Connect with us

Bitcoin

Bitcoin price finally breaks $11K as traders assess BTC’s next move

Published

on


The price of Bitcoin (BTC) broke above $11,000 at last, after 13 days within a tight range. But this time, the market dynamic is different because Ether (ETH) and most decentralized finance tokens are declining. 

As Bitcoin rose to as high as $11,024 on Coinbase on Sept. 16, Ether, DeFi tokens and the majority of altcoins stayed stagnant. The contrasting performances between Bitcoin and the rest of the market make the ongoing BTC rally unique.

Some traders suggest that profits from Ether and DeFi tokens are being cycled into Bitcoin. Others have hinted that MicroStrategy’s bulk purchase of BTC led the spot prices of the dominant cryptocurrency to increase. MicroStrategy purchased an additional $175 million worth of BTC, which would add $7 billion to BTC’s market capitalization, as on-chain analyst Willy Woo noted. In the spot market, an order that exceeds $100 million could trigger a slippage of over 3%. Denis Vinokourov, head of research for digital asset exchange and brokerage firm Bequant, told Cointelegraph:

“Any immediate concerns over the sustainability of certain DeFi-based offerings are likely to provide a degree of support for Bitcoin. Thus, ETH and BTC may remain on a downward trend. However, that market appears to be overly fixated on DeFi and is ignoring positive developments that have come out of Ethereum over the last few days, which indicate the transition to 2.0 is very much on-track.”

Nonetheless, after the breakout of Bitcoin above $10,500, a level that has acted as a strong resistance, the sentiment of traders is mixed. Some traders believe that BTC will face rejection at the $11,000 level. Others foresee a continuous rally past the $11,000 mark, due to optimistic on-chain indicators.

The bullish case for Bitcoin

The bullish case for Bitcoin in the short term is a retest of the $11,000 resistance level without a steep rejection. Traders generally expect BTC to enter the $11,000–$11,300 resistance range. But given its historical relevance, technical analysts anticipate a strong pullback after achieving that price point.

If the price of Bitcoin remains relatively stable after rising above $11,000, that would amplify the bullish case for Bitcoin. In the medium term, there are two key levels for BTC: $13,000 and $16,000. The $13,000 level is a resistance area that Ark Invest CEO Cathie Wood previously discussed. The $16,000 level is one of the two currently open CME gaps, with the other being at $9,650.

During a podcast hosted by Ark Invest back in August, Wood said that getting through $13,000 would mean “very little” resistance to a new high. As there is low resistance between $13,000 and $20,000, the probability of a strong extended rally increases. But on the way to $13,000 stands two crucial resistance levels at $11,000 and $12,000.

According to Ki Young Ju, CEO of CryptoQuant, long-term on-chain indicators look healthy for Bitcoin. Citing the data, he said “It’s time, gents,” suggesting that a prolonged uptrend could spark. The on-chain indicators show that various fundamental data points hint at “buy” or “strong buy.”

Bitcoin on-chain indicators signal buy and strong buy

Stablecoin and miner-related indicators, especially, signal an optimistic long-term trend for Bitcoin. It shows there is an abundance of capital on the sidelines stored in major stablecoins. Because stablecoins, such as Tether (USDT), account for a large portion of BTC’s daily volume, it shows that large amounts of capital are ready to enter the crypto market.

The bearish case for BTC in the near term

On Sept. 8, before the current Bitcoin price rally commenced, a crypto trader known as “Edward Morra” said there are two short-term CME gaps of $10,620 and $9,600 left, but which one will get filled first is uncertain. He hinted that the higher gap would likely fill first, and the other might follow:

“CME chart has a fresh gap 10620, usually most of the gaps (~90%) are filled within few days max, with exceptions (10%) that take a long time (like your $9,6 gap from July). So, it makes sense to assume higher gap at 10620 gets filled first here and then we see how it goes.”

