Category Archives: Bitcoin

The price of Bitcoin (BTC) dropped sharply on Nov. 26 following a mass sell-off from whales. Data from on-chain data firms, namely Santiment, Intotheblock, and CryptoQuant, show heightened levels of whale exchange inflows.

Whales selling right under Bitcoin's all-time high, particularly when the market sentiment was overly euphoric, led to a massive drop. Roughly $1.8 billion worth of futures contracts were wiped out, as Cointelegraph reported.

Some exchanges, like Binance as an example, recorded $400 million worth of liquidations within merely several hours.

According to Santiment, whales sold quickly after Bitcoin surpassed $19,300. Many of these high-net-worth individuals sold so aggressively that they are no longer in the whale category of holding over 1,000 BTC.

The overleveraged derivatives market started crashing as soon as the price of Bitcoin saw a relatively minor drop. Eventually, BTC dropped to as low as $16,200 on major exchanges. Analysts at Santiment said:

Researchers at Intotheblock spotted a similar trend. The drop in the price of Bitcoin matched the moment when whales transferred 93,000 BTC into exchanges. When the price of BTC was at the yearly peak, 93,000 BTC were worth $1.8 billion.

Subsequent to the rapid crash of the Bitcoin futures market, the outlook on Bitcoin from traders and analysts remains divided. Some believe that BTC is headedfor a deeper pullback, possibly to the $13,800 support level. Others, however, say that buyers now have the incentive to bring BTC above $18,000 to tap the liquidity above.

The bearish case for Bitcoin in the near term mainly revolves around two things. First, during previous bull markets, BTC historically dropped 30% or more before seeing a continuation of the rally. If BTC sees a similar trend, that would mean a drop to at least $14,500.

Second, short-term investor activity is increasing as the price of BTC consolidates. In the past, a spike in the number of young addresses marked a bearish trend.

Cryptocurrency trader and technical analyst, Edward Morra, emphasized that previous bull markets saw multiple corrections that were even more severe, such as by 30% to 40%. Furthermore, the trader also said that the Fibonacci sequence 0.618 level is $13,500.

Based on the combination of these two data points, Morra explains that a drop to $13,500 would be a fantastic opportunity. He said:

Josh Olszewicz, a chartist and a cryptocurrency investor, meanwhile says that local Bitcoin tops usually occur when unspent transaction outputs (UTXOs) aged one to three months reach 10%.

The investor notesthat it is currently at 8%, which has historically signaled a market top. He noted that similar to BDD, more young on-chain coin movements are generally bearish.

Nevertheless, the market sentiment around Bitcoin remains generally bullish. Many analysts that anticipate BTC to fall in the near term still expect the dominant cryptocurrency to hit an all-time high by the years end. Considering this, some traders are also optimistic about the short-term price trend of BTC.

A pseudonymous trader known as Byzantine General noted that the liquidity for Bitcoin is now in the $17,500 to $19,000 range. Liquidity emerges when traders in the futures market sway to one side of the market. Since the liquidity is higher up, it indicates that traders are likely shorting BTC and the liquidation prices of overleveraged shorts are located around $18,000.

Stop hunts and cascading liquidations can work both ways. If mass long contract liquidations caused BTC to drop on Nov. 26, short liquidations could trigger BTC to rally. Given that BTC/USD has dropped substantially in a short period, a relief rally is certainly possible. With liquidity near $18,000, the probability of this happening remains high.

Former Credit Suisse banker Mira Christanto added that the medium to the long-term outlook of BTC remains strong. She pinpointed the Bitcoin Difficulty Ribbon indicator, which suggests the price of BTC has been suppressed for a long time. The indicator signifies an acceleration of mining difficulty, which as seen in 2013 and 2016, marked the start of bull cycles.

Whale exchange deposits have continuously remained high throughout November, which was the main source of selling pressure. But, the one variable that could offset the sell-off from whales is stablecoin inflows. In the latest note to its clients, data analytics firm CryptoQuant said that the number of stablecoins deposited into exchanges rose sharply in recent months.

For the rally of Bitcoin to continue in the near term, two main factors are critical. BTC needs to stay above the $16,200 support region, which it has defended so far with a strong reaction from the market.

It also would need to see higher stablecoin inflow in the next several days, which would indicate that sidelined capital is returning to the market. The note read:

At least in the foreseeable future, it is critical for BTC to remain stable above $17,000 and consolidate. This would allow the derivatives market to see a potential resurgence in momentum and the open interest to build up. So far, there aren't too many signs that a massive correction must occur and that the road toward a new all-time high in the medium term has been hindered.

