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Bitcoin Price Deeply Discounted After ICE’s Bakkt Announcement

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The bitcoin price fell deeper into correction on Saturday, pushing the digital currency closer to bear-market territory as investors shrugged off a potentially game-changing announcement by Intercontinental Exchange.

BTC/USD Update

Bitcoin’s selloff intensified on Saturday, with prices hitting a low of $6,955.00 on Bitfinex. That was the lowest level in almost three weeks. The leading digital currency has since recovered to around $7,013, where it was down 5.5% from yesterday.

At current prices, bitcoin is capitalized at $120.7 billion, according to CoinMarketCap. Total trade volumes are worth $4.2 billion.

Since peaking above $8,500 last month, the bitcoin price has declined more than 17%. A fall to $6,800 would put BTC into bear-market territory, based on the generally agreed upon definition of the term.

As Hacked previously reported, bitcoin’s initial reversal was driven largely by technical re-positioning after prices entered overbought territory at the height of last month’s rally. On Friday, BTC crossed below the 100-day moving average, another bearish signal.

Bitcoin’s Fundamental Discount

Bitcoin’s latest breakdown came less than a day after Intercontinental Exchange (ICE) announced it was entering the cryptocurrency market with potentially game-changing implications. ICE, which operates 23 regulated exchanges including the New York Stock Exchange, is teaming up with some of America’s most iconic companies to bring bitcoin to mainstream circles.

Bakkt, the new startup that will hold and manage investors’ cryptocurrency, is looking to integrate bitcoin with the mobile shopping experience. At stake is roughly $25 trillion in fees currently doled out to credit cards and online shopping vendors.

Backed by Microsoft cloud services, Starbucks and a bevy of top investors, Bakkt aims to “build confidence in [cryptocurrencies] on a global scale,” according to Jeffrey Sprecher, ICE’s founder, chairman and CEO.

The market’s tepid reaction to the news suggests that technical forces are likely at play in keeping the bitcoin price rally under wraps. This is somewhat perplexing, given that murmurs of a potential crypto exchange-traded fund was partially responsible for bitcoin’s nearly 26% gain in July.

To be clear, Bakkt is scheduled to launch in November – pending regulatory approval. Given the market’s reaction, that timeline may be under scrutiny by investors who’ve grown accustomed with regulatory letdowns.

This isn’t the first time the bitcoin price has discounted  bullish fundamental news. As Hacked previously speculated, the mismatch between positive fundamental news and bitcoin’s performance largely stems from the absence of new traders in the market. While the shift to institutional custody is ongoing, it’ll be a while still before the big banks and hedge funds make the same type of noise as last year’s retail boom. In the meantime, there is plenty to be excited about if you are a bitcoin holder.

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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4.7 stars on average, based on 773 rated postsChief Editor to Hacked.com and Contributor to CCN.com, Sam Bourgi has spent the past nine years focused on economics, markets and cryptocurrencies. His work has been featured in and cited by some of the world's leading newscasts, including Barron's, CBOE and Forbes. Avid crypto watchers and those with a libertarian persuasion can follow him on twitter at @hsbourgi




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Analysis

Crypto Update: Coins Test Swing Highs Litecoin Runs Into Resistance

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The major cryptocurrencies continue to trade with a bullish bias after establishing a new short-term uptrend this week. The top coins are all holding on to the bulk of their recent gains, even as most of them entered consolidation patterns on the heels of the strong rally in the segment. With still only Ripple lagging the broader market notably, the immediate outlook remains positive, despite the still bearish long-term picture.

LTC/USD, 4-Hour Chart Analysis

Today, the initially leading Litecoin shined again, pushing past the $50 level and hitting the long-term resistance zone near $51. As LTC is overbought due to its recent lofty gains, the coin is now only on a neutral short-term signal in our trend model, since the bearish long-term setup continues to warrant caution for bulls here.

That said, the rising short-term trend is intact, and should the coin clear the overbought momentum readings, traders could enter small, speculative positions using strict risk management rules. Support levels are now found near $47, $44, and $38, while the next major resistance zone is ahead near the $56 price level.

BTC/USD, 4-Hour Chart Analysis

Bitcoin entered a consolidation pattern today, as we expected, after touching the longer-term zone resistance zone between $4000 and $4050. The momentum indicators hint on further consolidation, and in light of hostile long-term setup, traders should wait for the overbought readings to be cleared before entering new short-term positions.

Below the initial level $3850 support, further levels are found near $3600 and just above $3450, while the next resistance zone above $4050 is ahead near $4450. The short-term uptrend is intact in BTC, and our trend model remains on a short-term buy signal.

