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Crypto News Updates

Bitcoin Analyst Sees “Aggressive” Bull Run Towards $64,000; Here’s Why

Bitcoin prices could undergo an aggressive bull run in the coming sessions, with their upside price targets lurking anywhere between $60,000 and $64,000.

The bullish analogy comes from TradingShot, an independent analytics firm known for accurately predicting Bitcoin’s previous close above $50,000. Their analyst noted that BTC/USD has been trading inside an ascending channel range, defined by an upper trendline resistance, a median, lower trendline support.

He spotted a fractal pattern. Of late, Bitcoin typically pullbacks after testing the Channel’s upper trendline to test the median line as support. Later, the cryptocurrency breaks bearish towards the Channel’s lower trendline—the so-called “Support Base,” before retracing its move upward to retest the media, this time as resistance.

Bitcoin, cryptocurrency, BTCUSD, BTCUSDT

Bitcoin bounces off 200-MA support on a four-hour chart. Source: BTCUSD on TradingView.com

In 2021, Bitcoin is reiterating the fractal. The cryptocurrency has just bounced off the support base after correcting 21 percent from the Channel’s upper trendline above $58,000. Meanwhile, it now tests the median line (coupled with the 50-4H moving average wave) as resistance.

The TradingShot analyst noted that a successful break above the median line would put Bitcoin en route to testing the Channel’s upper trendline. It could also happen as the cryptocurrency’s Relative Strength Indicator forms higher lows, indicating room for further accumulation on each downside attempt.

“All the parameters suggest that based on that Channel Up, the price has most likely found its medium-term Support,” the analyst wrote. “If the 4H MA50, but more importantly the Channel’s median, break, then an aggressive path may open towards the $60-64k zone.

“However,” he added, “if the price gets rejected on or below the median, the Support base will most likely get tested again where consolidation below the median may follow for around 10 days until it breaks.”

Fundamentals

TrdingShot’s analogy appears in the wake of Bitcoin’s relentless uptrend since the coronavirus pandemic began. The cryptocurrency rose from $3,858-low in March 2020 to as high as $58,367 in February 2021—a more than 1,200 percent rise in just eleven months.

At the core of Bitcoin’s price rally were the US Federal Reserve’s near-zero lending rates and its unlimited bond-buying policy. The dovish programs forced the yields on US Treasury bonds lower, prompting investors to move their capital in far riskier markets.

Meanwhile, the prospect of the Fed’s quantitative easing, coupled with the US government’s trillions of dollars worth of stimulus, pushed the US dollar index down by more than 12 percent. All of it helped Bitcoin, a non-yielding asset with a limited supply cap of 21 million. Investors flocked to the cryptocurrency after assessing its gold-like anti-inflation features.

Hence, BTC/USD boomed, helped further by an adoption spree that saw firms like Tesla, MicroStrategy, Square, and others add billions of dollars worth of BTC into their balance sheets.

Bitcoin Risks

But an overzealous capital inflow into the Bitcoin market has also increased the fears of it being a bubble. Many analysts fear that the cryptocurrency deserves a big downside correction to neutralize its overvalued levels. The worries have grown further as the bond yields recover to pre-pandemic levels, making Treasurys attractive enough to hold.

“That’s because as yields go on a run, then money will flow into government bonds, which also means the U.S. Dollar Index (DXY),” said Ben Lilly, an independent cryptocurrency analyst. “These two types of flows can hurt bitcoin and crypto, as we saw late last week.”

Bitcoin, cryptocurrency, BTCUSD, BTCUSDT

Bitcoin price bounces off its 200-MA wave. Source: BTCUSD on TradingView.com

Bitcoin was trading 16.14 percent lower from its previous record high at this press time.

Source: Bitcoinist News

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Crypto News Updates

Citi’s Bitcoin Report Does Little in Offsetting Yield Fears; Price Down Again

Bitcoin kickstarted the week with an incredible recovery rally, negating a considerable portion of its losses from the previous weekly session against a downside correction in US bond yields.

Nevertheless, the flagship cryptocurrency’s intraday bull run failed to garner further higher bids on Tuesday. A sell-off at the local top ensued due to profit-taking sentiment, pushing its prices lower by as much as 3.72 percent to $48,380. Bitcoin was still up 7.5 percent on a week-to-date timeframe.

