Increasing stock market volatility drags Bitcoin and altcoin prices lower

Increasing stock market volatility drags Bitcoin and altcoin prices lower

Increasing stock market volatility drags Bitcoin and altcoin prices lower

The cryptocurrency market faced another day of downward pressure as the unease in the traditional markets continues to spread following the recent interest rate spike on the 10-year U.S. Treasury bond. 

Data from Cointelegraph Markets and TradingView shows that the price of Bitcoin (BTC) fell to a low at $44,710 late on Feb. 25 before buying at the key support returned to help the digital asset recover back above $46,500 but generally, analysts are looking for $50,000 to become an established support before expecting bullish continuation.

Increasing stock market volatility drags Bitcoin and altcoin prices lower
BTC/USDT 4-hour chart. Source: TradingView

Despite major BTC purchases by MicroStrategy, Tesla and MassMutual, a majority of institutional investors still have security and tax treatment concerns that prevent them from investing in Bitcoin, according to Galaxy Digital co-president Damien Vanderwilt.

Institutional investment has been a significant source of optimism in the cryptocurrency sector in 2021, but its influence in helping BTC reach a market cap of $1 trillion may be overstated as recent analysis shows that stablecoin whales and retail traders still hold the most buying power.

Interest rate increase puts pressure on GBTC

On Feb. 25, the interest rate for the 10-year U.S. Treasury spiked to 1.52%, its highest level in over a year.

According to Chad Steinglass, Head of Trading at CrossTower, the move led to market-wide pressure that pushed the “GBTC premium down as low as negative 6% and it closed around negative 2% today.” The analyst sees interest rate volatility as a major source of market volatility, as the long end of the curve steepens while the U.S. dollar is pushed lower.

Increasing stock market volatility drags Bitcoin and altcoin prices lower
Daily cryptocurrency market performance. Source: Coin360

Cryptocurrencies fell under increased pressures as equity markets deteriorated throughout the day, possibly due to a “scramble for liquidity” resulting from traders “pushing up against margin calls and needing to free up cash.”

Steinglass said:

“I interpret the GBTC premium collapse as a sign that either retail is dumping to free liquidity, or large fund holders like ARKW are seeing outflows, which causes them to sell GBTC along with everything else.”

Traditional markets are still choppy

The 10-year Treasury yield pulled back .0582 basis points to 1.46 on Feb. 26, marking a 3.82% decrease from its high on the previous day. This leadi to a choppy day in the markets which saw the major indices close mixed.

The NASDAQ finished the day up 0.56%, recovering some of its losses from the 3.5% drop on Feb. 25. Meanwhile, the S&P 500 and DOW finished the day in the red, down 0.48% and 1.51% respectively.

A majority of the top cryptocurrencies also took on sharp losses on Friday, with the exception of Cardano (ADA), which became the third-ranked cryptocurrency by market cap after its price broke out to a new all-time high at $1.29. The current excitement for the altcoin appears to be connected to the upcoming ‘Mary’ mainnet launch scheduled for March 1.

Increasing stock market volatility drags Bitcoin and altcoin prices lower
ADA/USDT 4-hour chart. Source: TradingView

Basic Attention Token (BAT) has also battled back against the market sell-off to post a 6.43% gain following the Feb. 23 announcement of the upcoming Brave Decentralized Exchange (DEX).

Ether (ETH) price is down 7.19%  and trading below $1,500, while Binance Coin (BNB) has dropped 8.36% to $224.14

The overall cryptocurrency market cap now stands at $1.533 trillion and Bitcoin’s dominance rate is 61.3%.

Title: Increasing stock market volatility drags Bitcoin and altcoin prices lower
Sourced From: cointelegraph.com/news/increasing-stock-market-volatility-drags-bitcoin-and-altcoin-prices-lower
Published Date: Fri, 26 Feb 2021 23:02:39 +0000

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Increasing stock market volatility drags Bitcoin and altcoin prices lower

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Bitcoin price ‘macro top’? Not so fast — data shows the real FOMO isn’t even here

Bitcoin price ‘macro top’? Not so fast — data shows the real FOMO isn’t even here

Bitcoin price 'macro top'? Not so fast — data shows the real FOMO isn't even here

Bitcoin (BTC) bears thinking that $58,000 was this cycle’s top will be sorely disappointed, fresh investment data from past bull markets shows.