Ethereum Tries to Form Swing Low while Ripple Fights Trendline

ETH/USD, 4-Hour Chart Analysis

Ethereum entered a shallow correction after hitting the resistance zone near $145, but the price action and the volume patterns continue to support the bullish short-term case. The $160 price level remains a viable target for bulls but the momentum indicators continue to show overbought readings. The short-term uptrend is intact and our trend model is still on a short-term buy signal as well. Support levels are found near $130 and $112 while above $160 resistance is ahead near $180.

EOS/USD, 4-Hour Chart Analysis

Only a few of the major altcoins managed to follow Litecoin to a new swing high today, but EOS slightly extended its rally, despite being severely overbought from a short-term perspective. While the new high is a positive sign for the coming period, EOS remains only neutral in our trend model, and traders should wait for the oversold readings to be cleared before entering new positions.

XRP/USDT, 4-Hour Chart Analysis

While the leadership of the rally is still healthy, Ripple continues to lag the leaders, still fighting with the declining trendline that stopped the recent rally attempt in the coin. XRP is holding up above the $0.32 level, but it’s stuck below the recent swing high, and traders should still focus on the relatively stronger coins despite the short-term buy signal in our trend model.

From a long-term perspective, technicals remain negative, and a move towards the $0.28 and $0.26 levels remains likely. Further support zones are found near $0.32 and $0.30, while short-term targets are still ahead near $0.3550, and $$0.3750.

Featured image from Shutterstock

Disclaimer:  The analyst owns cryptocurrencies. He holds investment positions in the coins, but doesn’t engage in short-term or day-trading, nor does he hold short positions on any of the coins.

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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4.7 stars on average, based on 468 rated postsTrader and financial analyst, with 10 years of experience in the field. An expert in technical analysis and risk management, but also an avid practitioner of value investment and passive strategies, with a passion towards anything that is connected to the market.




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Bitcoin

Bitcoin Price Eyes $4,200 as the Bulls Show Greater Conviction

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Bitcoin’s price returned above $4,000 on Wednesday, looking poised to revisit the December highs and challenge the recent downtrend. Even a decent run north at current levels could signal a trend reversal for the leading digital currency after several months of anguish.

BTC/USD Update

After experiencing a sharp pullback overnight, the bitcoin price rebounded just as quickly Wednesday morning. In the process, it avoided the dreaded ‘bull trap,’ which describes a false breakout from a declining trend line. While it’s still too early to determine whether bitcoin has turned a corner, recent price action suggests buyers are still in play.

The leading digital currency traded as high of $4,066.30 on Bitfinex. It was last seen hovering north of $4,035, having gained 1.1%. The hourly relative strength index (RSI) implies positive momentum after running into overbought territory during the height of the rally earlier in the week.

Trade volumes have moderated in the last 24 hours after reaching their highest levels in about ten months. Nearly $9 billion in BTC changed hands on virtual exchanges on Wednesday, according to CoinMarketCap. That’s significantly higher than the 2019 average.

Has Bitcoin Bottomed? A Closer Look at the Bullish and Bearish Cases

Activity in the derivatives market has picked up in the last 48 hours. In terms of exchange-based volumes, BitMEX processed 16% of total BTC trades. Actual bitcoin volumes are likely much higher than what’s reported on virtual currency exchanges. It is estimated that over-the-counter trading is just as big as the exchange-based markets. As Hacked recently reported, “private bilateral contracts” have also increased in popularity over the past six months as institutional investors continue flocking to crypto.

Hacked predicted the bullish breakout before it happened. See: Crypto Breakout Coming? Volume Indicators Say Yes

Bulls Eye $4,200

The $4,200 price point has become a major inflection point for bitcoin. It not only represents the high from late December, but also the 15-week moving average through early February. A move above $4,200 could pave the way for a sustained rally back toward $5,000 and eventually $5,500. The path forward is paved with obstacles, but it’s the latter price point ($5,500) that could negate the long-term downtrend.

For derivatives traders, $4,200 is important for one other reason: it represents the strike price of a fairly sizable three-month call option by a firm named QCP Capital. Basically, the counterparty to this trade will earn a hefty premium if bitcoin exceeds that level when the contract closes. Although the size of this trade – equivalent to 250 bitcoins – is tiny compared to the broader market, it suggests traders are keeping a close eye on the December high. More on this story: Bitcoin and Derivatives: Why $4,200 is So Critical.

Not everyone is convinced that the latest breakout attempt will amount to anything. According to Alex Sunnarborg, a founding partner of crypto hedge fund Tetras Capital, bitcoin could still be headed for new lows in the near future.

“Calling [the bitcoin bottom] is very difficult,” Sunnarborg told Forbes. “That’s part of the reason I’m really thankful that we’re in the position we are right now.” More from CCN: Crypto Expert Warns Not to Trust the Bitcoin Rally.

