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Bitcoin Market Drops 9% amid General Decline in Equities Market

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Bitcoin and other assets experienced market drops in premarket trading on Monday, responding to several serious factors such as the COVID pandemic.

The price of Bitcoin dropped by 9% on Monday as investors brace for an equity market decline. Even though many people view it as a safe haven asset, Bitcoin sometimes follows trends in other markets, including traditional climes. 

In addition, the price of the major crypto also tends to experience a September dip, much like stocks. BTC is currently trading at $43,095 at press time, reflecting an overall decline across the broader crypto market. For instance, Ether, the second-largest crypto by market cap, is down by about 10% to $2,999. 

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The general drops in the Bitcoin market and those of other assets come as stablecoin regulation uncertainty heightens. According to a weekend report by the New York Times, The Financial Oversight Council may declare stablecoins systemically risky. If this is the case, then the tokens and their operators will likely come under heavy regulation. The Fed plans to issue a critical report on digital currencies that may cover stablecoin risks. The governing institution will most likely do this once the President’s Working Group on Financial Markets concludes its stablecoin findings.

Amid the ongoing underperformance of the assets markets, investors also seem to be keen on the Federal Reserve’s next move. They want to know whether the US central banking system will indicate its readiness to discontinue the disbursement of stimulus checks. The Federal Reserve plans to hold a two-day meeting beginning on Tuesday.

Apart from investor worry over the government’s position on monetary stimulus, there are other reasons for the sweeping market sell-off and assets decline. Firstly, there is the fear of the underwhelming China property market making inroads into the general financial market. There is also the rise in the number of COVID cases, stemming from the delta variant spread as Autumn approaches in North America. Finally, investors harbor concerns about the fast-approaching debt ceiling deadline and the government’s brinkmanship in handling the issue.

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Outside Bitcoin Price, Futures Market Also Drops Across Major Indexes  

The decline in US stock futures saw many of the indexes underperforming early on Monday. For instance, futures on the Dow Jones Industrial Average dropped by 650 points or 1.9%. Furthermore, there was a futures decline in the S&P 500 and Nasdaq 100 indexes of 1.7% apiece. The Dow and the S&P now look set for their worst daily performances if the declines persist after the open. The last time this happened for the former was July 19th, and for the latter, May.

The stocks most affected in premarket trading were those linked to global growth. Ford Motor Company (NYSE: F) and Carrier Global were each down by over 3%. In addition, General Motors (NYSE: GM) and Boeing Co (NYSE: BA) dipped 2%. Finally, Nucor steel had a 2.8% drawdown. Stocks of leading banks like Bank of America (NYSE: BAC), and JPMorgan Chase (NYSE: JPM) were also down 2%.

Stocks of energy-producing corporations also plummeted. Occidental Petroleum, Hess, and Devon Energy suffered some of the biggest drawdowns in premarket trading. WTI crude also fell by about 2%.

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Conversely, as several company stocks took a dive, bond prices gained as investors opted for safety. This resulted in the ten-year treasury yield going down by 4 basis points to 1.329%.

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Top 3 Price Prediction Bitcoin, Ethereum, XRP: Leading cryptos take the back seat

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  • Bitcoin price may experience constricted trading conditions as capital enters the broader altcoin market.
  • Ethereum price approaches new all-time highs.
  • XRP extends bullish momentum to the fourth consecutive daily close above the open.

Bitcoin price is likely to face some underperformance against Ethereum, XRP, and the broader altcoin market. Ethereum price action pushes higher during the Tuesday trading session, making another attempt at new all-time highs. XRP price is close to recovering all of the losses it sustained on Black Friday.

Bitcoin price action to consolidate in the interim

Bitcoin price is currently in a horrible place from a technical analysis perspective. It is in its twelfth consecutive day trading inside the Cloud. The Cloud (red and green shaded areas) within the Ichimoku Kinko Hyo system is an area of indecision, volatility and frustration. It’s the place where trading accounts go to die. Traders should expect to see sideways activity followed by false breakouts until a clear breakout above or below the Cloud.

BTC/USD Daily Ichimoku Chart

Altcoins should catch a bid throughout December, as Bitcoin trades mostly sideways. A trading range between $53,000 as support and $65,000 as resistance is expected. Any breakout above the Cloud will likely see Bitcoin push new all-time highs near the $77,000 value area.

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Ethereum charges higher towards new all-time highs

Ethereum price has been somewhat of a surprise given the bearish sentiment and exiting the bear channel. Ethereum is currently just $200 shy of hitting the prior all-time high, showing resilience and outperformance of the broader cryptocurrency market. However, some warning signs should be observed.

ETH/USD Daily Ichimoku Chart

Ethereum is trading up against the upper trendline of a bear flag. At the same time, the Composite Index has printed a high above November 9th high while the corresponding price levels on those dates show lower highs. This creates a form of divergence known as hidden bearish divergence. It is a warning sign that the current swing higher may not be as honest of a move as it appears.

If Ethereum fails to close above the $4,600 value area on the daily chart, a pullback to $4,000 is likely.

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XRP price up over 16% from Sunday lows, looks to extend higher

XRP price may be a barometer for how the rest of the altcoin market may behave in December. XRP’s daily Ichimoku chart forms a significant bear trap, which looks very similar to its peers’. Unlike Ethereum’s chart, which shows evidence of overbought conditions, XRP’s chart shows that a bullish extension is very likely to be sustained.

XRP’s behavior over the past two months has been one of epic frustration for bears. There have been nine occasions when XRP has fulfilled all the Ideal Bearish Ichimoku Breakout entry requirements. Unfortunately for the bears, all nine of those occasions have failed to generate any substantive or sustained selling pressure. This repeated failure has undoubtedly trapped a significant number of short-sellers – creating prime conditions for a short squeeze.