Part of the cryptocurrency’s gains also received a boost from Citi’s latest report on cryptocurrencies. The investment bank concluded that Bitcoin could become a currency of choice for international trade. Nonetheless, the upbeat projections did little in maintaining the asset’s intraday bias.

Bitcoin, cryptocurrency, BTCUSD, BTCUSDT

Bitcoin slips on Tuesday. Source: BTCUSD on TradingView.com

Bitcoin’s downside move Tuesday appeared in the entire cryptocurrency market, with top tokens like Ethereum and Binance Coin each tailing Bitcoin to its intraday losses. Overall, the crypto market lost about $23 billion during the Asia session, setting the forthcoming periods on alert mode about potential declines.

Yields FUD

Bitcoin’s 21 percent price decline last week and its recovery on Monday appeared in response to the ongoing turbulence in government-bond markets. Global 10-year interest rates rose on optimistic economic growth forecasts, putting pressure on assets that performed well against falling yields in 2020. As a result, bitcoin plunged alongside tech stocks.

But on Monday, the yields stabilized, providing the cryptocurrency a break from its corrective moves. It received a further boost after Australia’s central bank responded to rising bond yields by doubling its Treasury purchases. Interest rates move inversely to bond prices.

Analysts noted the US Federal Reserve would need to take a similar call. Crypto economist Ben Lilly said in his weekly newsletter that rising yields would push the cost-to-service debt higher, which is “very troubling in an economy that’s still operating at less than full capacity in light of COVID.”

“It’s why J-Pow and the Federal Reserve can’t sit idle,” Mr. Lilly added. “Let me rephrase that… It’s why they haven’t sat idle. They are already acting in the markets by purchasing U.S. debt (bonds).”

US Treasury, Fed Total Assets

The US Federal Reserve’s balance sheets as of this week. Source: FRED

Bulls have long perceived central banks’ intervention into the bond markets as optimistic for Bitcoin. As they rake up Treasurys, they effectively push the yields on them lower, making them less attractive for other investors. As a result, the money starts flowing into riskier assets.

Bitcoin…

…rose by more than 1,200 percent after the Fed launched its unlimited bond-buying program and slashed interest rates to near-zero last March. Meanwhile, the Wall Street indexes also posted incredible rallies amid the central bank’s expansionary policies.

“The more central banks around the world purchase assets, keep yields low, and continue to add more ink cartridges to the money printer, the more vertical this cycle might be,” noted Mr. Lilly. “However, if the FED decides to change course and tighten up, this can act as a major headwind for crypto.”

The 10-year US Treasury note’s yield was near 1.415 percent on Tuesday, a slight down from its previous day’s close at 1.422. Investors now await Fed official appearances for clues about whether the central bank will do anything about the rising interest rates.

Source: Bitcoinist News

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Crypto News Updates

Bitcoin (BTC/USD) Signals Falling Wedge Breakout to Retest $58,000

Bitcoin opened this week in positive territories, looking to recapture its record high levels after crashing to its three-week lows in the previous session.

The benchmark cryptocurrency was up 4.70 percent ahead of the London morning bell, hitting an intraday high shy of $47,500 after bouncing off its 200-4H simple moving average wave. Its sharp pullback also helped it broke above a descending trendline resistance that comes as a part of a Falling Wedge pattern.

In retrospect, traders perceive Falling Wedges as bullish reversal patterns that form when an asset slips lower while forming a sequence of lower highs and lower lows. That ends up making two converging trendlines. Traders realize a bullish bias when the asset convincingly breaks the Wedge’s resistance, accompanied by higher volumes.

Bitcoin Above $50,000

On Monday, Bitcoin posted a similar resistance breakout, with its volumes on a four-chart stabilizing alongside. The move upside signaled that the cryptocurrency could post extended gains in the sessions ahead, with levels above $50,000 looking like ideal primary upside targets for bulls.

Bitcoin, cryptocurrency, BTCUSD, BTCUSDT

Bitcoin breaks out of the so-called bullish reversal pattern. Source: BTCUSD on TradingView.com

However, a convergence of 50-4H simple moving average (the blue wave) and a resistance horizontal line near $52,170 should test the bitcoin bulls before they attempt to reclaim the ultimate Wedge primary targets above $58,000. Meanwhile, the support area of $43,000-45,500 needs to hold the floor to stop bears from taking control or risks declining BTC/USD rates to lower $40,000s or upper $30,000.

