Crypto Markets Regain their Luster as Facebook Eyes ‘GlobalCoin’ Launch; Huge Bitcoin Rally Could Be Coming, but Only After Correction

Roughly one week ago, bitcoin (BTC) and its altcoin peers experienced a sudden flash crash that had many in the industry worried about a deeper correction in the near future. It would later come to light that the sudden drop in BTC, which occurred on May 16, was attributed to a single liquidation event on Bitstamp. An unknown bitcoin whale dumped 5,000 BTC in a single trade, a move that cascaded across the digital currency market.

The cryptocurrency market quickly recovered from the event, as evidenced by the double-digit weekly returns for bitcoin and some of the large-cap altcoins. Bitcoin has returned to the coveted $8,000 range, but faces stiff resistance up ahead. If history is any indication of where we go from here, there will be plenty of ups and downs for the bitcoin price before it launches through the stratosphere.

Crypto Markets Recover

At the time of writing on May 24, all major cryptocurrencies with the exception of bitcoin SV (BSV) were reporting gains over the 24-hour cycle. Week-on-week, the market is flush green, with bitcoin gaining nearly 11%, Litecoin (LTC) more than 12% and Binance Coin (BNB) a whopping 36.6%.

Even BSV is eyeing a weekly return of 70.5% after the unusual Craig Steven Wright filed a U.S. copyright claim for the original Satoshi Nakamoto whitepaper (the Copyright Office didn’t buy it).

Cryptocurrency prices
Most of the top-20 cryptocurrencies reported gains this week. | Source: CoinMarketCap.com

The total cryptocurrency market is now worth roughly $249.6 billion, according to CoinMarketCap. The market bottomed around $222 billion roughly seven days ago. Bitcoin’s share of the total pie is equivalent to 56.7%, down from a previous high of around 60%.

The bulls are clearly in the driver’s seat for now, with altcoins showing greater recovery potential. Read why Ethereum (ETH) could hold the key to the next altcoin season in our latest Top 3 Price Prediction

Next Major Bitcoin Rally?

As Hacked recently reported, bitcoin experienced several massive corrections during the last bull market, which ended on a high near $20,000. It seems that bitcoin hoarding is best done buying on the dip, which explains why each of the 30+% corrections between 2015-17 was snatched up by the market bulls.

As colleague Joseph Young recently pointed out, bitcoin’s price sees an average profit of 153% after those 30% drops. The actual profit measure was calculated by Josh Rager, a closely-followed cryptocurrency trader.

If you’re a long-term holder, the formula is simple: wait for bitcoin to experience a sharp pullback and increase your holdings. The historical trend suggests this is one of the smartest approaches to increasing your exposure to BTC aside from regular cost-averaging.

Bitcoin Price
Bitcoin (BTC/USD) remains in heavy accumulation. | Source: TradingView.

Also read Bitcoin: One Year Out from Quadrennial Halvening, Get Ready for Chaos.

Facebook Plans New Cryptocurrency for 2020: Report

BBC News reported Friday that Facebook is planning an initial roll out of its new cryptocurrency in 2020, a move that could hasten the adoption of blockchain-based payment systems.

Dubbed ‘GlobalCoin,’ the new cryptocurrency will be implemented in about a dozen countries during the first quarter of 2020. Testing of the new payment system will begin this year.

Rumors linking Facebook to cryptocurrency have circled for many years, though tangible clues about a new digital payment system began to emerge in late 2018. The company at the time was reportedly seeking a new stablecoin for WhatsApp, one of its most popular messaging apps. Facebook would later acquire a smart contract firm by the name of Chainspace, all but confirming its intention to innovate in the blockchain arena.

Hacked reported earlier this month that the social media company was already in talks with private investors about raising $1 billion for its new cryptocurrency payment system. We reported at the time:

“… Facebook is seeking roughly $1 billion for the new initiative and has already approached credit card companies Visa and MasterCard about a potential partnership. The cash infusion would ensure ‘FB coin’ is well capitalized and stable, unlike most of the major cryptocurrencies today.”

The Week Ahead and Things to Consider

The end of ‘crypto winter’ was widely predicted by the analysts, but the advent of ‘crypto spring’ has occurred much quicker than many had envisioned. Peak-to-trough, bitcoin is up 150% in the span of less than six months. Altcoins led by Litecoin and Binance Coin have also seen rapid gains, offering definitive proof that the market has turned in the bulls’ favor.

Big things appear to be on the horizon in terms of adoption, institutional trading and development, all of which will have a direct impact on prices. But the path higher, if it should continue to materialize, will be accompanied by major pullbacks. As Rager pointed out, the reward for buying on the dip could be huge.

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. Charts via CoinMarketCap and TradingView.

Author:
Chief 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