XRP/USDT Daily Ichimoku Chart

The critical price level for XRP to close above is the $1.15 value area. From there, XRP price would be positioned in a favorable bullish Ichimoku entry condition that positions XRP towards the $3.00 value area. Down-side risks remain limited to the $0.65 value area. 

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ETH/BTC Ready to Break Higher? Not So Fast, Some Analysts Say

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A much-discussed chart among crypto traders in recent days has been the ethereum (ETH)/bitcoin (BTC) chart, with many claiming it looks primed for a sharp move higher. However, some are still betting on an opposite outcome, with investor demand also indicating stronger appetite for bitcoin.

The potential break-out for ETH has gotten a fresh round of attention following strong outperformance of ETH over BTC during the past week. At 11:57 UTC on Tuesday, ETH was up 11% over the past 7 days, while BTC was up 2.5% over the same time period.

The notable difference in performance came at a time when the stock market has tumbled over renewed coronavirus fears, with the US S&P 500 futures currently down by about 2.9% from its all-time high on Monday last week.

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And as has been pointed out by many in recent weeks, bitcoin is still behaving more like a risk asset that fluctuates with the stock market, than a safe haven hedge like gold. This relationship has once again been demonstrated in recent days, some crypto traders have argued.

The ETH/BTC chart has also been pointed to by Raoul Pal, founder & CEO of Real Vision, who said recently that he sees it as “the most important chart in digital asset markets right now.”

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“A break higher will lead to more risk seeking into year end,” Pal said, suggesting that we may be entering a new bullish period for altcoins.

Source: Raoul Pal via Twitter

However, as usual, not everyone agrees with the narrative that ethereum is about to break higher relative to bitcoin. According to the popular crypto trading educator and Crypto-TA.nl founder Crypto_Ed, the ETH/BTC chart is not breaking out yet, and instead may be looking at a move lower.

“I see many tweeting ETHBTC chart looks so good….. All I see is a rising wedge with bearish divergence and it looks more like it’s gonna break down,” he said, adding that the same also holds true when looking at the same chart with a longer time frame.

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Similar takes were also shared by other traders.

Growing capital flows

According to last week’s Digital Asset Fund Flows report from CoinShares, bitcoin appears to be enjoying greater momentum than ethereum in terms of capital flows into regulated investment vehicles.

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As reported, last week, BTC saw the largest inflows in 5 weeks totaling USD 247m (compared with USD 114m a week earlier) following the launch of another investment product in Europe, they added. ETH saw inflows totaling USD 23m last week, compared with around USD 13m a week earlier. 

MTD – month-to-date; YTD – year-to-date; AUM – assets under management. Source: CoinShares

Moreover, Marcus Sotiriou, a sales trader at the UK-based digital asset broker GlobalBlock, is also demonstrating a bullish stance towards bitcoin.

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“Bitcoin appears to be forming a falling wedge pattern which is historically bullish and has a higher probability of breaking to the upside than the downside,” the trader wrote in an emailed comment, adding:

“If the down trending line of resistance is broken, bitcoin may be on its way to retest the all-time-high as the technical target is around that region.”

At 11:57 UTC, BTC traded at USD 57,600, up 1.4% over the past 24 hours. At the same time, ETH stood at USD 4,581, up 6.3% over the same time period.

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Ethereum Price Analysis: ETH gains 20 percent from the Sunday low, peaks at $4,750?

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  • Ethereum price analysis is bearish for the rest of today.
  • ETH/USD saw further upside above $4,550 previous high.
  • Resistance is currently found at $4,750.

Ethereum price analysis is bearish today as we expect a retracement to follow after a strong spike higher was seen again today. However, ETH/USD bulls are likely exhausted after reaching $4,750, and we can expect a retracement over the next 24 hours.

Ethereum Price Analysis: ETH gains 20 percent from the Sunday low, peaks at $4,750? 1
Cryptocurrency heat map. Source: Coin360

The cryptocurrency market has seen bullish momentum continue today. The market leaders, Bitcoin and Ethereum, have gained 2.45 percent, while Ethereum 8.1 percent. Meanwhile, the rest of the top altcoins follow with similar results.

Ethereum price movement in the last 24 hours: Ethereum retests $4,400 as support, spikes to $4,750

ETH/USD traded in a range of $4,332.10 – $4,753.27, indicating strong volatility over the last 24 hours. Trading volume has increased by 37.24 percent, totaling $26.25 billion, while the total market capitalization trades around $555.6 billion, resulting in a market dominance of 20.73 percent.

ETH/USD 4-hour chart: ETH rejects further upside at $4,750

On the 4-hour chart, we can see the Ethereum price reacting after reaching the $4,750 resistance, likely indicating the end of the current rally.

Ethereum Price Analysis: ETH gains 20 percent from the Sunday low, peaks at $4,750?
ETH/USD 4-hour chart. Source: TradingView

Ethereum price has seen strong bullish momentum return since Sunday. The rally came after a strong drop of almost 15 percent on Friday when Ethereum found support at $3,950 once again. 

From there, consolidation followed until another test of the support was seen late in the weekend. Bulls quickly rejected further downside, leading to a swift rally higher over the next 24 hours.

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By the start of Today, Ethereum price had already cleared past the $4,400 previous resistance. After a slight retracement, another more upside followed Today, leading ETH to a new high at  $4,750.

Ethereum Price Analysis: Conclusion 

Ethereum price analysis is bearish today as we saw strong resistance reached at $4,750 after a 20 percent advance over the past days. Therefore, we assume bulls are exhausted, and ETH/USD should be headed for a retracement later today.

While waiting for Ethereum to move further, see our articles on the Best Crypto Wallet 2021, Decred Wallet, and Ripple vs SEC.

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