Wed, 14 Apr 2021 08:47:17 +0000
Wed, 14 Apr 2021 08:47:17 +0000
Bitcoin surged past $64,500 this week, shattering yet another record-high milestone after a month of downside consolidation, over sentiments that a fresh Wall Street listing of one of the leading crypto firms, Coinbase, would attract more wealthy investors to the booming sector.
But the flagship cryptocurrency borrowed its bullish cues from elsewhere, as well. On Tuesday, the US Bureau of Labor released March’s Consumer Price Inflation data, showing that the index rose by its most in nearly nine years, led by pent-up demand and rising fuel prices as the US economy continued to recover from pandemic-driven lockdowns.
The labor department noted that inflation rose 0.6 percent in March than February, making its quickest pace since February August 2012. According to Reuters’ poll, the outcome beat economists’ expectations of a 0.5 percent raise. Meanwhile, the headline inflation surged 2.6 percent against the expectations of a 2.5 percent raise.
Kathy Bostjancic, the chief US financial economist at Oxford Economics, said that inflation could rise to 3.5 percent this year.
Bitcoin behaves bullishly against inflation fears. The cryptocurrency’s massive upside move after its mid-March crash came on the prospect that the US dollar — with time — would lose its purchasing power. That was due to the Federal Reserve’s decision to slash down benchmark lending rates near zero while launching an unlimited bond-buying program to cushion the US economy from the pandemic-led recession.
Later, the Federal Open Market Committee ruled out that it wants to push inflation above 2 percent in the future. That further prompted investors to increase their exposure in the Bitcoin market thanks to its limited supply cap of 21 million tokens. Even firms like Tesla and MicroStrategy added billions of dollars worth of bitcoin tokens to their otherwise cash-based balance sheets.
Preparing Grounds for Bitcoin Adaption
Meanwhile, mainstream financial services saw potential demand for bitcoin from institutional investors. In turn, Morgan Stanley and Goldman Sachs announced crypto-enabled investment services for their wealthy clients. Global payment giant PayPal allowed bitcoin checkout on its legacy payment platform in addition to the option of buying, selling, and storing the cryptocurrency.
Bitcoin’s latest climb above $64,500 came on the heels of confirmed inflation growth.
Bitcoin rises as central banks pledge to use more financial repression even with rising inflation. pic.twitter.com/6FMylaBpBS
— Daniel Lacalle (@dlacalle_IA) April 12, 2021
Investors continue to watch whether the rising prices are transitionary or are here to stay. They attempt to realize how long the Fed could continue its ultra-accommodative stance, including a $120bn monthly purchase of government bonds and mortgage-backed securities. So far, the central bank has clarified that it does not wish to raise rates until 2024.
The stance remains long-term bullish for Bitcoin.
Tue, 13 Apr 2021 15:12:48 +0000
Bitcoin price is booming but there’s still the same old argument that remains: “nobody uses the top cryptocurrency for actual transactions.” While the claim has long been solid due to the asset acting more so as a store of value, daily transaction volume has also been soaring, nearing a milestone $10 billion.
Here’s a closer look at how the ecosystem is thriving , from miner revenues and much more, and how they all factor into the cryptocurrency’s continued global dominance.
Bitcoin Transaction Uptick Brings Network Near Milestone $10 Billion
The recent ongoing crypto market rally has cemented the asset class as a real contender in the finance space, with Bitcoin dealing a major blow to gold and setting sights on the dollar itself.
Bitcoin was designed initially to replace cash, acting as the first ever digital system for such built on a peer-to-peer network. In its early days, the cryptocurrency was used to buy things like pizzas or drugs on the dark web, but once it started to show its value, people instead began to store it, or what the crypto community calls “HODL.”
RELATED READING | EASY AS PI: BITCOIN INDICATOR SAYS THE TOP IS IN
That has left most pundits sticking to the asset’s biggest flaw: few are using it for actual transactions. However, that’s all changing. Today, the Bitcoin network is sending larger transactions than ever before at a high price per coin. The average transaction made in BTC now averages around half a coin, or around $32,746 – up 20% from just one week ago.
The Bitcoin network is as healthy as ever, according to most standards | Source: Arcane Research
Total daily transaction volume is also now approaching more than $10 billion each day sent across the network. The number of transactions each day is also up slightly, adding to the metrics.
Data: Diving Deeper Into The Cryptocurrency Network Ecosystem
Miners are also now taking in roughly $5.5 million each day in revenue from fees generated in BTC – a now booming business opportunity. According to ByteTree, nearly all major blockchain network metrics are in the green, with 30-day volatility notably down.
