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Bitcoin Price Loses $10.5K Support as US-China Trade War Tensions Cool

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Bitcoin (BTC) price was feeling the pressure Aug. 14 after a fresh downturn saw the largest cryptocurrency settle below $10,500. 

Market visualization

Market visualization. Source: Coin360

Trade war tensions relief lifts markets, sinks Bitcoin price 

Data from Coin360 painted a gloomy picture for investors Wednesday, with BTC/USD trailing 7.2% daily losses.

Bitcoin 7-day price chart

Bitcoin 7-day price chart. Source: Coin360

The latest in what has become a recognized pattern in recent months, Bitcoin reversed its previous successes from the weekend, when geopolitical uncertainty and fiat currency weakness in several jurisdictions pushed markets above $12,000. 

In particular, it was Hong Kong and Argentina fuelling the theory, which Bitcoin critics such as gold bug Peter Schiff took the opportunity to debunk as markets fell. 

“Now that trade tension with China has eased, the pressure on the yuan is off. Those who bought Bitcoin to speculate on Chinese safe haven buying, which never happened, are taking their chips off the table,” he tweeted Tuesday.

Tensions between the United States and China had eased slightly, with Washington delaying the introduction of some new trade tariffs, which buoyed global markets.

50/50 split on short-term Bitcoin price

Meanwhile, sentiment among Bitcoin

proponents on social media remains more open to interpretation. A survey conducted by regular trader and analyst Josh Rager delivered a rare even split regarding the future Bitcoin price. 

Asked whether BTC/USD would drop below $10,000 in the short term, exactly 50% of the more than 3,500 respondents voted for and against. 

Bitcoin had seen four figures on several occasions over the past weeks.

Altcoins break with tradition to stabilize against Bitcoin

Wednesday price action meanwhile produced some surprises for altcoin traders. Normally more erratic than Bitcoin, the day’s trading was characterized by stability in altcoins relative to Bitcoin. 

Ether (ETH), the largest altcoin, lost only 1.6% compared to Bitcoin’s 7.2%, with other major coins such as Litecoin (LTC) and XRP performing similarly. 

Ether 7-day price chart

Ether 7-day price chart. Source: Coin360

Some others, such as Bitcoin Cash (BCH) and Bitcoin SV (BSV), even delivered modest gains over the same period. A slight exception was Binance Coin (BNB), which shed 5%.

Bitcoin’s share of the total cryptocurrency market cap pulled back slightly to circle 67.5%, down from over 68% the day before.

Source:cointelegraph

Bitcoin

Bitcoin (BTC) Price Still Follows Stock-to-Flow Model Despite 48 Percent Correction

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The Bitcoin price is still in line with the much-talked-about stock-to-flow model. Will the coin rally in 2020?

While Bitcoin’s massive 48 percent correction from its yearly high of $13,700 might cast doubt on the new bull market, it actually remains in line with the stock-to-flow (STF) model. Hence, it is not unreasonable to assume BTC could see another rally after the upcoming halvening if the model is valid.   

The first scarce digital object 

The STF model, which was aims to predict the price of the leading cryptocurrency based on its scarcity, was developed by Dutch crypto analyst Plan B.

Commodities with a high STF ratio (the existing stockpile divided by the annual production) are preferred by investors because they are gradually becoming more scarce. For example, gold, which boasts a market cap of $8.4 trln, has a

ratio of 62 while silver only has 22 due to its higher supply growth (1.6 percent and 4.5 percent respectively).         

BTC’s STF ratio is currently at 25 but it will increase after the next halvening in May 2020. The miner reward for each block will be reduced from 12.5 BTC to just 6.25 BTC. It is expected that the ratio will reach 50, which would put “digital gold” very close to the yellow metal. 

Bitcoin Price

image by @100trillionUSD 👉MUST READ

“Almost entirely nonsense” 

However, not everyone is amused by Bitcoin’s STF model. In early November, economist Alex Krüger called it “massively overhyped.” 

Krüger downplays the importance of the supply side if the demand for Bitcoin is not factored in. He believes that demand is the most important factor that drives the BTC price. 

He further doubled down on his criticism, claiming that the model is “almost entirely nonsense.”

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Global Debt to be Worth $12 Million per Bitcoin by Year End

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Bitcoin has achieved market capitalization close to some of the biggest corporations, ranging between $100 and $300 billion. But taken in proportion to the size of the world’s financial system, BTC may have a different valuation.


Debt Issuance Shows No Signs of Slowing

The bloated worldwide debt, fueled by extreme quantitative easing in the last decade, will reach $255 trillion by the end of the year, reported Reuters. The analysis of the Institute of International Finance estimates each person on the planet would carry $32,500 in debt.

“With few signs of slowdown in the pace of debt accumulation, we estimate that global debt will surpass $255 trillion this year,” the IIF said in a report.

Due to bitcoin’s limited supply, it is possible to chart the size of global debt-fueled finance in BTC terms. One bitcoin (as per current aggregated supply) will have to be worth over $12 million to describe the size of the worldwide debt.