Compiled by on-chain analytics resource Whalemap, statistics covering BTC buys of between $5 million and $7 million conclude that even at recent all-time highs, Bitcoin was far from a “macro top.”

“No FOMO in sight” for BTC

During the 2017 and shorter 2019 bull market, Bitcoin saw mass buy-ins of a similar size — $5-7 million. 

When investments of that amount hit a peak, price action began to reverse, signalling the start of consolidation or a heavier retracement. 

According to Whalemap, cash injections in that area have been far from their previous peaks this year, indicating that the current correction will likely be temporary and on par with BTC’s typical corrections during a bull run.

“Previous macro tops have occurred when thousands of transactions worth 5 to 7 million dollars each were flooding the blockchain. True FOMO,” researchers tweeted on Feb. 25.

“Currently, no such FOMO in sight for BTC.”
Bitcoin price 'macro top'? Not so fast — data shows the real FOMO isn't even here
Bitcoin $5-7 million transaction volume vs. BTC/USD chart. Source: Whalemap/ Twitter

The expectation of further buy-ins supports existing data that came to light this week, notably from Coinbase Pro, which has seen multiple tranches of over 10,000 BTC leave its books for private or custody wallets.

The first negative premium on the Grayscale Bitcoin Trust (GBTC) since early 2017 may also point to the conclusion that the 2021 bull cycle still has a lot more room to run.

“Another significant Coinbase outflows at 48k. US institutional investors are still buying $BTC,” Ki Young Ju, CEO of fellow monitoring resource CryptoQuant, tweeted on Friday.

“I think the major reason for this drop is the jittering macro environment like the 10-year Treasury note, not whale deposits, miner selling, and lack of institutional demand.”

Liquidity grab?

The start of the turnaround maybe sooner than many think. In his latest analysis, pseudonymous cryptocurrency trader Rekt Capital eyed the 4-hour BTC/USD chart for proof of a turnaround.

“Pulls back but still holds the wick-to-wick Higher Low. Turn $46720 in to support (black) and BTC will move higher. Strong bullish divergences on the 4HR are appearing as well,” he commented alongside an annotated screenshot of the chart.

Bitcoin price 'macro top'? Not so fast — data shows the real FOMO isn't even here
BTC/USD 4-hour candle chart. Source: Rekt Capital/ Twitter

Speaking to Cointelegraph, the Whalemap team noted that short-term the spent output profit ratio (SOPR) — which tracks overall market profit and loss — was indicating that a deeper sell-off is off the cards, at least for now.

“Hourly SOPR shows potential for at least a short term bounce,” they said.

Bitcoin price 'macro top'? Not so fast — data shows the real FOMO isn't even here
BTC/USD SOPR chart. Source: Whalemap

Friday further sees a major expiry event on Bitcoin options, something which has dictated temporary downward pressure on BTC in the past. 

The day’s low of $44,150, some say, was merely an attempt to suck up liquidity before the next leg higher.

“Yes, market dumped after ‘mega-whales’ sold into the rally (as warned), but since then, they have been buying dips!” the creator of exchange orderbook data analysis service Material Indicators observed.

“With stonks uncertainty, I don’t know how many more dips there will be, but they’re being bought!”

That “uncertainty” is being exacerbated by concerning trends in bond yields, Cointelegraph reported this week, with behavior seen as similar to before the Global Financial Crisis of 2008.

Title: Bitcoin price ‘macro top’? Not so fast — data shows the real FOMO isn’t even here
Sourced From: cointelegraph.com/news/bitcoin-price-macro-top-not-so-fast-data-shows-the-real-fomo-isn-t-even-here
Published Date: Fri, 26 Feb 2021 12:04:10 +0000

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Bitcoin price ‘macro top’? Not so fast — data shows the real FOMO isn’t even here

Why is Bitcoin $86K in Nigeria? Here’s why the BTC premium is huge in some countries

Why is Bitcoin $86K in Nigeria? Here’s why the BTC premium is huge in some countries

Why is Bitcoin $86K in Nigeria? Here's why the BTC premium is huge in some countries

Since the start of 2021, Bitcoin (BTC) price has been chasing new highs on a weekly and daily basis. On Feb. 21, BTC reached a new all-time high at $58,300. However, an interesting phenomenon is that even with many global cryptocurrency exchanges in existence, BTC’s price can still vary greatly depending on geography.

