- Increased selling pressure from the F2Pool mining pool, the macro environment, whale deposits and a low institutional participation have fueled the drop of Bitcoin’s price.
- According to Michaël van de Poppe, $46,000 to $48,000 is currently acting as support zone. If this level is broken, $37,000 is likely to be the bottom.
The price of Bitcoin is trending downward. After BTC reached an all-time high above $58,000, the trend has been on the bearish side ever since. However, among analysts, the sentiment seems to be bearish in the short term, but still bullish in the medium and long term.
At the time of publication, Bitcoin was trading at $46,436 with a loss of 5.0% in the last 24 hours. On the weekly and monthly charts, Bitcoin is down 9.6% and up 43.5%, respectively. The market capitalization has dropped to $867 billion.
In a recent video, Crypto Daily has explored some reasons for Bitcoin’s price plunge. Titled “Bitcoin: The Reality of the Situation,” the YouTuber clarifies that there has been an increase in selling pressure from some miners in China who use F2Pool’s mining operations. Crypto Daily made the important distinction that it is not F2Pool as such, but “the community” of miners that have organized themselves.
Thus, they have moved a significant amount of BTC to exchanges. Their goal, although unsustainable in the medium and long term, according to the YouTuber, is to open short positions in the futures market before moving large amounts of Bitcoin to the exchanges to sink the price and make more profit.
In addition to the above, the price of Bitcoin seems to be reacting to the performance of the traditional market. In recent days, major U.S. markets have posted losses and some investors may be selling assets such as BTC to increase their liquidity. Something similar happened during “Black Thursday” in 2020.
NASDAQ FUTURES DOWN 0.7%, S&P 500 E-MINI FUTURES DOWN 0.5%, DOW FUTURES DOWN 0.6%
— First Squawk (@FirstSquawk) February 26, 2021
However, as CryptoQuant CEO Ki-Young Ju elaborated, the long-term outlook is still bullish. Ju recorded an outflow of 48,000 BTC from Coinbase today, Feb. 26. While he believes institutions are still accumulating, he expects to see an increase in buying pressure for BTC to resume its upward path. On the factors that led to the market’s current decline, said Ju:
I think the major reason for this drop is the jittering macro environment like the 10-year Treasury note, not whale deposits, miner selling, and lack of institutional demand.
How much could Bitcoin’s price drop?
Trader Michaël van de Poppe has stated in his latest video that February and March are historically a bearish month for the crypto market. The trader believes that investors should take advantage of the drop to accumulate more BTC and their favorite altcoins. Referring to the weekly Bitcoin chart, van de Poppe said:
There is nothing to worry about. We are still in a bullish cycle and we also saw those corrections in 2017 and 2016, the previous bullish cycles (…). It is comparable to the period we had here in June 2016.
The trader compared BTC inflows and outflows from exchanges to reaffirm that Bitcoin’s bull cycle is just beginning. However, in the short term investors should prepare for a potential bear market that could extend throughout March until the price bottoms out. The trader has set current support at $46,000 to $48,000. If this level is broken, $37,000 is likely the bottom that the price could touch before it starts to resume the uptrend.
#Bitcoin couldn't break the $52,000 resistance and broke south towards support.
It's currently on support, but you'd want to see a clear breakthrough of $48,500-49,500 for bullish continuation.
— Michaël van de Poppe (@CryptoMichNL) February 26, 2021
El Salvador President Looking to Buy the Bitcoin Dip, But Wants a Better Discount
Bitcoin ($BTC) price recorded a minor correction over the past 24-hours, falling to a daily low of $60,122. The retrace comes just days after $BTC posted a new ATH of $66,973 on Wednesday. The price correction is now being seen as an opportunity by many to stack more $BTC.
Nayib Bukele, the president of El Salvador, the world’s first country with Bitcoin as its legal tender is also among many who wants to buy the Bitcoin dip. However, he thinks the correction is too small and might need a better discount to make the purchase.
Bukele’s interest in Bitcoin has been known the world over as he is seen as the main architect behind El Salvador’s BTC adoption. The small central American nation started buying $BTC right after it was formally inducted in September this year. They made a total of 700 BTC purchases throughout September when the top cryptocurrency was trading under $45K. At the time Bukele was criticized as their purchase value was on the decline.