Moreover, the culmination of negative news, including Coinbase CEO Brian Armstrongs tweet thread about U.S. regulationand Chinese police seizing $4.2 billion in BTC and other cryptocurrencies from the PlusToken Ponzi scheme, hit the market in recent days to fuel bearish sentiment.

However, as the impact of this negative news wears off, the fear along with selling pressure on Bitcoin and other cryptocurrencies could decrease in the upcoming weeks

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Bitcoin analysts explain what's next in the aftermath of BTC plunging to $16.2K - Cointelegraph

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LONDON Bitcoin has plunged by close to $3,000 in less than 24 hours after hitting highs not seen since the end of 2017.

The price of bitcoin was trading at $19,374 at 1:45 p.m. London time Wednesday when it began its slide. The losses accelerated overnight, with the price falling from $18,824 at 2 a.m. Thursday to $16,857 by 9 a.m., according to data from industry site CoinDesk.

Bitcoin has been on a tear in 2020, skyrocketing over 150% in a jump crypto enthusiasts have credited to unprecedented monetary and fiscal stimulus in response to the Covid-19 crisis, as well as interest from big-name investors such as Paul Tudor Jones and Stanley Druckenmiller.

The latest tumble comes as many predicted the cryptocurrency would soon hit an all-time high of $20,000.

AntoniTrenchev, a managing partner and co-founder of Nexo, which bills itself as the world's biggest crypto lender, said he expects bitcoin to rally well into the $20,000s and beyond.

"Long term I don't see anythingderailing Bitcoin's irrevocable rise higher," said Trenchev. "That doesn't mean we won't have pullbacks along the way. Look what happened in March; Bitcoin plunged 40% in one day during the coronavirus market panic. 20-30% falls can and should be expected."

He added: "Any healthy market needs to have pullbacks and periods of consolidation. Already in 2020 we've seen a gain of 160%."

Bitcoin peaked at $19,783 in December 2017. After hitting that milestone, the bubble burst and bitcoin plummeted to $3,122 the following year.

It climbed past $15,000 on Nov. 5, $18,000 on Nov. 19, and $19,000 on Nov. 24.

Bitcoin's market value which is calculated by multiplying the total number ofbitcoins in circulation by theprice now stands at $315.3 billion, down from $355.9 billion on Tuesday, according to CoinDesk.

CNBC's Ryan Browne contributed to this story.

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Bitcoin plunges by nearly $3,000 after closing in on its all-time record - CNBC

Following bitcoins sharp pullback on November 26, renowned trader Peter Brandt says BTC is likely to see a further correction, although he thinks prices have not topped. The comments follow the massive sell-off of cryptos that resulted in traded volumes of $8.5 billion being recorded across exchanges in just 24 hours. According to Messari, this is the second-highest traded volumes figure ever recorded.

Prior to the bears taking over, BTC had gone on an extended bull run and during the run up, many analysts predicted the digital asset would at least breach the $20,000 mark. However, at the time of writing, BTC appears to have stabilized after bottoming out at $16,218.

In keeping with the practice of issuing bullish statements when BTC is on a bull run, some analysts insisted that BTC would end the year above $20,000. Still, even after the latest crash, some remain adamant that the $19,500 resistance level will be breached and they back their predictions with data. For instance, the findings from a study carried out by a Swiss financial institution, SEBA says that current wallet holdings suggest large holders are unperturbed by the sell-off.

Also agreeing with the SEBA findings is Mati Greenspan, the founder of Quantum Economics who tweets that the 17% pullback is rather tame at this stage of the cycle. When one Twitter user asks if a further drop is expected, Greenspan responds my guess is weve already seen the worst of it.

However, not everyone agrees with the assessment that the large drop is actually a long-overdue correction. Instead, some bitcoiners on Twitter say rumors that the U.S. Treasury Secretary Steve Mnuchin is planning to change rules governing the use of noncustodial wallets might have triggered the large drop on November 26. Without giving away much, Ryan Selkis the founder at Messari tweeted I survived the Mnuchin crash of 2020.

However, Kyle Samani, the managing partner at Multicoin thinks the Mnuchin rumors have no effect on the current BTC bull run. He argues:

(The) next wave of buyers macro buyers want regulation For them, 21M cap is a feature, and censorship resistance is (kind of) a bug They dont want self custody. Just inflation hedge.

Still, others believe the resumption of withdrawals on the Asia crypto exchange Okex might have caused the drop. Okex froze withdrawals after one of the exchanges private key holder was reportedly taken in custody. While there is no consensus on what caused the drop, many bitcoiners appear to agree that BTC might not be returning to $10,000.