This raises an intriguing question. How can Bitcoin price simultaneously trade at $53,047 in Malaysia, $49,727 in Singapore, $51,133 in India, and over $86,000 in Nigeria? Is the reason simply a temporary imbalance between buyers and sellers, taxes, regulations? Or is there something else at play?

As shown in the chart below, there really isn’t a set price for BTC as nearly every country has its own digital asset valuation.

Why is Bitcoin $86K in Nigeria? Here's why the BTC premium is huge in some countries
Bitcoin price premiums. Source: bitcoinpricemap.com

At any given time, cryptocurrency prices will differ between countries, even after adjusting the currency rate. Indeed, some additional buying or selling pressure could create discrepancies, but that should not be continuous and steady.

What’s causing the huge BTC price discrepancies?

This phenomenon isn’t something new or exclusive to cryptocurrencies, however. Exxon Mobil stocks, for example, are traded in the United States, Russia, Argentina, Germany, Mexico, and Switzerland markets.

While there may be different reasons for the friction including bureaucracy and nation-specific laws, they’re basically the same asset. Nevertheless, their prices usually differ after adjusting for currency exchange rates.

Unlike stocks, however, transferring cryptocurrencies usually takes less than an hour, and it doesn’t depend on custodians and depositary receipt administrators. Therefore, bureaucracy can not be the reason for the big price differences for Bitcoin, which is borderless.

On the other hand, suppose one just bought BTC in the U.S. or Europe and is willing to sell it in Argentina to profit from the 6.5% difference. Even if there were no trading fees involved, the result would be the local currency, Argentine Pesos ARS.

Things get more complicated though, as one will need to convert this fiat money back to USD or EUR. There might be domestic restrictions, taxes, or even worse, a different currency rate for foreigners. Moreover, traditional currency remittances don’t take place on weekends and usually take one or two business days.

Why is Bitcoin $86K in Nigeria? Here's why the BTC premium is huge in some countries
2020 index of economic freedom. Source: heritage.org

Not surprisingly, the countries with the highest BTC valuations consistently score low on investment and financial freedom global rankings. Barriers and taxes created by strict government controls translate into additional risks and costs for the fiat conversion and remittance. This all contributes to the premium seen versus the remaining countries.

Government action might create extreme situations

Extreme capital control situations such as the Nigeria Central Bank recently shutting down all cryptocurrency-related bank accounts could be behind the current 70% premium versus global BTC markets. But Nigeria likely has the highest premium in the world because this country, in particular, is also the leader when it comes to Bitcoin adoption, based on the latest data. 

#Bitcoin Price is now $80,000 in Nigeria – a 60% premium.

That’s what happens when you try to ban something people want.

— Bitcoin Archive (@BTC_Archive) February 18, 2021

Eventually, arbitrage traders will find a solution to bypass sanctions, and the price gap should tighten. But right now, there is no effective way to “profit” from the arbitrage.

For those wondering what would cause Bitcoin to trade below most liquid markets such as the U.S., there is no definitive answer. It is most likely some regulatory hurdle for depositing fiat money on local exchanges, thus creating an imbalance favoring the sell-side.

The negative premium is less common, however, and stablecoins could be used to mitigate this effect. Meanwhile, when a hefty premium is seen in local fiat currency, it does not justify a similar price gap for dollar-denominated stablecoin trading.

Thus, such differences in pricing across various countries represent the risks, red tape, taxes, and inefficiencies of converting fiat between currencies and sending fiat money across borders.

author and do not necessarily reflect the views of Cointelegraph. Every investment and trading move involves risk. You should conduct your own research when making a decision.

Title: Why is Bitcoin $86K in Nigeria? Here’s why the BTC premium is huge in some countries
Sourced From: cointelegraph.com/news/why-is-bitcoin-86k-in-nigeria-here-s-why-the-btc-premium-is-huge-in-some-countries
Published Date: Fri, 26 Feb 2021 13:30:00 +0000

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Why is Bitcoin $86K in Nigeria? Here’s why the BTC premium is huge in some countries

Exchange listings and NFT boom back Enjin’s (ENJ) 52% rally to a new high

Exchange listings and NFT boom back Enjin’s (ENJ) 52% rally to a new high

Exchange listings and NFT boom back Enjin’s (ENJ) 52% rally to a new high

Nonfungible tokens (NFTs) are rapidly becoming a focal point of the cryptocurrency market, as evidenced by stories of millions of dollars being raised in minutes for one-of-a-kind tokenized art pieces and rare collectibles that traders rush to get their hands on. 