Overall, the early moves upside this week show that bears are losing focus in the short-term, which should help Bitcoin sustain its recovery up until $50,000 in the best-case scenario.

Macro Narrative

Bitcoin’s recovery takes cues from a recovery in US government bonds on Friday and Monday. Meanwhile, the cryptocurrency expects to remain healthy also as US President Joe Biden’s $1.9 trillion stimulus proposal advances through the House of Representatives.

The bill is now in Senate, controlled equally by Democrats and Republicans, with a decisive vote lying with Vice President Kamala Harris, a Democrat. That has vastly improved the likelihood that the bill would become law even if the entire Republican lot votes against it.

Analysts at Ecoinometrics noted that the Federal Reserve holds about $1.5 trillion in its Treasury General Account.

Meanwhile, Treasury Secretary Janet Yellen has clarified that her office plans to spend all the money to stay in course with Mr. Biden’s expansionary plans, which, in addition to the stimulus, also concerns a $1.4 trillion worth of student loan forgiveness and spending another $3 trillion for infrastructure projects.

“That’s all on the table for 2021, and the total is $6.3 trillion that the US Treasury is going to have to find somewhere,” Ecoinometrics stated. “Even if the final number comes lower, it’s still several trillion, way more than what is sitting on the Treasury General Account at the moment.”

“In that environment, I can only see the narrative for Bitcoin as a hedge against the risk of inflation strengthening,” the data analysis portal added.

Source: Bitcoinist News

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Crypto News Updates

Bitcoin Weekly Outlook: T-Bonds Threaten Crucial BTC/USD Support

Key Bitcoin Takeaways:

  • Bitcoin fell wildly last week as the US dollar capitalized on rising Treasury bond yields.
  • Nonetheless, dip-buying sentiment near a technical support level kept the cryptocurrency’s bullish bias intact.
  • A further rise in yields could have bears test the support area for a breakdown.

The BTC/USD exchange rate logged a sharp rebound and erased a major portion of its previous week’s losses on Monday. It was able to close the Sunday session above $45,000, a level that falls inside the support area that has capped Bitcoin’s bearish attempts from turning a full-fledged sell-offs.

Nevertheless, the cryptocurrency fell by up to 26.30 percent after settling its record high above $58,000 on February 21. There was a clear indication of profit-taking across all the riskier markets, including technology stocks. The carry trades themselves came in the wake of a late-week US dollar rally, buoyed by a dramatic rise in the Treasury yields so far this year.

US 10-year Treasury note, US10Y, bond yield, bitcoin

US 10-year Treasury note yield corrected lower at the end of last week. Source: US10Y on TradingView.com

The interest rate on the benchmark 10-year note jumped from 1 percent at the beginning of 2021 to over 1.6 percent ahead of February close, its highest level in a year. Its uptick reduced the appeal of Bitcoin, a non-yielding asset, as it already traded at overvalued levels.

That led to a massive downside correction, with the price dipping to as low as $43,016 in the previous session. However, a correction in 10-year note yields at the end of last week and the beginning of the new one coincided with an uptick in the Bitcoin markets.

Technical Support Held

The inverse moves between the 10-year note yield and Bitcoin this week do not guarantee a negative correlation. More so, they have to do with a strong buying sentiment in the Bitcoin markets inside a provable support area highlighted in the chart below.

Bitcoin, cryptocurrency, BTCUSD, BTCUSDT

Bitcoin regains the support area that last sent its prices to record highs. Source: BTCUSD on TradingView.com

So far, the range has capped bears from extending their sell-off bias. Many analysts see it as a validation that Bitcoin’s ongoing correction won’t last. Instead, bulls will take over the market and push the prices back to their recent record levels.

“Even in this correction, the outflow of Bitcoin from exchanges is still heavy,” argued Michaël van de Poppe, an independent market analyst. “This means that people are buying their Bitcoin to hold in cold storage as an investment vehicle and those are not selling. We’re still early. In a healthy correction.”

