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Analyst: Bitcoin (BTC) Is Tracking USD/Yuan Exchange Rate

Bitcoin BTC USD Yuan

A contributing author and Asian markets analyst on Forbes has pointed out that the non-correlation of cryptocurrency–that digital assets fluctuate to their own market devices–does not tell the full story. Instead, William Pesek argues that prices for Bitcoin are moving with the price of the Chinese Yuan versus the U.S. dollar, as opposed to the dominant assumption being placed on USD movements alone. According to Pesek,

“There’s an easily trackable correlation between bitcoin and the dollar/yuan exchange rate…No, bitcoin doesn’t track the dollar’s zigs and zags–except when we’re talking about its moves versus China’s currency. A sliding yuan tends to be bitcoin positive.”

Pesek continued,

“As the yuan weakens, after all, moneyed mainlanders are increasingly desperate to spirit their wealth beyond the prying eyes of Beijing’s tax collectors.”

The argument for the relationship between the Bitcoin and the USD/Yuan exchange rate hinges on the voracious appetite of Chinese investors for Bitcoin and digital assets. Despite the Chinese government and President Xi’s massive crackdown on Bitcoin, which culminated in the outright banning of BTC trading and initial coin offerings (and rumors of mining to be targeted next), savvy Chinese investors have continued to find ways to buy digital assets at an impressive pace.

Pesek also points out that the brewing trade war between China and the United States, stemming from the failed negotiations of both President Trump and President Xi, have thrown the USD and Yuan into flux. Similar to how the looming possibility of a no-deal Brexit pushed European investors into Bitcoin, the deterioration of U.S.-Chinese trade relations has mainlanders looking to BTC and digital assets favorably. Despite its historic volatility, Bitcoin is beginning to resemble the digital gold safe haven that has long been held up by supporters.

However, while the uncertainty kicked up over a possible trade war is good news for Bitcoin bulls, it also harbors deeper implications for the broader global economy. Pesek anticipates that fiscal policy by President Trump and the Chinese government will force further deterioration, and ultimately lead to even greater investment by the Chinese mainland into Bitcoin.

As evidenced in places of extreme economic mismanagement, such as Venezuela and Argentina, cryptocurrency has become an alternative asset for investors looking to harbor their funds against uncertain government fiat. While the U.S. and China represent two of the more historically stable economies, and the global powers driving financial markets, the lack of confidence inspired in the fluctuating USD and Yuan could make otherwise conservative investors take a glimpse at the digital gold of BTC.

At the Consensus 2019 event, billionaire investor and crypto bull Mike Novogratz shared his opinion that Bitcoin had likely maximized its utility as a store of value asset. While Novogratz commenting more on the room for innovation in Bitcoin as digital gold, it remains to be seen how digital assets handle a possible fortuitous turn in the coming years, with the combination of Brexit, a U.S.-China Trade war and inevitable recession looming on the horizon.

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US Global Investors CEO Predicts Bitcoin (BTC) Ready for Bull Cycle, Prefers Gold

Bitcoin BTC Price Analysis Gold 2019

Frank Holmes, CEO of US Global Investors and one of the more prominent natural resources capitalists in the country, called Bitcoin an alternative to gold, but stated that he preferred the physical store-of-value asset to its digital counterpart. In addition, he issued a stern warning to ‘millenial’ traders who have failed to do their homework on Bitcoin and precious metals such as gold.

Speaking in an interview with Kitco News on May 17, an organization that deals in precious metals trading, Holmes highlighted the fact that BTC and cryptocurrency wallets increased since 2018, despite the falling coin prices of last year’s crypto winter,

“What’s important during this whole year is that even though the price fell 80% to 90% depending on the coins, you had an increase of wallets out of people buying bitcoin, and that’s a sign that we’re ready for the next bull cycle. ”

In addition to increasing adoption, Holmes found the conditions of January 2018’s collapse to be somewhat favorable for a coming bear cycle. Compared to the traditional markets in 2008, which catalyzed one of the worst global recessions in history, the crypto markets of early 2018 were not overleveraging, which Holmes believes will allow them to recover more quickly,

“This [correction] can be a year, and we’re slowly climbing out of it, and [bitcoin] is becoming an alternative asset class like gold.”

