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Retail boosts purchases of Bitcoin and dollar can reach R$7, according to analysis – Market Summary

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This Monday (22), Bitcoin (BTC) remains below US$ 60,000. While retail investors boost bitcoin purchases in the Brazilian market, the dollar is more likely to hit the record level of R$7 than return to R$5, according to analysts.

After the positive weekend, check out today’s Market Summary bitcoin being rejected at $60,000 and dropping to $57,327. Most altcoins are also trading in the red, except for CRO and Elrond – understand why these currencies have soared in the last few hours.

Retail investors drive bitcoin purchases

After several consecutive days of loss, in which bitcoin (BTC) dropped 20% from its peak price to about $56,000, the asset finally began to rally over the weekend, according to CoinGoLive.

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The currency dump is being influenced by long-term investors (LTH) – or diamond hands, which according to analysts Glassnode, have already entered a moderate phase of profit-taking. This causes downward pressure on prices.

Meanwhile, retail investors, with less than 1 BTC, are currently in an intensive phase of buying, “which ensures that the current correction is not the beginning of a bear market, but a consolidation”, says Willy Woo in your latest marketing newsletter.

In the chart below, the blue circles represent purchases by retailers (small investors). There has been an intensification of purchases by this group in recent days.

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On the other hand, long-term holders also kept buying bitcoins, although some of them participated in BTC sales.

retail investors drive Bitcoin purchases
Thermal map of trading of holders with less than 1 BTC – Source: wobull.com

At this time, the largest cryptocurrency by market capitalization is traded at US$57,471 – R$321,705 on major Brazilian brokers; its market capitalization has dropped to $1.08 trillion and also its dominance over altcoins is between 40%.

Coalition presidentialism creates demand for public spending as a bargaining chip for support

A point to be considered in any analysis of the fiscal issue in Brazil is the nature of our political system, which led to the creation of a parliament with a strong populist bias and which operates what we call Coalition Presidentialism.

In this system, it is very difficult to form a stable political base in Congress, since the strength of small parties, without ideology and dependent on punctual government actions for the benefit of their members, creates an almost autonomous demand for public spending as a currency. exchange of political support for the government on duty.

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The concern with the sustainability of public accounts is part of the economic debate in Brazil, especially after the 1998 Constitution established a series of new social programs, including the establishment of labor and social security rules.

Read too: Who will pierce the ceiling first: Bitcoin or Bolsonaro?

If public spending is a bargaining chip, as the elections get closer, it can become the “hole in the ceiling”. In an analysis of Brazil, the American bank Wells Fargo assesses that the Brazilian currency – which has gained strength in recent weeks – tends to weaken.

“Although the fiscal rule may be intact for the time being, we continue to believe Bolsonaro will seek to further improve cash transfers as the elections approach.”

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“As Brazil’s debt and fiscal trajectory worsens over time, we believe financial market sentiment could turn negative towards Brazil and the Brazilian real,” economists say.
They point out, in a report obtained by Cointimes, that the currency has more chances of going to the record level of R$7 than returning to R$5. At this moment, the foreign currency is traded at R$5.60.

CRO and Elrond (EGLD) fire

Most alternative currencies mimicked the performance of the BTC over the past few days, meaning they are slightly down today. Ethereum (ETH) was above $4,350 yesterday, but a 3% decline took it back to around $4,200.

Crypto.com’s native token also reached a new record, above $0.7, after jumping more than 50% in one week. That’s because the company has just launched a credit card for cryptocurrencies in Brazil and abroad in the US, now the iconic Staples Center stadium in Los Angeles, is called Crypto.Com Arena.

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Read too: Time to sell? Brokerage cryptocurrency with 500% potential can correct in the short term

Elrond (EGLD) soared 23% and also set a new price record. The institutional-grade, high-yield, eco-smart contract platform announced the launch of the largest DeFi incentive program to date, worth $1.29 billion.