One project that has been benefiting greatly from the resurgence of NFTs is Enjin Coin (ENJ), which broke out to a new all-time high of $0.67 on Feb. 25 following its listing on the Crypto.com exchange as well as the launch of spot and perpetual futures trading on FTX.

Data from Cointelegraph Markets and TradingView shows that ENJ rose 52% from a low of $0.438 on Feb. 24 to a new high of $0.67 before experiencing a pullback to its current price of $0.611.

Exchange listings and NFT boom back Enjin’s (ENJ) 52% rally to a new high
ENJ/USDT 4-hour chart. Source: TradingView

A scroll through the project’s Twitter feed details numerous recent partnerships and integrations that have helped fuel Enjin Coin’s price rise.

Minecraft is one of the most notable integrations for the Enjin ecosystem, and users are able to earn special NFTs that unlock secret games inside the video game series.

The platform has also benefited from joining forces with the growing ecosystem of the Binance Smart Chain (BSC), which has launched an NFT educational campaign that Enjin will be part of.

VORTECS™ data from Cointelegraph Markets Pro began to detect a bullish outlook for ENJ on Feb. 24, several hours before today’s price rise.

The VORTECS™ score, exclusive to Cointelegraph, is an algorithmic comparison of the historic and current market conditions derived from a combination of data points including market sentiment, trading volume, recent price movements and Twitter activity.

Exchange listings and NFT boom back Enjin’s (ENJ) 52% rally to a new high
VORTECS™ Score (green) vs. ENJ price. Source: Cointelegraph Markets Pro

As seen on the chart above, the VORTECS™ score for ENJ reached a high of 70 on Feb. 24, shortly before the price began to spike to a new all-time high on Feb. 25.

The growing popularity of the NFT space, along with numerous big-name partnerships has Enjin well-positioned as the current bull market cycle progresses into 2021.

Its recent integration with BSC provides a way to escape high fees on the Ethereum network and could bring a new wave of activity to the Enjin ecosystem.

Title: Exchange listings and NFT boom back Enjin’s (ENJ) 52% rally to a new high
Sourced From: cointelegraph.com/news/exchange-listings-and-nft-boom-back-enjin-s-enj-52-rally-to-a-new-high
Published Date: Thu, 25 Feb 2021 21:00:00 +0000

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Exchange listings and NFT boom back Enjin’s (ENJ) 52% rally to a new high

Soaring Treasury yields are worrying economists — But what does this mean for Bitcoin?

Soaring Treasury yields are worrying economists — But what does this mean for Bitcoin?

Soaring Treasury yields are worrying economists — But what does this mean for Bitcoin?

This week’s correction in the price of Bitcoin (BTC) showed that a market doesn’t go up in a straight line. Meanwhile, another topic has been gaining attention, namely the big rise in the 10-year yields of United States government bonds. 

In recent weeks, the 10-year Treasury yield of U.S. government bonds has surged 35% to a new high of 1.44%, the highest point since the cross-asset crash in March 2020.

Treasury yield bounces from a 60-year low

Soaring Treasury yields are worrying economists — But what does this mean for Bitcoin?
U.S. 10-year yield 1-week candle chart. Source: TradingView

The 10-year Treasury yield has been accelerating massively in recent weeks, similar to the run-up to the economic downturns in 2000 and 2008. Hence, rising yields are typically considered a signal of weakness for the economy and can have a big impact across many markets.

As the yields increase, governments must pay more for their underlying government bonds. This combined with the current economic conditions of the post-COVID-19 era and record national debt are factors that are unsurprisingly worrying economists. 

However, looking at the chart above from a technical perspective, this entire run can still be considered as a simple bearish retest of the previous support level.

Such an example is shown by the previous attempt to test the resistance above. This could be happening here as well, where the rates will then drop back down from the 1.53% level. But it is important to keep an eye on this level because breaking through it can have a major impact on the markets.

The government bond yields also have an impact on mortgage markets. Given that the real estate market is massively overheated at the moment, with people taking on massive debt to purchase homes, an increase in interest rates could pop this entire bubble, similar to what happened in 2008.

However, yields also impact other markets, as gold often reacts to these moves as well. But is this time different? And how will Bitcoin respond to these potential macroeconomic shocks?

weakening dollar vs. Bitcoin

Soaring Treasury yields are worrying economists — But what does this mean for Bitcoin?
U.S. dollar currency index 3-day chart. Source: TradingView

The U.S. dollar currency index (DXY) index continues to show weakness as yields are rising, which is generally good news for Bitcoin bulls. This suggests that investors are fleeing the dollar toward higher risk, higher reward investments, such as Bitcoin.

