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October 2020 Déjà vu? Bitcoin pullback at $38K has traders at odds over next move

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The wider cryptocurrency market entered a period of consolidation on July 27 following Bitcoin’s (BTC) brief spike above $40,000 the day before that helped ignite a rally across the market and brought a renewed sense of optimism to the market.

Data from Cointelegraph Markets Pro and TradingView shows that a mid-day attempt by bulls to lift the price of BTC back above the $40,000 level was rejected resulting in a price pullback to $37,500.

BTC/USDT 4-hour chart. Source: TradingView

While Tuesday’s price pullback may suggest that Monday’s rally was simply a short squeeze, others point to the rising Grayscale Bitcoin Trust (GBTC) premium, which is now at the highest levels in months at -5.88%, suggesting that institutions are once again betting on more BTC price upside.

Bitcoin bulls battle to reestablish uptrend

Rumors that Amazon would begin accepting cryptocurrency payments in 2021 helped ignite the market-wide rally seen on Monday, though officially denied by the company later on.

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However, as pointed out by pseudonymous independent market analyst Rekt Capital, Bitcoin’s price chart shows a fractal pattern that is similar to the price-performance in October 2020, just before BTC price began its run to a new all-time high.

If a similar pattern plays out in the current market, Bitcoin’s price will see a continuation of the uptrend that the Amazon rumors initiated.

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Not all of the available suggests a continuation of the upward momentum, however, as was pointed out by Jarvis Labs analyst and co-founder, Ben Lilly, who has been monitoring on-chain data to gain deeper insight into the most recent pump, particularly with Ethereum’s London hard fork slated for Aug. 4.

Lilly said,

“Onchain activity and demand hasn’t showed up. Pair this up with Amazon news as fake and shorts getting rekt, I wouldn’t be surprised to see low $30ks be4 1559.”

An example of bearish bias, however, was provided by the pseudonymous Twitter user Bear Wolf, who saw Monday’s developments as nothing more than a short squeeze amid a wider bear market.

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“19K is still my target for the end of the bear market,” he wrote. “Dead Cat Bounce to 46K (Short Squeeze). TA invalidates if we pump to 50K and find support >>ABOVE

Altcoins give back gains

A large percentage of the gains seen in the altcoin market on Monday were given back on Tuesday as the euphoria from the Amazon rumors subsided.

Daily cryptocurrency market performance. Source: Coin360

Dogecoin (DOGE) and Solana (SOL) were the two hardest-hit tokens in the top 20, seeing losses of 10% and 10.8%, respectively, while Monday’s top performers Strike (STRK) and Venus (XVS) both dropped by 16%.

A pair of 30% gains from Axie Infinity (AXS) and MyNeighborAlice (ALICE) marked the best performances of the day while the blockchain-based identity management solution Civic (CVC) saw its price increase by 20%.

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The overall cryptocurrency market cap now stands at $1.488 trillion and Bitcoin’s dominance rate is 47.8%.

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Bitcoin Drops as China Declares Crypto-Businesses Illegal

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  • China declared that cryptocurrency-related businesses are illegal
  • Bitcoin, Ether, and stablecoin Tether do not qualify as legal tender in China
  • BTC drops in price as the announcement went out

Once again, China reiterated its antagonistic stance on Bitcoin and the cryptocurrency industry as a whole.

In an announcement, the People’s Bank of China (PBOC) mentioned that BTC, ETH, and USDT are not legal tenders in China. They added that these cannot be used in the currency market.

Additionally, the central bank deemed all crypto-related businesses as illegal. This includes overseas exchanges serving residents within China and derivative transactions.

Following the news, Bitcoin’s price fell by almost $2,000 as the news circulated. This has been a common pattern whenever China FUD comes out.

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Earlier, China also reiterated its stance on crypto trading and mining while testing the Digital Yuan. According to the PBOC, it will continue releasing regulatory pressure over the crypto trading industry.

Despite the negative news, many analysts remain bullish on Bitcoin and the cryptocurrency industry as a whole. According to analyst Lark Davis, this is not new and will happen again in the future.

In a tweet, Davis mentioned that “The year is 2025, #bitcoin has just corrected from 400k to 250k on China banning BTC fears.”

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Can Bitcoin Surpass $6,000,000? Ethereum and Polkadot Creator Details Possible Future of Crypto

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Early Bitcoin developer and co-founder of Ethereum and Polkadot, Gavin Andresen, is outlining a future where BTC rises to a staggering $6,000,000 per coin.

Gavin Andresen, who took over as Bitcoin’s lead maintainer from founder Satoshi Nakamoto in 2011, just published a new blog post detailing how BTC’s theoretical evolution could look.

Andresen describes a “possible” scenario where Bitcoin hits a price tag of $6,000,000 by 2061, transaction fees 326x higher than they are now, and the blockchain is used chiefly by whales.

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“Imagine: it is the year 2061. The BTC price is six million US dollars – equal to about a million 2021 dollars because of inflation.

Miners are being rewarded 0.006103515625 BTC per block, plus transaction fees of about 5 BTC for 4,000 or so transactions ($7,500 per transaction).

But most BTC transactions don’t happen on the BTC network. Most BTC is locked up in multi-signature outputs secured using multiparty computation and mirrored on another chain as ‘wrapped’ tokens.”

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In his scifi scenario, Andresen says those who do remain on Bitcoin’s network will be incentivized to keep it alive.

“The transactions that do occur on the main BTC network are high-value, mostly between super-whale-size holders…

These whales maintain the BTC network forever. They are the miners and the transaction creators; they don’t care how high transaction fees go, because they receive as many fees as they pay.”

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However, Andresen says that by 2100, even those users would likely leave the blockchain.

“In the year 2100 the whales notice that the mining reward is basically zero… Eventually, there are zero new BTC being produced on the BTC network, and zero BTC circulating on the BTC network. There is nothing left to secure, and the chain stops.”

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Top Analyst Maps Bitcoin and Cardano Price Trajectories, Warns Best Entry Point for ADA May Be Gone

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Top Analyst Maps Bitcoin and Cardano Price Trajectories, Warns Best Entry Point for ADA May Be Gone

Crypto trader Michaël van de Poppe is looking at what’s ahead for Bitcoin (BTC) and the smart contract platform Cardano (ADA).

The analyst tells his 420,000 Twitter followers that the best entry point for Cardano may be gone after the asset bounced off a key support level at $1.86.

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“If you want to get into Cardano, this was the region where you would want to get into it, and the higher low that might be created.

So based on the daily timeframe, the best entry might be gone, but you’re still getting a better entry than the ones who have been buying around $2.80.”

Van de Poppe is now looking to see if ADA can turn resistance at the $2.37 level into support.

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If the markets correct further, he is keeping an eye on the $2.15 level as a potential buy zone.

“When you’re looking at the four-hour time frame, I think you’re getting the exact same view as what you have right now on Bitcoin and [Ethereum], actually. So you’re going to look for an entry point which is around the fact of $2.15, so anything in this region might be a good entry point if we get a corrective move.”

Looking at the Bitcoin pair, van de Poppe thinks that ADA will most likely consolidate briefly after retesting support at its previous all-time high.

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“We can see that we’ve had a beautiful retest of the previous high here too, and therefore some consolidation is most likely going to take place before we’re going to have new impulse waves.

So both the USDT and BTC pair are looking for continuation, and I think that’s just great, and I think that’s just what we want to see with the markets right now.”

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