Bollinger Bands could soon release volatity, right as a top signal has appeared | Source: BTCUSD on TradingView.com
That volatility should soon see a storm of change one way or another soon enough. From a technical standpoint, the Bollinger Bands are at historical tightness, coiling up for what should be an enormous move. Another technical tool says the top could be in, but that doesn’t mean the cryptocurrency can’t surge another almost 100% from current levels before its all said and done.
RELATED READING | DATA: BITCOIN BULL RUN MAY BE LESS THAN ONE-QUARTER COMPLETE
With the Coinbase listing within hours, Bitcoin now well above $60,000 and so much going on fundamentally in the world of crypto, a transformative breakout that defies all technical odds could be next.
Featured image from ShutterStock, Charts from TradingView.com
Tue, 13 Apr 2021 09:28:38 +0000
A quick look into the world’s leading cryptocurrency Bitcoin and what’s ahead for it as it achieves another lifetime high.
And So It Goes, And So It Goes
In retrospect, the BTC/USD exchange rate reached $62,750 ahead of the European opening bell on Tuesday. Some traders really showed their conviction for an extended bullish bias in the Bitcoin market. The previous top, near $61,778, now looks less like resistance and more like support, preparing the price for another leg up towards $65,000, $70,000, and maybe even $100,000.
On the other hand, the prospect of traders securing profits near local tops offset upside convictions. As the bitcoin price rallies monumentally, it becomes riskier for some to buy it at sessional peaks. Bitcoin’s response to parabolic upside moves throughout its twelve-year lifetime has resulted in yearlong bear markets.
Of course, this time, Bitcoin appears more mature as an investment asset thanks to the influx of many corporates and financial services into the cryptocurrency sector. For instance, the cryptocurrency looks definitely overbought based on its technical indicator readings.
Nonetheless, any attempt to correct the bitcoin price by more than 30 percent from its sessional top prompts intervention from MicroStrategy, a Nasdaq-listed business intelligence firm now holding more than 91,000 BTC on its balance sheet.
The Lion Still Has Claws
The Michael Saylor company buys Bitcoin every time its price even attempts a bigger and better bearish breakdown. It even raised a billion dollars through private debt sale with a clear intention to use the proceed to buy bitcoin.
MicroStrategy’s last popular bid for the cryptocurrency was just shy of $59,500. So, from what it appears, the company won’t like it when retail traders/investors would want to take the prices anywhere below $59,500. That makes the level fundamental support, given Mr. Saylor manages to raise more funds to protect the support with another big BTC buyout.
But even if the CEO outright ignores a breakdown below $59,500, given MicroStrategy has almost more than doubled its bitcoin investments in the US dollar terms, the cryptocurrency expects to survive a bloodbath scenario by holding $59,000. Here’s what Crypto Cred, an independent market analyst, has to say about the next potential sell-off.
“We have a weekly [support] level at $59,000 […] On the daily timeframe, we can see – by the miracle of science — that that weekly level is also the daily level.”
So, for now, the $59,000-level, with some help from bitcoin superhero Mr. Saylor, are holding Bitcoin from going anywhere lower. Mr. Cred, however, mentions that a potential sell-off that leads the cryptocurrency below $59,000 would have it test the next levels near $57,000 and $54,000.
That’s all, folks!
Tue, 13 Apr 2021 07:41:25 +0000
Key Bitcoin Price Outlook
- The bitcoin price briefly surged above $61,000 on Tuesday.
- The climb surfaced as a part of an upside weekly session, as traders’ appetite for safe-havens surged ahead of key US inflation data.
- Technically, the cryptocurrency shied away from confirming a price breakout to the upside.
Bitcoin rallied above $61,000 on Tuesday.
The flagship cryptocurrency’s upside move was brief but left traders more confident about extended gains. Changpeng Zhao, the CEO of Binance, noted that the traffic volume peaked on their trading platform following Bitcoin’s spike. That indicated that more traders rushed to online exchanges to buy Bitcoin or sell it to secure short-term profits.
Just seen another ATH in traffic volume. Systems holding up so far. Monitoring. Will see if #bitcoin does it too.
Not financial advice.
— CZ Binance (@cz_binance) April 13, 2021
Michaël van de Poppe, an Amsterdam-based market analyst, hinted that traders would willingly buy Bitcoin at its fresh highs. The social media influencer, followed by more than 210,000 entities online, said in a tweet that the bitcoin price could log a new record peak on Tuesday.