However, from a technical perspective, the DXY saw a bearish retest at 91.50 points, followed by more downside for the dollar, as seen in the chart above. Now, a retest of the 90 points level is underway, with the primary question being whether this level will hold as support.

Soaring Treasury yields are worrying economists — But what does this mean for Bitcoin?
BTC/USD vs. DXY. Source: TradingView

Nevertheless, it’s debatable whether the rise in yields is having any direct effect on the price of Bitcoin, particularly in recent days. Meanwhile, the DXY has often been inversely correlated with the price of Bitcoin, though this has been decreasing in recent months (see below).

Soaring Treasury yields are worrying economists — But what does this mean for Bitcoin?
BTC rolling 90-day correlation vs. USD, VIX, Gold and S&P 500. Source: Digital Assets Data

After the crash in March 2020, this inverse relationship grew stronger until September 2020, as a weakening dollar was accompanied by a major increase in BTC price.

Of course, assets are only correlated until they aren’t, and many other factors can have a much bigger impact on BTC in the short term — for example, miners or whales selling Bitcoin, government regulations, etc. 

Why is gold showing weakness?

Soaring Treasury yields are worrying economists — But what does this mean for Bitcoin?
Gold 3-day chart. Source: TradingView

The 3-day chart for gold’s price shows a clear-cut correction since August 2020. More importantly, the increase in yields and the weaker dollar have not impacted the gold market as much as Bitcoin’s market.

Even with the recent surge in yields, people are not buying gold. In fact, an increase in yields has historically not benefitted gold — at least not in the short term — because higher yields would make government bonds more attractive for funds to hold for settlement and as a risk-off asset in their portfolios.

When yields continue rising toward higher levels, however, the uncertainty surrounding the economy also increases, and investors typically begin to shift from the dollar to gold as a safe haven. This was seen in the 1980s when yields ran toward 14% and gold also spiked to new all-time highs.

BTC has become increasingly important in macroeconomics

In the current state, however, falling gold prices may simply be an immediate reaction to the increase in yields in general. However, another possibility is that an increasing number of investors are opting for “digital gold” instead of the precious metal, not only because of the higher upside potential — i.e., risk-reward — but also because these positions can be liquidated much easier.

But another possibility is that an increasing number of investors are preferring “digital gold” to the precious metal — not only because of the higher upside potential but also because these positions can be liquidated much easier on digital trading platforms.

11 August 2020, dotted blue line, US corporations led by $MSTR begin buying #bitcoin as a treasury asset. pic.twitter.com/LEMNzwqQru

— Willy Woo (@woonomic) February 25, 2021

Today, the market capitalization of Bitcoin is still only 7% to 10% of gold’s, which highlights this massive upside potential.

Therefore, the macro conclusion that can be drawn is that the markets are becoming increasingly uncertain about the economy’s and the dollar’s future, as exemplified by the rising 10-year Treasury yields. However, it’s still too early to write off the recent correction in BTC price to this macroeconomic development, as multiple other variables are at play.

Ultimately, the rising yields and a weakening dollar are exciting developments to keep an eye on moving forward. With Bitcoin becoming an increasingly important player in the macroeconomic environment, strategists at JPMorgan Chase, for example, believe BTC may continue to eat away at gold’s market share. This will likely result in an even higher valuation for Bitcoin, particularly in the event of another economic crisis at the expense of gold.

In December 2020, JPMorgan strategists noted:

“The adoption of bitcoin by institutional investors has only begun, while for gold, its adoption by institutional investors is very advanced. If this medium to longer-term thesis proves right, the price of gold would suffer from a structural headwind over the coming years.”

author and do not necessarily reflect the views of Cointelegraph. Every investment and trading move involves risk. You should conduct your own research when making a decision.

Title: Soaring Treasury yields are worrying economists — But what does this mean for Bitcoin?
Sourced From: cointelegraph.com/news/soaring-treasury-yields-are-worrying-economists-but-what-does-this-mean-for-bitcoin
Published Date: Thu, 25 Feb 2021 15:00:00 +0000

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Soaring Treasury yields are worrying economists — But what does this mean for Bitcoin?

What Bitcoin price levels will invalidate the short-term bearish scenario?