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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4.7 stars on average, based on 773 rated postsChief Editor to Hacked.com and Contributor to CCN.com, Sam Bourgi has spent the past nine years focused on economics, markets and cryptocurrencies. His work has been featured in and cited by some of the world's leading newscasts, including Barron's, CBOE and Forbes. Avid crypto watchers and those with a libertarian persuasion can follow him on twitter at @hsbourgi




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Analysis

Crypto Update: Bitcoin Touched $4000 as Broad Rally Continues

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Yesterday’s break-out to new short-term highs continued today in the cryptocurrency segment, with Bitcoin’s push towards the $4000 making headlines in the segment. The most valuable coin surged past the $3850 level, dragging most of the majors higher, but Ethereum and most of yesterday’s leaders lagged behind BTC during today’s session.

That said, the short-term trend remains positive in case of the majority of the coins, and even though some of the top currencies are overbought, the counter-trend move could continue. In light of the increased activity, trading volumes, and volatility in the market, the majors might be in for a more sustained bullish, move, and as now only Ripple is showing clear signs of relative weakness, despite today’s rally, the leadership of the short-term move looks healthy.

While the long-term picture is still clearly negative in the segment, until the newly established short-term uptrends remain intact, traders could still play the move, sticking to strict risk management rules and relatively small position sizes.

BTC/USD, 4-Hour Chart Analysis

While Bitcoin left behind the initial resistance level near $3850, and quickly rallied up to the strong longer-term zone between $4000 and $4050, it might need to consolidate before another push higher. BTC is slightly overbought from a short-term perspective, and given the significance of the resistance, traders could exit a part of their positions here.

The $4000-$4050 zone stopped the year-end rally (outside of a brief, failed break-out), and a move above it could open up the road towards the $4250 and the crucial $4450 levels. Below $3850, further support is found near $3600 and just above $3450, and our trend model remains on a short-term buy signal and long-term sell signal.

ETH/USD, 4-Hour Chart Analysis

Ethereum continues to trade near the $145 resistance level following yesterday’s surge, and bulls are still eyeing a test of the next major resistance zone near $160, which marked the top of the previous counter-trend move in the coin.

While the coin is still overbought form a short-term perspective, given the momentum if its recent move, the rally could continue after a brief consolidation period. The newly-established uptrend is intact in ETH, and traders could enter new positions should the overbought readings got cleared, with support levels found near $130 and $112.

XRP/USDT, 4-Hour Chart Analysis

Although Ripple continues to be relatively weak compared its major peers, today it spiked to a new 5-week high, riding the market-wide trend and testing a strong declining trendline in the process. The coin triggered a short-term buy signal in our trend model by topping its January swing high, but given its relative weakness, traders should focus on the more bullish coins during the current counter-trend move.

The long-term setup remains negative, and from a broader perspective, odds still favor the test of the key long-term $0.28 and $0.26 levels, with further support levels found near $0.32 and $0.30, and with short-term targets being ahead near $0.3550, and $$0.3750.

EOS Continues to Lead but Litecoin Struggles to Gain Ground

LTC/USD, 4-Hour Chart Analysis

LTC continues to trade slightly above last week’s highs but compared to the leaders of the current leg of the rally it remained relatively weak today. With that and the still negative long-term setup in mind, traders should exit a part of their positions here, even as the short-term uptrend is intact and a push towards the next major resistance level near $51 is still possible. Our trend model is still on a buy signal, as a failed break-out is not yet confirmed, with support levels still found near $44, $38, and $34.50.

EOS/USD, 4-Hour Chart Analysis

EOS remained relatively strong today, spiking above the $3.80 level after leaving behind the $3.50 resistance. Now, the coin is clearly overbought from a short-term perspective, and that led to a downgrade in our trend model as a pullback is now likely.

The short-term trend remains bullish despite the correction risks, and should the coin clear the overbought momentum readings traders could reenter their position following strict risk management rules. Support is now found near $3.50, $3, and $2,80 while strong resistance is ahead near $4.50 and $5.

Featured image from Shutterstock

Disclaimer:  The analyst owns cryptocurrencies. He holds investment positions in the coins, but doesn’t engage in short-term or day-trading, nor does he hold short positions on any of the coins.

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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2 votes, average: 5.00 out of 52 votes, average: 5.00 out of 52 votes, average: 5.00 out of 52 votes, average: 5.00 out of 52 votes, average: 5.00 out of 5 (2 votes, average: 5.00 out of 5)
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4.7 stars on average, based on 468 rated postsTrader and financial analyst, with 10 years of experience in the field. An expert in technical analysis and risk management, but also an avid practitioner of value investment and passive strategies, with a passion towards anything that is connected to the market.




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Hacked.com and its team members have pledged to reject any form of advertisement or sponsorships from 3rd parties. We will always be neutral and we strive towards a fully unbiased view on all topics. Whenever an author has a conflicting interest, that should be clearly stated in the post itself with a disclaimer. If you suspect that one of our team members are biased, please notify me immediately at jonas.borchgrevink(at)hacked.com.

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