Bitcoin Against Key Inflation Data
Calls for a higher bitcoin price comes from investors and traders who believe the cryptocurrency would become a global safe-haven asset against inflation. Rising consumer prices are one of the biggest fears investors have from the post-pandemic market. If the inflation runs higher than anticipated, it could tarnish asset values, limit buying power, and sap corporate margins.
Bitcoin believers project it as a hedge against rising inflation, citing its 21 million supply cap as a viable tool against the Federal Reserve’s relentless quantitative easing policy. Later on Tuesday, the March Consumer Price Inflation data expect to report a 0.2 percent spike in core inflation, according to economists surveyed by Dow Jones.
Meanwhile, the March headline inflation expects to hit 2.5 percent, up from 1.7 percent in February. It was 2.5 percent last in January 2020.
John Authers, senior editor for markets at Bloomberg, cited BCA Research’s Dhaval Joshi comments on Bitcoin in his recent opinion editorial.
Mr. Joshi stressed that the Bitcoin price has risen in the previous 12 months due to its anti-fiat features. It is popular because of its “libertarian anti-government ideas” and its simpler-to-procure talents — the latter has made bitcoin a viable competitor to shiny metal gold, another hedging asset but with poor performance on record against rising inflation fears.
Technicals Watch Fundamentals
At least Wall Street is taking notice. The past few months have witnessed the arrival of new investors in the form of Tesla, MicroStrategy, Square, and other corporates. They have also seen investment giants like Goldman Sachs and Morgan Stanley announcing new bitcoin-enabled investment products for their wealthy clients.
Meanwhile, PayPal has announced support for cryptocurrencies via its legacy platforms. Bank of New York Mellon will also launch a bitcoin-based custodianship service later this year. Payment processing services Mastercard and Visa are also experimenting with cryptocurrencies, with the latter having performed a stablecoin transaction atop its existing money transmission layer.
Technically, the bitcoin price has not confirmed a bullish breakout move yet. The cryptocurrency continues to trade inside a bullish continuation pattern, nonetheless, instilling hopes that it would rise by another $20,000 in the coming session.
Mon, 12 Apr 2021 14:02:46 +0000
Bitcoin price has finally closed a weekly candle over $60,000 on Binance for the first time in the asset’s history, marking the highest weekly close ever. However, just as such a moment is realized, a highly accurate top-sniping indicator with a three for three success rate has called the top of the current crypto market cycle.
But could picking the top in the powerfully trending cryptocurrency really be easy as Pi?
Pi Cycle Top Indicator Says It’s Game Over For Currency Crypto Market Cycle
Bitcoin price is clearly at an inflection point. After rising from $4,000 to more than $60,000 per coin in under a year, the uptrend has taken a long pause, sticking around the resistance level for several weeks now. Technical indicators are and have been extremely overheated; volume and volatility are dropping. All signs are pointing to a sizable correction, yet fundamentals in crypto are the strongest ever.
Even the most bullish on the industry are suddenly finding themselves wondering if a top of the current cycle could be in – even if if the market isn’t behaving like a normal top. Signs are mounting by the day, but picking a peak in each Bitcoin cycle isn’t easy. Or is it?
According to a highly cited “Pi Cycle Top Indicator” on TradingView, the highly accurate tool was able to just about perfectly call all three previous Bitcoin tops – and it has just appeared again with last night’s weekly close.
The Pi Cycle Top indicator has given its only fourth ever signal in Bitcoin | Source: BTCUSD on TradingView.com
Bitcoin Market Cycles Tell A Tale Of A An Ultimately Bullish Endgame
Each time in the past, the signal has marked the peak of each cycle on higher timeframes. If the Pi Cycle Top Indicator goes four out of four for picking Bitcoin peaks, that doesn’t mean all is lost for the first ever cryptocurrency.
The most recent peak in 2017 saw the signal appear just one day ahead of the high for the cycle, and was within striking distance from the high. Very few moments passed between the time the signal appeared and the exact high.
The 2017 "bubble pop" was a near flawless call | Source: BTCUSD on TradingView.com
In 2013, the Pi Cycle Top Indicator missed the exact top, instead appearing on the second “double top” formation, before entering the longest bear market yet.
RELATED READING | STOCK-TO-FLOW CREATOR: BITCOIN CYCLE “NOWHERE NEAR THE TOP”
The anomaly that’s in bull’s favor, is the first 2013 peak. The signal arrived too early, and the trending crypto asset surged another 85% after the indicator said the top was in.