For instance, the SEBA findings say $16,200 is the new support price for BTC while the resistance is $19,500. Prior to the Thursday drop, Mike Novogratz of Galaxy Digital opined that BTC prices are not going to fall below $12,000 in the current cycle.

Do you think BTC will go past $20,000 this year? Share your views in the comments section below.

Image Credits: Shutterstock, Pixabay, Wiki Commons, Twitter,

Disclaimer: This article is for informational purposes only. It is not a direct offer or solicitation of an offer to buy or sell, or a recommendation or endorsement of any products, services, or companies. Bitcoin.com does not provide investment, tax, legal, or accounting advice. Neither the company nor the author is responsible, directly or indirectly, for any damage or loss caused or alleged to be caused by or in connection with the use of or reliance on any content, goods or services mentioned in this article.

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Veteran Analyst Says BTC Might See Further Correction but 'Prices Have Not Topped' | Markets and Prices - Bitcoin News

This entire article is Saifedeans fault.

Saifedean Ammous, author of The Bitcoin Standard, kept heaping steak tartare onto my plate at a Bitcoin meetup back in August 2018, in between jokes about liberal plebs.

As the youngest woman in the room, per usual, I wanted acceptance from the Bitcoin clan. Despite nearly a decade of (fickle) vegetarianism, I accepted the authors meat offerings in exchange for an off-the-record interview. I torpedoed questions his way between bites. Ammous told me last week, via direct message, that he couldnt remember if that was his first public steak dinner. But there would be many that followed.

Long before he became a bitcoiner, Ammous was a carnivore.

I was, independently, into low-carb keto, he said, referring to ketogenic diets. These two things started to merge together more and more as people who were interested in Austrian economics became interested in meat and good food.

Over the past decade, bitcoin-themed steak dinners have become a global ritual, hosted by communities from San Francisco to Tokyo. It was the Kraken exchanges Bitcoin evangelist Pierre Rochard who organized most of Ammous steak-and-bitcoin dinners in New York, inviting friends from the Socratic Seminar meetup. This was all pre-COVID, of course. (These days, there are a few outdoor gatherings at beaches and parks.)

I was traveling to the U.S. and Pierre told me to stop by in New York and hed organize a dinner for me. Then 70 people showed up, Ammous said. After that, everyone on Twitter was constantly asking, and demanding, their own steak dinner in their own hometown.

Becoming a Bitcoin-carnivore evangelist

Since then, Ammous organized Bitcoin-themed dinners in more than a dozen cities, including Hong Kong, Amman, Beirut, London, Madrid and Milan. Meanwhile, hundreds of Bitcoin fans routinely post meaty food porn via Twitter and Telegram groups like Citadel Chefs. Like Ammous, they often profess theynaturally found this a hobbyist combination, rather than following a demographic trend. As Crypto Twitter icon @cryptomedici wrote: I dont follow the chad lifestyle, the chad lifestyle follows me.

Ammous is among the most famous carnivore evangelists tweeting hot pics of fatty steaks, his version of thirst traps. In fact, the prolific economist penned a manifesto for grilling steak to beat fiat food, equating empty carb calories with inflationary government-issued money.

The (tongue-in-cheek) narrative says bitcoiners like Ammous will simply avoid the impending collapse of Western civilization by re-inventing feudalism, as lords of private citadel meat-lockers paid for with the worlds hardest money. Loving meat is a part of some bitcoiners shtick, along with hating journalists and socialism. Memes and jokes abound comparing Soy Boy or vegan token fans to hyper-masculine bitcoiners.

Its very masculine to grill. In the Wild West, the cowboys are always seen having this massive steak, nutritionist Lorraine Kearney said in a phone interview. Especially if theyre trying to lift weights and bulk up, its always about eating more protein.

Back in 2018, I told Ammous Id try carnivory, if only to gloat when my body didnt magically transform into a lean, mean hodling machine. To my great dismay, two weeks of a 90% meat diet left me feeling stronger, more energetic and less emotionally volatile than Id ever been. By the third week I stopped craving sweets and my doctor noticed a significant improvement in my health, compared to my last annual physical.

As it turns out, Im hardly the first liberal woman to fall in love with both bitcoin and grilled flesh. To the contrary, author Amber OHearn was one of the most influential authors in the early days of crypto-carnivory. Shes been writing about her keto diet experiments for nearly a decade.

Im off all medications, OHearn said, describing how this diet helped after her bipolar diagnosis. Ive never had symptoms of the mood disorder again.

Like any crypto trend, believers can seem quite fanatic. Zcash co-founder Zooko Wilcox even tweeted that keto diets can help treat cancer. (Wilcox and OHearn were once married, but have since continued their meat evangelism separately.)

