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Bitcoin Maturation Means Lower-Volatility Rallies

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During Bitcoin’s recent price rally which saw it climb to an all-time high of almost $67,000, volatility measured over 260 days dropped to around 66.

Volatility has been a part of Bitcoin and the crypto market’s journey since its debut as price swings have over the years defined the status of the digital coin. Bitcoin usually experiences these price swings when new highs are reached, of which this year has been no exception. Despite Bitcoin’s impressive performance this year which saw it touch new highs, it has also experienced one of the wildest volatility phases this year including its 7% price drop within five minutes last week.

However, according to Mike McGlone, a Bloomberg Intelligence commodity strategist, Bitcoin’s price action, this year suggests that the digital coin might have moved past its usual history, especially the market’s four-year crypto cycles as “it appears the gyrations are diminishing if you take a longer view.”

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Mike McGlone attributed his claims to a natural maturation and the influx of institutional adoption, citing the US launch of the first Bitcoin futures exchange-traded funds last month. During the Bitcoin recent price rally which saw it climb to an all-time high of almost $67,000, volatility measured over 260 days dropped to around 66. These levels were unseen since May when Bitcoin dipped under $40,000.

Dan Morehead, CEO and founder of Pantera Capital, also shared the same sentiments last month, stating that he thinks Bitcoin’s extreme volatility could be a thing of the past. Morehead revealed that the previous price cycles that investors have grown accustomed to are over, adding that the market will see less volatility, on both the upside and downside.

Morehead also attributed the change of pattern to the greater institutional adoption in the crypto space. “Deep bear markets like the one in 2018 that saw crypto assets shed over 90% of their value are a thing of our primordial past,” he stated. The Pantera CEO also asserted that investors “probably won’t see any more of the 100x-in-a-year rallies either.”

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“The first halving reduced the supply of new Bitcoin by 15% of the total outstanding Bitcoin. That’s a huge impact on new supply and it had a huge impact on price. Each subsequent halving’s impact on price will likely taper off in importance as the ratio of reduction in the supply of new Bitcoin from previous halvings to the next decreases,” Morehead told reporters.

Bitcoin at press time was trading at $62,100 as bulls are now trying to achieve the third successive weekly close and the first-ever monthly close above the $60,000 barrier. Bitcoin could retest the all-time high ($67,000)  and rally toward the ‘pattern target’ at $89,476 if its price rebounds off the 20-day EMA as bulls will make one final attempt to thrust the pair above the flag. 

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Bitcoin Senator Rallies For Support Against Powell’s Renomination As Federal Reserve Chair, Here’s Why

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Popular Bitcoin Senator, Senator Cynthia Lummis is reportedly soliciting for the support of her fellow Republicans in her stance against Jay Powell after the latter got renominated to chair the Federal Reserve.

Bitcoin Senator Wary of Crypto-unfriendly Nominees

As reported by Decrypt who first broke the news, a source in Lummis’ office says her reasons border on her belief that there is an unlawful treatment of crypto-based institutions in her home state, Wyoming.

Meanwhile, the Bitcoin senator is not only against the nomination of Powell. The source still claims that Senator Lummis is also asking her Republican colleagues to help block Leal Brainard’s nomination as well. Brainard is another nominee of President Biden’s for the Fed positions.

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Lummis’ skepticism might be as a result of the Special Purpose Depository Institutions or SPDIs as they are otherwise called. They are a new type of crypto-based bank that Wyoming lawmakers granted a special operational license to, just last year.

Two crypto-based companies that received the license in 2020 include Kraken exchange and Avanti — the stablecoin issuer. However, the Federal Reserve’s decision to not approve their applications for central bank-issued accounts has placed a hold on their banking ambitions.

Speaking about the Federal Reserve’s delay in a Wall Street Journal feature article by Lummis on Wednesday, she says it is an intentional and unlawful obstruction. She added that the Fed’s reasons are ambiguous at best. According to the Bitcoin Senator, Lummis claimed that the Wyoming entities have met all requirements for being a bank under the Federal Reserve Act.

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Lummis insists that Powell and Brainard are only avoiding their legal obligations in their continued treatment of SPDIs and like many other U.S lawmakers, she wants to know why.

Could Lummis’ Pressure Affect Powell’s Confirmation?

As Lummis continues to apply even more pressure on her colleagues, the possible extent to which this pressure can truly go in affecting the confirmation process of both Powell and Brainard, remains to be seen.

But with the chair of the Senate Banking Committee, Sherrod Brown, reportedly holding a vote on the pair sometime this month, both of them could be confirmed.

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Also, there’s a possibility of a potential tight vote now that some progressive Democrats — most notably Elizabeth Warren — are saying they will not be voting for Powell.

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PlanB’s Floor Model First Miss: Bitcoin Price Closed Way Below $98K In November

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PlanB’s floor model was wrong about BTC’s November closing price. The stock-to-flow model, though, is still on track.

Bitcoin’s closing price for November below $60,000 meant that PlanB’s floor model, which was particularly accurate until now, was finally broken.

At the same time, though, the analyst confirmed that the more popular stock-to-flow model was still valid as BTC is on track towards $100,000.

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PlanB’s Floor Model Fails

PlanB is among the most popular analysts in the cryptocurrency space, predominantly known for the Bitcoin stock-to-flow model, which he published in early 2019. However, he also posted another model, which he referred to as the “worst-case scenario,” in July this year.

Also known as the floor model, it’s based on technical aspects, such as the 200-day moving average, and saw BTC closing August at $47,000, September at $43,000, and October at $63,000.

The first two months were spot on. BTC closed in October at $61,000, which was still very near to the model’s predicted price, and PlanB said it was “good enough” for him.

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However, November’s closing actual closing price of way below $60,000 was quite different from what the model envisioned – $98,000. As such, the analyst admitted that this was the model’s first miss after nailing the previous few months.

S2F on Track

As mentioned above, the floor model works separately from the stock-to-flow model, which sees the stock as the size of existing reserves (or stockpiles) and the flow as the annual supply of new bitcoins to the market.

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It’s actually even more bullish as the original version sees bitcoin tapping $100,000 by the end of the year. The upgraded stock-to-flow cross-asset model, which introduced different phases of bitcoin’s development, predicted a price tag of $288,000 until 2024.

Although bitcoin still struggles below $60,000 at the time of this writing, PlanB believes that the original S2F hasn’t been broken as the asset is on its way towards $100,000. If BTC is indeed to go into a six-digit price territory, it would have to increase its USD value by more than 66% in the next 30 days.

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CashApp Added Bitcoin Taproot Support, Here’s Why It Is Important

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CashApp now supports the updated version of Bitcoin

The widely known Cash App mobile payment service developed by Square, which is being used to transfer money with the usage of a mobile app, now fully supports the Bitcoin taproot update.

The mobile payments service is currently available in the U.S. and the U.K. but is still reporting 70 million annual transactions between users and generating $1.8 billion in gross profit.

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The taproot upgrade was highly anticipated by the Bitcoin network and the cryptocurrency community in general. Previously, the update went into effect on Nov. 14, 2021, at block 709,632.

Previously, the announcement appeared on the app’s website that has described numerous benefits that users will experience after the implementation of the update. One of the main advantages is increased privacy and reduced transaction fees.

The two-week period has been chosen to confirm the functionality of the updated version of the currency. As for now, the update has been activated for all customers. Taproot-enabled wallets are now available for both receiving and sending.

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