, the market cap of Bitcoin surged from $190 billion to around $280 billion. This now makes Bitcoin more valuable than most major U.S. companies.

The weekly price chart of Bitcoin. Source: TradingView.com

Bitcoin is equivalent to the 18th largest commercial company in the U.S.

If Bitcoin’s valuation is compared to publicly-listed firms in the U.S., it would match the 18th biggest firm.

The 17th largest company in the U.S. is Home Depot with a market cap of $306 billion. Verizon falls behind it with a $242 billion valuation, leaving a large gap in between.

Since the market cap of Bitcoin is currently around $280 billion, it is larger than all of the companies in the U.S. outside of the top 17.

Companies that Bitcoin surpassed in recent months include some big names such as Netflix, PayPal, BofA, Coca-Cola, Salesforce and Disney.

Top companies in the U.S. by market capitalization. Source: Dogs of the Dow

Bitcoin is still behind the three largest financial institutions in the U.S. by valuation, namely Visa, Mastercard and JPMorgan. For the top cryptocurrency to surpass all three, it would need to hit $23,000, or a market cap of $426 billion.

However, the price of BTC must reach somewhere around $120K for Bitcoin to catch up to Apple, the most valuable company in the world with a market cap of $2 trillion.

Investors becoming aware of Bitcoin’s asymmetric risk-reward potential

Meanwhile, analysts anticipate BTC to rally throughout 2020 and in early 2021, expecting BTC to enter price discovery and hit new all-time highs.

In 2017, Bitcoin reached a new record-high 15 months after the 2016 block reward halving. BTC saw its latest halving in May 2020, so the chances of a new peak in mid-2021 remain high based on historical cycles.

Over the long term, cryptocurrency investors and analysts say the perception of Bitcoin as a durable store of value would push its valuation.

Tyler Reynolds, a former Google and Morgan Stanley alumni, said the fixed supply of Bitcoin makes it compelling as a hedge against government spending. He wrote:

“As it’s currently shaping up, the next bull run will be led by BTC with the very narrative that OGs have been saying since 2011: Bitcoin’s hard supply cap makes it a durable SoV as governments devalue their fiat currencies to support unconstrained government spending.”

Other notable investors, such as the billionaire Wall Street hedge fund manager Paul Tudor Jones, called Bitcoin an ideal inflation play.

Bitcoin is particularly attractive to institutions because it could act as a hedge within a diversified portfolio but also give investors exposure to Bitcoin’s asymmetric risk-reward potential.

The relatively low market cap of Bitcoin compared to companies like Visa and safe-haven assets such as gold indicate there is significant room for further growth in the next decade.

Author: Joseph Young

Source: Coin Telegraph: Bitcoin at $15K is now bigger than PayPal, Coca-Cola, Netflix, Disney

The monthly Bitcoin price candle closed above $13,000 for the first time since 2017 when BTC hit an all-time high of nearly $20,000.

The monthly candle of Bitcoin (BTC) for October has closed above $13,000 for the first time since December 2017. It comes after both daily and weekly candles all closed above the crucial resistance level.

Traders often use the monthly log chart to evaluate the long-term and macro trend of an asset. On a monthly chart, each candle represents a whole month of trading activity. As such, a Bitcoin monthly log chart typically covers many years of trading activity.

The monthly chart is considered to be one of the main high time frame charts alongside the weekly chart. A clear breakout above an important level, like $13,000, on the monthly chart, indicates a technical breakout.

The monthly price chart of Bitcoin. Source: TradingView.com

$13,000 breakout means $20,000 is near

As Cointelegraph previously reported, Ark Invest’s Cathie Wood emphasized the importance of the $13,000 level.

Wood, who manages $11 billion in assets under management at Ark Invest, said there is little resistance between $13,000 and $20,000. This means if Bitcoin breaks out on a high time frame chart, the probability to rise to a new record-high could get higher. She said:

“That $13,000 [level] is important because if we were to get through that, then in technical terms, there would be very little resistance and we would probably be on our way back to the peaks we saw in late 2017 — so, around $20,000. Now, we’re not sure if that is going to happen. We could stay in a new trading range, just at a little bit of a higher level than the recent six to 10. Maybe we’re in the $10,000 to $13,000 range. Nonetheless, a breakout.”