Notably, the liquidity incentive program will be used on the Elrond-based DeFi Maiar DEX platform and indicates the project’s commitment to making DeFi a mainstream phenomenon.

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The result of the main altcoins in the last 24 hours is as follows: Ethereum (-3.17%), Binance Coin (-2.13%), Solana (+3.67%), Cardano (-3.08%), Ripple (-3.11%), Polkadot (-3.41%), Avalanche (+1.01%), Dogecoin (-2.59%), Shiba Inu (-2.05%) and Crypto.com ( +3.84%).

According to CoinGoLive, the market capitalization of all crypto assets is around $2.69 trillion as of this Monday.

Follow the crypto market news on the Cointimes Telegram group (log in) and have a great day of trading.

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Wen moon? Data shows pro traders becoming more bullish on Bitcoin price

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MicroStrategy’s purchase of 7,002 BTC might have helped boost Bitcoin price today, but derivatives data also shows that pro traders are becoming more bullish.

The $4,700 Bitcoin (BTC) price spike on Nov. 29 was likely a great relief for holders, but it seems premature to call the bottom according to derivative metrics. 

This should not come as a surprise because Bitcoin price is still 15% below the $69,000 all-time high set on Nov. 10. Just 15 days later, the cryptocurrency was testing the $53,500 support after an abrupt 22% correction.

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Today’s trend reversal was possibly encouraged by MicroStrategy’s announcement that it had acquired 7,002 Bitcoin on Monday at an average price of $59,187 per coin. The listed company raised money by selling 571,001 shares between Oct. 1 and Nov. 29, raising a total of $414.4 million in cash.

More bullish news came after German stock market operator Deutsche Boerse announced the listing of the Invesco Physical Bitcoin exchange-traded note or ETN. The new product will trade under the ticker BTIC on Deutsche Boerse’s Xetra digital stock exchange.

Data shows pro traders are still neutral-to-bullish

To understand how bullish or bearish professional traders are positioned, one should analyze the futures basis rate. That indicator is also known as the futures premium, and it measures the difference between futures contracts and the current spot market at regular exchanges.

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Bitcoin’s quarterly futures are the preferred instruments of whales and arbitrage desks. Even though derivatives might seem complicated for retail traders due to their settlement date and price difference from spot markets, the most notorious benefit is the lack of a fluctuating funding rate.

Bitcoin 3-month futures basis rate. Source: Laevitas.ch
The three-month futures typically trade with a 5%–15% annualized premium, which is deemed an opportunity cost for arbitrage trading. By postponing settlement, sellers demand a higher price and this causes the price difference.

Notice the 9% bottom on Nov. 27, as Bitcoin tested the $56,500 support. Then, after Monday’s rally above $58,000, the indicator shifted back to a healthy 12%. Even with this movement, there is no sign of excitement, but none of the past few weeks could be described as a bearish period.

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Lending markets provide additional insight

Margin trading allows investors to borrow cryptocurrency to leverage their trading position, therefore increasing the returns. For example, one can buy Bitcoin by borrowing Tether (USDT), thus increasing the exposure. On the other hand, borrowing Bitcoin can only be used to short it or bet on the price decrease.

Unlike futures contracts, the balance between margin longs and shorts isn’t necessarily matched.

OKEx USDT/BTC margin lending ratio. Source: OKEx

When the margin lending ratio is high, it indicates that the market is bullish—the opposite, a low lending ratio signals that the market is bearish.

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The chart above shows that traders have been borrowing more Bitcoin recently, because the ratio decreased from 21.9 on Nov. 26 to the current 11.3. However, the data leans bullish in absolute terms because the indicator favors stablecoin borrowing by a wide margin.

Derivatives data shows zero excitement from pro traders even as Bitcoin gained 9% from the $53,400 low on Nov. 28. Unlike retail traders, these experienced whales avoid FOMO, although the margin lending indicator shows signs of excessive optimism.

