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After the Collapse: Bitcoin Price Holds Near $6,500 Amid Strong Volumes

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Bitcoin’s price edged higher Thursday, as markets stabilized from one of the worst routs in recent memory.

BTC/USD Update

Bitcoin is currently trading at $6,457 on Bitfinex for a gain of 2.8% on the day. The leading digital currency is little changed compared with 24 hours ago.

Daily turnover in BTC crossed the $5 billion mark late Wednesday and has since fallen back to around $4.8 billion, according to data provider CoinMarketCap. As Hacked previously reported, bitcoin typically requires daily turnover of at least $4 billion to generate a sustained rally – at least, this is the trend we’ve observed during the 2018 bear market.

Bitcoin’s trading range experienced a patch of volatility between 0:700 UTC and 11:10 UTC Thursday, with prices fluctuating between $6,249.07 and $6,549.97, based on CoinMarketCap data. The coin swung through a similar peak and trough roughly 17 hours earlier.

In the meantime, the bitcoin price appears to be recovering from oversold levels, which means further gains could be likely. The closely watched relative strength index (RSI) bottomed at 30 on Wednesday before recovering at 35. Based on this indicator, BTC is still oversold.

The cryptocurrency market is increasingly tilting toward bitcoin, a sign investors are less keen on experimenting with altcoins and tokens during the latest downturn. Bitcoin’s share of the total market cap is a tad below 49%, the highest since December.

After the Selloff

The crypto universe is coming off one of its worst days in recent memory as investors reacted negatively to headlines that the U.S. Securities and Exchange Commission (SEC) is delaying a ruling on a highly-touted bitcoin ETF. In the case of bitcoin, prices fell through a critical support cluster on Wednesday en route to fresh three-week lows.

With the loss, bitcoin has not only reversed July’s strong recovery, it has entered bear-market territory based on the traditional definition of the term. The next critical line of support is likely $6,000 – a key psychological threshold. Buyers have previously shown a vested interest in protecting this level.

Although piecing together a short-term outlook is difficult following yesterday’s collapse, bitcoin must return to the $7,000 range to shake off bearish headwinds.

The cryptocurrency fell below $6,000 on multiple occasions this year, with the most recent swing low occurring in late June. Over the next four weeks, BTC values would rise more than 20%.

Disclaimer: The author owns bitcoin, Ethereum and other cryptocurrencies. He holds investment positions in the coins, but does not engage in short-term or day-trading.

Featured image courtesy of Shutterstock.

Important: Never invest (trade with) money you can't afford to comfortably lose. Always do your own research and due diligence before placing a trade. Read our Terms & Conditions here. Trade recommendations and analysis are written by our analysts which might have different opinions. Read my 6 Golden Steps to Financial Freedom here. Best regards, Jonas Borchgrevink.

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4.6 stars on average, based on 694 rated postsSam Bourgi is Chief Editor to Hacked.com, where he leads content development for one of the world's foremost cryptocurrency resources. Over the past eight years Sam has authored more than 10,000 articles and over 40 whitepapers in the fields of labor market economics, emerging technologies, cryptocurrency and traditional finance. Sam's work has been featured in and cited by some of the world's leading newscasts, including Barron's, CBOE and Forbes. Contact: sam@hacked.com Twitter: @hsbourgi




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Bitcoin Price Avoids Bigger Fall amid Market-Wide Consolidation

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Bitcoin traded to the upside on Wednesday, snapping a multi-session losing streak that dragged prices toward new lows for the year. The outlook on BTC and other cryptocurrencies remains overwhelmingly bearish, which means investors can expect a re-test of last week’s lows relatively soon.

BTC/USD Update

The bitcoin price reached a high of $3,570.00 on Bitfinex, a modest recovery from early-week lows. It last traded at $3,513, having gained 2.2% from the previous day. BTC values on Bitfinex had a $100 premium compared with exchanges like Coinbase, Bitstamp, Bittrex and Gemini.