Although the price of Bitcoin hit $20,000 in 2017 and $13,970 in 2019, the monthly candle never closed above $13,000. This is because BTC saw sharp rejections during both peaks, which then rattled the market.

The recent rally is particularly optimistic because it has shown a more sustainable staircase-like uptrend. As the price rose, it established clear support levels, making the rally more stable.

What do traders expect in the near term?

In the immediate future, traders are readying for a minor pullback. Technically, the monthly chart of Bitcoin closed significantly higher above key short-term moving averages.

A pseudonymous trader known as “Loma” said BTC would likely drop to around $13,100, and resume the rally. The 5-day moving average on the Bitcoin monthly chart is found at $12,256, so a drop to low $13,000s would be healthy for the rally. Loma wrote:

“The gameplan is we’re going to nuke $BTC to $12.9-13.1k, which is just enough for shorts to pile on expecting $12-12.4k retest, then we use them as nuclear fuel to drop the biggest bearnuka candle upwards leaving shorts in Liquidation Land.”

Similarly, Michael van de Poppe, a full-time trader at the Amsterdam Stock Exchange, said a drop to sub-$12,000 could also occur.

As Cointelegraph reported, a Bitcoin pullback entering November would place even more pressure on the altcoin market. Bitcoin has sucked most of the volume from the cryptocurrency market, which means that if BTC goes down, the selling pressure on altcoins would likely intensify.

Author: Joseph Young

Source: Coin Telegraph: Bitcoin monthly candle closes above $13K for the first time since 2017

Bitcoin’s price saw a 4% drop in the last 24 hours, but it’s unlikely to see a correction like in previous cycles for three reasons.

The price of Bitcoin (BTC) has increased by 36% in the last 35 days, showing a strong rally. The market sentiment has been optimistic due to rising institutional demand and the perception of BTC as an inflation hedge.

But after a large uptrend, the belief that BTC may pull back has begun to increase. While a minor correction could occur, like the 4% downward trip to just under $13,000 on Oct. 28, a sizable downtrend is becoming increasingly unlikely. Bitcoin was at $13,860 at the day’s peak, which marked the top of the July 2019 rally. After hitting such a resistance area, a minor pullback is expected. Following a drop to below $13,000, BTC has quickly recovered to $13,150, demonstrating resilience.

Throughout the past 11 years, Bitcoin price has moved in cycles. One of the most prominent narratives, among many others, is the block reward halving, where roughly every four years, the Bitcoin blockchain cuts in half the amount of BTC mined. The halving slows down the pace at which new BTC is created, causing its overall circulating supply to decrease over time. The year following every halving, BTC has rallied strongly, as seen in December 2017 when BTC hit $20,000, subsequent to the July 2016 halving.

If a similar pattern follows, the price of Bitcoin will likely hit $20,000 in March 2021, an analyst known as Ceteris Paribus said. “For $BTC to match last cycle’s time to regain all time high, it would need to hit $20k on March 11, 2021. Would be kind of poetic for it to happen a year after (arguably) the most infamous day in bitcoin’s history.”

As such, analysts anticipate the road to $20,000 in the medium term to be met with obstacles and minor corrections. But three reasons could prevent Bitcoin from seeing a big pullback in the near term.

Lower exchange inflows, staircase rally, and spot-led uptrend

During a bull cycle, the biggest threat to an uptrend is a potential sell-off from long-time hodlers and whales. Before the sell-off happens, some on-chain indicators could show an intent to sell. The most widely used indicator to gauge seller activity is exchange inflows.

When whales prepare to sell Bitcoin, they typically transfer their BTC holdings to exchanges. On some occasions, if a high-net-worth individual is dealing with extremely large BTC holdings, then they might engage in peer-to-peer trades on over-the-counter markets. But in most cases, whales use exchanges like Coinbase, Gemini and Binance. As such, when inflows to major exchanges increase, it often suggests the selling pressure on BTC might intensify.

In the past month, as Bitcoin has rallied, exchange inflows have not increased substantially. Ki Young Ju, CEO of analytics firm CryptoQuant, reaffirmed on Oct. 27 that Bitcoin exchange inflows are declining. On Oct. 22, whale inflows temporarily spiked, causing concerns of heightened selling pressure. Ju noted, “Still safe from short-term $BTC dumping as well.”