Despite being receptive to a bullish cycle ahead for Bitcoin, Holmes reiterated that he prefers gold to BTC, stating that the latter is not a replacement for real-world precious metals. He also cautioned younger investors not to become too caught up in cryptocurrency, and to consider other asset classes, including as a way to contribute patriotically to the U.S.,

“[Millennials] should do their homework, they should open up a history book on why gold is so significant… why the great ‘love trade’, that if you love your country you should have gold in reserve. If you have a crisis, your paper money goes down in tremendous value. Gold is what bailed out Britain, getting it over to Canada, and then trading to get weapons from America, it was gold that did it.”

Holmes gave another prediction that the price of gold would rise with the easing of central banks around the globe, particularly in Europe, causing a decrease in value for fiat currencies that would push traders into precious metals. He highlighted the looming trade war between the United States and China that will ultimately lead to negative rates. He claimed the EU to have “massive” negative real interest rates with “no hope of them rising.” He further chastised EU governments for continuing to print money, and made the statement “you better buy gold, and you better back up the truck and have that minimum 10% golden rule.”

The geopolitical uncertainty brewing around U.S.-Chinese trade relations could further contribute to investment interest in cryptocurrency–similar to early April’s Brexit craze–as traditional economies and fiat currencies appear less certain.

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New Research Shows Bitcoin (BTC) Conversation Has Matured Dramatically

Bitcoin BTC Conversation 2019

The recent price rally for Bitcoin and cryptocurrency has a number of analysts and investors scratching their head and asking the question: what’s different between now and 2017?

While coin prices fell through the majority of last year, leading analysts to label 2018 a crypto winter, the market reached an all-time high in late 2017 following a massive bull rally for Bitcoin. Despite currently trading at under $8000, the price of BTC reached an all-time high of $19700 in the final weeks of December 2017. At the time, it appeared that Bitcoin was finally receiving the adoption and investor interest it deserved after nearly a decade on the market.

However, it quickly became apparent that market prices had outstripped valuation and usability, and the entire landscape of cryptocurrency collapsed with coin’s falling 80 percent or more over twelve months. In the aftermath of the price fall, analysts pointed to Fear Of Missing Out (FOMO), unrealistic expectations and greed as primary contributors to the spectacular boom and bust cycle for Bitcoin.

Bitcoin Conversation Evolving

Compared to eighteen months ago, alternative data provider Indexica believes that Bitcoin has matured as an asset since the last bull rally, and has published research supporting their claim. The group created a custom index processing the language contained in thousands of text documents related to cryptocurrency and Bitcoin, and found that the industry, as a whole, has matured greatly over the last several years.

According to their findings, professional discourse around Bitcoin has continued to grow throughout 2019, marking a key price indicator for the currency’s rally since the start of April. As outlined by Bloomberg, Indexica’s findings show three main drivers for growth:  “a more complex conversation surrounding Bitcoin, fewer concerns about fraud and a shift in the tense of how Bitcoin is talked about from the past to the future.”

‘Complexity of Bitcoin’–defined as a measure of the quality of discourse surrounding the asset–made up the majority (24 percent) of the conversation related to BTC. Indexica attributes the increased quality of discussion to the growing pool of academics and professional investors now populating the space of cryptocurrency, moving beyond the niche technology market it represented just a few years ago.

Bloomberg cites the entrance of Fidelity Investments getting into the cryptocurrency game for institutional investors as one strong indicator that the marketplace for Bitcoin has changed dramatically over the last eighteen months. In addition, Wall Street investment bank JP Morgan Chase has also given a vote of confidence to the utility of digital assets, by creating the in-house JPMCoin.