On the other hand, Kearney said high amounts of fat can contribute to issues like heart disease. Bitcoin-carnivores often dismiss this warning as fake news by the media-fiat-food-industrial complex, hell-bent on brainwashing the masses. Of course, every citadel-dwelling hero needs a mainstream elite villain to foil his own righteousness. However, the reality of carnivore diets may be more nuanced.

Plant-eaters clap back

Kearney agreed with OHearn, broadly speaking, that high-protein diets can be very healthy and every persons body is different.

The nutritionist said shes known clients who feel amazing after years of only eating animal protein, while others prefer low-carb diets with diverse plants. She added that grass-fed meat has many more nutrients, so results may depend on the quality of the ingredients.

The carnivore diet has been around for a number of years. But the research will take a decade, if not longer, to provide the benefits of such diets, Kearney said. When people remove inflammatory, highly processed foods and introduce a more natural diet, like with meat, theyll see results like a decrease in weight gain and bloating, less fatigue and better gut health.

There may also be some truth to the bitcoiner mantra that established norms were based on inaccurate science. Kearney said the past four decades saw a massive shift among nutritionists.

Some of the products they used to recommend were processed foods it was all about restricting calories, Kearney said. Now its more about focusing on balance and understanding the psychological aspects as well.

There are also plenty of vegan bitcoiners, from Bitcoin Core developer Matt Corrallo to Lightning Labs CEO Elizabeth Stark.

Bitcoin doesnt care what you eat, Stark said in a direct message.

The steak-loving author of Bitcoin: Sovereignty Through Mathematics, Knut Svanholm, agreed with Stark.

I believe that we should probably leave diets out of any Bitcoin discussion, Svanholm said. It tends to be a bit silly and people are semi-religious when it comes to food preferences.

Thanksgiving feasts

Meanwhile, Wilcox and OHearn are among many bitcoin aficionados who ate a predominately meat dinner for Thanksgiving 2020.

I like fatty steak, roast beef, ground beef and bacon more than turkey. And thats even more true on Thanksgiving, which is a celebration of plentitude and togetherness, Wilcox said in a direct message.

For a festive twist on the holiday classics, OHearn combined turkey with a keto-friendly stuffing.

Sausage stuffing with ground pork and pork rinds, to help absorb the fat the way bread does in a stuffing, OHearn said over the phone, describing the menu. I also eat eggs and dairy without having too much of a problem. So for holidays I might have eggnog.

It was OHearn who convinced me that bitcoiners meat fetish isnt primarily the result of loud mens testosterone-induced, Freudian fixations.

There are these ideals about what a woman should be that dissuade women from taking pleasure in their bodies and being physical. Meat is connected to that, OHearn said, contradicting the diets stereotype. Meat is sexy and carnal plus, one of my primary roles as a mother is to nourish my children, inside my body, next through breast-feeding and then preparing their food and nutrients.

Like so many bitcoiners who ate Thanksgiving dinner with their families, OHearn said she was grateful for her healthy family. As for myself, I ate plenty of plants this holiday, despite knowing lean protein makes me feel better than pecan pie. Rather than travel to family, I joined an outdoor gathering of bitcoiners for turkey, my first friendsgiving as part of the clan. I no longer felt like an outsider, nor was I the sole young woman. But I did bring my own ros, because we all know the bitcoin cowboys will only bring beer and whiskey.

It may be precisely because of our differences, instead of despite them, that we were so grateful to gather with diverse friends contributing, in our own ways, to the first open-source, digital money. Especially during the pandemic, were thankful to be a part of an economic shift that just might manage to outlive our BBQ-slathered grills and little stone castles.

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Bitcoin's Carnivore Cult Is Both Stupid and Correct - CoinDesk - Coindesk

Bitcoin isn't the only cryptocurrency posting strong gains lately.

Ether, XRP and a handful of other so-called "altcoins," or alternative cryptocurrencies, rallied Monday, following the world's best-known digital currency higher.

At around 9:15 a.m. ET, ether passed the $600 level, a point it hasn't reached since June 2018, according to data from industry site CoinDesk. XRP at one point surged 29% to almost 55 cents, hitting its highest level in over two years.

Ether was last trading up about 8% in the last 24 hours at $595, having earlier risen as much as 13%, while XRP was 19% higher at around 54 cents. Both are up about 350% and 180% respectively year-to-date.

Crypto industry investors said altcoins were tracking the momentum that has seen bitcoin surge recently. Bitcoin last week crossed the $18,000 threshold and is close to an all-time high near $20,000, which it hit in late 2017 before slumping as low as $3,122 the following year.