With no large selling pressure coming from whales on exchanges, derivatives traders have explained that the ongoing rally is spot-led, not futures-driven. This differentiation is critical because when a rally is primarily fueled by the futures market, it could raise the probability of a rapid pullback. The reason behind this tendency is the possibility of cascading liquidations.

On a Bitcoin futures exchange, cryptocurrency traders place short or long positions with leverage. But that also indicates that if BTC drops 10%, the position would get liquidated and the trader would lose the base capital of $10,000. When the futures market drives the rally and a small drop rattles traders, it could cause a cascade of long futures contracts, causing the market to drop.

The recent rally, however, has seen significant demand from spot and institutional markets. “Light,” a pseudonymous Bitcoin derivatives trader, said, “Market structure is distributed with no exchange monopolizing price discovery. spot is leading derivatives. make of that what you will.” The continuous increase in the trading volume of LMAX Digital, Coinbase, Bakkt and Binance demonstrates the dominance of the spot market in the recent uptrend.

Lastly, the staircase rally of Bitcoin supports the argument that a large price drop has become less likely. In December 2017, Bitcoin crashed after reaching $20,000 because the uptrend occurred in a short period, so there was not enough time to establish support and resistance levels. This time, BTC is climbing a staircase, consolidating after each rally. Such a technical pattern strengthens the uptrend and uplifts the overall momentum.

Potential reasons for a Bitcoin downtrend

Still, there are two key reasons why traders anticipate a short-term Bitcoin downtrend. First, the U.S. dollar index (DXY) has been rebounding. Since alternative stores of value, including gold and Bitcoin, are priced against the dollar, the recovery of the DXY could negatively affect BTC. Second, Bitcoin market sentiment is demonstrating FOMO-level excitement — the fear of missing out — which raises concerns of an overheated rally.

Bitcoin traders Michael van de Poppe and Nick Cote both emphasized that the rising DXY could be a problem for BTC in the near term. Van de Poppe, a full-time trader at the Amsterdam Stock Exchange and a Cointelegraph contributor, said that $12,700 remains a potential target if the DXY continues to climb:

“Retrace here on $BTC, as $DXY is pushing upwards given the surrounding coronavirus pandemic fears. To avoid deviation above the range high, $13,250-13,325 has to hold for support. If that breaks, $12,700 seems next.”
Researchers at Santiment also emphasized that the “social mood” of the Bitcoin market has been increasing quickly. Marking a positive factor in the long term, in the foreseeable future it raises the chances of an overheated rally. If so, the derivatives market could begin to get overcrowded and whales could ponder taking profit on their positions: “Overall social volume is also rising, indicating higher than normal FOMO levels.”

Possible variables

In the last three days, the hash rate of the Bitcoin blockchain network has dropped substantially. According to data from ByteTree, miners have been selling large amounts of BTC in the past week. Analysts attribute this trend to the end of the rainy season in China, which affects the cost of electricity of Bitcoin miners. During the rainy season, miners can gain access to cheaper electricity, which allows them to mine more BTC with lower costs.

There is a possibility that, as miners slow down their operations, they will sell BTC to take profit. As Cote, an on-chain analyst, said, the hashing power outflows out of China have been fast and could further accelerate in 2021. While this is a positive development for the decentralization of the hash rate, in the short term, it could affect the markets:

“The only thing faster than $BTC outflows from exchanges will be hash power outflows out of China in 2021. The energy goliaths are here and they are ready to supply all the good miners with cheap electricity to put a plug in their own bleeding.”

Atop the mass exodus of miners in China, the uncertainty around how the United States presidential election will affect the global equities market is causing both American and European stocks to slump. The Dow Jones Industrial Average has decreased by 5.10% in the past five days, rattling all risk-on and risk-off markets. The DXY aside, gold, Bitcoin and stocks have all fallen in tandem in the last 24 hours, demonstrating a high level of uncertainty in the market.

Author: Joseph Young

Source: Coin Telegraph: Bitcoin price sees pullback, but bulls still marching toward $20K

Dan Tapiero shared a survey from Statista that showed only 7% of Americans previously used BTC, showing Bitcoin is still in an early phase.

According to new data from Statista, only 7% of Americans have previously used Bitcoin (BTC). This means current investors in BTC are still in an early stage of growth.

