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These Bullish Factors Suggest Bitcoin is Poised to Post an Explosive Move Higher

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  • Bitcoin’s price has remained steady despite the crypto market being struck multiple blows by recent developments
  • Last week, the market faced a $150m KuCoin hack, which was closely followed by the CFTC charging the BitMEX co-founders
  • The weakness created by these events was compounded by turbulence within the stock market due to President Trump’s health
  • Despite all this, Bitcoin’s price has remained squarely within the trading range it has been caught within over the past few weeks
  • One analyst is noting that its strength in the face of this indicates that an explosive move higher is brewing

Bitcoin and the entire cryptocurrency market have been consolidating for the past few days, after seeing some slight selling pressure earlier in the week.

This selling pressure resulted from a variety of different factors, but it wasn’t enough to alter the crypto’s underlying market structure.

While speaking about where he expects the market to trend next, one analyst noted that Bitcoin could be gearing up to see an explosive move higher in the near-term.

This move could help provide a tailwind for the entire cryptocurrency market, potentially sending altcoins also surging higher in tandem.

Bitcoin Shows Signs of Strength Despite Bearish News Events 

At the time of writing, Bitcoin’s price is trading up just under 1% at its current price of $10,600, which is around the point at which it has been trading at throughout the past several days.

Earlier this week, news surrounding the CFTC’s charges against the three co-founders of popular margin trading platform BitMEX rocked the market and caused Bitcoin’s price to fall from $10,900 to $10,400.

The cryptocurrency has been stable ever since, and it appears that the initial selloff was simply a knee-jerk reaction to the news.

This came about concurrently with fears surrounding the recent $150m KuCoin hack, as well as uncertainty within the traditional markets.

Analyst: BTC Likely to See Strong Push Higher as Strength Mounts

One analyst explained that a combination of strength in the face of multiple bearish developments and on-chain metrics flipping bullish seems to indicate that a push higher could be imminent for Bitcoin in the near-term.

“Bitmex FUD & Trump [News] barely made a dent on the BTC price. That’s pretty telling on the strength. On-chain metrics are bullish as well. I see no reason to be bearish on BTC unless the stock market crashes. The risk reward here is pretty sweet for spot BTC hodling.”

If Bitcoin pushes higher in the near-term, it could further confirm this sentiment and lead to an influx of buying pressure.

Featured image from Unsplash.
Pricing data from TradingView.





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Crypto market ‘panic’ is subsiding, now’s the time to buy

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The chief executive of Pantera Capital, Dan Morehead, is confident that the big crypto selloff is slowing because he thinks “we’ve seen the most of this panic”.

In the monthly newsletter published on June 14, the venture capitalist stated that the best time to buy is when markets are “well below trend”. A Bitcoin trend deviation chart backed up this claim as it showed that the asset has only been this “cheap” relative to its trend for a fifth of its lifecycle.

He also asserted that the year-on-year returns do not indicate that Bitcoin is overvalued either.

“The year-on-year return never went literally off-the-chart like in past peaks. It’s currently trading at 281% year-on-year — which seems entirely plausible given the money printing that has occurred in that period.”

Morehead went on to explain that a convergence of three news events that had made the markets fall so sharply.

Another clampdown from China was one of the big factors, but as Morehead pointed out this has happened several times before.

“OK, let’s take in the latest China “banning bitcoin” thing out with a wider lens. It feels like we’ve also seen **that** movie before.”

He listed eight separate incidents over as many years when China has banned Bitcoin or cracked down on the industry, followed by a chart depicting huge gains Bitcoin has made afterward. Beijing has also been cracking down on Bitcoin mining operations over concerns of energy consumption as it strives for carbon neutrality.

Related: Signs the Bitcoin hash rate is starting to move away from China

The second reason cited by the Pantera Capital boss was U.S. Tax Day which traditionally has affected markets as investors chose to liquidate some of their holdings to raise money for their tax bill.

“Previous Tax Day cycles have hit local lows seven days before Tax Day. That makes tremendous sense. That’s about how long it takes to get your money out of an exchange and to your bank.”

The third factor he named was Elon Musk’s 180 on Bitcoin but he did not elaborate on the impact the Tesla CEO’s tweets had on the market at the time. Musk caused a “tweet war” on May 17 when he hinted that Tesla may sell some of its BTC holdings due to environmental concerns over energy consumption.

Crypto asset markets plunged 43% from their $2.5 trillion all-time high in mid-May, shedding over a trillion dollars in total market capitalization in the weeks that followed. Markets have been consolidating since they hit their lowest point in this pullback on May 24, and are currently around $1.6 trillion.





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Bitcoin price falls after Fed shifts interest rate hikes forward amid inflation fears

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Bitcoin dropped closer to a key support level and the Dow and the S&P 500 pulled back after the Federal Reserve moved forward its plan for 2 interest rate hikes in 2023.

Bitcoin (BTC) price extended its losses shortly after Federal Reserve Chair Jerome Powell announced that the Fed would move forward its timeline and schedule two interest rate hikes in 2023.

Bitcoin price was already seeing weakness in the early trading hours after losing the $40,000 level to mark an intra-day low at $38,300. The Dow and S&P 500 also pulled back 0.77% and 0.54% respectively.

Daily cryptocurrency market performance. Source: Coin360

The decision comes as economists worry about rising inflation in the United States and Powell said that the Fed had raised its inflation expectation from 2.4% to 3.4%. While Powell described the current inflation spike as “transitory”, consumer prices are at a 13 year high and analysts worry that rising inflation will impact the post-covid economic recovery.

Powell did not directly address whether, or when the Fed would begin tapering its $120 billion monthly bond purchases but the decision to begin raising rates in 2023 suggests that the program will see cuts way in advance of 2023 in order to be carried out in a moderate fashion.

Can Bitcoin price maintain its current range?

BTC/USDT daily chart. Source: TradingView

On June 15 Bitcoin price successfully completed its bullish inverse head and shoulders pattern (4-hour chart), but fell short of the $45,500 target after hitting resistance at $41,350.

While the price has slipped below $40,000 and failed to flip the level to support, analysts are viewing the current price action as nothing more than range-bound trading and at the time of writing, $38,300 looks like a lower support retest.

With less than 3 hours before the daily close, traders will likely look for BTC to hold above the 20-day moving average near the $37,000 level which is expected to function as support.

One thing to note is the steady inflow of BTC to major exchanges and an increase in miner outflows over the past few days as data from CryptoQuant suggests that Bitcoin inflows lead to bearish outcomes.

The 50- and 200-day moving averages are also enroute to converge, possibly forming a bearish ‘death cross’, but both are lagging indicators, meaning they are not entirely reflective of spot price action. Nevertheless, both moving averages could present considerable resistance for bulls.

A dip below the $37,000 to $36,000 range where many traders on crypto-Twitter have announced they have bids would likely take BTC price to the lower end of its current range in the $35,000 to $31,000 zone.