Connect with us

Bitcoin

Bitcoin Under Pressure as Focus Shifts on Wild Crypto Rivals

Published

on

Yashu Gola



Bitcoin has every reason to continue its upside rally for the rest of this week, ranging from Tesla’s $1.5 billion investment to Twitter’s consideration of holding it. Nevertheless, the flagship cryptocurrency is going down.

The BTC/USD exchange rate corrected sharply after hitting its record high of $42,000 on Tuesday, pointing to a spike in profit-taking sentiment among daytraders. As of Thursday, the pair was down by more than 8.5 percent from its local top, albeit sustaining its long-term bullish bias.

Its correction largely coincided with a drop in Bitcoin Dominance Index, a metric that calculates Bitcoin’s market share against the entire cryptocurrency market, which includes large-cap digital assets like Ethereum, XRP, Binance Coin, and Cardano. On Tuesday, the index was as high as 64.76 percent. It turned lower to 61.48 percent on Thursday.

Bitcoin, cryptocurrency, BTCUSD, BTCUSDT

Bitcoin Dominance Index drops amid altcoin boom. Source: BTC.D on TradingView.com

The reasons were visible in the altcoin market performance this week. Cardano blockchain’s native token ADA surged by up to 23 percent against Bitcoin. Polkadot’s DOT inched upward similarly by more than 9 percent. Meanwhile, Avalanche’s AVAX jumped into higher ranks by surging more than 118 percent.

Overall, the altcoin market added up to $79.5 billion this week to push the cryptocurrency market valuation above $1.4 trillion. Bitcoin lost about $77 billion from its local top, as calculated from its record high market capitalization of $897.9 billion. That reflects a higher degree of portfolio reshuffling in the cryptocurrency space.

Historically Bullish

Bitcoin has a history of undergoing vast corrections after recording parabolic rallies. In many instances, traders moved their capital out of the flagship cryptocurrency. They put them in oversold altcoin rivals, leading to the so-called altseason. Once altcoins marked their peaks, traders flocked back into the Bitcoin market to resume its rally.

More so, the rally in the altcoin market concerns majorly projects that compete with Ethereum. The fees on the second-largest blockchain have increased substantially following its bull run. That is pushing many speculators out of Ethereum markets to bet on its rivals, including Avalanche, Matic, Celo, and many other smart-contracts platforms.

Avalanche, AVAX, AVAXUSD, AVAXBTC, cryptocurrency

Multi-chain network Avalanche is one of the best performers against Bitcoin and Ethereum. Source: AVAXUSDT on TradingView.com

The cost to purchase one Ethereum token has dropped 6.58 percent from its record high of $1,839.

What’s Next for Bitcoin?

Notably, Ethereum fees need to come down to reduce speculation in other markets. In turn, that could limit Bitcoin’s downsides in the short-term as the cryptocurrency continues to maintain support above its 20-4H exponential moving average (the green wave in the chart below).

Bitcoin, cryptocurrency, BTCUSD, BTCUSDT

Bitcoin attempts to rebound from 20-MA support. Source: BTCUSD on TradingView.com

Fundamentals remain supportive. On Tuesday, Federal Reserve Chairman Jerome Powell admitted that the US economy had not realized the coronavirus pandemic’s total impact on labor markets. He added that the Fed would need to continue its dovish measures to guarantee maximum employment in the future.

“We expect that it will be appropriate to maintain the current accommodative target range of the federal funds rate until labor market conditions have reached levels consistent with maximum employment and inflation has risen to 2 percent and is on track to moderately exceed 2 percent for some time,” Mr. Powell stated.

That expects to push investors away from cash-based and riskier assets and turn back to safe-havens like gold and bitcoin. Tesla’s investment into the cryptocurrency now serves as a benchmark through which other corporates can explore alternative reserves assets to protect their balance sheets from the “dollar devaluation.”

On Wednesday, Twitter’s CFO Ned Segal said they might exchange their greenback reserves for Bitcoin.



Source link

Bitcoin

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

Published

on

By

Yashu Gola



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 link

Continue Reading

Bitcoin

Altcoins bounce to new highs as Bitcoin price trades sideways under $50K

Published

on

By

Cointelegraph By Jordan Finneseth

The cryptocurrency market recovered some of the losses from the past couple of days on Feb. 25 as Bitcoin (BTC) briefly pushed back above the $50,000 level and multiple altcoins have seen double-digit price gains. 

Data from Cointelegraph Markets and TradingView shows that Bitcoin bounced off a low of $45,200 late on Feb. 24 before rallying 15% to $52,000 in the morning trading session.

BTC/USDT 4-hour chart. Source: TradingView

While the rebound in the cryptocurrency market is a welcome sight for bullish investors, Bitcoin price is still finding resistance above $50,000, and this level has yet to be confirmed as support.

Economists have also begun to worry about the rising Treasury yields, which are usually a signal of weakness for the economy and can have a large impact across many markets.

Catalysts for a $100,000 Bitcoin

Now that Bitcoin has entered a slight corrective phase, analysts are debating whether or not the digital asset will be able to surpass $100,000 by the end of 2021.

According to Giles Coghlan, chief currency analyst at HYCM, the answer to that question “depends on who you ask,” with crypto advocates feeling “very bullish” that 2021 “will be the year Bitcoin steps into the limelight,” while traditionalists remain skeptical about the “risky, unpredictable market.”

Coghlan sees the momentum behind the recent gains being driven by “the general public hype” following pro-crypto tweets from Elon Musk and Mark Cuban, but now the enthusiasm “seems to be waning” as Bitcoin struggles to hold $50,000.

Due to the volatile nature of BTC, it’s “too early to tell if this will be the new baseline support level.”

Coghlan said:

“I wouldn’t be surprised if the price slowly drops back to $40,000 USD in the coming weeks, which seems to be a more realistic level of support. A drop below this is also plausible based on how Bitcoin performed over the course of 2020.”

The analyst sees the acceptance and endorsement of Bitcoin by “large institutional funds and regulatory bodies” as the next big driver of new price highs, which would also end the domination of the crypto market by retail traders and could lead to a “less volatile” market as a result.

Announcements and protocol upgrades boost altcoin prices

Several large- and mid-cap altcoins saw their prices breakout on Thursday as recent announcements and new integrations pushed trading volumes higher.

Daily cryptocurrency market performance. Source: Coin360

Cardano’s ADA is the best performing coin in the top 10, currently up 10.4% and trading at $1.15, while Fantom (FTM) continues to benefit from its recent cross-chain integration with Ethereum and is up 31.79% to a price of $0.7755. 

Other notable performers include Enjin Coin (ENJ), which is currently up 34% and trading at $0.6221. Polygon’s MATIC has also increased by 27.74% and trades at $0.2023.

BTC/USD daily chart. Source: Coin360

The overall cryptocurrency market capitalization now stands at $1.533 trillion, and Bitcoin’s dominance rate is 61.3%.