What Bitcoin price levels will invalidate the short-term bearish scenario?

What Bitcoin price levels will invalidate the short-term bearish scenario?

The price of Bitcoin (BTC) is continuing to range between $48,000 and $51,000, unable to break out of the $51,600 resistance level.

If Bitcoin struggles to surpass the $51,600 resistance area in the near term, technical analysts say the probability of a correction rises.

What Bitcoin price levels will invalidate the short-term bearish scenario?
BTC/USDT 4-hour price chart (Binance). Source: TradingView

$51,600 is the key level to watch

According to Josh Olszewicz, a cryptocurrency trader and technical analyst, the $51,600 level is currently acting as a strong resistance level.

For Bitcoin to retest the all-time high at $58,000 and initiate a potential rally towards $62,000, it needs to cleanly move past $51,600, he explained. 

Hence, a rally beyond $51,600 is the clear invalidation point for any short-term bearish scenario for Bitcoin.

The failure to break out in the near term could result in a bearish test of lower support areas, found at around $42,000. He said:

“If 4h breaks down, be prepared for some uber bearish calls to start popping at 36.7k meanwhile, I’ll be bidding the daily Kijun at 42k. Alternatively, if $BTC breaks above 4h Cloud at 51.6k, I like ATH retest at 58k, R3 yearly pivot test at 62k, macro PF diag test at 70k, R4 yearly pivot test at 80K. Seasonality suggests we go neutral/sideways through March and then reach for those higher targets in Q2.”

The $42,000 support area is a key level because it marks the top of the previous rally. On Jan. 8, the price of Bitcoin peaked at $42,085 on Binance, seeing a steep correction afterwards.

Bitcoin dropping to $42,000 to retest the previous top as a support area would not be necessarily bearish beyond the short term, however. 

Whale clusters show similar levels of support

Moreover, analysts at Whalemap noted large inflows to whale wallets at $48,500 and $46,500, which they say should provide BTC with some support. 

“The current situation looks similar to the one we had at 29K,” they explained. What’s more, the $46,532 level may now be “the new $29,000,” which held as support during the previous correction in January before the rally continued. They added: 

The $55,400 is an important level to keep an eye on as well. Getting back above it will be a good sign
What Bitcoin price levels will invalidate the short-term bearish scenario?
Whale cluster levels. Source: Twitter/@whale_map

The most compelling argument for a short-term Bitcoin drop

Bitcoin tends to seek liquidity after a prolonged consolidation, which means it can drop down to fill buy orders at lower support areas that can ultimately fuel a new rally.

A pseudonymous trader known as “Salsa Tekila” echoed this sentiment. He said that there is a big support area at $41,000, followed by resistance at $54,000. He wrote:

“My current take on $BTC mid term: 1) Support around $41K. 2) Resistance around $54K. Depending on context, I might trigger swings around those two vicinities. Likely just scalp until then, unless major events come to fruition.”

Bitcoin tested the $44,800 support level in the past 72 hours, but it was not enough to propel BTC above $51,600.

This trend could cause the price of Bitcoin to drop back to the $44,800 level or to a lower support level, at $42,000.

The ideal scenario would be for Bitcoin to hold onto the $44,800 support area if it drops again, stabilize it as a macro support level, and move back up.

Title: What Bitcoin price levels will invalidate the short-term bearish scenario?
Sourced From: cointelegraph.com/news/what-bitcoin-price-levels-will-invalidate-the-short-term-bear-scenario
Published Date: Thu, 25 Feb 2021 09:00:00 +0000

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What Bitcoin price levels will invalidate the short-term bearish scenario?

Traders remain bullish even as DeFi’s TVL falls to $54.4 billion

Traders remain bullish even as DeFi’s TVL falls to $54.4 billion

Traders remain bullish even as DeFi’s TVL falls to $54.4 billion

Decentralized finance and the numerous platforms offering investment services have been the talk of the cryptocurrency sector for several months, and this has resulted in investors capturing spectacular gains for some of the top DeFi tokens like Uniswap’s UNI and AAVE. 

The fast-moving prices and 1,000% annual percentage yield on staked tokens elicited cheers from investors when the market was going up, but the recent selling pressure seen as Bitcoin’s (BTC) price dropped below $45,000 shows that the highest fliers are often the quickest to fall as traders rush to exit their positions and lock in their gains.