Looking to the aggregate data via CoinMarketCap, bitcoin is trading hands at an average of $3,478 for a gain of 2%. Daily trading volumes reached $4.6 billion, with spot accounts driving an increasing share of the market activity. Over the last 24 hours, the BitMEX derivatives exchange processed 19.2% of bitcoin trades on virtual currency platforms. That figure was around a quarter on Tuesday.

The total market capitalization of all cryptocurrencies recovered around $110.4 billion on Wednesday, having gained roughly $3 billion from Tuesday’s low.

Volatility on the Rise

Bitcoin continues to exhibit extremely high volatility relative to the past six months, where markets carved out a narrower and more predictable trading range. The brief era of ‘stable bitcoin’ came to an abrupt end last month as market participants braced for a highly contentious hard fork of the bitcoin cash network. Markets have yet to recover from that cataclysmic event, which not only ruptured the BCH community, but diverted valuable hash power away from the original bitcoin.

The bitcoin volatility index, which tracks the daily price fluctuations of BTC over the past 30 days, has rose to 5.7% on Tuesday, according to bitvol.info. That’s the highest level since early March, when the market was facing a broad reversal from record highs.

BTC has struggled to put together a convincing recovery in the wake of the recent selloff, with prices overcoming the $4,000 barrier on only one occasion in the last two weeks. The new resistance test appears to be concentrated around $3,700-$3,800, a clear sign that the market was in the process of carving out lower highs and lower lows. On the opposite side of the spectrum, the leading digital currency has fallen to the low $3,300 on multiple occasions and appears poised to test the upper range of the $2,800-$3,200 support zone.

The general view seems to be that bitcoin still has a way to go before fully bottoming out. That largely explains why so many investors have been reluctant to enter the market at today’s prices. For the time being, attention should be paid to the aforementioned support to determine possible entry.

Disclaimer: The author owns bitcoin, Ethereum and other cryptocurrencies. He holds investment positions in the coins, but does not engage in short-term or day-trading.

Featured image courtesy of Shutterstock.

Important: Never invest (trade with) money you can't afford to comfortably lose. Always do your own research and due diligence before placing a trade. Read our Terms & Conditions here. Trade recommendations and analysis are written by our analysts which might have different opinions. Read my 6 Golden Steps to Financial Freedom here. Best regards, Jonas Borchgrevink.

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4.6 stars on average, based on 694 rated postsSam Bourgi is Chief Editor to Hacked.com, where he leads content development for one of the world's foremost cryptocurrency resources. Over the past eight years Sam has authored more than 10,000 articles and over 40 whitepapers in the fields of labor market economics, emerging technologies, cryptocurrency and traditional finance. Sam's work has been featured in and cited by some of the world's leading newscasts, including Barron's, CBOE and Forbes. Contact: sam@hacked.com Twitter: @hsbourgi




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If Bitcoin ETF Doesn’t Happen by February, How Will it Affect the Market?

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The Bitcoin exchange-traded fund (ETF) has already become the catalyst of the next big rally of the cryptocurrency to the minds of many investors.

Realistically, however, the U.S. Securities and Exchange Commission (SEC) could easily deem the cryptocurrency market unready of handling a large-scale investment vehicle like an ETF based on the wild volatility in the prices of major cryptocurrencies over the past year and the lack of surveillance in smaller markets.

Jake Chervinsky, a government enforcement defense and securities litigation attorney at Kobre & Kim, has said that while the probability of the approval of a Bitcoin ETF could increase over time, as of now, there only exists a 10 percent chance for the ETF to be approved.

He said:

“Here’s my prediction, with a big disclaimer. This is not in any way meant as advice. Don’t even think about trading on this. I have no idea how the ETF decision will impact the markets anyway. If the deadline were today, I’d give the ETF a 10% chance of approval. My prediction is based largely on the manipulation issue. I think the chance of ETF approval will go up over time as market structure continues to develop & more surveillance-sharing agreements are entered.”

