Connect with us

Bitcoin

Bitcoin Sees Biggest Volatility Spike of the Year; Should Long-Term Holders Be Worried?

Published

on

Bitcoin’s precipitous drop over the past 48 hours has rendered the virtual currency highly susceptible to new bear-market lows. According to one indicator, the sudden and dramatic downshift disrupted a period of calm not seen  disrupted a period of calm not seen in over two years.

Bitcoin Volatility Surges

In the span of just 24 hours, bitcoin’s 30-day volatility index more than doubled, reaching the highest level since early October. The doubling was not only the quickest surge in expected volatility exhibited this year, but also the largest in terms of percentage growth.

According to bitvol.info, the volatility index surged to to 2.16% on Wednesday compared with just 1.05% on Tuesday. Just one day prior, the volatility tracker reached its lowest level since 2016.

To provide a comparison of just how quickly fortunes changed, the volatility index jumped 0.87 percentage point between July 22 and Aug. 13. The 30-day tracker also climbed 1.1 percentage point over a four-week stretch ending July 2. Despite those gains, the volatility regime has been in a firm downtrend since the beginning of the year thanks in large part to the arrival of bitcoin futures trading on CBOE and CME.

To recap: the bitcoin volatility index measures how much the price of BTC varies over time. The 30-day reading is calculated using the standard deviation of the daily open price over the previous month. The volatility index is also reported at 60-day, 120-day and 252-day windows. In all cases, the figures have skyrocketed over the course of the week.

In the fast-moving crypto markets, volatility is a double-edged sword. Periods of heightened uncertainty bring about substantial changes to the underlying price of digital assets. This can go both ways: it can produce unprecedented gains like we saw in 2017 or relentless crashes like we’ve observed on at least three occasions this year.

Where’s the Bottom?

Bitcoin’s outlook turned bleak on Wednesday after prices crashed below the $6,000 floor, opening the door to fresh yearly lows that pierced below $5,200. With fundamental support ($6,000) blown out of the water, market participants are bracing for a more protracted downturn in the weeks and months ahead.

Aggregate data via CoinMarketCap show an average bitcoin price of around $5,545 as of Saturday afternoon. Should bearish sentiment prevail, a test of the $5,000 support could be on the horizon. This level is consistent with forecasts put forward by leading crypto analysts Willy Woo and Crypto Rand.

As reported by Hacked three weeks ago, bitcoin’s NVT Ratio leaves little doubt about the intensity and longevity of the current bear market. The ratio, which divides bitcoin’s market cap by its average daily volume, suggests we are about halfway through a long-term bear trend. Declining trade volumes, the absence of retail interest and a deep schism in the bitcoin cash community all play into this narrative. Market manipulation also cannot be ruled out when analyzing sharp and sudden movements in the bitcoin price, especially with no fundamental catalyst present.

These factors should have very little impact on long-term holders of bitcoin. For starters, BTC is gaining widespread acceptance in institutional circles. Although this has not yet resulted in a commensurate uptake in actual trading, bitcoin and digital assets more generally have enjoyed wider recognition as a legitimate asset class. Secondly, bitcoin’s fundamental picture has changed very little from peak-to-trough, which suggests that the downturn has less to do with bitcoin’s perceived value as an asset class/future payment platform and more to do with market sentiment, speculation and technical re-positioning.

Thirdly, bitcoin whales appear to have played no part in the latest price collapse. If anything, whales have contributed to bitcoin’s continued stability over the past year. So long as the largest wallets aren’t actively unloading their positions, there’s little reason to fear that big investors have a vested interest in tanking the market.

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.

Rate this post:

Important for improving the service. Please add a comment in the comment field below explaining what you rated and why you gave it that rate. Failed Trade Recommendations should not be rated as that is considered a failure either way.
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)
You need to be a registered member to rate this.
Loading...

4.6 stars on average, based on 704 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




Feedback or Requests?

Bitcoin

Bitcoin Price Showcases Resilience Following Anniversary Rally

Published

on

Bitcoin held on to most of its gains Tuesday, as the market consolidated higher following an early-week rally that coincided with the one-year anniversary of its last record high. The bulls aren’t out of the woods yet, and price action over the next 24-48 hours could dictate whether the newfound strength is here to stay.

BTC/USD Update

The bitcoin price reached a session high of $3,684.40 on Bitfinex, which was a considerable premium compared with other exchanges. At the time of writing, BTC/USD was trading hands at $3,594. The leading digital currency was valued anywhere between $3,470-$3,522 on other leading exchanges including Coinbase, Bitstamp, Gemini and CEX.io.

Looking at the aggregate pricing data, bitcoin was last valued at $3,523, having gained 4% over the past 24 hours, according to CoinMarketCap. Over the same period, trade volumes have surged by $1.7 billion to $5.8 billion, signaling a strong bullish shift in market sentiment.

Bitcoin approached $3,700 on Monday following a double-digit rally that reverberated across the virtual currency market. The rally came exactly one year after bitcoin notched its last record high, the now famous $20,000 bull run.

The spike pushed BTC into overbought territory, according to the Relative Strength Index (RSI). The RSI has since moderated back to the mid-50 region, according to the latest monthly chart.

The total cryptocurrency market cap was last spotted just below $113 billion. The market peaked above $115 billion on Monday. Market-wide trade volumes surged to $17.3 billion, according to latest available data.

Spencer Bogart Remains Bullish

One of bitcoin’s strongest backers believes 2018 has been a fantastic year for the leading digital currency – that is, if one looks past the price action.