The growth of debt comes from governments and government companies, as well as non-financial businesses. A debt bonanza analysis by Bank of America Merill Lynch shows that government debt has ballooned by $30 trillion, companies added $25 trillion, households $9

trillion and banks $2 trillion. All of that additional debt has been accrued since the bankruptcy of Lehman Brothers in the fall of 2008.

Instead of entering a decade of stagnation, central banks poured in liquidity to boost all sectors, leading to significant asset valuation growth. In spite of that, the financial sector carries debt which is 240% of the world’s gross domestic product.

Bitcoin Still Valued Low in Comparison to Size of Financial Sector

It is somewhat difficult to reconcile the idea of sound money, which BTC aims to be, with a debt-fueled economy. But in a way, the current market price of bitcoin reflects the fact that not all funds in circulation are sound, and that debt-based economic activity has been the chief driver of asset valuations in the past decade.

If bitcoin’s value was matched to real economic output, it would be about 60% lower, at around $4 million per BTC. But the presence of debt skews nominal prices.

This potential BTC price has far outpaced the historical highs of the coin. Based solely on the crypto market, bitcoin has peaked around $20,000 in Korea, and at $19,600 in other markets. Some predictions see bitcoin price going to $50,000 again. Experts admit BTC would have reached higher bids if the futures markets did not start swaying the price as well.

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Top 3 Price Prediction Bitcoin, Ethereum, Ripple: Sell the rallies– key theme ahead?

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  • Crypto markets uninspired by short-lived optimism.
  • Top 3 widely traded coins to shed 4+% each on the week.

The world’s no. 1 digital coin, Bitcoin, is seen fading its tepid recovery from 2.5-week lows of 7,007, as we head towards the weekly closing. However, the second most traded cryptocurrency, Ethereum and Ripple, both cling to minor recovery gains so far this Sunday but the further upside lacks momentum, as sellers continue to lurk. The total market capitalization of the top 20 cryptocurrencies now stands at $195.25 billion, as cited by CoinMarketCap.

The top three coins are seen resuming last week’s downtrend into a fresh week ahead, with FXStreet’s Confluence Detector tool enabling to highlight key supports and resistances for better trading decisions.

BTC/USD: Bears headed to November lows

As explained here, Bitcoin failed to sustain it recovery near the $ 7,200 mark, as stiff resistances are aligned there, with the confluence of the previous high on the 4-hour chart and 23.6% Fibonacci Retracement (Fib) level of the weekly price action.

However, if the bulls manage to take out the last, the next resistance near the 7,265 region, the 23.6% Fib of the monthly price action. A break above which will expose the 10-day Simple Moving Average (DMA) at 7,332.

Given that the bears have returned, a test of the 2.5-week lows at 7,007 is back on sight. Note that the multi-week lows also intersect with the Pivot Point 1 Week S1 and Bollinger Band 1D lower, making it a critical demand zone. Should this support be breached, it is likely to accelerate the downside momentum towards 6,750 – Pivot Point 1 Week S2.

ETH/USD: Stiff resistances are packed just ahead of 144

Ethereum has pared the recovery gains, as a pack of resistances just ahead of the 144 handle restricts its every upside attempt. The resistance

zone is a confluence of the Fib 38.2% 1W, previous high on the 4-hour chart and Pivot Point 1D R1.

A sustained break above the last will intensify the recovery momentum towards the next resistance aligned near 147.50, where the 23.6% 1M and 61.8% 1W coincide.

To the downside, the earlier support around 143, the intersection of the 38.2% Fib 1D and previous low on the 15-minutes sticks, is already breached, opening floors for further declines towards the 140 handle – the previous week low.

XRP/USD: Bearish bias intact while below 0.2225

Ripple is seen consolidating around 0.2170 levels, as the immediate upside remains capped near the 0.2180 region (38.2% Fib 1D/ 5-HMA). 

A break above that level, the coin is likely to test the day’s high at 0.2197 beyond which the 0.2220-0.2225 supply zone will grab buyers’ attention. That level is the key confluence of the 200-HMA, 38.2% Fib 1W and 100 4-hour SMA.

On the flip side, the next support is directly seen near 0.2157, which is the previous week low. Sellers are likely to aim for the minor support of the Pivot Point 1W S1 at 0.2135 if the bearish momentum picks up pace.   

See all the cryptocurrency technical levels.

Information on these pages contains forward-looking statements that involve risks and uncertainties. Markets and instruments profiled on this page are for informational purposes only and should not in any way come across as a recommendation to buy or sell in these assets. You should do your own thorough research before making any investment decisions. FXStreet does not in any way guarantee that this information is free from mistakes, errors, or material misstatements. It also does not guarantee that this information is of a timely nature. Investing in Open Markets involves a great deal of risk, including the loss of all or a portion of your investment, as well as emotional distress. All risks, losses and costs associated with investing, including total loss of principal, are your responsibility.

Source: fxstreet

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