"What you generally see in the space is bitcoin goes on a run and then a period of time later might be a few weeks, might be a month the altcoins then go on a run," Peter Wall, CEO of London-based crypto mining firm Argo Blockchain, told CNBC. "Bitcoin leads and the altcoins follow."

Another altcoin, Chainlink, rose as much as 6% to around $15. It's currently up more than 740% since the start of the year.

Chainlink is often associated with a concept called "DeFi," or decentralized finance, which aims to recreate traditional financial products like loans without middlemen like banks.

DeFi has become a popular theme in crypto this year, with several new projects emerging. It has been compared to the initial coin offering, or ICO, frenzy of late 2017 which saw multiple new virtual coins appear.

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Ether, XRP and other 'altcoins' rally as bitcoin heads for all-time high - CNBC

The price of Bitcoin (BTC) hit $19,000 on Nov. 24 for the first time since the historic rally in December 2017. Three key reasons are behind the dominant cryptocurrencys strong momentum.

The main factors buoying BTCs ongoing rally are whale accumulation, decreasing exchange supply and explosive volume trends.

All throughout November, Cointelegraph reported that whale clusters were steadily forming as the price of Bitcoin rallied.

These clusters emerge when Bitcoin whales buy BTC at a certain price point and do not move them. Analysts have interpreted this as a signal that whales are accumulating and that they have no intention of selling in the near term.

The difference between the ongoing Bitcoin rally and previous price cycles is that the recent uptrend has proven to be more sustainable. In fact, each whale cluster shows that every major support level BTC reclaimed was accompanied by whale accumulation.

On Nov. 18, when Bitcoin dropped to as low as $17,200, analysts at Whalemap said that the new whale support is located at $16,411. They said:

Since then, Bitcoin has seen several more dips below $18,000 but has since recovered above $18,800, sustaining its strong momentum.

Furthermore, data from Santiment, an on-chain market analysis platform, shows a similar trend. Santiment researchers found that the number of BTC whales significantly increased in recent months. They explained:

One consistent trend throughout the 2020 bull cycle has been the continuous drop in Bitcoin exchange reserves.

Investors and whales deposit BTC to exchanges when they want to sell BTC. Hence, the recent drop in exchange reserves means there are fewer sellers in the market.

A pseudonymous trader known as Byzantine General said that every time spot exchanges expand their BTC reserves, they get accumulated. He said:

The volume of both institutional and spot exchanges has been increasing rapidly since September. Open interest on Bitcoin futures and options at CME surpassed $1 billion in November, and Binances BTC/USDT pair has consistently delivered over $1.5 billion in daily volume.

Various data points also show that the spot market has been leading the rally, not derivatives or futures markets. This trend makes the rally more stable and reduces the risk of massive corrections.

When the futures market accounts for the majority of the volume during a Bitcoin uptrend, there is a large risk of cascading liquidations. This time, the spot market has been leading the rally, thus making it more sustainable.

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Why Bitcoin price just hit $19,000 for the first time in 3 years - Cointelegraph

Bitcoin bull and Galaxy Digital CEO, Mike Novogratz, says bitcoin is for everyone. He argues that those committing 2% to 3% of their net worth to this digital asset today will see substantial gains in five years. Novogratz adds that while bitcoin remains a volatile asset he does not expect its price to drop to levels seen in March when it crashed to under $4,000. Instead, he asserts that bitcoin prices shouldnt fall below $12,000 in this current cycle.

According to a report, the bitcoin bull says unlike 2017, current evidence supporting bitcoin prices is better than its ever been. Novogratz repeats the now widely accepted view that institutional investors are driving the current bull market. Novogratz explains:

This rally is being driven by institutions slowly getting into this space, high net-worth individuals, hedge funds, real institutions. Bitcoins become a macro-asset.

The participation by these players along with increased regulation should smooth out some of bitcoins volatility.

Novogratz also comments on U.S. President-Elect Joe Bidens pick for the Treasury Secretary post, former Federal Reserve Chairperson, Janet Yellen. The former Federal Reserve Chair has previously said she is not a fan of bitcoin and that it is a highly speculative asset.

Although Yellens possible return as the U.S. Treasury boss has rattled some within the crypto space Novogratz is not overly worried because a lot has changed since she made the comments. Instead, the CEO thinks Yellens general dovishness should be good for hard assets like gold and bitcoin.

Novogratz concludes by sharing his thoughts on altcoins saying:

You can lose 60% of your money in a day. And so fair warning, if youre going to play in those things, do it with small size and know what youre doing.