So How Can a Bitcoin ETF Rejection Affect the Market?

Historically, the cryptocurrency market has generally not been affected by a certain event or a catalyst during both bear and bull markets.

In the bull market, regardless of negative events and news coverage, due to an overwhelming demand for crypto, the prices of cryptocurrencies tend to increase. In a bear market, as seen in the case of Nasdaq, Fidelity, and NYSE, positive announcements have minimal impact on the prices of digital assets.

The potential effect on the approval of a Bitcoin ETF on the cryptocurrency market remains unclear, and no one really knows. There have been several reports claiming that if 10 percent of investors in the stock market invest in the Bitcoin ETF, the Bitcoin price would surge to a certain amount.

But, such a vague prediction is no different than a startup thinking “China has 1.3 billion people, 10 percent of that is 130 million, so we can at least secure 130 million customers.” Some startups actually received investment from venture capital firms with this theoretical strategy and lost out in the Chinese market.

Such “if” predictions occur quite frequently in crypto. If 10 percent of the offshore banking sector invests in Bitcoin, the dominant crypotcurrency could be worth $3 trillion. If 10 percent of gold investors invest in Bitcoin, the asset could be worth $700 billion. But these numbers are merely vague estimates and in no way represent real numbers.

The rejection of an ETF approval could affect the market if the price of Bitcoin has been increasing in anticipation of the announcement.

The Case of Winklevoss ETF in July

On July 26, when the highly anticipated Winklevoss Bitcoin ETF was rejected by the U.S. SEC, the price of Bitcoin did not experience a substantial move on a weekly basis. It dropped from $8,200 to $8,000 but recovered to $8,200 the very next day.

The price of BTC could begin to increase as the February deadline of the VanEck ETF comes closer, but the market will likely not lose out more than the value it added in anticipation of the ETF, unless the price of Bitcoin increases solely due to the ETF approval.

Hence, whether the ETF is approved or not, an immediate impact on the price of Bitcoin should not be expected, especially as the bear market of 2018 extends to next year.

Disclaimer: The author owns bitcoin, Ethereum and other cryptocurrencies. He holds investment positions in the coins, but does not engage in short-term or day-trading.

Featured image courtesy of Shutterstock.

Important: Never invest (trade with) money you can't afford to comfortably lose. Always do your own research and due diligence before placing a trade. Read our Terms & Conditions here. Trade recommendations and analysis are written by our analysts which might have different opinions. Read my 6 Golden Steps to Financial Freedom here. Best regards, Jonas Borchgrevink.

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4.1 stars on average, based on 5 rated postsJoseph Young is a finance and tech journalist based in Hong Kong. He has worked with leading media and news agencies in the technology and finance industries, offering exclusive content, interviews, insights and analysis of cryptocurrencies, innovative and futuristic technologies.




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Bitcoin Life Expectancy: Lindy Effect Suggests BTC Is More Difficult to Kill Than Ever Before

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The crypto bear market is showing little signs of letting up. On Tuesday, a fresh wave of selling engulfed bitcoin and altcoins, dragging the market toward fresh yearly lows and thrusting Tether (USDT) in to the top-five by market cap. Against this backdrop, it’s easy to forget that cryptocurrencies like bitcoin have become so resilient to death that no amount of fear, uncertainty and doubt can override the phenomenon currently underway.

Market Update

The market capitalization of all cryptocurrencies reached a low of $107.3 billion on Tuesday, as bearish forces continued to push prices lower. Last week, the market bottomed around $103 billion, marking a new 15-month low. The way prices are going today, new lows are likely in the short run.

Losses among the majors ranged from 2% to 8%, with bitcoin reaching the lower end of $3,300. The leading digital currency is quickly approaching a critical test of the $2,800-$3,200 support following a series of lower lows and lower highs.

