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Bitcoin Prices Contained by the Narrowest Trading Range in Six Months

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The notoriously volatile bitcoin spot rate has exhibited rare stability over the past eight sessions, a sign that one of the world’s most volatile assets may be on the path to long-term recovery. Bitcoin traders are now asking: what’s next?

Bitcoin Shows Rare Stability

Bitcoin’s recent price movement can be described in many ways: a narrow trading range, a technical hurdle or even the long-awaited stability that many in the crypto community believe is necessary for long-term adoption. Regardless of how you describe it, bitcoin is currently experiencing its smallest price fluctuations in almost six months.

Prior to Thursday’s rally, the digital currency had traded between roughly $8,675 and $9,210 over the past week. Prices peaked above $9,800 on Thursday, the highest since early March. The digital currency was last seen trading around $9,585 for a total market capitalization of $163 billion.

Given the recent moves, prices have found support above the 50-day moving average, which Fundstrat Global Advisors has pegged at about $8,600. The firm, which has become popular among cryptocurrency traders for its insight into bitcoin, recently told Bloomberg that a break above $9,700 could propel BTC higher in the short term.

Bitcoin’s recent streak of narrow moves is both comforting and frustrating if you are a cryptocurrency investor. Although the digital currency skyrocketed in April en route to its strongest month of gains since the December peak, the fundamentals suggest many more milestones can be squeezed out of the latest rally. However, the recent slowdown in growth likely means that a repeat of April is unlikely this month. What’s more, percentage gains of the magnitude we saw in 2017 may be long over for bitcoin. Neither of these things is inherently bad, and as we will soon show, the near future is still very bright.

Why Is Bitcoin So Volatile?

Bitcoin’s reputation for being extremely volatile is well deserved, with price trends over the last few months adding further credence to the fact. The digital currency peaked near $20,000 in December before plunging below $6,000 just a few months later.

Several factors continue to underpin bitcoin’s extreme price fluctuations, chief among them being low liquidity, bad press and varying opinions about its perceived value. The debate over bitcoin’s status as a currency or commodity also makes it difficult to predict how investors will respond to the asset.

Those who hold a larger portion of bitcoin also contribute to the volatility when they decide to convert it into fiat currency. As we’ve seen repeatedly, the ‘bitcoin whales‘ have a tendency to generate oversized moves in the market.

Proponents of bitcoin and digital currency more generally believe the answer to many of these challenges lies in institutional adoption. A greater inflow of institutional cash, combined with more options to trade the digital asset, could propel the market forward. Institutions currently play a smaller role in the market but that is expected to change very soon.

America’s largest exchanges are already trading bitcoin futures contracts. The Chicago Board Options Exchange (CBOE) is also leading broader efforts to list bitcoin-based exchange-traded funds (ETFs), a move that could link crypto to a multi-trillion-dollar market, and one of the fastest growing to boot.  Recent news of Goldman Sachs entering the bitcoin market will also bolster institutional presence and possibly encourage other banks to join its ranks.

That said, extreme value swings aren’t expected to go away anytime soon. For early adopters, that could turn into a positive if the bulls are correct in their belief that bitcoin is destined for new highs this 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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4.7 stars on average, based on 743 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 Turns Defensive Following Sunday Slide; Binance Euro Platform Sees “Huge” Demand Amid Brexit

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Bitcoin traded within a narrow range on Monday, after a sharp and sudden reversal during the previous session dragged prices back toward $3,500. The largest digital currency by market capitalization faces renewed headwinds in the wake of yet another failed attempt to break through the $3,700-$3,800 range.

BTC/USD Update

The bitcoin price slipped 0.4% on Monday to $3,581.16, according to aggregate data provided by CoinMarketCap. Bitcoin fell 4% on Sunday in the span of an hour, where it briefly pierced below $3,550. During the previous session, BTC had gained 2.5% as part of a broad market rally that included altcoins and tokens.

The following chart highlights bitcoin’s present value via Bitstamp. Weak momentum via the MACD can be clearly observed.

A sustained drop below $3,550 would spell trouble for bitcoin, as it would mean the loss of a long-term vital support. This would likely lead to an imminent drop to the $3,400 region and, possibly, a re-test of the December low near $3,100. Another possible scenario is a bounce off $3,400, which would keep prices very much rangebound.

Trading in BTC has picked up sharply since the beginning of the year, with daily volumes climbing above $5 billion. Over the last 24 hours, more than $5 billion worth of BTC traded hands on virtual currency exchanges. BitMEX continues to be the largest by overall volume, though its share has declined after it announced the closure of U.S.-based accounts.

Bitcoin’s Price Recovery Stalls as BitMEX Shuts Down U.S. Accounts.

Bitcoin’s market cap is currently valued at $62.6 billion, which represents 52.4% of the overall crypto universe. Its share has steadily increased during the bear market as interest in altcoins and tokens continued to diminish.

Europe and the Future of Crypto

Cryptocurrency exchange Binance has shined the spotlight on the European region after the company announced it would expand its fiat-to-crypto offerings to the region. The leading exchange will service the region through the Island of Jersey, a self-governing entity of the United Kingdom. The Binance Jersey platform will allow traders to buy bitcoin, Ethereum and other cryptocurrencies through traditional fiat channels like the euro and British pound.

Binance CEO Changpeng Zhao, also known as CZ, said the new exchange is “overwhelmed with registrations.” As Forbes recently noted, the strong demand for crypto trading comes at a time of heightened uncertainty regarding Brexit. That uncertainty has not only roiled traditional financial markets, it has cast a dark shadow over London’s role as a traditional banking hub.