Meanwhile, not everyone agrees with the narrative that the entry of institutional investors into the crypto market is the only significant factor behind the bitcoin bull-run. Marcus Swanepoel, the CEO Luno exchange says retail volumes have increased in the past few months.

In a Twitter post, Swanepoel writes:

This bitcoin bull run is not just from institutions. Our (retail) volumes in South Africa, Malaysia, Nigeria, and Indonesia all trebled over last month and (are) at all-time highs. Emerging market consumers are voting with their money and theyre ready for a better financial system.

Meanwhile, at the time of writing, bitcoin had dropped from over $19,350 reported on many exchanges to just above the $17,000 handle.

What are your thoughts on Novogratzs belief that BTC will not go below $12,000 in this cycle? Share your views in the comments section below.

Image Credits: Shutterstock, Pixabay, Wiki Commons

Disclaimer: This article is for informational purposes only. It is not a direct offer or solicitation of an offer to buy or sell, or a recommendation or endorsement of any products, services, or companies. Bitcoin.com does not provide investment, tax, legal, or accounting advice. Neither the company nor the author is responsible, directly or indirectly, for any damage or loss caused or alleged to be caused by or in connection with the use of or reliance on any content, goods or services mentioned in this article.

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Mike Novogratz: Everyone Should Put 2% to 3% of Their Net Worth in Bitcoin | News - Bitcoin News

Bitcoin's (BTC) price rose to almost $20,000 in 2017 before losing more than 80% of its value to a multi-year long bear market. In the years since, the asset has never again come close to these price highs until now. At time of publication, crypto's first currency is once again trading a few percentage points away from its previous milestone.

While crossing $20,000 may soon be celebrated as a psychologically significant threshold, Bitcoin will not actually reach its all-time high in terms of buying power at that point thanks to inflation.

If you bought #Bitcoin at the top in December 2017, you wont truly recover your buying power until we hit 21.24k, podcaster Vlad Costea said in a tweet on Tuesday. Costea used $20,000 as Bitcoins high, putting the numbers and dates into an inflation calculator to determine the most accurate figures.

U.S. dollar holders lose approximately 2% of their purchasing power per year on average from inflation. Official datareveals2.13% inflation in 2017, 2.49% in 2018, 1.76% in 2019 and 1.86% in 2020.

Bitcoins last all-time high varied across exchanges. Coinbase's price index shows that Bitcoin reached a record high of $19,891.99 on Dec. 16, 2017. Using this number, Bitcoin must reach $21,131.02 to once again hold the same purchasing power as it did in 2017, according to Officialdata.orgs inflation calculator.

Other previous historical Bitcoin levels also show inflationary impact, although not particularly notable. Bitcoins $1,200 level in 2013 values about $1,341 in todays dollars.

With all the United States money printing in 2020, however, the future will tell whether this year will ultimately have a greater inflationary impact on the U.S. dollar than the currently stated sub-2%.

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Will 'money printer go brrr' rob Bitcoin of its all-time high? - Cointelegraph

Whats behind this current run-up in the price of bitcoin? Thats a question for which many people want a definitive answer. So far, one unifying theory is tough to come by.

What we do know is that since mid-October the price of bitcoin shot up from the $11,000 range to the cusp of $19,000. And while prices are a few hundred dollars shy of its all-time high, bitcoins market cap recently set a record by breaking above $345 billion; since the mega-rally in 2017, more bitcoin has been mined and put into circulation.

For a large swath of market observers, the cause of the rally is clear: more buyers with deeper pockets. If so, that augurs well for continued gains. But theres also a plausible theory that unusual circumstances have temporarily constrained supply, calling into question the rallys staying power.

The case for demand: New money

It seems not a day goes by without some story of a major financial institution warming up to bitcoin, if not outright embracing it. A CIO at BlackRock saying on CNBC that it could take the place of gold to a large extent. An analyst at Citi saying bitcoin could reach $318,000 by the end of 2021. A report from JPMorgan claiming institutions are buying at three times the amount they were in the previous quarter.

The world is in the midst of a pandemic that is wreaking economic turmoil on every continent, even Antarctica. Central banks are printing fiat currency as fast as they can (funnily enough, Hewlett Packards stock is up 3% year to date). Governments are also in on the act, throwing trillions of dollars, euros and anything else they can borrow in an effort to stave off an economic calamity that would lead to social unrest and violence in the streets or more of it.

Since its birth in the depths of the global financial crisis more than a decade ago, such potentially inflationary measures were exactly the sort of things bitcoin advocates warned about, and perhaps secretly hoped for, when they began stocking up on digital assets.