In a follow-up analysis, Morra said: “Now let’s see if lower one gonna be filled.” Technically, a move up to the $11,000 resistance level and a drop back down to the $9,600 support level is a healthy minor correction for BTC.

The 9600 CME gap remains unfilled

Data from market analysis firm CryptoCompare shows that the average transaction value of Bitcoin has stabilized. Throughout August and September, active addresses have increased but have since stagnated. Active addresses directly reflect user activity on the Bitcoin blockchain network. The stagnation of the metric could increase the chances of a pullback in the near term. CryptoCompare analysts stated:

“Is this a sign that bigger, perhaps institutional, players are getting more involved in the space? Active addresses for #Bitcoin are stable at the moment, while #Ethereum’s momentum is dropping, possibly reflecting the recent pull back from the #DeFi space, following a very active period.”

Market variables

There are two variables that could have a direct effect on the price of Bitcoin. First, cryptocurrency trader Cantering Clark said profits from Ether and DeFi are likely moving back into Bitcoin. Whether that would redistribute to altcoins after a potential BTC rejection remains unclear. 

Clark clarified that BTC would likely move back down to the $10,100 area in the near term. When it does, there is a chance that the profits that initially moved back into BTC could be redistributed to higher-risk assets, which include DeFi tokens. For now, Clark emphasized that both ETH and DeFi seem weak:

“Considering it looks like there is a rotation taking place at this point between assets, I think that regardless of where we move up to, that we end up coming back down to around 10.1 area. Just keeping it real. ETH and Defi seem a little cooked.”

Second, Liesl Eichholz, an analyst at Glassnode, said that the fundamentals of BTC are starting to drop off after the strong rally. Network growth, network activity, liquidity and market sentiment have all slightly declined. The four on-chain data points suggest that a pullback following a steep 4.5% rally within a seven-day period is likely. Despite the weakening fundamentals, Eichholz noted that the accumulation of BTC by HODLers continues to increase.





Source link

Bitcoin

Institutions still predict $100K Bitcoin price

Published

on

By


Despite Bitcoin price cooling off in recent days, with the premier cryptocurrency currently hovering around the $32,000 mark, it is still showcasing strong technicals as well as a thirty-day price gain of nearly 40%. Not only that, but even since its recent dip — which has seen the digital asset fall from its recently established all-time high of around $42,000 to its present value — the top crypto is still in the green over the last 12 months, exhibiting a value spike of nearly 300%.

In this regard, since the fourth quarter of 2019, a number of traditional finance players have been predicting big things for Bitcoin (BTC), especially as governments all over the world continue to print money in the form of “economic stimulus packages,” leading to fears of inflation becoming more prevalent but also of a looming economic disaster that could potentially result in a global recession of unprecedented proportions.

For example, during the second quarter of 2020, the economy of the United States plunged at an unprecedented rate, with the global powerhouse’s gross domestic product, which outlines a nation’s total output of goods and services, falling by 31.4%.

In the wake of such developments — including an alarming rate of money being printed by central banks globally — many investment houses and banking institutions are now beginning to see a future for Bitcoin, especially as a hedge against monetary inflation, despite its current volatility levels.

Many institutions see BTC at $100,000-plus

Earlier this year, American megabank JPMorgan Chase’s strategy team, led by Nikolaos Panigirtzoglou, claimed that a theoretical target of $146,000-plus could be sustainable for BTC by the end of 2021, pushing the narrative that the digital currency seems to be a prime candidate for replacing gold as a long-term store-of-value, especially for a budding base of younger, more tech-savvy investors.

In a similar vein, new data released by Pantera Capital, an investment firm and hedge fund, reiterates JPMorgan’s sentiments surrounding BTC, suggesting that its price action is closely following the Stock-to-Flow model, thus reaffirming its faith in the digital asset hitting the $115,000 mark by Aug. 1.