As $BTC touched new ATH, El Salvador’s Bitcoin holding got into millions of profit which is now being used for building hospitals and other national projects. He also shared a photo of himself sitting on the throne depicting him as the king after BTC ATH.
El Salvador is Reaping the Benefits of Bitcoin Adoption Already
International media continues to show El Salvador’s BTC adoption in a bad light, focusing more on the protests and less on the benefits that Bitcoin adoption has given to the country. The national Chivo wallet is already being used by two-thirds of Salvadorans while the Bitcoin ATMs have been a great success too receiving millions in daily remittance.
El Salvador has also invested in clean Bitcoin mining using abundant geothermal energy available in the country. The country has already set up the infrastructure and has mined its first Bitcoin as well, thus the adoption has proven to be a great win for the financially challenged nation, despite skepticism from all around.
One Ethereum Competitor Is Showing Strength As Bitcoin Loses Ground, According to Crypto Trader Benjamin Cowen
Crypto analyst Benjamin Cowen says an Ethereum rival is showing strength as Bitcoin pulls back from its all-time high.
Cowen tells his 576,000 YouTube subscribers that AVAX, the native token for the smart contract platform Avalanche, is “weathering the storm relatively well.”ADVERTISEMENT
The 12th-ranked asset by market cap is trading at $68.28 at time of writing, up over 5% in the past 24 hours and more than 20% in the past week, according to CoinGecko.
Cowen notes that AVAX is trading well above both its 20-week simple moving average (SMA) and 21-week exponential moving average (EMA). Taken together, the two metrics are what Cowen refers to as the “bull market support band.”
“We also have some wiggle room in the sense that we are above the bull market support band of the AVAX/USD valuation. The 20-week SMA is at $35.85 and the 21-week EMA is at $43.47. What that tells you is that Avalanche has been performing pretty well for the last several weeks.
A lot of coins are right above their bull market support band, and they haven’t been performing as well recently. A lot of these things can have some type of seasonality as the money ball just jumps around from project to project, and right now, clearly, AVAX is showing a decent amount of strength.”
Cowen doesn’t predict that AVAX will have a strong move against Bitcoin “in the next month or so,” but he does say that Avalanche can increase in value in terms of its relationship to the US dollar in the short term.
This ransomware gang moved $6.8 million in Bitcoin amid regulatory overhaul
Ransomware groups, Darkside and BlackMatter recently moved multi-million dollars worth of Bitcoin upon getting the news of REvil’s servers getting hacked by a global coalition of law enforcement agencies. According to the authorities, 107 BTC, which amounts to $6.8 million were moved earlier today by splitting the amount into several different wallets.
Furthermore, officials revealed that the gangs were already aware of regulators’ oversight and therefore had prepared the mentioned balance to be laundered or cashed out. According to The Record, officials noted that the breakdown of funds into smaller portions is usually used for money laundering operations as the regulators directly transfer the entire amount of confiscated funds instead of splitting them up.
“Basically, since 2AM UTC whoever controlled the wallet started to break the BTC into small chunks… At the time of this writing, the attackers split the funds into 7 wallets of 7-8 BTC and the rest (38BTC) is stored in the following wallet: bc1q9jy4pq5su9slh56gryydwkk0qjnqxvfwzm7xl6”, Omri Segev Moyal, CEO and co-founder of security firm Profero shared this data with The Record.
It is obvious that the Darkside and BlackMatter were next on the regulatory hitlist as Darkside was the ransomware strain developed by REvil associates that were used earlier this year in the infamous Colonial Pipeline incident of May. This attack indirectly led to fuel supply outages across the US East Coast.
REvil ransomware group’s website went offline
Yesterday, the Reuters’ report about REvil’s servers being hijacked by the regulators went viral and threw other ransomware groups in a fit of panic. A multi-nation operation against cybercrime group, REvil was implemented and took down the group’s “Happy Blog” website, which was formerly used to leak victim data and extort companies.
“The FBI, in conjunction with Cyber Command, the Secret Service and like-minded countries, have truly engaged in significant disruptive actions against these groups,” said Tom Kellermann, an adviser to the U.S. Secret Service on cybercrime investigations and VMWare head of cybersecurity strategy. “REvil was top of the list.”, he added.