Interestingly, Indexica’s study also found that the tense of conversation surrounding cryptocurrency has changed within the last month. Futurity of Bitcoin, which logged 15 percent of the indexed conversation, gives an indication that discussions are geared towards the future of BTC–as opposed to what has already transpired. SInce the start of April, the future for Bitcoin and the crypto markets has been a dominant topic of conversation, providing another indicator on the direction of the industry.  

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First Brexit, Now Trade Wars: Global Politics Driving Bitcoin (BTC) Investors

Bitcoin BTC Cryptocurrency Trade War 2019

In April, after more than a year of falling prices, Bitcoin and the crypto markets took off on a bullish rally. While the initial price jump has been tied to a massive 21,000 BTC buy, geopolitical overtones at the time concerning Brexit contributed to the wave of investment interest.

During the same week that Bitcoin and cryptocurrency experienced its first bullish rally since the beginning of 2018, British Parliament and Prime Minister Theresa May were embroiled in a debate on how to handle their exit from the European Union. While once a seemingly impossible though, the U.K. appeared to be drawing near a ‘No-Deal’ Brexit, which would have brought about an abrupt and immediate cease in trade and relations with the European Union.

In anticipation for such an event, currency speculators were predicting a collapse in the British Pound and drop-off for the Euro, driven by the economic turmoil and halting trade between the two entities. Parliament swooped in during the first week of April to prevent a No-Deal Brexit, and the entire event was brought to anti-climatic end mid-month with Brexit being delayed to the end of October 2019.

However, the economic uncertainty kicked up in the wake of Brexit was enough to draw vast swathes of the investment landscape to cryptocurrency as a possible alternative to government fiat and the traditional markets that relied upon their currency. Similar interest in cryptocurrency has continued to be generated throughout May, as the fallout from U.S. and Chinese trade negotiations creates a murky global landscape.

The ‘trade war’ brewing from President Donald Trump’s handling of U.S.-Chinese relations has the investment class once again looking at cryptocurrency as a potential means for economic viability. The bullish turn for Bitcoin is no doubt related to the market cycle of a severe bearish period coming to an end, but the geopolitical implications of global economics have changed over the last eighteen months.

Whereas cryptocurrency was previously viewed too volatile to participate in, institutional investors are turning to the possibility of Bitcoin as a substitute store of value and alternative to the traditional markets. In addition, the entire industry has been vetted and supported by the entrance of social media giant Facebook and Wall Street stronghold J.P. Morgan Chase.

The vote of confidence for cryptocurrency is in; now it remains to be seen how the industry can move past the FOMO and price speculation that led to January 2018’s massive collapse in valuation. It’s possible that the looming global recession for the world’s markets–after 12 years of bullish prices–could force the hand of investors and cryptocurrency. But given the economic uncertainty being generated by both a looming trade war and a delayed Brexit, it could be only a matter of time before crypto takes a more central stage as a currency and digital asset.

Either way, the valuation for cryptocurrency appears tied up in larger factors than retail price speculation.

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Bitcoin, Ethereum, Bitcoin Cash, Ripple, IOTA, Litecoin, NEM, Cardano: Price Analysis, Jan. 04

The views and opinions expressed here are solely those of authors/contributors and do not necessarily reflect the views of Cointelegraph.com. Every investment and trading move involves risk, you should conduct your own research when making a decision.

While China banned initial coin offering (ICO) back in September 2017, it has not prevented the Chinese social network Renren from seeking an ICO. The company’s stock, which is listed on the New York Stock Exchange climbed 47.39 percent to $18.32 a share following the news.

Similarly, Israeli trading company Plus500 saw its stock price spike 20 percent as it reported that cryptocurrency trading had boosted its profits.

This shows that the markets are excited about the companies getting involved with the Blockchain technology or cryptocurrencies.

But not regulators, apparently. The Israel Securities Authority, for example, is not in favor of stocks, whose main business is linked to cryptocurrencies. The regulator plans to prohibit the listing of shares of such companies. Will other stock markets regulators also follow? Difficult to say.

As the cryptocurrencies market cap has crossed over the $760 bln point with altcoins outperforming Bitcoin, let’s see if can identify any buy or sell patterns today.