Bitcoin’s value ascent in relation to the S2F model. Source: Pantera Capital

The S2F model that was developed by PlanB looks at BTC halving events that take place roughly every four years and how they play a direct role in spurring the currency’s value roughly six months after each cycle. In this regard, one can see that following each of the previous three halvings, Bitcoin has shown remarkable growth. For example, after the May 2020 halving, the price of 1 BTC rested at $8,000, only to shoot past the $15,000 threshold after exactly six months.

Raiffeisen Bank too employed the S2F model in a recent report to ascertain where Bitcoin might be headed in the near future. According to the company’s research team, price targets beyond the $100,000 mark or even $1 million may be possible to achieve. “The fact is, now that the value has more than tripled in 2020 and momentum remains strong, future further gains should not surprise us,” the study reads.

Other prominent players from the realm of traditional finance who have projected big things for BTC in the short term include individuals such as Andy Yee, public policy director for Greater China at cross-border payments provider Visa, who believes that this rally is different from the one in 2017, as it marks a shift from high-speculative, nonfunctioning tokens toward Bitcoin and Ether (ETH).

Similarly, Thomas Fitzpatrick, global head of U.S.-based financial giant Citibank’s CitiFX Technicals market insight product, allegedly wrote in a private report — which was leaked online — that by December, Bitcoin has the potential to scale up to a price of around $318,000.

Fanciful projections or imminent reality?

Even though the S2F model was at first one of the few technical indicators signaling Bitcoin’s astronomical rise, it now seems that an increasing number of experts and analysts are beginning to see the technological and monetary proposition being put forth by BTC and other cryptocurrencies.

Sam Tabar, co-founder of Fluidity — the company behind the AirSwap trading platform — and former head of capital strategy for Merrill Lynch told Cointelegraph that everyone needs to remember that the optimism surrounding BTC at this point is not just fluff, as speculation is now backed by real substance, adding:

“Bitcoin is not ruled by any one person or government. Instead, it is ruled by the simple laws of supply and demand. […] In essence, Bitcoin is two sides of the same coin: On the one side is a global currency, and then the other side is digital gold.”

As a proxy for a global currency, the friction of buying crypto has been significantly reduced, as it’s easier than ever before to acquire Bitcoin. Similarly, as a proxy for gold, Tabar opined that Bitcoin is being used as a hedge against the U.S. dollar, especially as the newly elected President Joe Biden looks to spur U.S. dollar spending in order to prop up the economy against the effects of COVID-19 lockdowns.

Providing a more technical breakdown as to why institutions are betting big on Bitcoin, J. P. Thieriot, CEO of asset trading platform Uphold, told Cointelegraph that unlike traditional dollar debasement havens like gold and other commodities, Bitcoin has zero elasticity on the supply side.

He highlighted that if/when the price of gold reaches $3,000, marginal gold mines will once again fire up, with the same dynamic being applicable with oil and every other non-math-based unit of account. Thieriot believes that “The unique lack of supply-side elasticity means that, price-wise, BTC will respond more precipitously than things like gold, to the exact same drivers.” He further added:

“BTC is in the early stages of its rollout. As it metamorphosizes from fringe curiosity to portfolio must-have, it’s pretty logical to assume that inflows will grow. If I were a bookie, I’d say the over/under for Dec 31, 2021 midnight… is $85,000.”

Lastly, the ever-increasing institutional demand seems to be changing the digital-asset market, which in turn is driving many banks to make seemingly outlandish price projections in relation to BTC. For instance, more funds are now looking to enter the crypto game, and recently, American firm Osprey Funds announced that it will be launching its over-the-counter crypto solution, Osprey Bitcoin Trust, which will likely rival Grayscale Bitcoin Trust.

Investor sentiment surrounding BTC is high

When looking at the market sentiment surrounding Bitcoin, the digital currency is increasingly showing correlations with the core functions traditionally afforded by traditional fiat currencies for their users — that is, it has become a unit of account, a standard of deferred payments and, lastly, a tangible long-term store of value.

