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Bitcoin Weekly Forecast: Last call before BTC hits $100,000

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  • Bitcoin price pulls back to confirm the start of an 85% breakout move.
  • On-chain metrics suggest interest in BTC is not waning, and the immediate support levels are stable.
  • Adoption of the pioneer crypto and as an extension, the ecosystem is going splendidly.

Bitcoin price is showing its most bullish pattern in 2021 so far, as it pulls back to support from a prior ceiling level before the next slingshot higher. If successful, this move could put BTC extremely close to a six-digit per coin value.

On-chain metrics are also leaning bullish, with interest from investors increasing at a constant pace. All of this, combined with the more widespread adoption of the big crypto, suggests that the last two months of 2021 and Q1 of 2022, are likely to be a period cryptocurrency enthusiasts will be looking forward to.

Adoption takes on new meaning

One area in which Bitcoin adoption is expanding is as a municipal asset. Miami and its Mayor Francis Suarez are taking Bitcoin adoption to a new level by announcing that every citizen with a digital wallet will earn dividends in BTC. This development comes off the heels of the launch of CityCoin, known as MiamiCoin, in August.

CityCoins give the power back to communities by launching a city’s cryptocurrency token. While Miami launched its coin in August it is not the only city: New York released its own coin “New York Coin” on November 10. 

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Staking MiamiCoin has earned an excess of $21 million in yields, which if yield generation continues at a similar rate, Mayor Suarez believes will enable the city to cover its tax needs. The Mayor further added that all citizens of Miami would be given a generated wallet, which will receive free BTC dividends.

On the adoption side of things, BitWise is optimistic about the approval of a “spot Bitcoin ETF.” Matt Hougan, the CIO at investment company, stated,

Ultimately, what many investors want is a spot Bitcoin ETF. We think that’s possible. So Bitwise will continue to pursue that goal, and we will look for other ways to help investors get access to the incredible opportunities in crypto.

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BitWise dropped out of the Bitcoin futures ETF race because of this reason as it continues to focus on a spot ETF.

While the adoption in the west continues, the Indonesian Ulema Council (MUI) classifies Bitcoin and cryptocurrencies as haram. For the people to be allowed to trade these assets, they have to abide by the Shariah guidelines and show a clear benefit.

Bitcoin price prepares before lift-off

Bitcoin price breached a bullish pennant pattern, signaling a continuation of the 65% uptrend that transpired between September 30 and October 20. The initial leg-up, referred to as the flagpole, was followed by a consolidation that squeezed BTC price together to form a pennant. Together, this technical formation is a bullish pennant, which forecasts a 38% upswing obtained by adding the flagpole’s height to the breakout point at $62,760.

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On November 8, Bitcoin price breached through the pennant, indicating a breakout, but since then, BTC has retraced and is currently aiming to retest the 2-day demand zone, ranging from $60,521 to $63,620. This pullback will allow BTC to build up steam before propelling 38% to $86,836.

On its way to the intended target, Bitcoin price will likely take a break at the 161.8% Fibonacci extension level at $77,908. In some cases, this run-up could extend another 15% to tag the $100,000 psychological level.

BTC/USDT 1-day chart

BTC/USDT 1-day chart

Supporting this bullish outlook for Bitcoin price are the daily active addresses, which are hovering at 958,000. This number has increased steadily by 20% since late July. This climb indicates  that investors are returning to invest in BTC, suggesting a bullish narrative in play.

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BTC DAA chart

BTC DAA chart

The estimated leverage ratio for all exchanges, which shows the extent investors are using leverage in their trades, reached an all-time high of 0.199. Since then it has started to decline and is currently hovering at 0.189, suggesting a reset in the number of leveraged positions. Perhaps, this is due to the November 10 flash crash. However, this development is undoubtedly good for Bitcoin price as it unwinds the market, given it will eventually allow the price to climb higher.

BTC leverage ratio chart

BTC leverage ratio chart

From a short-term perspective, the 30-day Market Value to Realized Value (MVRV) model has reset and is currently displaying 1%. This on-chain metric is used to determine the average profit/loss of investors that purchased BTC over the past month.

The flash crash seems to have reset the metric, suggesting that an upswing is plausible.

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BTC 30-day MVRV chart

BTC 30-day MVRV chart

While things are looking up for Bitcoin price, investors need to note that the Fear and Greed Index shows that there is “Greed” in the market. An increase in this metric that pushes it into the “extreme greed” territory will suggest that another correction might be due.

BTC Fear and Greed Index

BTC Fear and Greed Index

Bitcoin price will probably remain bullish as long as it stays above the 2-day demand zone, extending from $60,521 to $63,620. A breakdown below this area will indicate that the optimistic narrative faces massive overhead pressure and is likely to fail. Confirmation of this will come  from BTC closing below $60,000 on a daily basis.

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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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