Dan Tapiero, the co-founder of 10T Holdings, said Bitcoin is still at the “birth” phase of a new asset class. He wrote:

“It’s still so early for Bitcoin. Still at the birth of a new global asset class.”

In the longer term, Bitcoin has significant growth potential to evolve into an established store of value, like gold. If so, investors anticipate its valuation to increase exponentially over the next decade.

The percentage of people that previously used Bitcoin. Source: Statista

What is needed for Bitcoin mainstream adoption to pick up?

Currently, the majority of the demand for Bitcoin comes from investors that perceive BTC as gold 2.0. Investors believe BTC would eventually establish itself as a safe-haven asset.

Consequently, institutional investors have heavily accumulated BTC in recent months. MicroStrategy and Stone Ridge, for instance, purchased $425 million and $110 million worth of Bitcoin, respectively.

But if the retail demand for Bitcoin picks up in tandem across major regions, it could cause BTC to grow exponentially.

The data from Statistica shows only six countries have more than 10% of their population as Bitcoin users. The top countries in terms of Bitcoin users per capita are Nigeria, Vietnam, and South Africa, the Statista Global Consumer Survey found.

Tapiero emphasized that the survey does not include countries top to bottom, which might have missed large cryptocurrency markets. South Korea, as an example, is not on the list despite being one of the world’s bigger Bitcoin markets. He said:

“It’s a survey of select countries. It’s not a straight top to bottom survey. IE there are countries that belong on this list that are not listed.”

In recent years, the Bitcoin exchange and fiat on-ramp infrastructure have significantly improved across the U.S., Europe, and Asia. However, there are still many countries that lack a reliable exchange infrastructure to this day.

Canada, as an example, lacks a strictly regulated major local cryptocurrency exchange users can rely on, apart from Coinbase.

Once the exchange and fiat on-ramp infrastructure gets fully established, then it would become easier for retail investors to enter the market.

Without exchange-traded funds (ETFs) and major bank custodians, users still have to undergo a relatively complex process of using exchanges. Some exchanges require a thorough Know Your Customer or KYC verification process before users can initiate wire transfers to buy Bitcoin.

As such, until there are further improvements in the infrastructure to onboard retail investors, the broader mainstream population would likely struggle to enter the cryptocurrency market.

The monthly price chart of Bitcoin. Source: TradingView.com

Where would BTC go with mainstream adoption?

The long-term predictions of Bitcoin widely vary, anywhere from $20,000 to $1 million.

On Oct. 16, Cointelegraph reported that asset manager Raoul Pal, the founder of the Real Vision Group, believes BTC is heading to $1 million.

At a price point of $1 million, the fully diluted market capitalization of BTC would be at around $21 trillion. That would be more than two-folds of gold’s current market valuation of $9 trillion.

Author: Joseph Young

Source: Coin Telegraph: ‘Still so early’ — 7% of Americans have bought Bitcoin, study finds

Nasdaq faces several threats in the fourth quarter that could hinder its momentum. But numerous vital catalysts could uplift its momentum.

  • The Nasdaq Composite has rallied 11.69% in the past 20 days, recovering towards an all-time high.
  • In the near term, the U.S. stock market faces numerous threats, including rising COVID-19 cases heading into the winter season.
  • The strong performance of Big Tech, a possible post-election stimulus, and vaccine breakthroughs could fuel equities in November.

The Nasdaq Composite faces several threats in the fourth quarter that could potentially hinder its strong technical momentum. But numerous vital catalysts could uplift its momentum, particularly after the presidential election.

The three critical factors for an extended Nasdaq recovery are Big Tech’s resurgence, a post-election stimulus, and the vaccine breakthroughs.

Since September 23, the index climbed 11.69%, nearing its all-time high it hit on September 2.

The year-to-date performance of the Nasdaq Composite. | Source: Yahoo Finance

Dr. Fauci’s COVID-19 Warnings and Gloomy Earnings are Nasdaq Risks

Since September, Dr. Anthony Fauci has voiced concerns about the worrying trend of COVID-19 in the U.S.

Fauci pinpointed the high baseline of virus cases in the U.S. and the infection rate as concerning figures.

Heading into December, Fauci has begun to sound the alarm on growing COVID-19 cases once again.

