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Bitcoin Price Jumps 5% on One-Year Anniversary of $20,000 Bull Run

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The value of bitcoin rebounded sharply on Monday, shaking off a volatile weekend that dragged prices to new yearly lows. The broader cryptocurrency market quickly followed suit, as altcoins and tokens generated sizable gains over the last 24 hours.

BTC/USD Update

The bitcoin price reached a high of $3,600 on Bitfinex, where it traded at a significant premium relative to other well-known exchanges. At the time of writing, BTC/USD was trading hands at $3,515, having gained 6.5%. The cryptocurrency was valued at less than $3,400 on Coinbase, Bitstamp, Bittrex and Gemini.

Aggregate data courtesy of CoinMarketCap show an average price of $3,436 for a gain of 5%. Volumes in the last 24 hours reached $4.4 billion after falling sharply throughout the weekend.

Bitcoin is now testing the high from Dec. 12, which is situated near $3,550. That level represents the latest in a series of lower highs stretching all the way back to the end of November.

At current values, bitcoin has a total market capitalization of $59.9 billion. The broader cryptocurrency market was worth $109.1 billion, having defended the $100 billion level over the weekend.

$20,000

It was one year ago today that bitcoin reached its latest and most famous all-time high near $20,000. At this time last year, the cryptocurrency market was surging on expectations of rising institutional adoption and an ICO gold rush that attracted millions of dollars to blockchain startups. The market would go on to set new record highs in January, this time without bitcoin, as altcoins and tokens generated the bulk of bullish activity. The total market capitalization peaked near $840 billion before the euphoria faced and bearish forces took over.

The fallout from bitcoin’s record run has led to concern about the future of cryptocurrencies. Hacked previously covered the prospect of a long-awaited mass extinction event of altcoins and tokens, many of which entered the market with nothing more than a whitepaper. During the height of the bullish fervor, Ethereum’s Vitalik Buterin acknowledged that 90% of the projects currently listed on CoinMarketCap would eventually go to zero. In his view, this would lead to a consolidation of sorts, with the next wave of ICOs churning out higher quality projects.

One of the major themes of 2019 will be the evolution of security token offerings and the exchanges that list them. Progress on platforms like tZero could serve as a bellwether for the growth and viability of this market.

For bitcoin, the major question mark heading into the new year is whether the U.S. Securities and Exchange Commission will grant fund issuers the right to launch a crypto-backed exchange traded fund (ETF). The regulator is expected to rule on the VanEck SolidX Bitcoin Fund, a highly-touted ETF, by the end of February.

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 738 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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Crypto Update: Sideways Drift Continues but Sellers Still in Control

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While the bounce on Monday gave some hope to crypto bulls that last week’s plunge was just a correction in an ongoing broader counter-trend move, so far, we haven’t seen meaningful follow-through. That means that the bearish short- and long-term trends are still dominant in the segment and sellers are clearly in control of every major top coin.

Also, while volatility is relatively low, correlations are still elevated, and volume patterns are bearish as well, so our trend model remains on sell signals with regards to the overwhelming majority of coin on all time-frames. Traders and investors are still advised to stay away from entering new positions, as we have no evidence the bear market is over, and at least the test of the lows is likely in the coming months.

That said, a quick recovery above the primary resistance levels would be a positive sign here, but until we see signs of technical strength, the defensive approach is warranted as bearish risks remain very high here.

BTC/USD, 4-Hour Chart Analysis

Bitcoin’s relative stability is still the only positive sign among the top coins, but BTC also lacks bullish momentum and it failed to leave the close vicinity of the key $3600 support level. The $3850 resistance is out of reach, for now, and given the clearly bearish long-term setup, traders and investors shouldn’t enter positions here.

A move above that level would be a positive sign for bulls, with further zones between $4000 and $4050, and near $4450, but we still expect a move towards the support levels near $3250 and $3000 in the coming weeks, even if a broader bottoming process might already be underway.