Although bitcoin and Brexit aren’t directly linked, cryptocurrency regulation in Europe is likely to crystalize this year. It remains to be seen whether this will serve as an added draw for investors to diversify into digital assets as a store of value should Brexit implode.

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 743 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 Reverses Gains as Bears Eye Breakdown of Major Support Level

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Bitcoin swung lower on Sunday, giving back all of Saturday’s gain and setting the stage for a possible re-test of a long-term support level.

BTC/USD Update

Bitcoin’s price fell 4% to $3,596.96, where it was approaching an important long-term support. That level is located at $3,550. A successful penetration south by the bears could set the stage for a bigger drop toward new yearly lows. As a refresher, bitcoin bottomed near $3,100 last month before rebounding more than 30%.

Read: Bitcoin Approaches “GTFO” Level.

The bulk of the selloff on Sunday occurred over the span of one hour beginning around 06:30 UTC. Trading volumes have remained elevated throughout the session, with roughly $5.4 billion worth of BTC trading hands on virtual currency exchanges.

More on this story: Return to $100 Billion Awaits as Crypto Market Loses $5B in One Hour.

The leading digital currency received a boost heading into the weekend, as buyers re-emerged following a period of hesitation. Bitcoin climbed back above $3,700 on Saturday before the latest reversal took root.

Broad Market Reversal

Even with the recent decline, bitcoin’s share of the overall cryptocurrency market was little changed at 52.5%. That’s because altcoins and tokens registered bigger percentage losses, with Ethereum, bitcoin cash and EOS each falling 4.5% or more.

Alternative cryptocurrencies tend to gravitate around bitcoin, especially during bearish trends. Justified or not, bitcoin continues to be a major influence on how other assets perform. At the time of writing, the total cryptocurrency market cap was worth $119.8 billion.

Trading across all virtual assets has remained elevated over the last 24 hours, with total volumes exceeding $16.7 billion. Cryptocurrencies have seen a substantial rise in circulation over the past three months as long-dormant accounts became active once again.

In less than one month, cryptoassets will enter its longest bear market in history, according to CNBC’s Ran NeuNer. As of Sunday, the bear market has stretched on for 394 days. The longest on record was seen back in 2014-15 when the bear trend lasted for 420 days.

2019 could be a year of accumulation for bitcoin, as long-term holders and institutional investors look to capitalize on low prices. As we recently speculated, bitcoin will likely prove to be an attractive investment in the $2,000-$4,000 range. The current hesitation reflects uncertainty about whether the market has reached a definitive bottom.

Read: Bitcoin’s Year of Accumulation.

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 743 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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Altcoins

Crypto Markets Get a Boost Heading Into the Weekend as Debate Over Bitcoin ETF Intensifies

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Cryptocurrency prices rose on Saturday, alleviating the risk of an imminent pullback following days of mostly lateral moves. As history has shown, longer periods of sideways trading are often followed by brisk selloffs in bitcoin and altcoins.

Flush of Green

The biggest cryptocurrencies all reported gains at the start of the weekend. Bitcoin, the largest by market cap, climbed back above $3,700 in a show of momentum for the bulls. At last check, the bitcoin price was valued at $3,744.11, having gained 2.5% from Friday.

Bitcoin’s price broke out on Monday but failed to generate sustained bids throughout the week. As a result, it spent most of that period hovering between $3,600-$3,700. Bitcoin faces a major long-term support at $3,550; a break below this key level could be a momentum killer for the bulls.

The leading digital currency continues to be a good barometer for the overall market. With a market dominance rate of 52.5%, bitcoin has a direct impact on how altcoins and tokens perform. It comes as no surprise that coins other than bitcoin rose by more than $2 billion on Saturday, according to CoinMarketCap.

The total market cap of all cryptocurrencies improved to $124.7 billion, up markedly from a 24-hour low of $120.9 billion.

Litecoin was the top gainer among major cryptos, rising 4.4% to $32.65. XRP added 1.7% to $0.3313, Ethereum climbed 2.5% to $125.01 and bitcoin cash rose 1.4$% to $130.70.

Outside the top-ten, IOTA rose 4.1% to $0.3246. NEO advanced 5% to trade at $8.09.

Bitcoin ETF Debate Continues

The U.S. Securities and Exchange Commission (SEC) has a big decision to make in roughly five weeks: approve or reject the VanEck SolidX Bitcoin Trust. Unlike previous crypto ETF applications, the VanEck-SolidX application proposes a physically-settled bitcoin fund that addresses many of the SEC’s ongoing concerns around investor protection and market manipulation.

Some investors are clinging to the hope that SEC approval of the VanEck-SolidX product will give the market a much needed boost by the end of the first quarter. But the impact of the approval/rejection could depend largely on how the market performs heading into the decision, now slated for Feb. 27. As Hacked reported last month: “The rejection of an ETF approval could affect the market if the price of Bitcoin has been increasing in anticipation of the announcement.” More here.

The consensus among analysts and market observers is that the SEC is unlikely to approve any bitcoin ETF this year. This view was recently echoed by bitcoin bull and CNBC contributor Brian Kelly, who says the bitcoin futures market isn’t mature enough to allow for an ETF to be approved. He didn’t comment specifically on the VanEck application, which has been designed as an alternative to futures-linked products by holding a repository of physical BTC as opposed to derivatives.

The SEC’s Office of Compliance Inspections and Examinations (OCIE) named crypto as one of six regulatory focal points for 2019. In a recently released report, OCIE said: “Given the significant growth and risks presented in this market, OCIE will continue to monitor the offer and sale, trading, and management of digital assets, and where the products are securities, examine for regulatory compliance.”

For more on this story, read: As Race for Bitcoin ETF Heats Up, SEC Identifies Cryptocurrency as a Top Priority in 2019.

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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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 743 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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