Traders remain bullish even as DeFi’s TVL falls to $54.4 billion
Daily cryptocurrency market performance. Source: Coin360

On Feb. 22, Bitcoin’s price entered a sharp corrective phase that saw the top digital asset pull back by more than 20% from its all-time high of $58,274. As this occurred, the majority of altcoins also saw double-digit corrections, and DeFi tokens like PancakeSwap’s CAKE fell as much as 55%. 

Total value locked in DeFi shows resilience

The total value locked (TVL) in DeFi platforms also took a hit as Bitcoin and altcoins corrected. Data from DeFi Llama shows the combined TVL of all DeFi platforms fell from $64.89 billion to $54.22 billion on Feb. 24. Cointelegraph also reported that this week’s correction led to the second-largest day of DeFi loan liquidations in history. 

Traders remain bullish even as DeFi’s TVL falls to $54.4 billion
Total value locked in DeFi. Source: DeFi Llama

The decline in TVL is a result of decreasing token values rather than protocol outflows, indicating that tokenholders remain committed to the continued expansion of decentralized finance and that the current yields are still incentivizing investors to remain engaged.

Market analysis indicates that despite the recent $5.8-billion Bitcoin and altcoin liquidation, bulls remain optimistic and see this price pullback as a sign of a healthy market.

The same goes for the DeFi sector, which has been in a strong uptrend since the start of the year. Increasing DEX volume and as a rising TVL show that DeFi is still in the early stages of growth, and while pullbacks are to be expected, the overall trend is positive as institutional and retail investors increasingly gain exposure to this emerging asset class.

Title: Traders remain bullish even as DeFi’s TVL falls to $54.4 billion
Sourced From: cointelegraph.com/news/traders-remain-bullish-even-as-defi-s-tvl-falls-to-54-4-billion
Published Date: Wed, 24 Feb 2021 23:00:00 +0000

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Traders remain bullish even as DeFi’s TVL falls to $54.4 billion

Sam Bankman-Fried: The crypto whale who wants to give billions away

Sam Bankman-Fried: The crypto whale who wants to give billions away

Sam Bankman-Fried: The crypto whale who wants to give billions away
Title: Sam Bankman-Fried: The crypto whale who wants to give billions away
Sourced From: cointelegraph.com/magazine/2021/02/24/sam-bankman-fried-the-crypto-whale-who-wants-to-give-billions-away
Published Date: Wed, 24 Feb 2021 15:04:45 +0000

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3 reasons Bitcoin price is quickly recovering from its ‘severe’ 23% correction

3 reasons Bitcoin price is quickly recovering from its ‘severe’ 23% correction

3 reasons Bitcoin price is quickly recovering from its 'severe' 23% correction

The price of Bitcoin (BTC) quickly recovered from around $44,800 to over $50,000 within merely 22 hours. 

Behind the rapid recovery are three major factors, including low funding rates, Square’s $170 million Bitcoin purchase, and the spot market stabilizing.

Bitcoin futures funding rates substantially drop

Across major futures exchanges, including Binance, Bybit and Bitfinex, the funding rate of Bitcoin has dropped to 0.01%.

The Bitcoin futures funding rate was consistently above 0.1% throughout the entirety of the rally from the $40,000s to $58,000.

3 reasons Bitcoin price is quickly recovering from its 'severe' 23% correction
BTC/USDT 4-hour price chart (Binance). Source: TradingView.com

When the futures funding rate is high, it means the market is overcrowded with buyers and the rally likely overextended.

This creates a major risk of a long squeeze, which can cause the price of Bitcoin to drop quickly in a short period.

With the funding rate back to 0.01%, the risk of a long squeeze is significantly lower and if a new uptrend ensues, the rally could be more sustainable.

3 reasons Bitcoin price is quickly recovering from its 'severe' 23% correction
BTC and ETH funding rates. Source: Bybt.com

Square buys $170 million worth of BTC

On Feb. 24, the U.S. payments giant Square bought $170 million worth of Bitcoin. This comes after purchasing $50 million worth of Bitcoin on Oct. 8 of last year. At the time, Square’s chief financial officer Amrita Ahuja said:

“We believe that bitcoin has the potential to be a more ubiquitous currency in the future. As it grows in adoption, we intend to learn and participate in a disciplined way. For a company that is building products based on a more inclusive future, this investment is a step on that journey.”

The additional purchase of Bitcoin by Square carries a significant meaning because it shows that the company is confident in BTC over the long term.

The price of Bitcoin is substantially higher than where it was in August of last year, which indicates that as its price rises, the confidence from institutions also increases.

