Bitcoin has been on the receiving end against the dollar this week. The crypto encountered a massive decline in price once it failed to close Friday trading above the 50-day EMA. That price action has panicked many bulls who expected the price to surge past $11,000 in the few days ahead.
But, a majority of the bitcoin bulls are yet to discover that this decline is nothing compared to what is likely to come. The current moves are just temporary shakeouts before the bitcoin price declines further below the descending triangle. The recent move that took bitcoin towards the 50-day EMA precisely targeted to shake out the bears.
Notably, on the daily chart for BTC/USD, the market makers were seen to run their stops and liquidate most of their positions as the price was moving up. Now, the price is back around the $10,000 level and it might sink lower. Thus, it is better to take positions in these types of markets instead of being a day trader.
Since the market is quite volatile, many retail traders are adopting a ‘wait and see’ mode regardless of whether they are bearish or bullish. The high volatility is hitting many stops and forcing traders out of the market. On the other hand, position traders may still have open positions since a move downwards may come to fruition with time.
Although it is quite tempting to use high leverage offered by many futures exchanges, the best thing is to have a working plan. Also, it is good to use a leverage that is manageable since the market can get quickly out of hand. Around 65% of the traders are long on Bitcoin while 35% are short showing that nothing much has changed.
What to Expect
It is not likely to see a lot of change in the shorts to longs ratio until the Bitcoin price breaks below the descending triangle. The move may coincide with a decline in the S&P 500. The daily chart for the index reveals that it closed above the 200-day EMA but it appears quite vulnerable and may soon start plunging below the 200-day EMA.
In the instance that Bitcoin registers any move upside, it will just delay the downward move that currently seems imminent. When the S&P 500 plummeted in October 2018, BTC also followed suit and eventually plunged hard below $6,000. It formed a temporary bottom around $3,130 before rising back again in April.
Currently, the S&P 500 is expected to decline. Analysts believe that the plunge will force bitcoin to also dive below the $3,000 psychological level. It will then get a landing around $1,200 – $1,800 around June 2020. After the plunge, it will pave way for a multi-year bull trend in the stock market, Bitcoin, and altcoins markets. Even though Bitcoin’s prospects may appear bright, the worst is yet to come for now.
Finnish Authorities Have $15M in Seized Bitcoin But Don’t Want to Sell It
Finland’s customs agency has been struggling with what to do with a horde of bitcoin it fears could end up back in the hands of criminals if sold off.
Finnish Customs, known locally as Tulli, has been trying to offload a total of 1,666 bitcoin for several years, even drawing up a plan in September 2018 for a public auction of the digital coins. But officials have concerns that a sale would attract the wrong kind of attention and that it could even put the agency’s own security at risk.
Speaking to local media, Tulli director Pekka Pylkkanen said: “From our point of view, the problems are specifically related to the risk of money laundering. The buyers of [cryptocurrency] rarely use them for normal endeavors.”
Tulli confiscated the bitcoin trove following a successful bust of an online dark market in September 2016. At the time, bitcoin traded at around $570, meaning the 1,666 BTC was worth approximately $950,000. With prices now just under $9,200, it’s worth closer to $15 million, according to CoinDesk’s Bitcoin Price Index.
At bitcoin’s all-time peak near $20,000 in December 2017, the cache would have been worth almost $33 million.
Tulli isn’t the only government authority having to decide what to do with confiscated bitcoin, usually with dollar-values many times greater than when they were first seized. The U.S. government, which has seized hundreds of millions of dollars-worth of bitcoin over the years, has hosted multiple online auctions for confiscated bitcoin.
Bitcoin confiscated by the Belgian authorities was sold by an online auction house in early 2019. And later that year, U.K. police used the same auctioneer to sell more than $290,000 worth of cryptocurrency it had seized from a teenage hacker.
In 2018, the Finnish government barred customs officials from trying to sell seized bitcoin on exchanges or trading platforms, ordering the agency instead to hold any confiscated digital assets in a secure cold storage solution.
Pylkkanen’s claim that most crypto holders use them for illicit purposes isn’t supported by the numbers. A November report from blockchain analytics firm Elliptic suggested $829 million in bitcoin, just 0.5 percent of all transactions, were linked to the dark web.
Bitcoin longs worth $25M liquidated on BitMEX; is $10k a dream again?
Bitcoin’s volatility has been on the rise for the past few weeks now. The king coin, while it was once aiming to surpass the $10k resistance, now has to deal with immediate resistances around $9.6k and $9.3k The coin bid a temporary goodbye to $10k on 25 February, following which its value took a dive from $9,682.73 to $9,288.42. This fall accounted for a little over 4%, and it did not stop there.
At midnight on 25 February, the coin had managed to gain many of the buyers’ interest; however, the sell-offs further pulled down its price by 2%.
Source: BTC/USD on Trading View
The price of Bitcoin had also recorded a drastic fall on the day before, on 24 February, price movement that again stalled the king coin’s bullish momentum. In fact, over the past three days, Bitcoin has lost 9% of its value and it was trading at $9,152.72, at press time.
The sudden slump in the price of Bitcoin triggered contract expiry on BitMEX exchange. A total of $25 million longs were liquidated within an hour, with the highest sell liquidation being worth $7 million.
This high liquidation was also recorded on 24 February, where BitMEX reported liquidation of nearly $23 million worth longs.
A similar trend was observed in the Ethereum market, with the coin recording a loss of 7.37% within hours after the coin fell to a value of $245.62. The second-largest digital asset by market cap has since been trading at $235.87. ETHUSD Futures contract on BitMEX also saw a spike in expiration as the coin lost its elevated value. $521k longs were liquidated when Bitcoin first fell, and the liquidation of $555k longs followed the second fall of the king coin.
Despite several efforts, the price of the world’s largest crypto keeps slipping like sand and along with it, the altcoin castle also seems to collapsing.
Bitcoin (BTC/USD) forecast and analysis on February 26, 2020
Cryptocurrency Bitcoin (BTC/USD) is trading at 9607. Cryptocurrency quotes are trading below the moving average with a period of 55. This indicates a bearish trend on Bitcoin. At the moment, cryptocurrency quotes are moving near the lower border of the Bollinger Bands indicator stripes.
Bitcoin (BTC/USD) forecast and analysis on February 26, 2020
As part of the Bitcoin exchange rate forecast, a test of the level of 9750 is expected. Where can we expect an attempt to continue the fall of BTC/USD and the further development of the downward trend. The purpose of this movement is the area near the level of 9210. The conservative area for Bitcoin sales is located near the upper border of the Bollinger Bands indicator strip at 9980.
Cancellation of the option to continue the depreciation of Bitcoin will be a breakdown of the area of the upper border of the Bollinger Bands indicator stripes. As well as a moving average with a period of 55 and closing of quotations of the pair above the area of 10040. This will indicate a change in the current trend in favor of the bullish for BTC/USD. In the event of a breakdown of the lower border of the Bollinger Bands indicator bands, we should expect an acceleration in the fall of cryptocurrency.
Bitcoin (BTC/USD) forecast and analysis on February 26, 2020 implies a test level of 9750. Further, it is expected to continue falling to the area below the level of 9210. The conservative sales area is near the area of 9980. The breakdown of the cryptocurrency fall option will be the breakdown of the level of 10040. In this case, we should expect continued growth.