Talking to CNBC, Fauci bluntly stated that the U.S. is “in a bad place,” as colder weather approaches.

Dr. Fauci stated:

We’re in a bad place now. We’ve got to turn this around…We’ve got to convince Americans that public health measures do not mean shutting the country down. It’s actually an avenue to keeping the country open.

If virus cases spike, the probability of additional restrictions rises, which might hurt overall business productivity.

As such, the prospect of a worsening pandemic in the upcoming months could hinder the Nasdaq Composite’s momentum.

The U.S. also reported its first confirmed COVID-19 “reinfection,” which has scientists worried about the upcoming winter season.

Atop the gloomy prospect of the pandemic, other major stock market indices, especially in Europe, fell due to weak earnings.

But there are hopes that the Big Tech’s strength, the possibility of vaccines, and a new stimulus package could offset the grim market sentiment.

Catalyst #1: Big Tech Performance

Throughout April to September, Big Tech fueled the Nasdaq Composite’s record rally.

According to Holger Zschaepitz, a market analyst at Welt, Apple, Amazon, and tech stocks recently caused the Nasdaq to outperform. He said:

“Nasdaq notches best day since April in kind of Crack-up boom ahead of Q3 2020 earnings season, Apple iPhone announcement, Amazon Prime Days and a general revaluation of Tech Stocks due to lower rates forever.”

For tech-heavy indices, including Nasdaq and the S&P 500, the resurgence of Big Tech remains a significant catalyst.

Tech Stocks fuel the Nasdaq 100 rally in the past week. | Source: Bloomberg, Holger Zschaepitz

Catalyst #2: Post-Election Stimulus Could Uplift the Nasdaq

On October 7, U.S. President Donald Trump rejected the $2.4 trillion stimulus proposal from the Democrats.

President Trump stated that stimulus talks would only continue after the election, criticizing the newly proposed stimulus bill.

But shortly after that, President Trump tweeted that the House and Senate should “immediately” approve more stimulus. He said:

“The House & Senate should IMMEDIATELY Approve 25 Billion Dollars for Airline Payroll Support, & 135 Billion Dollars for Paycheck Protection Program for Small Business. Both of these will be fully paid for with unused funds from the Cares Act. Have this money. I will sign now!”

The timing of President Trump’s call for additional stimulus so quickly after rejecting the stimulus proposal makes a stimulus agreement after the election more likely.

Strategists believe a stimulus package is not coming before the November 3 presidential election. Watch the video below:

Catalyst #3: Vaccine Breakthroughs

By the year’s end, Goldman Sachs strategists are not dismissing the outlook of vaccine breakthroughs buoying high-risk assets.

A team of strategists led by Zach Pandl, co-head global FX, rates, and EM strategy at Goldman Sachs, wrote:

“But the wide margin in current polls reduces the risk of a delayed election result, and the prospect for near-term vaccine breakthroughs may provide a backstop for risky assets.”

The confluence of the recovery of tech stocks and favorable macro factors could further strengthen the trend of U.S. stocks in November.

Author: Joseph Young

Source: CCN: 3 Reasons Nasdaq Will Smash November Earnings Gloom

Bitcoin miners selling as well as a strengthening dollar are some of the reasons the price of BTC saw a significant correction, dropping below $11,000.

The price of Bitcoin (BTC) dropped by 7% in less than two hours, liquidating over $100 million worth of longs on Sep. 3. On BitMEX alone, the sudden drop wiped out nearly $99 million worth of longs.

Three key factors likely caused the Bitcoin price to drop: miner outflows, the strength of the U.S. dollar, and major resistance.

Miner outflows

As reported earlier today, large-scale mining pools are sending higher-than-normal amounts of BTC to exchanges in recent days.

Bitcoin outflows across major mining pools. Source: CryptoQuant

The data indicated that miners were preparing to sell their Bitcoin holdings, which added selling pressure to the markets. Ki Young-Ju, the CEO of CryptoQuant, wrote:

“Miners send a certain amount of BTC to exchanges periodically, so they already have a large amount of BTC in the exchange. Whenever they decided to sell, it seems they move a relatively significant amount of BTCs to other wallets, and some of them are going to exchanges.”