In a new interview with CNBC, Blockchain Capital partner Spencer Bogart said there doesn’t appear to be an imminent ceiling to bitcoin’s market cap, arguing that the value limitations usually associated with early-stage tech startups do not apply to bitcoin.

“Bitcoin does not make a kind of price-to-earnings or price-to-value revenue that normally puts an upper bound or a ceiling on a typical kind of early-stage technology company,” Bogart said, according to CCN. “Bitcoin can surely reach that high. But how long will it take – we are not sure yet.”

From the perspective of institutional adoption and business development, 2018 has been a positive year for bitcoin. That value metrics have skewed the outlook to the downside isn’t at all surprising given last year’s crypto euphoria, which generated massively inflated prices in a short period of time. According to several analysts, the end of ‘crypto craze’ is a positive step toward establishing stability and predictability in the nascent asset class.

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.

Rate this post:

Important for improving the service. Please add a comment in the comment field below explaining what you rated and why you gave it that rate. Failed Trade Recommendations should not be rated as that is considered a failure either way.
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)
You need to be a registered member to rate this.
Loading...

4.6 stars on average, based on 704 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




Feedback or Requests?

Continue Reading

Analysis

Crypto Update: Ripple and Litecoin Lead Another Rally Attempt

Published

on

The last 48 hours saw a nice bounce in the cryptocurrency segment, which led to improvements in the short-term technical setup of some of the most oversold coins. While the rally, which is being spearheaded by Litecoin and Ripple, hasn’t changed the still overwhelmingly bearish long-term picture, it could be the start of a larger scale counter-trend move. We will take a closer look at the broader picture in our long-term cryptocurrency analysis, which will be released tomorrow.

The deeply oversold long-term momentum readings and the horrible sentiment in the segment could fuel a more sustained move, but until we have confirmation that the short-term trend change in the key coins, traders and investors should remain defensive even towards the relatively stronger coins.

The strongest coins should form a pattern of higher highs and higher lows before entering new positions, and for now, our trend model only shows neutral short-term readings even in the case of the leaders, and most of the coins are still on sell signals on both time-frames.

BTC/USD, 4-Hour Chart Analysis

Bitcoin hit marginal new bear market lows before bouncing higher yesterday, and although the coin got close to the $3600 level, it remains in a bearish technical setup, and our trend model is still on sell signals on both time-frames.

That said, a move above primary resistance could set up a failed breakdown pattern, which could trigger a larger scale correction, but for now, traders and investors shouldn’t enter positions here. Further strong resistance is ahead between $4000 and $4050, while support is found near $3250 and $3000.

ETH/USD, 4-Hour Chart Analysis

Ethereum also remains on sell signals on both time-frames despite the rally attempt, as it continues to be stuck below the key $95-$100 resistance zone. The coin is still deeply oversold from a long-term standpoint, but until a confirmed short-term trend change, odds still favor new lows in the coming weeks, and traders should stay away from Ethereum here. Further strong resistance is ahead near $120 and $120, while the next major support zone is found between $73 and $75.

Bullish Leadership Finally Forming Among Altcoins?

LTC/USD, 4-Hour Chart Analysis

Litecoin spiked as high as the $30-$30.50 support/resistance zone on Monday after breaking out above the $26 resistance level and it also broke the steep short-term downtrend line. Should the coin form a higher swing while remaining above $26, a short-term trend change would be confirmed, but for now, given the clearly bearish long-term picture, traders should wait before entering the coin’s market. Below $26, key support is found between $23 and $23.50 while the next major resistance level is ahead at $34.50.

XRP/USDT, 4-Hour Chart Analysis

Ripple is on a similar technical position to Litecoin, as although the sharp bounce took the coin above both the $0.30 and $0.32 resistance levels after hitting marginal new lows, a short-term trend change is not yet confirmed.

The coin needs to form a higher swing low and stay durably above $0.32 for an upgrade to buy in our trend model, and for now the long-term sell signal remains clearly in place, with the next major resistance zone is found near $0.3550.

XMR/USDT, 4-Hour Chart Analysis

On a negative note, only a few coins show clear technical improvements thanks to the rally attempt, and the likes of Monero, DASH, Stellar, NEO, and ETC only registered weak bounces and even in the case of the surging EOS and IOTA, the gains were only enough to regain a fraction of the recent losses.

So, while a short-term trend change could be ahead after the rout, traders should remain cautious until a clear bullish leadership is established in the segment.

Featured image from 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.

Rate this post:

Important for improving the service. Please add a comment in the comment field below explaining what you rated and why you gave it that rate. Failed Trade Recommendations should not be rated as that is considered a failure either way.
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)
You need to be a registered member to rate this.
Loading...

4.7 stars on average, based on 421 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.




Feedback or Requests?

Continue Reading

Bitcoin

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

Published

on

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.

Rate this post:

Important for improving the service. Please add a comment in the comment field below explaining what you rated and why you gave it that rate. Failed Trade Recommendations should not be rated as that is considered a failure either way.
1 vote, average: 5.00 out of 51 vote, average: 5.00 out of 51 vote, average: 5.00 out of 51 vote, average: 5.00 out of 51 vote, average: 5.00 out of 5 (1 votes, average: 5.00 out of 5)
You need to be a registered member to rate this.
Loading...

4.6 stars on average, based on 704 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




Feedback or Requests?

Continue Reading

Recent Posts

A part of CCN

Hacked.com is Neutral and Unbiased

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.

Trending