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Investments In Bitcoin Rotate From Ethereum Again as BTC Flirts With USD 50K

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Last week ended with “growing investor confidence” across the digital asset market, with bitcoin (BTC) in particular becoming a more favored investment at the expense of ethereum (ETH) once again, per data from cryptoasset management firm CoinShares.

According to the firm’s weekly report on digital asset fund flows, which tracks flows into and out of regulated digital asset funds, bitcoin saw inflows of USD 69m last week. The weekly inflows marked the third consecutive week of positive flows for the asset, after having suffered from “the longest run of outflows on record” earlier this year, the report said.

Meanwhile, ETH funds saw less than one-third of the inflows that bitcoin had, with USD 20m flowing in last week, according to the report. 

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The stronger inflows into bitcoin led to the number one digital asset taking market share from ethereum, CoinShares said, while noting that ethereum’s market share for the investment products covered has fallen from a peak of 28% to 25% last week.

Also, in a week, flows into BTC increased by 38%, while flows into ETH dropped by 45%.

The fund flows tracked by CoinShares are often seen as a proxy for institutional interest in different digital assets, as many financial institutions and traditional investors prefer to hold regulated funds rather than the digital asset itself.

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

In terms of other digital assets, binance coin (BNB) and polkadot (DOT) were the only two that saw outflows, each losing USD 0.8m.

In total, digital asset investment products saw inflows of USD 90m last week, making it the seventh consecutive week of fund inflows for the sector. However, CoinShares also noted that volumes still remain relatively low at USD 2.4bn for the week.

Source: CoinShares

The latest fund flows data marks a change from findings in a report from investment banking giant JP Morgan from two weeks back. In the report, the bank said that prices of regulated bitcoin and ethereum futures on the Chicago Mercantile Exchange (CME) suggests an increasing institutional interest in ethereum at the expense of bitcoin.

Meanwhile, the bitcoin price on Monday and Tuesday continued to strengthen, as it flirted with the psychologically important USD 50,000 mark for the first time since early September. At 09:50 UTC, bitcoin was up by  5% over the past 24 hours to trade at a price of USD 50,078. Ethereum, meanwhile, was up 2% to USD 3,428 over the same time period.

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What’s the effect of Bitcoin realizing gains after 4 months

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Bitcoin hit a new all-time high of $67,276 two days ago and since then, something has changed. There has been a marked difference in investors’ behavior from hours before the ATH and hours after it.

In any case, it is playing in their favor as the profits gained from this will not only benefit long-term holders, but also the market in return.

Bitcoin holders in profit

Following the much-awaited ATH breach, long-term holders’ supply has begun declining to indicate that these holders are distributing.

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Down by 37k in just 3 days, these investors have sold Bitcoin worth over $2.2 billion. 

Bitcoin LTH supply | Source: Glassnode

However, this is not surprising because the market is expecting to sell anyway. This is because for a long time LTHs have been buying into weakness and selling into strength. The distribution we’re seeing right now will mark the return of short-term holders.

Since the May rally, their holdings had been falling. Until now. In the past too, STHs’ holdings only gained strength when LTHs supply went down. And, that is what will happen this time as well.

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Bitcoin LTH-STH supply | Source: Glassnode

So, have LTHs pulled out completely?

Not really. Since the $67.2k all-time high, BTC has fallen by over 8% to trade at around $61k, at press time. Despite that, however, the strength selling continued. This resulted in a bit of the supply being overhead by about 1.59%.

What’s more, as is visible on the illiquid supply shock ratio chart, supply is still continuing to move to on-chain entities. These have projected minimal selling in the past (less than 0.25% of the supply they buy).

What this means is that the market is only experiencing a short-term correction at the moment, while the long-term picture remains intact.

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Bitcoin illiquid supply shock ratio | Source: Glassnode

Plus, the incline of the realized cap is proof that Bitcoin is realizing profits and new inflows are absorbing these gains after declining for almost the entire summer. 

Bitcoin entity adjusted realized cap | Source: Glassnode

Ergo, this move by investors is for the benefit of the market since the hype surrounding the king coin has and will continue to bring in new investors.

And, the more supply LTHs distribute, the more they will realize profits and the chances of long-term holders increasing will improve. This will result in the market strengthening further. 

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Bitcoin decides fate of $60K as weekly close keeps BTC traders on their toes

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Bitcoin (BTC) is lining up a crucial weekly support test on Oct. 23 after impulsive sellers moved large amounts of BTC to major exchange Binance.

BTC/USD 1-hour candle chart (Bitstamp). Source: TradingView

BTC dices with $60,000

BTC/USD is keeping traders nervous into Saturday, data from Cointelegraph Markets Pro and TradingView shows, deciding on the fate of $60,000 support.

The level had proven the first major area of buyer interest overnight after old all-time highs at $64,900 failed to prop up the market.

While analysts remain bullish on longer timeframes, the comedown is creating an interesting close to the current weekly candle.

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For Cointelegraph contributor Michaël van de Poppe, however, called the correction “fine” and maintained his prognosis of a macro price top of as much as $300,000.

Elsewhere, a popular theory revolves around a structured flushing out of overleveraged traders, these having pushed up funding rates to classic unsustainable levels during the run to $67,100 all-time highs.

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Front-running the United States’ first Bitcoin ETF is likewise still a major topic of debate, as noted by popular Twitter account BitBit.

Binance reserves shoot higher

While exchange balances broadly continue to trend lower, meanwhile, Binance has seen a dramatic uptick in its reserves in recent days.

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Related: Price analysis 10/22: BTC, ETH, BNB, ADA, XRP, SOL, DOT, DOGE, LUNA, UNI

According to data from statistics resource Bybt, these increased by over 50,000 BTC to near 400,000 BTC as of Friday.

Bitcoin balance on Binance. Source: Bybt

Exchange reserve upticks tend to signify a desire to sell or have BTC available to sell at short notice.

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Bitcoin Price Correction is Not Over !! BTC Price Can Drop To This Level!

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After reaching ATH, Bitcoin price has entered the correction phase. In the past 24 hours, the flagship currency plunged hard and dropped below $60,000. Meanwhile, Most altcoins followed suit, and the overall crypto market cap lost more than $150 billion since its peak earlier this week.

Bitcoin Price Enters Correction Phase !

As you can see in the chart, Bitcoin should test the resistance at $63,500k. On a successful breakout, the BTC bulls may possibly aim for a new all-time high.

On the downside, initial support is near $60,200. If Bitcoin price fails to hold above this level then the second support level at $58,800. 

The daily chart remains positive with support of around $59.6k, which would place it back into the middle of the strong uptrend that dominated price action since early October. A period of sideways consolidation should set Bitcoin up for a renewed move higher.

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Analyst Expects Bitcoin Price To drop at  $57,000 level ! 

In a recent video, Popular crypto analyst and trader Michaël van de Poppe tells his 136,000 YouTube subscribers that the current Bitcoin correction is likely not yet over. 

Based on Fibonacci levels, the previous high/low and Pivot targets to watch lie near $57,000.

Poppe Believes That  “This Entire Range ($57,000 -$59,000) That We’ve Got Here Is Actually The Area That I Want To See Sustained In Order To Keep The Momentum Going.

Once BTC is out of the correction phase, analysts expect a BTC price surge between 25%-50% once BTC regains its bullish momentum. As per the daily time frame, BTC price could still run all the way towards $75,000 with minor bearish divergence and a slight reversal. The Next Rally will most likely take the BTC price towards the $90,000 level. 

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