When the first ever cryptocurrency did eventually peak, it saw an enormous rejection, sending the price tumbling a full 82% in four days. Yes, only four days. An 80% correction in four days would see Bitcoin back at $12,000 for a brief point in time.
In 2013, Bitcoin kept going before an 82% correction. Then it did another 3-4x | Source: BTCUSD on TradingView.com
Considering the strong fundamentals and presence of institutional investors, anything that severe of a drop would likely be bought up in a fury, much like it was on Black Thursday just one year ago. Such a strong correction could purge all overheated indicators, shake out any remaining weak hands, and reignite interest for another more powerful leg up.
The Pi Cycle Top Indicator appearing in that case, wouldn’t be all that bad. If another 2013-like scenario plays out, Bitcoin would see a stomach-churning correction any day that would most certainly have the market thinking the peak was in.
If buyers stepped back in like they did in 2013, after short-term bottom Bitcoin rocketed back up another three to four times in price beyond the previous year’s high. In a similar scenario, the leading crypto asset could correct, but then after getting back above $60,000, would eventually see more than $100,000 per coin – a target that is more in line with analyst expectations.
Interestingly, the first 2013 Pi signal took place in April of that year, within two days from the signal appearing in 2021. Whatever the case may be, volatility is about to pick up in Bitcoin just as this top signal has appeared. Knowing all the past scenarios, which is the most probable to occur? Or is this time just pain different?
Featured image from Deposit Photos, Charts from TradingView.com
Mon, 12 Apr 2021 05:51:09 +0000
Key Bitcoin Takeaways
- Bitcoin flirts with $60,000 for a breakout move.
- The cryptocurrency is trending inside a classically bullish ‘Ascending Triangle’ pattern.
- Coinbase’s listing on Nasdaq, US inflation data update this week promises further upside.
Bitcoin has endured significant selling pressure over the last few trading sessions as it attempts to close above $60,000.
The flagship cryptocurrency trades $1,500 lower from its previous all-time high level, near $61,778 (data from Coinbase). Despite positive fundamentals, led by Goldman Sachs and Morgan Stanley’s decision to offer bitcoin-enabled investment services to their wealthy clients, BTC/USD bulls remain cautious against a rising US dollar.
As a result, repeated attempts to break above $60,000 have failed on follow-throughs. The new week also begins with Bitcoin trading above the said psychological resistance level, relying on a convergence of technical and fundamental catalysts to pursue an extended uptrend.
That Ascending Channel
The first bullish cue for Bitcoin comes from an Ascending Triangle forming on its daily charts.
In retrospect, Ascending Triangles are bullish continuation patterns that appear when an asset fluctuates inside a range specified by a horizontal resistance line and a rising trendline. The price retests the upper range repeatedly, only to undergo a breakout later. The massive upside move takes the price higher by as much as the maximum Triangle height.
Bitcoin checks all the boxes when it comes to qualifying for an Ascending Triangle breakout. The cryptocurrency now eyes a breakout that takes its price north by up to $20,000 — the maximum distance between the Triangle’s upper and lower trendline. That shifts the price target to $80,000.
Coinbase Listing, Inflation Data
Bitcoin’s potential to log a bullish breakout also increases because of Coinbase’s listing on Nasdaq Stock Market this Wednesday. The milestone entry on Wall Street by one of the world’s leading cryptocurrency firms has raised speculations among bulls about an extended bitcoin price rally.
“Traditional investors who purchase Coinbase stock will indirectly speculate on the crypto market, and similarly, crypto traders who own Coinbase stocks will have a vested interest in the success of the company,” said James Anderson, CEO of RioDeFi, an ecosystem of interoperable financial products.
If not a follow-through buying, the Coinbase news expects to make a holder out of an average trader. Blockchain analytics platform Glassnode noted the same in its recent analysis, noting an increase in unspent bitcoin units across wallets that held the cryptocurrency long-term.
The only snag in the Bitcoin rally anticipated this week could come from higher-than-expected inflation data.
Treasury yields volatility could pick up if March’s Consumer Price Index (CPI) comes higher than usual this Wednesday. In turn, that would increase the appeal of holding the US dollar among foreign investors. It should at least limit Bitcoin’s demand in global markets, if not hurt it altogether.
Long-term, crypto bulls treat higher inflation as their cue to stay invested in Bitcoin. Many corporates, including Tesla, have previously decided to invest in cryptocurrency to safeguard their balance sheets against fiat-led devaluation.
