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Will the dollar’s weakness result in Bitcoin finally breaking $12,000?

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Historically, a weaker United States Dollar leads to strength across other “safe haven” assets. By analyzing the correlation, such momentum and conclusion can also be drawn with Bitcoin (BTC) and the USD.

Bitcoin has gained in 2020 as the U.S. Dollar Currency Index (DXY) has been having a tough year. But will this momentum continue in the coming months? Let’s take a closer look at the charts.

Bitcoin has to hold the $11,000 support level to avoid a CME gap test at $9,600

BTC/USD 1-day chart. Source: TradingView

The triangle broke upward as the majority of the markets were waiting for a climax to occur, resulting in a rally towards $11,700 and the breakthrough of the crucial $11,000-11,200 resistance zone.

However, to sustain the bullish momentum, support has to hold at this $11,000-11,200 area for a test of the $12,000 resistance area to occur.

BTC/USD 1-week chart. Source: TradingView

BTC/USD 1-week chart. Source: TradingView

The weekly chart of Bitcoin is showing the significance of the $12,000 resistance level. Since the bear market started, the $12,000 area has been a big hurdle.

This crucial barrier led to multiple tests of this zone. However, a breakthrough didn’t occur yet. But the general consensus is that the more often a level gets tested, the weaker it becomes.

As an example, it took silver almost seven years to break through the resistance of $18.

Silver 1-week chart. Source: TradingView

Silver 1-week chart. Source: TradingView

This breakout took a long time, as silver’s price was constantly rejected at the $18 barrier. However, the breakthrough of the $18 level resulted in a massive move with the rally continuing toward $30, a 60% increase since the breakout.

But while that’s not much for enthusiasts in the cryptocurrency markets, it’s a large move for the commodity markets. Therefore, a breakthrough of the $12,000 barrier should result in a massive move for Bitcoin as well as the first big hurdle is found between $16,500-17,500.

Such a move would result in almost 50% as well.

A weaker dollar would suit Bitcoin well

DXY vs. BTC/USD 1-day charts. Source: TradingView

DXY vs. BTC/USD 1-day charts. Source: TradingView

In recent months, the U.S. Dollar Currency Index has been the center of many discussions regarding Bitcoin’s movements.

Quite clear, they do move in the opposite ways of each other, resulting in the conclusion that a weaker U.S. Dollar benefits the price of Bitcoin. This is also the main reasoning behind big institutional investors taking a position in Bitcoin, a major signal of an upcoming new cycle.

Indeed, the inverse correlation is evident and quite natural as the global economy is built around the world reserve currency, the U.S. Dollar.

DXY vs. Gold 1-week chart. Source: TradingView

DXY vs. Gold 1-week chart. Source: TradingView

The primary example of weaknesses surrounding the U.S. Dollar is found in the reaction of gold since the dot com bubble of 2000.

Since the collapse of the markets in that year, the U.S. dollar lost its value, resulting in a rally of 600% on gold in the years after. Silver even rallied 1,100% in this period.

Similarly, when the U.S. Dollar started to show strength, gold and silver retraced heavily as expected.

Therefore, since the recent weakness of the U.S. Dollar resulted in a rally around the commodity markets, this would also benefit any momentum in Bitcoin in the coming years. This momentum is often classified as “opting out of the system’” by Bitcoin believers.

The most likely scenario for Bitcoin

BTC/USD 1-week chart. Source: TradingView

BTC/USD 1-week chart. Source: TradingView

The most likely scenario would be a continued range-bound structure with some further tests at lower levels.

Multiple arguments can be drawn for this scenario. The first one is the overall weakness of Ethereum so far in Q4, resulting in the overall weakness of the crypto market.

In general, the month of January is a perfect month for Ethereum and the markets. However, a breakout in this quarter of the year is unlikely given all the uncertainties surrounding the global economy at this stage.

The second argument is the conclusion that the market is still in the build-up of a new cycle. Throughout these build-ups, accumulation ranges are defined, building momentum for the next impulse move to occur.

BTC/USD 4-day chart. Source: TradingView

BTC/USD 4-day chart. Source: TradingView

The 4-day chart of Bitcoin shows similarities with the start of the previous cycle in 2016. Long, sideways constructions were building up momentum, after which a big impulse move occurred towards the next resistance level.

That’s the most likely scenario at this point as the market is still building up for the next big cycle. This cycle will take the market to levels not seen before, but it won’t happen in one go.

Therefore, accumulation is a critical part of the build-up in such a market, which appears to be currently happening.

The views and opinions expressed here are solely those of the author and do not necessarily reflect the views of Cointelegraph. Every investment and trading move involves risk. You should conduct your own research when making a decision.





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Nearly 99% Of Bitcoin Ownership Has Been Profitable, Data Reveals

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Bitcoin is the best-performing mainstream asset in 2020, next to stocks, gold, and anything else. But according to new data, owning the top crypto asset by market cap at any point in nearly 99% of its existence would have resulted in profitability. Here’s how high the price of Bitcoin will need to reach before it reaches 100% profitability once again and what that will mean for the crypto market.