ETH/USD, 4-Hour Chart Analysis

While Ethereum spiked higher again towards the $130 resistance level today, the move failed again and bulls failed to make technical progress, with the recent low still being in danger. A sustained push above $130 could still signal a failed break-down pattern, but the lack of bullish momentum points to a continuation of the decline.  Key support is found near $120 and between $95 and $100, while further resistance is ahead at $145, $160, and near $180.

Altcoins Unchanged and Bearish After Choppy Day

LTC/USD, 4-Hour Chart Analysis

The volatility compression continued in all of the major altcoins as well, but the broad selling pressure is still apparent in the segment. Litecoin failed to get close to the primary resistance zone near $34.50 despite the early-week rally attempt, and it continues to threaten with a move below the key $30-$30.50 support zone.

A breach of support would likely trigger a move towards the $26 level, with the oversold short-term momentum readings now being cleared in the market of LTC. Further strong resistance is ahead near $38 and $44 and with support found near $23, and traders and investors still shouldn’t enter positions here.

XRP/USDT, 4-Hour Chart Analysis

Ripple has been showing signs of relative weakness again today, after the brief period of stability and the technical picture continues to be negative on all time-frames, and our trend model is also on short- and long-term sell signals. The $0.32 price level is still in focus, and we still expect a move below $0.30, with strong support found near the $0.26 level, with resistance ahead near $0.3550 and $0.3750.

DASH/USD, 4-Hour Chart Analysis

Dash remained among the relatively weaker majors as well, and it still hovering around the $70 price level after bottoming out close to $67.50. A test of the bear market low near $56 seems very likely in the coming weeks, and only a move above the strong resistance zone between $76.50 and $80 would change the short-term outlook for the coin.

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 443 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’s Year of Accumulation

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Although bitcoin looks poised to extend its January losing streak to five consecutive years, 2019 will be a year of slow accumulation for the virtual currency, according to Eric Thies, a well-known technical analyst. In the meantime, traders can expect the bear market to reach its climax once a new yearly bottom is breached.

Accumulation Year

In promoting the view that 2019 will be an accumulation year for bitcoin, Thies directed our attention to the major bear trend that emerged in 2015. That was the year bitcoin exhibited significant volatility, albeit in a lower range. Following the latest breakdown in price, bitcoin could be in for a similar trading pattern this year.

“Similar to 2015, 2019 may be the year of accumulation,” Thies said, according to CCN. This means bitcoin is likely to be an attractive investment in $2,000-$4,000 range – even with wild swings priced in.

Bitcoin’s volatility regime has changed dramatically in the last two months. Following a period of unprecedented calm, volatility surged to nine-month highs in the back end of December. Volatility will likely remain a factor for the foreseeable future as the technical tug-of-war continues. More on this: Bitcoin Maintains Narrow Trading Range as Recovery Faces More Resistance.

Circulation Grows

That bitcoin will remain highly volatile is supported by the recent influx of digital currency into circulation. Anonymous owners of dormant bitcoin wallets have been trading with greater frequency since October, which means their activity may have predated the November price collapse.

Data from Flipside Crypto recently showed that long-dormant bitcoin wallets have accounted for about 60% of the market’s circulating supply in the last 30 days alone. What’s more, active bitcoin supply has increased by a whopping 40% since the summer. This, of course, feeds into higher expected volatility.

If that’s not enough, consider that 1,000 addresses hold 85% of available bitcoin. As Bloomberg recently noted, many of these holders remained on the sidelines during the 2017 bull run and its subsequent collapse. If dormant accounts are becoming active again, there’s good reason to suggest that the whales are looking to re-enter the market.

Not Overnight

It’s reasonable to expect that bitcoin will become more attractive at lower prices, especially as more institutional investors access the crypto market in the coming year. But that doesn’t mean the accumulation will happen overnight. Previous bear cycles have taught us that downtrends can stretch for 1-2 years before any noticeable accumulation takes place. The only difference this time is there are more people involved, and more eyeballs on the price.