Bitcoin This Week

Santiment notes that Bitcoin’s 30-day correlation with the US stock market has grown stronger lately. At the core of their copycat trends lies—again—the rising bond yields.

The first big impetus comes from the improving vaccine rollout across the world, reigniting hopes of faster-than-expected economic recovery once life goes back to normal. Then, the Democrats took control of the US Senate, making it possible for president Joe Biden to pass his ambitious $1.9tn stimulus that would further balm the economy.

It has pushed the inflation expectations higher, causing a sell-off in the bond markets in recent weeks. It also comes as investors fear that the Federal Reserve would tighten their monetary policies more quickly than previously reported. The central bank chairman Jerome Powell has indicated that his office would keep rates lower until they push the inflation above 2 percent.

Underscoring this tense climate is recent wild swings in the tech stock and Bitcoin markets and growth in shares that lost the most during the pandemic. Santiment notes:

“As we’ve noted in previous data studies, BTC rallies tend to be the most prominent when [the cryptocurrency’s correlation with the US stocks] turns negative, as it did in December 2020.”

Bitcoin, cryptocurrency, BTCUSD, BTCUSDT

Bitcoin fluctuates in line with the S&P 500. Source: Santiment

Erratically, a further rise in US bond yields could push the Bitcoin prices lower. Should it happen, the pressure to maintain the upside bias would fall on the technical support area, as mentioned above. Else, the price risks fall to $40,000 or lower.

Source: Bitcoinist News

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Crypto News Updates

A $40,000 Bitcoin Likely as Price Breaks Critical Support Zone

A relief bounce in the Bitcoin market Thursday did little in offsetting its prevailing correction bias as its price slipped inside a critical support area.

The BTC/USD exchange rate touched an intraday low of $45,000 during the early Asian trading session Friday, down by up to 22.90 percent from its record high established earlier this week. Traders held on to $45,000 and the levels around it as support, given the range’s historically-verified capability of capping downside corrections.

Bitcoin Support Confluence

Nonetheless, the latest downside move appeared much stronger, raising possibilities that bitcoin would extend its decline further lower.

“[I’m] keeping an eye on the $44ks — tested once, but a break below there likely sends price back down to $40k,” alarmed Josh Rager, the co-founder of BlockRoots.com. “And if price makes way to $40k — you know it’s going to wick in the mid to upper $30ks. [It] could bounce here — but going to take it level by level/day by day.”

Bitcoin, cryptocurrency, BTCUSD, BTCUSDT

Bitcoin is down over 22 percent from its record high. Source: BTCUSD on TradingView.com

Mr. Rager’s downside target at $40,000 converged well with the blue wave in the chart above.

It represents the 50-period simple moving average (50-SMA) on Bitcoin’s daily chart. The wave has underpinned the cryptocurrency’s uptrend throughout 2020. Many instances showed the price breaking below the 50-SMA but only to reclaim the wave later to confirm the market’s bullish bias.

Analyst Willy Woo’s floor model—which has zero evidence of turning false—also alerts about hard price support near $39,000. Mr. Rager agreed that Bitcoin could fall to $40,000 in the coming sessions while forming a wick towards $38,000-39,000. The cryptocurrency may resume its uptrend at a later stage.

Psychological Price Floors

Bitcoin rallied by almost 100 percent in 2021 to hit an all-time high above $58,000. Its gains appeared on growing institutional adoption, led by Tesla’s $1.5 billion investment into the cryptocurrency and its intentions to use the decentralized token as a form of payment for its services and products.

This week, mobile payment app Square announced that it had also upped its Bitcoin reserves by investing another $170 million into the cryptocurrency. The Jack Dorsey-headed firm had added $50 million worth of bitcoins to its balance sheet late last year.

Nasdaq-listed business intelligence firm MicroStrategy also took a similar but heightened call to increase its bitcoin exposure. It put $1.06 billion to purchase another stash of the digital assets, pushing its total reserves from around 71,000 BTC to above $90,500 BTC.

All the firms revealed the average rates at which they purchased Bitcoin. For Tesla, it was between $35,000-$40,000. MicroStrategy’s latest investment into the Bitcoin market arrived when it was trading above $52,000. Meanwhile, Square stated that it purchased the cryptocurrency at a mean price of a little over $51,000.