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Bitcoin, Ethereum and Two Smart Contract Competitors Are the Winners Among Institutional Investors, According to Crypto Asset Manager CoinShares

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Leading digital asset manager CoinShares says institutional investors have a strong appetite for Bitcoin (BTC) and three leading smart contract platforms.

According to the firm, the overall crypto market correction has left investors hungry for more.

“Digital asset investment products saw inflows of US$306m last week suggesting [a] continued appetite for digital assets.”

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As usual, BTC led all digital assets in terms of capital inflows, this time in the wake of a new exchange-traded product (ETP) set to launch on the Deutsche Borse exchange.

“Bitcoin saw the largest inflows in 5 weeks totaling US$247m following the launch of another investment product in Europe. This brings the 11 week run of inflows to US$2.7bn.”

BTC is trading at $58,475 at time of writing, up nearly 6% on the day.

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The leading smart contract platform Ethereum (ETH) concluded a strong month of inflows with a week totaling over $23 million.

“Ethereum saw inflows totaling US$23m last week, marking its 5th consecutive week of inflows.”

This week’s big winners in inflows relative to assets under management (AuM) also include the scalable smart contract platform Solana (SOL) and the interoperable blockchain Polkadot, which is designed to support multiple layer-1 smart contract protocols.

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“In terms of inflows relative to AuM, Polkadot and Solana continue to be the winners, with inflows representing 8.6% (US$11.5m) and 5.9% (US$14.6m) of AuM respectively last week.”

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Source: CoinShares

Ethereum is currently trading at $4,453.79, up 7.5% in the last 24 hours. SOL and DOT are trading at $211.48 and $36.82, respectively, at time of writing.

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Nayib Bukele sends cryptic response to Bank of England over Bitcoin law criticism

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  • Nayib Bukele questions England love for El Salvador over Bitcoin adoption.
  • England expreses concern over El Salvador Bitcoin law.
  • Outside England IMF also criticized El Salvador over Bitcoin law.

After he expressed concerns over Bitcoin adoption in the country, El Salvador President Nayib Bukele has sent a cryptic response to the Governor of the Bank of England, Andrew Bailey.

Over the weekend, Bailey said he is not a fan of bitcoin or its growing adoption in countries like El Salvador. He expressed concerns while speaking at Cambridge University, asking if Salvadorians are aware of Bitcoin’s volatility.

“It concerns me that a country would choose it as its national currency,” Bailey said in response to a question at an appearance at the Cambridge University student union on Thursday. “What would worry me most of all is, do the citizens of El Salvador understand the nature and volatility of the currency they have.”

Bank of England is not the only international body to express concerns over Bitcoin adoption by El Salvador. Since June, when the Central American country announced its Bitcoin intention, numerous global financial organizations have tried to warn the country not to do it.

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Outside the Bank of England, the IMF also criticized the move by the country.

Nayib Bukele’s cryptic, Ironic response

While addressing Bailey’s most recent comments, President Bukele responded in a tweet pointing at the “genuine” concerns that the BOE has for the people of El Salvador.

“Bank of England is “worried about El Salvador’s adoption of Bitcoin? Really?

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I guess the Bank of England’s interest in the well-being of our people is genuine. Right?

I mean, they have always cared about our people. Always.

Gotta love Bank of England,” he wrote.

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El Salvador adopted Bitcoin as its legal tender months back, and according to Nayib Bukele, there has been progress since the country made the move.

For instance, the nation has used the aforementioned volatility, especially when the price dips, to accumulate more portions of the asset and to use the profits when the price increases to make plans for buying pet hospitals or new schools.

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El Salvador adopted Bitcoin as its legal tender months back, and according to Nayib Bukele, there has been progress since the country made the move.

For instance, the nation has used the aforementioned volatility, especially when the price dips, to accumulate more portions of the asset and to use the profits when the price increases to make plans for buying pet hospitals or new schools.

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