BTC/USD

Though Bitcoin broke out of the downtrend line, it did not reach our expected target objective of $16,000. Failure of the bulls to capitalize on the breakout of the downtrend line is a bearish sign.

b

We find a symmetrical triangle developing, which is a continuation pattern. The cryptocurrency is currently retesting the breakout levels of the triangle. If it holds the $14,000 levels and reverses direction, we suggest long positions above $15,500.

If the BTC/USD pair falls below $14,000, it is likely to fall to the neckline and below that to the trendline of the triangle. A breakdown of $12,000 levels will be negative, which can extend the fall to $8,000 levels.

Therefore, traders should keep a stop loss around $13,500 once their long positions are triggered. Also, avoid buying below the specified levels.

ETH/USD

We expected a move to $973, once Ethereum sustained above $863 and it has reached our target objective today.  

e

The resistance line of the channel is likely to act as strong resistance. Based on the previous experience, we find that once the cryptocurrencies are in a momentum, they overshoot their target objectives.

Therefore, traders can book partial profits at the resistance line and hold the rest with a close stop-loss because if the ETH/USD pair breaks out of the ascending channel, it can rally to $1,200 levels.

However, the markets can turn down in a jiffy, so make sure to trail the stops higher instead of being fixated on the targets.

BCH/USD

Though Bitcoin Cash broke out of $2,475, it could not reach $2,900 levels, as we had expected. It turned back from $2,770.6933.    

b

The cryptocurrency has again fallen to the critical trendline support, which has provided support on two previous occasions. If this level breaks, there is marginal support at the $2,072.6853 point; below that a fall to $1,733.3558 is likely.

If the trendline support holds, we may see another attempt by the bulls to push the  BCH/USD pair higher. The pair is likely to gain momentum above $2,800 levels.    

XRP/USD

Ripple did not waste any time in consolidation, as we had anticipated. It just broke out to new lifetime highs yesterday and has continued higher.

x

With this rally, the pair has risen from a low of $0.22255 on December 11 to a high of $3.317 today. That is a 1,390 percent rally within a month.

It is difficult to project a target when an asset class is backed by such a strong momentum. However, as a reference, the next target on the XRP/USD pair is $3.414 and above it $3.90469. Nevertheless, even at the risk of missing out on a further rally, we believe that the traders should book about 50% profits at the current levels and hold the rest with a close stop loss.

The cryptocurrency is clearly overbought and is due for a correction or a consolidation shortly.   

IOTA/USD

We have recommended long positions on IOTA in our two previous analyses. We expect the bulls to attempt a rally towards the upper end of the range at $5.59.

i

The bears are defending the overhead resistance of $4.34. Currently, the IOTA/USD pair is taking support at the 20-day EMA.

If this level breaks, it is likely to retest the lows at $3.03 levels. The cryptocurrency pair will gain momentum only above $4.34 levels.

Since IOTA is still inside the range, we recommend holding to the long position with a stop loss of $2.85. We shall reconsider our position in a couple of days.   

LTC/USD

The pullback in Litecoin could not sustain above the $250 levels. The cryptocurrency has again broken below the neckline of the bearish head and shoulders pattern.

l

It has again broken below the 20-day EMA, which has flattened out. Still, we find buying on dips, closer to the $200 levels.

The LTC/USD pair has support at $195.417, below that at $179.7308 from the 50-day SMA, and finally at $175.199, which is the lows formed on December 22.

If the cryptocurrency pair doesn’t break out of $260 within a couple of days, we expect it to resume its slide towards the lower targets.

XEM/USD

NEM has climbed from a low of $0.23595 on December 08 to a high of $2.06278 today, which is a 774 percent rally within a month. It has climbed to the sixth position in terms of market capitalization. Hence, we included it in our analysis.  

n

The XEM/USD pair has risen vertically over the past three days. It has a target objective of $2.13774, which is a critical Fibonacci extension level. We expect some resistance at this overhead resistance. Therefore, traders should keep a close stop-loss on their position.