Buying Bitcoin Has Been Profitable, Nearly 99% Of The Time Data Shows

The first-ever cryptocurrency has, as analysts expected, thus far been a primary beneficiary of the post-pandemic world. The all-digital, ultra-scarce asset has beaten gold, soaring stock valuations, and anything else aside from less liquid altcoin cousins.

In just ten years, it has performed over 100,000,000% in ROI, leaving only 1.5% of days unprofitable in its existence remaining. Currently, there’s only one single day in 2020 that buying Bitcoin was unprofitable,. And with the cryptocurrency only trading $20 or so below the 2020 high – by the time this is published another few days could be knocked off the chart, and the closer to 99%.

Days profitable in Bitcoin | Source: LookIntoBitcoin.com

According to LookIntoBitcoin charts, there have been 3663 profitable days holding BTC, out of a total of 3718 days. This represents 98.5% of Bitcoin’s entire lifecycle thus far.

With less than two months worth of unprofitable price action to overtake, 100% might not be that far away.

What Will It Take To Return To 100% Positive ROI In Crypto?

According to Bitstamp’s BTCUSD price action from TradingView.com, the leading cryptocurrency by market cap truly spent more like 43 days above the current price level, with just a handful or two worth of wicks or one-day candle closes above it.

During those short spikes, anyone who was sucked into the peak Bitcoin FOMO is still stuck at a loss, either continuing to hold until that changes or having sold somewhere along the way.

bitcoin btcusd profitable days

Target for crypto to be profitable  | Source: BTCUSD on TradingView.com

Even fewer days have been spent above $13,800 where the 2019 top was set. If Bitcoin can beat its current 2020 high of $12,466, then the next likely target would be retesting the 2019 high.

The cryptocurrency’s bullish momentum could take out that resistance level this time with ease, instead, sending it to the next pit stop at around $16,500. Bitcoin has spent only a handful of days above this level. Beyond there, there’s the former all-time high of $20,000.

Above that level, Bitcoin will return to full 100% profitability, and back to price discovery. Where it eventually finds its next peak, will be the talk of the next year or more until that day comes.

Featured image from Deposit Photos, Chart from Look Into Bitcoin and TradingView.com



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Canada’s first public Bitcoin fund hits $100M mark

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Canadian digital asset manager 3iQ has recorded a major milestone fo its public Bitcoin (BTC) fund.

The Bitcoin Fund — Canada’s first Bitcoin fund listed on a major stock exchange — has crossed the $100 million market cap threshold, 3iQ announced in an Oct. 20 tweet.

Tyler Winklevoss, a major cryptocurrency investor and a co-founder of United States’ Gemini crypto exchange, congratulated 3iQ on the milestone.

As previously reported, 3iQ launched its Bitcoin fund in April 2020, listing the Bitcoin Fund’s shares (QBTC.U) on the Toronto Stock Exchange. At the launch, the Bitcoin Fund listed nearly 1.5 million Class A shares on the exchange.

In conjunction with a new market cap milestone, the Bitcoin Fund’s shares have seen significant growth since its launch. At publishing time, QBTC.U is trading at $15.80, up about 30% from $11 when it was listed in April.

At the launch, Winklevoss claimed that it was the “first public Bitcoin fund listed on a major stock exchange.” Winklevoss’s Gemini exchange is providing crypto custodian services for the Bitcoin Fund.

In January 2018, 3iQ reportedly became the first crypto fund regulated by the Ontario Securities Commission and the Canadian Securities Administrators.

Gemini seems closely tied to Canada’s cryptocurrency markest. Wealthsimple Crypto, the first regulated cryptocurrency exchange in Canada, launched trading with custodial support from Gemini in September 2020. Operating as a regulated digital currency exchange and custodian in the U.S., Gemini listed the Canadian dollar in August 2020.





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DragonEx crypto exchange considering shutdown amid OKEx ‘crisis of trust’

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DragonEx crypto exchange suspended deposits and withdrawals of all digital currencies on its platform due to issues triggered by OKEx’s ongoing withdrawal freeze.

In an official announcement on Oct. 21, DragonEx said that the OKEx freeze triggered a “crisis of trust” in centralized exchanges among its customers, which in turn fueled a run on funds and deteriorated the platform’s service.

DragonEx is now working on a restructuring plan in order to resume deposits and withdrawals on the platform. The company’s representatives said that the exchange will have to shut down if they don’t manage to successfully reorganize by Nov. 2, 2020.

The exchange also mentioned that the exchange suffered a large-scale hack in March 2019, costing over $7 million in user losses. The company’s executives wrote that after more than a year of hard work, the stolen assets have not been recovered.

News of DragonEx’s impending closure comes shortly after OKEx partially resumed some services on its platform after suspending withdrawals on Oct. 16. On Oct. 21, OKEx announced that it is resuming its peer-to-peer digital currency exchange services with three fiat currencies like the Chinese yuan, the Indian rupee and the Vietnamese dong.





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