That also increased Bitcoin’s ability to reclaim levels above $50,000 in the coming sessions, given the corporates’ high-profile exposure in the cryptocurrency above the said levels.

Source: Bitcoinist News

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Crypto News Updates

Richly Valued Bitcoin Extends Decline After Positive Jobs Data

Bitcoin prices dropped Friday, tracking declines in the US indexes after new data indicated a stronger economic recovery and an auction of seven-year bonds met with lukewarm demand from investors.

The flagship cryptocurrency’s upside momentum faltered earlier this week after establishing a record high above $58,000. At first, the move downside appeared like a natural downside correction that follows massive parabolic gains. Nonetheless, the sell-off accelerated in response to the latest macroeconomic updates, showing a positive correlation with tech stocks.

Bitcoin, cryptocurrency, BTCUSD, BTCUSDT

Bitcoin is down 20.78 percent from its record high. Source: BTCUSD on TradingView.com

Investors rushed out of some of the hottest pandemic winners in 2020. Shares of technology companies like Apple, Alphabet, and Netflix fell 2 percent apiece. Meanwhile, Tesla, the US carmaker which holds $1.5 billion worth of bitcoin in its reserves, suffered a share drop of 8 percent.

Dwyfor Evans, the head of macro strategy at Hong Kong-based State Street Global Markets, noted that expectations of the Federal Reserve’s rate hikes in the US prompted investors to de-risk their portfolios. That happened despite reassurances from the central bank’s chairman Jerome Powell that they would keep rates near zero until 2023.

Bond Sell-Off Ripples into Shorter-Dated Notes

Shorter-dated bonds experienced sell-offs. The five-year yield rose to 0.799 percent on Thursday from its previous session’s close of 0.612 percent, logging its largest one-day surge since December 2010. Meanwhile, the 10-year note yield touched another high at 1.513 percent before closing Thursday at 1.513 percent—still its highest level in a year. Yields move inversely to prices.

The US dollar index, a barometer to track the greenback’s value against top foreign currencies, opened 0.24 percent higher from its previous close on Wednesday. Its dramatic climb served as one of the major catalysts behind Bitcoin’s overnight plunge. The cryptocurrency’s loyal investor base treats it as a hedge against dollar depreciation.

US Dollar Index, US dollar, DXY, cryptocurrency

US dollar index climbs higher on investors’ risk-off bets. Source: DXY on TradingView.com

Investors tend to sell Treasurys when they expect faster inflation and growth. That lowers the value of bonds’ fixed payments and can ultimately prompt the Federal Reserve to increase short-term interest rates. Bitcoin, which remains uncorrelated to macroeconomic updates, could become a de-facto cash provider for investors who want to offset losses in traditional markets.

Lower yields served as the main reason behind its supersonic rally throughout 2020 and this year. Mainstream investors treat it as a hedge against global uncertainty. Therefore, it cannot always maintain its correlation with conventional assets, especially as the economic outlook improves from investors’ point-of-view.

Jobs Data vs. Bitcoin

At the core of recent sell-offs in bonds, tech shares, and bitcoin remain the US jobs data.

Labor Department data released Thursday showed the number of unemployed claims fell dramatically last week. That raised possibilities that the Fed would end its open-ended bond-buying program and raise benchmark interest rates much sooner than expected, given Mr. Powell’s earlier statements on the jobs market.

These developments hurt Bitcoin in the short-term. Nonetheless, when interest rate rises, it could also increase the cost of borrowing for companies and consumers, making them more likely to stay invested in profitable assets. Meanwhile, a continuous injection of the US dollar liquidity into the market dents their cash reserves’ valuation.

Bitcoin has emerged as an asset that offers hedging capabilities against fiat-linked inflation. Meanwhile, its profits in the previous year has paved way for many investors to treat it as a “digital gold.” Analysts believe the cryptocurrency is off to hitting $100,000 by the end of this year.

Source: Bitcoinist News

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Crypto News Updates

Raise $1bn to Buy Bitcoin, Jim Cramer Tells GameStock (GME) Board

Just as the GameStop Corp. (NYSE: GME) shares exploded higher in the final hours of trading on Wednesday, Jim Cramer advised the videogame retailer’s board to buy Bitcoin to increase its stock prices further.