It does not necessarily mean that the cryptocurrency will crash from $2.13774 levels. It can consolidate for a few days and then again resume its uptrend.

In a correction, we expect support at $1.57849 and $1.42889, which are 38.2 percent and 50 percent Fibonacci retracement levels of the recent leg of the up move from $0.794 to $2.06278.  

ADA/BTC

As we don’t have the charts with enough data available for ADA/USD, we are analyzing the ADA/BTC pair.

We expected Cardano to correct in our previous analysis; however, it extended its rally in the past two days and proved us wrong.

a

From a low of 0.00000338 on Nov. 25 to a high of 0.00009180, today, the ADA/BTC pair has risen 2,615 percent in one and half months. This shows that it is in a strong momentum.

Though momentum can carry it higher, the rally is overextended and is likely to enter into a consolidation or correction soon. Therefore, traders should book partial profits on every rise and should keep a close stop loss on their remaining position.

It is difficult to call a top, but the risk to reward is skewed to the downside.

The market data is provided by TradingView.

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Bitcoin Adoption by Businesses in 2017

2017 was a big year for Bitcoin. CBOE launched the first Bitcoin futures market, the NYSE filed for two Bitcoin ETF’s, and Bitcoin price rose over 1,300 percent. In 2017, Bitcoin became too big to ignore, as Bitcoin became more valuable, there were sizable increases in the amount of brick and mortars that accepted Bitcoin all over the world. Let’s take a look at the data.

Q1/17: Slight growth – 5.5%

According to Coinmap.org, on Jan. 3, 2017,  8,207 brick and mortar businesses accepted Bitcoin as a payment method for their goods and services.  On March 28, 2017, three days before the end of the first quarter, 8,665 businesses accepted Bitcoin. For the first three months of 2017, there was a 5.58 percent increase in Bitcoin accepting businesses.  

BTC Price Data: Calm growth – 7%

On the first day of the year, Jan. 1, 2017, Bitcoin was worth $979.5, roughly 13 times less than what Bitcoin is worth today – $13,390. On March 31, the last day of the first quarter, Bitcoin’s price was $1,045.03. The Bitcoin price rose 6.9 percent within the quarter.  

Q2/17: Steady growth – 5%

On April 4, 2017–8,682 businesses accepted Bitcoin. On June 27, 2017, three days before the end of Q2, 9,143 businesses accepted Bitcoin – all in all, an increase of 461 brick and mortars that accepted Bitcoin, which represents a 5.3 percent increase in the amount of businesses that started accepting BTC in the spring of 2017.

BTC Price Data: Boost – 135%

On April 1, 2017, Bitcoin’s price was $1,069.78; on the last day of the quarter–$2,519.27. Bitcoin’s price increased by $1,449.49; equivalent to a 135 percent increase in price.

First Half of 2017: 11% more businesses accept BTC while BTC price increased by 147%

When combined, the data from Q1 and Q2 represent the first six months of 2017. In the first half of 2017, there was an 11.4 percent increase in the amount of Bitcoin accepting businesses. 936 brick and mortar businesses added Bitcoin as an acceptable payment method for their goods and services.  The average quarterly increase in the amount of brick and mortar businesses that accepted Bitcoin was 5.44 percent.  And from the first day of Q1 to the last day of Q2, the Bitcoin price climbed a total of $1,501.1–a 147.43 percent increase in price.

Bitcoin Accepting

Q3/17: Cryptomania begins – 8.5% growth

On July 4th, 2017, 9,176 businesses accepted Bitcoin; while on Sep. 26, 2017–the number grew to 9,972 entities; an increase of 796 brick and mortar businesses that accepted Bitcoin as a payment method, which is equivalent to an 8.67 percent increase.

BTC Price Data: Another boost – 74%

On July 1, the first day of Q3, the Bitcoin price was $2,458.14, by the end of September it reached $4,286.64. From July 1 to Sep. 30, 2017, Bitcoin price increased by $1,828.5 which is equivalent to a 74.38 percent increase in price.