Miners represent one of the two sources of external selling pressure in the Bitcoin market other than exchanges. When miners begin to sell their holdings, it could cause significant pressure on BTC.

U.S. dollar rally

Throughout the last three days, the U.S. dollar has rallied against other reserve currencies. The dollar showed particularly strong momentum against the euro.

As Cointelegraph reported, the European Central Bank (ECB) warned the euro has become too expensive. The ECB’s warning rattled the markets, causing a euro sell-off as investors feared the imposition of restrictions.

As the dollar began to rally from a multi-year support area, both Bitcoin and gold declined sharply.

BTC was at strong resistance

The $12,000 to $12,500 range has acted as a strong area of resistance for Bitcoin since 2018.

The daily price chart of Bitcoin. Source: TradingView.com

The BTC price tested the $12,000 resistance level for the fourth time in a relatively short period. That might have led to a reaction from sellers, contributing to the pullback of Bitcoin.

But the price of Bitcoin dropped to as low as $10,625 across major exchanges. Salsa Tekila, a well-known pseudonymous trader, said it is a major support level at a higher time frame, which suggests that a bounce is likely in the near term.

Where do traders see BTC heading?

In the near term, traders generally foresee a rebound to $11,200. A decline from $11,200 would confirm the level as a strong resistance area while reclaiming it would signal bullish continuation.

Michael van de Poppe, a full-time trader at the Amsterdam Stock Exchange, said:

“The breakdown occurred and we reached the next level. That was a painful drop for me too, but I’m not going to cry in a corner. Expecting a relief rally towards $11,200 to occur in which alts make a bounce too. However, $11,200 is crucial threshold.”

A cryptocurrency trader Scott Melker said an ideal scenario would be a minor drop followed by a firm recovery. He said:

“My ideal $BTC trade here would be a pause in the drop, an RSI reset on the 4-hour from oversold, another drop showing RSI making a higher low and then an absolute rip on an oversold bull div.”

Author: Joseph Young

Source: Coin Telegraph: 3 reasons Bitcoin price suddenly plunged 7%, liquidating $100M in longs

The price of Bitcoin may be entering an uncertain phase, as on-chain data says BTC traders have established $10,000 as a strong support level.

The price of Bitcoin (BTC) has increased by 28% in the last 30 days and 36% at the weekly peak. Following the top cryptocurrency’s first breakout above $12,000 since September 2019, the sentiment remains optimistic. Many fundamental factors point toward an extended Bitcoin uptrend over the long run. Bitcoin has a favorable macro backdrop with the decline of the United States dollar and the rising demand for gold. The premier cryptocurrency has continuously rallied with the U.S. stock market and gold, demonstrating a consistent increase in appetite for BTC.

Bitcoin also has strong technical factors buoying the sentiment around the entire cryptocurrency market. The hashrate of the Bitcoin blockchain network is at an all-time high once again, which suggests a stable mining industry. The closure of BTC’s weekly candle above $11,900 indicates a strong uptrend following weeks of consolidation in June.

But on Aug. 19, the price of Bitcoin declined from $12,486 to $11,611, demonstrating steep rejection at a pivotal resistance area. Last August, the price of Bitcoin briefly went to the same resistance at around $12,300 before pulling back.

Due to the abrupt rejection of Bitcoin at $12,400, traders seemingly anticipate a stable consolidation phase over the next several weeks, cooling down the futures market, neutralizing the funding rates, and providing the market with a stronger foundation for a prolonged recovery.

The term “funding rate” refers to the mechanism used by Bitcoin futures exchanges to provide market balance. If the market is majority long, then long contract holders need to compensate short holders. When funding rates are too high, the price of BTC stagnates, since it’s less compelling to long the market.

Short-term Bitcoin trend

Based on various metrics and the pause of Bitcoin’s rally at a pivotal resistance level, crypto traders say that BTC is likely to stay in the current price range. Michael van de Poppe, trader at the Amsterdam Stock Exchange and Cointelegraph contributor, thinks BTC could stagnate throughout August and possibly into September, meaning that, altcoins could reap the benefits at least in the short-term: “The general scenario is that we’ll be ranging a bit here, before continuation of the downwards momentum. Overall -> alts [altcoins] (smaller ones) continue to do well.”