Bitcoin addresses holding at least 1,000 BTC vs. bitcoin price

Then theres the data. CoinDesks Galen Moore spells out in a recent piece four ways this current rally is different from the one of 2017. More whale accounts are holding 1,000 or more bitcoin than ever before, and unlike three years ago they have been growing in number with higher prices. Bitcoin and its closest rival, ether, are making recent highs together, whereas in 2017 ethers record prices were in the rearview mirror for months after bitcoin was going higher. Regulated markets are part of the mix this time around, with the CME daily futures trading volume hitting north of $1 billion several days the past few months. And since the start of 2020 some 200,000 bitcoin have been sold by investors in East Asia to satiate the growing appetites of their counterparts in North America.

These are all profoundly bullish signals. However, there remains a gnawing why question: Why just now?

After all, preliminary data on three vaccines for COVID-19 have shown an efficacy rate of 90% or higher. The very physical threat that loomed over workplaces and every aspect of everyones life may soon be gone. And even on the political front, uncertainty in the United States over who will run the federal government in a couple of months has also begun to dissipate.

The case for supply: Bottled-up bitcoin

Part of what makes the narratives to the current run-up seem so attractive is they focus on the demand side of the explanation. Yet, as we all know, supply is the other side of the equation. Is there enough bitcoin to slake the thirst of all those new buyers who have entered the market, spurred by economic worries and egged on by analysts?

Months ago, supply was the big topic among those who talk about crypto. Bitcoin was undergoing a halving, whereby rewards given for successfully mining a block were cut in half. That would automatically lead to a surge in prices, went the theory, because there were going to be 900 fewer new bitcoin added to supply every day but there were new buyers added every day. This was back in early May; in the subsequent couple of months bitcoins price stayed around the $9,000 range. As halvings are known events programmed into bitcoins code since the very beginning, the market apparently wasnt all too surprised when it actually happened.

Getting back to what else we know, one thing to add to that list is that in China, site of the lions share of bitcoins hash power, a government crackdown is taking its toll on some of the crypto exchanges that cater to the countrys miners and traders. The crackdown isnt necessarily about halting crypto but rather trying to stamp out money laundering. It just so happens crypto exchanges are possibly, maybe, suspected in the mix. Thus executives at exchanges have been getting the third degree.

At OKEx, a key executive literally, the guy who had the keys for OKExs addresses went MIA and only recently resurfaced after spending some time talking to authorities in China. In the meantime, the allegedly Malta-based exchange was forced to halt withdrawals because, obviously, only one person had such keys for one of the worlds largest trading venues and he happened to be in China. It is hoped OKEx has figured out a contingency plan in case someone gets hit by a bus.

Outflows of bitcoin from OKEx vs. bitcoin price

Oh, and the date this all started? Oct. 16. That happens to be a couple of days before the price broke out of the trading range between $10,000 and $12,000, where it had bounced around since July.

The case against supply: Business as usual

Then again, just because one cant withdraw bitcoin from OKEx, that doesnt mean one cant trade on it. In fact, open interest on its futures contracts are at $1.22 billion, according to Skew. Thats the biggest open interest figure for any exchange. The CME, for instance, is $200 million smaller.

Bitcoin Futures Open Interest by Exchange

While bitcoin can neither flow into or out of OKEx, its price is in line with those of its rivals.

BTCs price on OKEx is not that different from other exchanges, Ki Young Ju, chief executive officer of data provider CryptoQuant, told CoinDesks Muyao Shen. [P]eople can trade their BTC on OKEx despite the withdrawal suspension.

And miners are finding other venues to unload their newly minted bitcoin; Huobi, Binance and other exchanges seem to be picking up the slack, according to data from Chainalysis. Unfortunately, it hasnt been Robinhood-easy for some miners to then convert their crypto into fiat (in this case, Chinese yuan) because of the money laundering crackdown.

Stay tuned

The two explanations for bitcoins bull run discussed above new demand and bottled-up supply are not mutually exclusive. Soon, at least one of them will be put to the test: OKEx is expected to allow withdrawals by Friday of this week.

With all of the institutional flow around crypto, I dont think the status of any single exchange is enough to affect prices beyond typical daily volatility, George Clayton, managing partner of investment firm Cryptanalysis Capital, told CoinDesks Daniel Cawrey.

That may very well be the case. We will likely know by the end of this week. When we do, well be finally able to figure out if this is a demand-driven or a supply-driven market. That is, if it was really about there being more buyers or if it was truly about there being fewer sellers.

In the meantime, keep an eye out for when OKEx allows withdrawals again.