Boost and buzz, made by Bitcoin

In Q3 we began to see the Bitcoin price and the amount of Bitcoin accepting businesses increase at a larger rate than in previous quarters. A rise in price means that there is a rise in demand, and a rise in demand should be no surprise for the Bitcoin market considering the events that took place in Q3/17. The media began to cover the astronomical returns that investors were receiving from ventures in digital currencies; Bitcoin began to receive worldwide media coverage, and for the first time, Bitcoin was presented in a positive light opposed to its precedented association with money laundering and illegal drug purchases. Additionally, when Bitcoin hit new all-time highs, the news spread like wildfire, this may have influenced a number of people who felt as if they were missing out on massive returns to invest in the Bitcoin themselves so they would not miss out on the generous return on investment.

Q4: Always more BTC for business – 12%

On Oct. 3, 2017, three days into Q4/17, 10,040 brick and mortar Businesses accepted Bitcoin. On Dec. 19, 2017, 11,291 businesses accepted Bitcoin. A 12.4 percent increase in the amount of businesses from the beginning of the quarter.

BTC Price Data: Roller-coaster – 224%

Q4 experienced the largest increase in Bitcoin accepting businesses with an increase of 1,251 brick and mortar establishments accepting Bitcoin for their goods and services. At the beginning of Q4, Bitcoin’s price was $4,317.24. Around Dec. 17, Bitcoin hit an all-time high of $20,000, but in the last days of December, the cryptocurrency market experienced a correction in price–Bitcoin dropped to $14,000. Regardless, Bitcoin’s price rose $9,685.7900 a 224.35 percent increase from the beginning to the end of the quarter.

Second half of 2017: Nearly twice as many new BTC-friendly businesses compared to the first half of 2017

In the second half of 2017, the amount of businesses that accepted Bitcoin as a payment method increased by 2,115 establishments. This is equivalent to a 23 percent increase in Bitcoin accepting businesses from July 4, 2017 to Dec. 19, 2017.

The amount of Bitcoin accepting businesses increased by an average of 10.57 percent per quarter, almost two times the average quarterly increase in Bitcoin accepting businesses from the first half of the year (Q1 and Q2).

Price data: BTC is a record breaking currency

On Jan. 1, 2017–Bitcoin price was $979.53, and by the end of December, Bitcoin’s price was around $14,000; from the first day of Q1 to the last day of Q4 the overall price increase was around 1,329 percent and the priced increased by over $13,000 overall.

Crypto-mania and BTC adoption

It is possible that Bitcoin’s price dropped recently because retail investors who were new to the cryptocurrency market were not aware that cryptocurrencies have a much higher Beta–systematic risk–than the NASDAQ or the NYSE. As Bitcoin’s price dropped significantly, the market began to shake out the weak hands and many retail investors who were new to investing panicked and sold their coins.

Those who hodl’d obviously knew not to be worried, be scared, or feel the need to sell when the price shifted downward by a significant amount, because those who are not new to the crypto-community know Bitcoin’s price moves like the best roller coaster at your favorite theme park. The ups are astronomical and may even make you feel as if you have left earth’s atmosphere, but the downs are terrifying, leading you to believe the coaster is going to plummet straight through the earth and travel into the depths of hell, inducing anxiety, restlessness, and pumping up your adrenaline levels.

The data shows us that Bitcoin’s price is correlated with the number of businesses willing to accept Bitcoin as a payment method at a 0.7994 Pearson Correlation coefficient. This means that when there is an increase in Bitcoin price, it is highly likely there will be an increase in the number of businesses that accept Bitcoin.

The best part is, the Bitcoin fun is just beginning. We could call it “crypto-mania;” however, the fun also could end anytime soon.

Although interest in digital tokens is increasing at a rapid pace, the market capitalization of all digital assets is $560,456,007,471, and is still far below the market cap of the NYSE: $19.6 tln.

