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The Clock is Ticking for Bitcoin to Make a Massive Move; What Analysts are Saying

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  • Bitcoin’s price has been caught within an incredibly tight consolidation phase over the past few weeks
  • Multiple trend catalysts – both bearish and bullish – have arisen during this time, yet none of them have been able to provide BTC with any notable momentum
  • Analysts are now noting that this won’t last for too much longer, with many expecting a large movement in the coming days and weeks
  • One trader also believes that the next move will have serious conviction and may set the tone for where it trends over a long-term timeframe

Bitcoin and the entire crypto market have been consolidating as of late, with multiple notable news events doing little to provide BTC with any directionality.

Just a matter of weeks ago, news broke regarding the CFTC’s pursuit of the BitMEX co-founders. This rocked the market for a short period of time, causing Bitcoin to reel from $10,900 to $10,400.

It has since recovered the vast majority of these losses.

Today, news regarding Square – a publicly listed company – buying $50 million worth of BTC to hold as a reserve asset only boosted the cryptocurrency’s price by under 1%.

Despite the intensity of this sideways trading, one analyst believes a trend defining move is imminent.

Bitcoin’s Price Remain Stuck Within Tight Trading Range 

At the time of writing, Bitcoin is trading up just under 1% at its current price of $10,750. This marks a decent upswing from its recent lows of $10,630, but it isn’t a large enough move to invalidate the crypto’s consolidation phase.

The macro consolidation phase between $10,200 and $11,200 still remains, and which of these levels is broken first will likely determine where BTC trends in the near-term.

Discussions surrounding a potential second round of stimulus in the U.S. may influence where Bitcoin trends in the near-term.

Analyst: BTC Volatility Likely Only Days Away 

While sharing his thoughts on when Bitcoin might make a big move, one popular analyst stated that he is watching for a trend-defining breakout or breakdown before this weekend.

“I think that given this prolonged state of compression that we get a big move before the weekend for BTC. Either direction, I doubt we get some cookie-cutter retest. It’s one of those candles where you need to commit quick or the trade is already behind you.”

Image Courtesy of Cantering Clark.

Today’s news regarding Square is certainly positive for Bitcoin, but the cryptocurrency’s tempered response to it so far seems to be a bearish sign.

Featured image from Unsplash.
Pricing data from TradingView.





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Bitcoin

Bitcoin Struggles to Hold $17,000 After Wiping Out $1b in Open Interest

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  • Bitcoin has been struggling to hold above $17,000, despite this being an important price level for the cryptocurrency
  • Where it trends next will depend largely on whether or not bulls can continue building support at this level
  • So far, each dip below it has been met with intense buy-side support that has allowed it to ascend
  • Where it trends next will likely depend largely on its imminent price action
  • It is important to note that this recent selloff resulted in nearly $1 billion in open interest being wiped out
  • This may make the cryptocurrency fundamentally healthier in the days, weeks, and months ahead

Bitcoin and the rest of the crypto market have been facing their first sustained pullback in the time following BTC’s rally up towards its all-time highs.

The rejection right below these highs, coupled with fear stemming from Treasury Secretary Steve Mnuchin’s comments regarding a new wave of crypto regulations, have both hampered its price action.

Bears are taking increasing control over its price action, and where it trends in the near-term may depend largely on how bulls continue responding to the $17,000 level.

Bitcoin Descends Below $17,000 as Bulls Struggle to Find Support 

At the time of writing, Bitcoin is trading down just over 2% at its current price of $16,850. This marks a notable decline from the cryptocurrency’s recent $17,600 highs set a handful of days ago.

Where the entire market trends in the mid-term may depend largely on whether or not it remains below $17,000 for an extended period of time.

This level has been strong support throughout the past 24-hours, but the buying pressure here appears to be dissolving.

A sustained bout of trading here could result in the entire market seeing some massive near-term downside.

BTC Sees Massive OI Cleansing During Course of Recent Drop 

Throughout the course of the ongoing decline, Bitcoin has seen a massive decline in open interest within the derivatives and futures market.

In aggregate, $1 billion in OI was wiped out as a result of this move lower. It also led to record trading volume and $1.5 billion in long positions for all tokens being liquidated – trends that one analytics platform spoke about in a recent tweet:

“BTC yesterday: – $1 billion of Open Interest wiped out – record trading volume: $66 billion on futures and $7 billion on spot – $900 million longs liquidated – $1.5 billion longs liquidated on the entire futures market (all coins, all exchanges).”

Image Courtesy of Coinalyze.

This could ultimately help the crypto see more sustainable growth in the future, as high OI can often lead to immense turbulence in both directions.

Featured image from Unsplash.
Pricing data from TradingView.





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Decred co-founder explains rationale behind Bitcoin bull and bear cycles

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Since its launch approximately 12 years ago, Bitcoin (BTC) has seen a number of bull and bear cycles, each greater than the last. What drives these cycles, however? Decred co-founder Jake Yocom-Piatt claims that the answer lies within the human brain. 

“Bitcoin’s bull and bear cycles are functions of generic human psychology, attention spans, and its deterministic and diminishing issuance,” Yocom-Piatt told Cointelegraph.

Over the years, various parties have argued different cases for Bitcoin’s cycles, including PlanB’s stock-to-flow model, which projects future Bitcoin prices based on its programmed halving events every four years.

Bitcoin is unlike any asset before it. Its programmed finite supply and ease of movement allow for borderless value storage.

One might wonder though, whether Bitcoin’s nature as a programmed asset dictates its price cycles on some level, especially since its mining reward cuts in half every four years, essentially putting fewer Bitcoin on the market each time a block is mined. Its ultimate 21 million supply cap may also factor into the equation.

“The rate of supply of Bitcoin is constantly shrinking as a percentage of the total circulation, with the addition of a substantial supply shock every halvening,” Yocom-Piatt explained.

“Bull runs occur when demand begins to outstrip supply, driving up the price, which gets the attention of myopic investors. After a certain amount of time, these myopic investors’ attention span for a bull market fades, and we revert to a bear market. With each bull market, the overall awareness of Bitcoin grows, sowing the seeds for the next bull run.”

Bitcoin recently flirted with its 2017 all-time high near $20,000, receiving its fair share of mainstream media coverage in the process.