Spot market is stabilizing

When the price of Bitcoin was correcting, the price of Bitcoin on spot exchanges, like Coinbase, was much lower than futures exchanges

On Feb. 23, for instance, Bitcoin was trading $600 lower on Coinbase at one point when the price was near $44,800.

When the price of Bitcoin initially recovered from $44,800 to $48,000, there were signs of a bearish retest.

John Cho, the director of global expansion at GroundX, said:

“We were expecting it, but didn’t think it’d come this soon or this fast. A solid bounce from here would be ideal; but some potential retracement support regions I’m watching. My bias is towards the 40-41k region as it would fulfill a 30% correction from ATH.”

Bitcoin price has recovered above $50,000 since, and that could have reduced the likelihood of a bearish retest and the potential for more downside.

In the near term, if Bitcoin continues to remain above $50,600, which has turned into a support area, the probability of a rally toward the next resistance level at $56,000 rises.

Lastly, such corrections are quite normal for a Bitcoin bull market cycle, as Cointelegraph previously pointed out. In fact, they were commonplace during the 2017 bull market, which had nine major pullbacks between 20–40%. But despite these reoccurring “severe” corrections, the price of Bitcoin still increased by 20 times from its previous all-time high during that year.

Title: 3 reasons Bitcoin price is quickly recovering from its ‘severe’ 23% correction
Sourced From: cointelegraph.com/news/3-reasons-bitcoin-price-is-quickly-recovering-from-its-severe-23-correction
Published Date: Wed, 24 Feb 2021 12:00:00 +0000

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3 reasons Bitcoin price is quickly recovering from its ‘severe’ 23% correction

Charles Hoskinson Reveals Significant Updates for Cardano (ADA) as Price Attempts Recovery

Charles Hoskinson Reveals Significant Updates for Cardano (ADA) as Price Attempts Recovery

The decentralized open-source project running a public blockchain platform for smart contracts, Cardano, plans to implement several significant upgrades in the upcoming few months. During a recent interview, the project’s founder, Charles Hoskinson, also noted that Cardano has been negotiating potential partnerships with many industry names such as Celsius, Fireblocks, and Prime Trust.

Significant Updates Coming for Cardano

The 33-year-old co-founder of Ethereum spoke about his current project’s upcoming plans during an interview with the Financial Fox. Although he failed to provide more precise information on what’s coming, he said that the network will see many “smart contract stuff” in the next up to three months.

Simultaneously, the research arm of the Cardano Foundation is working on several new implementations:

“We are going to be announcing several new things like a smart contract institute that specializes in smart contract development design embedded at a university.”

Cardano’s founder said that he and his team have met with representatives from Prime Trust, Fireblocks, SingularityNET, and Celsius to discuss potential partnerships, such as support for Cardano.

He believes that integrations on larger-scale companies like the aforementioned names could enhance the adoption of the entire ecosystem.

“You need that for dApps, you need that for institutional investors to come in, you need that for all different kinds of actors, and that’s what consumes the majority of our time right now as a company.”

CryptoPotato recently reported that Cardano plans to release its long-anticipated Hard Fork Combinator (HFC) called Mary on March 1st, while all quality assurance and developer checks take place on February 24th.

DA’s Price Performance

Cardano’s native cryptocurrency, ADA, has been among the best performers in the past several weeks by taking full advantage of the bull run.

The asset entered the new year at $0.16, but it exploded in value in the following weeks. Several days ago, ADA breached $1 and continued north to a new 3-year record above $1.20. Following this 650% price surge, though, came the most recent cryptocurrency market correction.

ADA traded at about $1,15 when the sentiment changed, and the bears took control. In about 24 hours, the asset plummeted by more than 30% and bottomed beneath $0.80. Nevertheless, it has reclaimed some ground since then and has neared $1 once again.

Charles Hoskinson Reveals Significant Updates for Cardano (ADA) as Price Attempts Recovery
ADAUSD. Source: TradingViewTitle: Charles Hoskinson Reveals Significant Updates for Cardano (ADA) as Price Attempts Recovery
Sourced From: cryptopotato.com/charles-hoskinson-reveals-significant-updates-for-cardano-ada-as-price-attempts-recovery/
Published Date: Tue, 23 Feb 2021 22:53:38 +0000

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Charles Hoskinson Reveals Significant Updates for Cardano (ADA) as Price Attempts Recovery