“One last time GME,” tweeted the CNBC’s Mad Money host. “Issue one billion dollars in stock, buy one billion in bitcoin, and watch your stock go to $430.”

The statement appeared as other firms on Wall Street opted to replace a portion of their cash reserves with the benchmark cryptocurrency.

On Wednesday, Nasdaq-listed MicroStrategy revealed that it purchased $1.06 billion worth of additional bitcoins atop its 70,000-plus BTC reserves. Meanwhile, payment company Square also announced that it had added $900 million to its $50 million BTC profile on the same day.

Bitcoin, cryptocurrency, BTCUSD, BTCUSDT

Bitcoin rose from $3,858 to over $58,000 on booming institutional adoption against a depreciating US dollar. Source: BTCUSD on TradingView.com

Tesla, a Fortune 500 company, also invested $1.5 billion into Bitcoin to protect its reserves from the US dollar devaluation risks. The US carmaker went a step ahead by announcing that it would also start accepting the cryptocurrency for its services and products. The revelation came in early February.

Why Buy Bitcoin

Since the coronavirus pandemic began, the economic cycle came to a halt. The US government and its central bank, the Federal Reserve, responded by injecting additional US dollar liquidity into markets via banks (also known as quantitative easing), making loans affordable (cutting interest rates near zero), and providing direct aid to people (via stimulus).

The US dollar index, which measures the greenback against a basket of foreign currencies, fell by more than 12 percent due to its oversupply.

Many corporates were sitting atop huge piles of cash reserves. They did not want their dollars to get devalued due to inflation. It led them to Bitcoin, a nascent hedging asset that promises to retain its value against fiat devaluation. That became the main reason MicroStrategy, Tesla, Square, and many other firms decided to purchase the cryptocurrency.

Bitcoin surged by more than 1,200 percent from its mid-March nadir to $3,858 after the Federal Reserve’s commitment to providing infinite quantitative easing. MicroStrategy’s investment into the cryptocurrency has so far earned it twice its original input. Tesla is also sitting atop a $1 billion profit owing to Bitcoin’s parabolic uptrend.

But…

…Mr. Cramer proposed Bitcoin as a financial asset that could safeguard the so-called pandemic losers as well. His advice to the GameStop board to buy the cryptocurrency had more to do with generating adequate capital to fund its futures operations, especially as it came closer to bankruptcy last month.

The GME stock is currently in the midst of volatile price swings. On Wednesday, its value spiked by 104 percent to close at $91.71. TraderAlert data showed that the GME’s options activity also surged to its highest levels in two weeks, with bullish contracts outnumbering the bearish ones. The spike happened almost without any concrete catalyst.

GameStop, GME

GameStop stock posts a wild intraday rally without reason. Source: GME on TradingView.com

GME earlier became a central focus of a Reddit-driven buying mania launched by trader Keith Gill, also known as by his pseudonym DeepF**ingValue, in January to hurt hedge funds short on the GameStop stock. Mr. Gill doubled down on his GME investments lately by purchasing 50,000 extra shares.

The GME stock jumped 13 percent after his call. GameStop currently had about $500 million in its cash reserves as of October 31 last year.

Source: Bitcoinist News

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Crypto News Updates

Bitcoin Gains on Fed’s Infinite QE, Johnson and Johnson Vaccine Progress

Bitcoin reversed earlier losses after Jerome Powell, the Federal Reserve chairman, reiterated the central bank’s tendency to stick with its infinite quantitative easing policies during the second day of his testimony to Congress.

The benchmark cryptocurrency ended Wednesday 1.71 percent higher to $49,737.82, having fallen by up to almost 22 percent in the previous two sessions. It opened Thursday on an upside note, rising to $50,888 in the early Asian session. Other high-cap tokens, including Ethereum and Binance Coin, also surged higher.

On Wednesday, a morning sell-off in the US Treasuries also pushed the yields on the 10-year note to slightly less than 1.43 percent, its highest level since February, before it slipped back to 1.37 percent. As of Thursday’s Asian session, the yields were higher, around 1.39 percent.

Expectations that the US president Joe Biden’s $1.9-trillion stimulus package will tend inflation have hit Treasuries.