Additional reading: Crypto Winter and the Fed?

To demonstrate bitcoin’s potential at current levels, and why 2019 will be an attractive year to boost one’s holdings, it’s worthwhile to reflect on the cryptocurrency’s yearly lows rather than its highs. Below is a quick snapshot of bitcoin’s yearly bottoms stretching all the way back to 2012:

  • 2012: $4
  • 2013: $65
  • 2014: $200
  • 2015: $185
  • 2016: $365
  • 2017: $780
  • 2018: $3,200

Traders tend to focus on bitcoin’s lack of new all-time highs as evidence that the market is going nowhere, but these figures clearly show that BTC is a solid investment at almost any period in the last seven years (of course, this isn’t the case if you bought during the peak of 2018).

Make no mistake: technical analysis and market sentiment clearly show there is more pain ahead for bitcoin and the broader cryptocurrency market. But as the long-term value proposition continues to hold, there’s strong reason to believe we haven’t seen the last bull market. In the meantime, 2019 prices could represent a unique buying opportunity for those who missed the boat two years ago.

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 738 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

Bitcoin Maintains Narrow Trading Range as Recovery Faces More Resistance

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Bitcoin’s price held within a narrow range on Wednesday, as the latest corrective bounce failed to spur a bigger buying trend despite the presence of larger than normal volumes.

Stuck in a Range

The bitcoin price is currently trading at $3,673.66, little changed from 24 hours ago, according to aggregate data provided by CoinMarketCap. Over that stretch, BTC traded between $3,620 and $3,698.

At last check, bitcoin was trading hands at $3,614 on Bitstamp. The hourly momentum indicators show very little room for recovery in the short-term, with the RSI falling below 50.

Trading in BTC approached $5.6 billion on Wednesday, with BitMEX accounting for 14.3% of total daily transactions. The Hong Kong-based exchange announced this week that it is halting U.S. accounts amid regulatory scrutiny. It remains to be seen how whether this will have a noticeable impact on bitcoin derivatives trading. Relevant reading: As Race for Bitcoin ETF Heats Up, SEC Identifies Cryptocurrency as a Top Priority in 2019.

Bitcoin made a significant move higher at the beginning of the week, which averted a potentially bigger downfall that could have exposed the cryptocurrency to new lows. Immediate support is eyed at $3,550, the so-called “GTFO” level. The bulls must maintain this level to keep short-sellers at bay.

Bitcoin Sees Backwardation

As Hacked recently reported, bitcoin futures on the CBOE have entered backwardation, which means later contracts are trading consecutively lower than earlier expirations. Typically, futures markets operate in a contango state, meaning distant contracts trade incrementally higher than earlier expirations. In contango markets, futures prices are higher than the spot price, which means that speculators are willing to pay more now for a commodity at some point in the future than the actual price of that commodity when the contract matures.

Backwardation sometimes occurs when a market enters a periodic state of volatility. It’s not uncommon for energy futures or even CBOE VIX Volatility futures to enter backwardation at various points during the year.

In the case of bitcoin futures, volumes remain too low to have a significant impact on the overall market. While BTC circulation has spiked since the fourth quarter began, futures trading on CBOE and CME remain only a small drop in the bucket.

That being said, bitcoin has seen a sharp rise in volatility over the last two months, which eroded a period of unprecedented stability in digital currency trading. Bitcoin’s 30-day volatility index, courtesy of bitvol.info, is currently 4.57%. This figure conveys considerable uncertainty about the size of changes in bitcoin’s future value. The volatility index was as low as 1.02% at the start of November.

The following chart highlights bitcoin’s 30-day volatility index going back three months. As you can see, the November selloff upped the tempo of expected moves in bitcoin’s spot price.

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 738 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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