The widespread selloff has allowed Tether to reclaim its stablecoin status. USDT was last valued at $1.01, where it was trading slightly higher than its dollar-peg would suggest. Tether is now a $1.9 billion market, ahead of bitcoin cash, EOS and Litecoin.

Bitcoin Life Expectancy

The crypto market cap is by no means a perfect measure of overall health but provides a fairly accurate snapshot of where digital assets are trending. The extent to which bitcoin dominates the overall market capitalization is also telling. As of Tuesday, the leading digital currency represented 55% of the total market and has risen steadily amid the latest correction.

Bitcoin continues to exert a strong gravitational pull on the rest of the market, which analysts say is a reflection of the nascent state of digital currencies as a whole. During the height of the bull rally in January, bitcoin’s share of the total market fell to around 32%. This broad “decoupling” of bitcoin and other virtual currencies was considered a sign of market maturation. Eleven months later, talk of “market maturation” has all but dissipated as investors continue to gauge just how far prices will fall.

Media and traditional financiers have framed the recent price collapse as crypto’s biggest existential crisis. To them, there is no sign of a bottom until prices reach zero.

This may be the case for a myriad of the 2,000+ cryptocurrencies in circulation but does not represent the fate of projects that have developed real products. In the case of bitcoin, historical precedent suggests that a fall to zero simply isn’t in the cards. Bitcoin has collapsed longer and harder in the past, only to re-emerge stronger and more resilient than ever before. Its chance of survival continues to grow each time it overcomes attack, hard forks and FUD. This feeds directly into the Lindy Effect, which states that the remaining life expectancy of any system grows for every additional period of survival.

Bitcoin and other leading cryptocurrencies are a monetary phenomenon that have generated waves of adoption in circles that matter most: banks, businesses, global payment providers. And although people have tried to parse out “bitcoin” from “blockchain,” the value of cryptocurrency technology has rendered this distinction more difficult to analyze in a practical sense (as the CEO of Lighting Labs put it, we are entering a “bitcoin, not blockchain” world).

For the past decade, bitcoin has run on almost zero financial loss on the chain itself, making it the most reliable financial network in the world. Bitcoin is so decentralized, in fact, that the U.S. Securities and Exchange Commission (SEC) has officially declared that it cannot be considered a security. As investors will soon find out, autonomous networks that are sufficiently decentralized and with no central authority are difficult to kill.

This is by no means a “forecast” of where things go from here. Clearly, crypto is in a profound bear market that will yield additional pain and destruction for a large share of existing blockchains. But don’t let anyone fool you into believing that this this spells the end of bitcoin. It’s only the beginning.

We’ll leave you with the following quote from Nassim Nicholas Taleb to consider:

“… Bitcoin is an excellent idea. It fulfills the needs of the complex system, not because it is a cryptocurrency, but precisely because it has no owner, no authority that can decide on its fate. It is owned by the crowd, its users. And it has now a track record of several years, enough for it to be an animal in its own right.”

Disclaimer: The author owns bitcoin, Ethereum and other cryptocurrencies. He holds investment positions in the coins, but does not engage in short-term or day-trading.

Featured image courtesy of Shutterstock.

Important: Never invest (trade with) money you can't afford to comfortably lose. Always do your own research and due diligence before placing a trade. Read our Terms & Conditions here. Trade recommendations and analysis are written by our analysts which might have different opinions. Read my 6 Golden Steps to Financial Freedom here. Best regards, Jonas Borchgrevink.

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4.6 stars on average, based on 694 rated postsSam Bourgi is Chief Editor to Hacked.com, where he leads content development for one of the world's foremost cryptocurrency resources. Over the past eight years Sam has authored more than 10,000 articles and over 40 whitepapers in the fields of labor market economics, emerging technologies, cryptocurrency and traditional finance. Sam's work has been featured in and cited by some of the world's leading newscasts, including Barron's, CBOE and Forbes. Contact: sam@hacked.com Twitter: @hsbourgi




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