That is because an additional US dollar liquidity into the economy erodes the cash value of the debt instruments’ interest payments. Nevertheless, a rise in long-dated yields, accompanied by a rise in real rates, signals investors’ optimism about the US economy’s growth.

But higher yields hurt corporates’ equity valuations by tampering with their price-to-earnings multiples. Companies whose earnings remain slim against their stock market valuations appear less attractive to investors. About 100 largest firms listed on Nasdaq have values 37 times larger than their earnings.

Bitcoin Against Cash

Tesla and MicroStrategy, two of the leading bitcoin investors on Wall Street, are among the ones with higher P/E ratios.

Meanwhile, the former holds $1.5 billion of the cryptocurrency in its reserves. The latter has upped its bitcoin holdings from about 71,000 BTC to a little over $90,500 BTC after putting an additional $1.06 billion into it, according to its press release published Wednesday.

NYSE-listed Square has also reported a higher P/E ratio, meaning its stock remains overvalued against its earnings results. On Wednesday, the mobile payment firm announced that it had purchased $900 million worth of bitcoin tokens.

Bitcoin, cryptocurrency, BTCUSD, BTCUSDT

Bitcoin rises after MicroStrategy and Square ups their BTC holdings. Source: BTCUSD on TradingView.com

So it appears, all the said firms expect their cash reserves to lose value in the coming sessions due to expansive stimulus packages. Meanwhile, with Mr. Powell suggesting to keep the Fed’s $120bn monthly asset purchase program and interest rates near zero, holding a depressed US dollar against rising yields seem unattractive for companies.

In turn, that helps boost Bitcoin’s anti-fiat narrative, given its scarcity against the dollar’s unlimited supply injection. Meanwhile, among investors, who expect the US economy to recover speedily, as the Food and Drug Administration approves the Johnson and Johnson vaccine for emergency approval, it has reduced their risk-off appetite.

Growth to Sustain: Bianco

The Dow Jones finished at a record on Wednesday amid higher risk-on sentiment among investors. That limited Bitcoin’s growth in the session. Nevertheless, analysts note that rising bonds’ yields do not affect the cryptocurrency in the long run. Jim Bianco, the president of Bianco Research, noted:

“They think it’s a reflation trade, so the path of the stock market [and bitcoin] will continue to be up,” said Mr. Bianco. “If they’re rising because earnings are coming back, people are getting their jobs back, the standard of living is going up, that’s OK.”

Bitcoin was trading around $50,000 at this press time.

Source: Bitcoinist News

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Crypto News Updates

Bitcoin Fractal Sees BTC/USD Hitting $35-40K Before Resuming Bull Run

Bitcoin bulls should prepare for its price to drop into the $35,000-40,000 area, per an apprehensively accurate fractal.

First highlighted by TradingShot, an independent crypto trading consultancy, the fractal relies on a flurry of technical indicators to make its short-term bearish case. They include a so-called pitch-fan, three moving averages, and two momentum indicators. All of them have predicted Bitcoin’s short- and medium-term trends in the recent sessions.

The TradingShot study focuses on the support and resistance levels that constitute the pitch-fan. In it, Bitcoin’s every higher high formation leads to an upside rejection at the upper band or the median. Meanwhile, the lower band provides the much-required support to resume the uptrend, as shown in the chart below.

Bitcoin, cryptocurrency, BTCUSD, BTCUSDT

Bitcoin pitch-fan setup, as highlighted by TradingShot. Source: BTCUSD on TradingView.com

“A moderate projection shows that the median (red line) within 2-3 weeks can again provide support, this time making contact with the 1D MA100 (green trend-line),” noted the TradingShot analysts.

“The dotted lines are the 0.5 levels and have been supporting since November 10, 2020. Contact with the lower 0.5 bands will be a -40 percent correction, which only happened once during the 2017 Parabolic Run,” they added.

Bitcoin, cryptocurrency, BTCUSD, BTCUSDT

Bitcoin corrections from local highs since 2017. Source: BTCUSD on TradingView.com

In retrospect, each of Bitcoin’s corrections from local tops tested the 1D MA100 thrice and the 1D MA50 twice as support since December 2017. Currently, the 1D MA100 level sits near $40,000 while the 1D MA50 is near $35,000.