A minor pullback in the near-term would be a healthy reset for the price of Bitcoin, especially when funding rates are considered. Prior to the drop, the funding rate of Bitcoin futures contracts on BitMEX and Binance Futures were nearing 0.0864% and 0.1199%, respectively.

When funding rates are this high, it could leave Bitcoin and other major cryptocurrencies vulnerable to a potential long squeeze. As such, a stabilization period supplemented with a minor pullback and a drop in funding rates could benefit the longer-term trend of Bitcoin.

Considering numerous factors, including the positive reset of funding rates, derivatives trader Cantering Clark said that the BTC trend is overall positive, but uncertainty is beginning to build in the crypto market following BTC’s overnight drop. When the sentiment around Bitcoin turns cautious after weeks of rallying, it is generally optimistic. According to Clark:

“This is good, it’s already happening. The charts are coming out. Uncertainty is brewing. ‘Distribution,’ 7k calls, top, etc etc. Bring it to the brink, flip funding and then rip it up again.”

Similarly, Mohit Sorout, founding partner of Bitazu Capital, said the recent pullback would cool off the overheated derivatives market. The futures market overran the spot market in July, as BitMEX Research and CryptoCompare show. As the crowded futures market now begins to settle down, it could further strengthen the BTC uptrend. Mohit also said: “Cool off overheated derivs for a few days here then take us to the promised land.”

Long-term optimism

Over the long-term, researchers, especially on-chain analysts, are optimistic about the trend of Bitcoin due to an inflow of institutional capital into Bitcoin, more wallets holding onto BTC, and the amount of Bitcoin reserves on exchanges declining. The three data points indicate that fewer retail investors, for now, are willing to sell BTC at current prices, according to Glassnode: “Net Unrealized Profit/Loss (NUPL) broke in to the ‘Belief’ zone for the first time over a year. Its current value is lower than the last time $BTC hit $12,000 — suggesting potential for more price upside from here.”

While the momentum of Bitcoin remains generally strong due to institutions like Microstrategy acquiring more BTC and retail investors continuing to withdraw their Bitcoin from exchanges, whales or miners starting a BTC sell-off remains a persistent threat.

As Cointelegraph previously reported, whale clusters are found in the $12,000 to $14,000 macro resistance range, with $12,000 either marking a profit or break-even point. Whales typically don’t sell when they are below their break-even point, and instead wait for sufficient liquidity in the market. Similar trends were spotted in October 2019 and February 2020, when BTC abruptly dropped from $10,500.

Overall, as the OKEx on-chain data report shows, traders are beginning to treat the $10,000 level as a strong area of support. The exchange found that many traders closed their old positions from $6,200 to $9,700 and built up new positions at $10,000 onward. As BTC has remained above $10,000 for a prolonged period, the likelihood of a newfound rally would likely increase: “A lot of older positions (between $6,200 and $9,700) were recently (in the last seven weeks) closed for profit, reducing the downward pressure on BTC’s price.”

Talking to CNBC, Dave Chapman, BC Group’s executive director, said that the firm is seeing traditional finance investors joining the crypto space: “OSL is witnessing institutional investors and traditional finance scrambling to participate in the Bitcoin, Ethereum and wider digital asset space.”

The trend favors the alts?

One consistent theme throughout the rally of Bitcoin since early June has been the booming altcoin market. Led by the interest in decentralized finance, some altcoins have outperformed BTC in the past several weeks. Yearn Finance (YFI), Chainlink (LINK), Band Protocol (BAND) and Aave (LEND) all posted two-to-ten-fold gains.

Researchers at Santiment, an on-chain analysis firm, believe the so-called alt season “is about to be finished.” If it does, there are two scenarios: profits flow into stablecoin and the market corrects, or profits flow into Bitcoin:

“Alts will enjoy the party, one by one, crazy money will move from one to another, there are still some alts to pump (though their number is getting less and less). […] After process is over either we all together go down, or Bitcoin will go up alone.”

In the medium- to long-term, on-chain analysis and the trend of altcoins suggest that the $10,000 support level of Bitcoin could hold. An extended accumulation phase above a key level could catalyze another BTC rally in the final quarter of 2020.

Author: Joseph Young

Source: Coin Telegraph: Crypto Traders Discuss Whether Bitcoin Price Can Dip Below $10K Again

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