Today's markets

Bitcoin is trading at fresh 35-month highs above $19,000, having defended the psychological support of $18,000 during the Asian trading hours. The crypto market leader is now just 4% short of testing the record high of $19,783.

Hence, most alternative cryptocurrencies, which are still down significantly from their respective lifetime highs, are beginning to look relatively cheap. For instance, ether, the second-largest cryptocurrency by market value, is down at least 57% from the peak price of $1,431 reached in January 2018, despite having gained over 50% this month alone.

Should bitcoins uptrend slow, investors could rotate money to cheap alternative cryptocurrencies. During aggressive rallies in the price of bitcoin, market participants sell their alternative cryptocurrencies for bitcoin to capture the upside. Once bitcoin slows down, the capital flows back into alternative cryptocurrencies, and a valuation parity is found, Nicholas Pelecanos, head of trading at NEM Ventures, said.

In traditional markets, U.S. stock futures are flashing green while gold and the U..S. dollar are nursing losses. Risk sentiment remains firm on coronavirus vaccine optimism and ebbing political uncertainty in Washington, D.C. President Trump said his aides would cooperate with President-elect Joe Bidens transition to the White House, easing concerns about a drawn-out period of uncertainty.

Bitcoin watch

Bitcoin price chart shows history looking to repeat itself.

Bitcoin looks to be replicating moves seen following the 2016 mining reward halving.

The leading cryptocurrency by market value has rallied by $9,000 in the past seven weeks and looks set to challenge the all-time high of $19,783 reached in December 2017.

Notably, the cryptocurrency is closing on record highs 6.5 months following its third mining reward halving, which took place on May 11 this year. Reward halving refers to a programmed 50% reduction in block rewards executed every four years to keep inflation under check.

The latest move toward record highs looks similar to the one seen four years ago.

Bitcoin underwent its second halving on July 9, 2016, when prices were trading near $650. By the end of February 2017, that is, seven months after halving, the cryptocurrency had set a new peak price above the November 2013 high of $1,163.

The rally did not stop there, and the cryptocurrency went on to hit a record price of $19,783, as noted earlier. If history is a guide, bitcoin could see a significant rally in 2021.

Most analysts expect bitcoin to explore the uncharted territory above $20,000 over the next 12 months, courtesy of increasing institutional participation and bitcoins growing appeal as an inflation hedge.

According to Su Zhu, CEO of Three Arrows Capital, $36,000 is the level to watch out for once the cryptocurrency establishes a foothold above $20,000.

This [$36,000] is the strike with the largest bitcoin open interest on Deribit exchange, the dominant market leader in bitcoin and ether-settled options trading, Zhu tweeted.

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Original post:
Why Is Bitcoin's Price Rising? Here Are a Few Possible Answers - CoinDesk

Bitcoin (BTC) traders are pinpointing the order books of major exchanges that show the $19,500 level is a near-term resistance level.

On Nov. 25, Bitcoin price was rejected at $19,500 with a relatively large volume across top spot exchanges. On Binance, for example, BTC price hit $19,484 before seeing a slight pullback to sub-$19,300.

The minor rejection likely occurred because of the stacks of sell orders between $19,450 and $19,550.

A popular pseudonymous trader known as Byzantine General shared the order books of all major exchanges that showed $19,500 as a key area for sellers.

Vijay Boyapati, a Bitcoin researcher, similarly said that the $19,500$19,550 range remains as the last sell wall before a new all-time high.

If Bitcoin does not retest the $19,500 area again in the next several hours, this could mean that another drop is likely. Considering that it would be the last resistance until the new all-time high, traders expect some reaction from sellers.

Another small pullback would benefit Bitcoin because it would further neutralize the futures funding rate. The funding rate of BTC futures has increased once again to 0.07% on Binance Futures and other exchanges.

Considering that the average funding rate of Bitcoin is 0.01%, another short-term drop to reset the derivatives market may even strengthen the upward momentum.

However, a variable to consider is that the number of shorts in the Bitcoin market is at its highest since April.

In March, the price of Bitcoin crashed to below $3,600. Subsequently, it continued to climb, eventually surpassing $19,000. The rally accelerated in April when short contracts hit a yearly high.

The likelihood of a short squeeze rises when the number of short contracts in the market increases. A short squeeze occurs when the price of an asset continues to go up despite the presence of significant selling pressure.

This trend causes short-sellers to market-buy their positions, fueling more buying demand in the market. A pseudonymous analyst known as Cactus wrote:

If the number of shorts continues to increase, it would also cause the futures funding rate to decline. In a way, this could make the rally more sustainable in the medium term.

See the original post:
Bitcoin faces this final resistance zone before $20K all-time high - Cointelegraph