Sun, 11 Apr 2021 10:28:31 +0000
Total Bitcoin miner revenue has been on a steady uptrend since the start of the year, hitting its new all time high on Friday. According to figures from on-chain analytics site Glassnode, miners are now making an aggregate $64 million from newly minted coins and fees — up nearly 400% since a year ago. It’s important to note that this is despite block subsidy being cut in half post-halving.
Mining Revenue Up Despite Mining Difficulty and Mean Hash Rate Rising
In fact, Bitcoin’s mining difficulty also recently reached an all-time high — up 66% in the past year and 24% year-to-date. Increases in mining difficulty alongside hash-rate led many in the crypto community to believe that miner capitulation was inevitable. Miner capitulation is a phenomenon where Bitcoin mining is no longer profitable, leading to miners selling their newly minted tokens rather than accumulating them in response to bearish market conditions.
Paradoxically, this seemed to be the case when Bitcoin’s bullish momentum began to gain traction earlier this year. As BTC rallied to new highs, miners began to sell off their holdings in droves. Bitcoin miner net position change remained negative for the larger portion of the year, hitting a daily outflow of 23,000 on January 26.
However, outflow began to slow down in February as the major cryptocurrency continued to soar higher. Fast forward to March, miners began to accumulate again in a clear sign of confidence in the digital asset. Historically, a positive net position change indicates that miners are willing to speculate that Bitcoin will continue to appreciate. While on-chain miner volumes don’t represent the entire network, they paint a fairly accurate picture of mining pools and their systemic behavior.
What Does this All Mean for Bitcoin’s Future Price Action
So what does this all mean for Bitcoin? With no selling or capitulation as of now, miner fundamentals clearly point to a higher upside for the world’s largest cryptocurrency. In a sign of confidence, mining firms such as Riot Blockchain are investing to massively expand their operations. Trading at $59,744 at press time, Bitcoin continues to consolidate near its all-time high of $61,500. It seems only a matter of time before the digital asset sees another breakout rally.
Sun, 11 Apr 2021 09:55:26 +0000
Is Bitcoin a commodity? It is, according to most regulatory agencies including the CFTC.
But is Bitcoin a store of value (SoV) commodity? That seems to be the current consensus. Most of the investors are treating it as so, and calling it “Gold 2.0.”
Well, if that’s the case, then Bitcoin should follow the stock-to-flow model. At least to a degree. The model gauges the total amount of “stock” – Bitcoin, in this case – available at the moment against the “flow” of new production to get the stock-to-flow ratio. That ratio quantifies scarcity.
According to the creator of the model, famed analyst PlanB, “we are nowhere near the top of this bull market, according to both the S2FX model and on-chain signals.” And the stock-to-flow model predicts that, in the near future, Bitcoin will hit at least $100K. And the model’s still intact. It still holds. (or should we say… hodls)
Some people are worried about the recent few months of relative stability, and what that does to their price projections. Others are celebrating that Bitcoin’s been above $50K for a whole month and everything that implicates.
Is the market going through a healthy period of consolidation or is a downward trend looming on the horizon? That’s the question. According to our very own Tony Spilotro, tonight’s daily candle close is crucial, as Bitcoin could lose the uptrend line that started in March 2020. “Losing such a line, however, could lead to the first extended return to prices previously traded at, requiring a stronger bounce before the Bitcoin bull run resumes,” he claims.
BTC price chart on Bitstamp. Source: BTC/USD on TradingView.com
Back to PlanB’s models, notice that he said “s2fX” in his tweet. The analyst offers two models. The “s2f” model is a time series and only considers Bitcoin’s stock-to-flow. The “s2fX” model is newer, it’s not a time series, and considers BTC, gold, silver, diamonds, and real estate data. The first one forecasts $100K at the end of this cycle, the second one goes up to $288K.
Now, even though the data seems to correlate with it, the stock-to-flow model is not proven, much less universally accepted. Last year, economist Alex Kruger told Forbes, “The whole model rests on the wrong assumption that there is cointegration between price and scarcity.“
Fund manager Nico Cordeiro also chipped in, saying in his company’s blog, “From a theoretical point of view, the model is based on the rather strong assertion that the USD market capitalization of a monetary good (e.g. gold and silver) is derived directly from their rate of new supply. No evidence or research is provided to support this idea.”
Cordeiro also claims that gold’s price hasn’t been subject to the stock-to-flow model for more than 100 years. As a counterpoint, in PlanB’s original post about the model, the analyst claims, “Gold and silver, which are totally different markets, are in line with the bitcoin model values for SF.”
So, who’s right and who’s wrong? Only time will tell.
And only you can determine what all of this means for your portfolio.