More Bearish Cues

The possibility of Bitcoin correcting into the $35,000-40,000 region also increased due to a bearish LMACD indicator, a backronym for “Logarithmic Moving Average Convergence Divergence.”

In retrospect, the LMACD represents the logarithmic difference between Bitcoin’s 12-period moving average and its 26-period moving average. When LMACD slips below the 9-period moving average, it signals a bearish crossover. Conversely, when MACD breaks above the 9-period MA, it alerts about a bullish crossover.

The Bitcoin chart above shows the LMACD forming a bearish crossover, pointing to an extended sell-off in the coming sessions. That suits the pitch-fan theory.

“Every such prior formation not only came shortly after a Top but was also a Higher High on the Pitchfan,” the TradingShot analysts said. “The RSI got rejected just before entering its multi-month Sell Zone (Resistance) and is fast approaching its Buy Zone (Support). Notice how every hit on the RSI Buy Zone has been a Bottom.”

Bitcoin Long-Term Setup

TradingShot remained biased towards bulls from a long-term perspective, expecting that a lower probability of 40 percent correction would assist Bitcoin in resuming its upside run. The firm recommended traders time plan their bitcoin purchases near the provable support levels.

“We still have the better part of this Bull Cycle ahead of us,” it added.

Source: Bitcoinist News

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Crypto News Updates

Bitcoin Rebounds as PayPal Rival Buys Another $170M BTC; Boom Ahead?

Yerevan (Bitcoinist) – Bitcoin underwent a modest recovery this Wednesday after Square, a payment service rival to PayPal, revealed its recent investments into the cryptocurrency.

The Twitter-fame Jack Dorsey’s firm purchased $170 million worth of bitcoin tokens at an average rate of $53,125. Combined with its $50 million investment into the cryptocurrency previously, the latest BTC acquisition represents approximately five percent of Square’s total cash reserves, cash equivalents, and marketable securities as of December 31, 2020.

BTC/USD Retraces

Bitcoin popped nearly 5 percent following Square’s investment, hitting an intraday high of $51,398 before correcting lower modestly ahead of the European session. The cryptocurrency majorly held onto the support levels near its 20-day exponential moving average (green wave) that further underpinned its recovery after two days of relentless sell-offs.

Bitcoin, cryptocurrency, BTCUSD, BTCUSDT

Bitcoin rebounds after Square reveal its additional BTC investments. Source: BTCUSD on TradingView.com

The price retracement appeared on the prospects that high-profile investments into the Bitcoin space would propel more corporates into buying the cryptocurrency. What would compel them is higher inflation and an overly devalued US dollar caused by the Federal Reserve’s ultra dovish monetary policies and the US government’s expansive stimulus packages.

Bitcoin Liquidity Crisis

Vijay Boyapati, a long-term bitcoin supporter, noted that—if not for new buyers—companies that remain exposed to the cryptocurrency’s market would accumulate more of it in the future as their cash reserves erode.

“It’s important to understand that these purchases, as with MicroStrategy, are not one-time,” he said earlier Wednesday. “They’re a trend in allocating a portion of all future cash flow to Bitcoin, which will slowly but surely absorb the tradeable supply and drive the price higher.”

Ben Lilly, a crypto economist, also discussed the ongoing liquidity crisis in the Bitcoin market in one of his recent newsletters. The analyst noted that companies including Tesla, MicroStrategy, Grayscale Investments, Square, and others had accumulated more bitcoin tokens in the recent months than the miners produced.

Bitcoin, cryptocurrency, BTCUSD, BTCUSDT

Grayscale Investments have continued its bitcoin purchasing spree into the new year, reflecting higher institutional demand. Source: ByBt.com

He added that retail traders had treated the high-profile BTC accumulation as a cue to become holders. That was visible in the massive BTC withdrawals from all exchanges in recent months, pointing to traders’ willingness to trade less and hold more. Meanwhile, many put their bitcoin into decentralized finance pools as collateral to earn yields.

“Bitcoin were, and still are, leaving exchanges by the bucket load,” Mr. Lilly noted last week. “In effect, this means the amount of bitcoin available for willing buyers is drying up. Which in turn creates scarcity, demand pressure… And the reason many of us are here: higher prices.”

Source: Bitcoinist News