Also, over the course of 2020, an increasing number of e-commerce platforms added support for Bitcoin and other cryptocurrencies as a method of transaction to pay for goods and services. PayPal, for example — a company that boasts a 28-million-strong merchant base — now allows users to buy, sell and store cryptocurrencies via its platform.

On the subject, Paolo Ardoino, chief technology officer of crypto exchange Bitfinex, told Cointelegraph that consumer sentiment around Bitcoin is overwhelmingly bullish right now and that people who are celebrating the rise of various altcoins and other off-chain solutions owe their success to the flagship crypto, adding:

“The king of crypto is the base layer for an emerging alternative financial system. Bitcoin is providing a solid foundation for a staggering array of projects, some of which will fundamentally change the nature of money by the end of the decade.”

Thieriot believes that the sentiment driving BTC is a result of previously unseen levels of currency debasement generated by the monetary response to COVID-19. Beyond retail speculation, he believes corporations are looking to hedge their fiat exposure, evidently seeing some relative advantages of Bitcoin over traditional havens like gold and subsequently jumping in. “The early jumpers have been handsomely rewarded, and so the trend is likely to continue,” he added.

Lastly, Tabar highlighted that one of the more recent signs of growing consumer sentiment and institutional acceptance regarding BTC has come in the form of recent filings made by BlackRock, an American multinational investment management corporation with $8.7 trillion in assets under management as of the end of 2020. A quick look at the filings showcases a strong use of crypto-oriented language alluding to the company’s funds potentially engaging in “futures contracts based on Bitcoin.”





Source link

Continue Reading

Bitcoin

Altcoins rally while Bitcoin bulls are thwarted by resistance at $34K

Published

on

By


Bitcoin’s (BTC) tumble below $30,000 was short-lived as the top cryptocurrency found a new wave of support, including a $10 million ‘buy the dip’ moment from MicroStrategy. 

Data from Cointelegraph Markets and TradingView shows the strong inflows have helped lift BTC 4.92% to a daily high at $33,866.

As the prospect of the Biden administration passing massive stimulus packages to help get the United States economy going again, conversations about Bitcoin becoming a reserve currency are beginning to pop up again.

Although Bitcoin’s recent volatility has some analysts saying BTC is a cyclical asset rather than a hedge, the price recent movements have caught the eye of retail investors who have shown a renewed interest in cryptocurrencies in general.

Daily cryptocurrency market performance. Source: Coin360

Even the Bank of International Settlements has acknowledged that digital currencies may have use and the organization has outlined plans to roll out a variety of central bank digital currency trials this year.

Now that the Bitcoin fear index has flipped from “Extreme Greed” to “Fear,” some investors appear to be taking Warren Buffet’s advice of “buying when there is blood on the streets”.

Institutional investors are wary of future regulation

According to Chad Steinglass, head of trading at CrossTower, Bitcoin’s correction may have initially been triggered by critical comments fromU.S. Treasury Secretary Janet Yellen.

Prior to Yellen’s comments, Bitcoin was experiencing a “post-correction consolidation” and was “rangebound between $34,000 and $38,000” with traders “waiting to see which side of the range would be challenged or broken.”

BTC/USDT 4-hour chart. Source: TradingView

Steinglass further explaind that Bitcoin’s next steps will be determined by the actions of institutional investors. He said:

“$31,000 was a pocket of strong support, so at least not everyone is selling. We’ll have to wait and see if that wall remains, or if institutions continue to accumulate. If they do, it’s likely that the trend will re-establish itself and continue. If they move to the sidelines waiting for more regulatory guidance, then their lack of buy flows will be acutely felt.”

Altcoins bounce back

Many of the top altcoins also recovered nicely from this week’s correction. Polkadot (DOT) rallied 7.09% to a daily high at $18, while Chainlink (LINK) posted a double-digit gain and topped out at $22.31. Tezos (XTZ) has also seen a surge in interest which boosted the altcoin by 15% to $3.36.

The overall cryptocurrency market cap now stands at $949.8 billion and Bitcoin’s dominance rate is 64.4%.