2017 was a great year for Bitcoin. Not many assets can boast of having returns of over 1,300 percent, there was an overall increase of 3,084 Bitcoin accepting businesses, and the overall increase in Bitcoin’s price was $13,023.53.

In 2017 we began to see institutional investors incorporate digital asset investing options into their platforms for their clients, but the support from the largest institutional investors has not even become a market factor yet. Institutional investors–the ones on wall street with the big money– are looking to get into the crypto game in the first half of 2018 with a number of Bitcoin ETF’s that they have proposed. Furthermore, the retail investor and the layman are beginning to learn of digital currencies, and are becoming interested in incorporating digital assets into their portfolio.

It will be interesting to see what Blockchain technologies, especially Bitcoin, the first Blockchain technology, have to offer in 2018. But at this point in time, with Bitcoin being talked about daily on our local news channels, in our local supermarket, at our nearest barber shops and inside of classroom settings, it is safe to say we have entered a bull market.

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Bitcoin Finally Cools After Monster Rally

As Bitcoin smashed through the $11,000, $12,000 and so on all the way to $19,000 on some exchanges, people were wondering if, when, and how this monster bull run would all come to an end.

It finally has ended for the digital currency as the price corrected from just under the $19,000 mark to sit at 14,470 at time of publishing. This represents a fall of around 14 percent, which in Bitcoin terms is relatively minor.

Hardly a crash, nor a bubble pop, as some pessimists might suggest, it is presumed that investors may simply be taking stock and cashing out a little after gains of over $5,000 per coin.

Reasons for the rise?

Most of the recent run-up came about because of the news out of CME that they would be operating Bitcoin futures come December. That news helped push Bitcoin past $7,000 in a little price boost.

However, as the Dec. 10 and 18 deadlines for CME and CBOE to launch their futures approach, there has been fresh vigor and frenzy. Essentially, it allows for traditional investors to add a new asset class to their portfolios and helps with the adoption of such a sector.

Price correction

Of course, those who felt the full brunt of the rise will be sad that it is over, having profited incredibly well in little under a week. However, the price correction that this should be viewed as is probably a good thing ahead of the futures launch.

Many have seen Bitcoin rise to dizzying heights and then drop off steeply, citing bubbles and collapses and other such pessimism, however, it is natural for correction to take place – especially in such a speculative market.

Adam Sharp, the co-founder of Early Investing, said back in September when Bitcoin faced another big drop off after a great Bull run:

“It’s just natural and normal for a market to have a correction after a run like that. Historically, Bitcoin corrects anywhere from 30 percent to 50 percent. But the long-term trend is still strongly bullish. We’re up from $0.0033 in 2009 in the very early days to close to $4,000 today.”

Overcoming gravity

With this latest bout of adoption and mainstream acceptance, many are feeling that even with a dramatic price drop, Bitcoin still won’t be heading to zero – a concern that was still a potential not too long ago.

Analysts from FxPro said of this latest correction:

“Bitcoin has proven to all that it’s able to overcome gravity. Its exponential rise in value, however, isn’t simply due to the impending arrival of institutional investors. Cryptocurrencies, and Bitcoin, in particular, have become extremely popular with the general public, and as prices move ever higher, the desire to invest continues to grow.”

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Bitcoin is an Economic Miracle: Cambridge Professor

Dr. Garrick Hileman, an economic historian at the University of Cambridge and the London School of Economics, explained in an interview with CNN that Bitcoin is nothing short of an economic miracle.

Hileman stated:

“Many economists dismissed it as a flawed form of money, something that could never achieve the level of adoption that it has. Today we estimate 5 to 10 million unique active users of cryptocurrencies, and in my opinion that’s nothing short of a minor economic miracle.”

What Bitcoin represents

Bitcoin is the world’s first form of decentralized money; a store of value that is censorship-resistant and that is immutable against manipulation by central entities, authorities and governments.

The decentralized structure and peer-to-peer protocol of Bitcoin are unique in that they allow the Bitcoin network to operate as its own economy, without intermediaries and third party service providers. While some central banks and financial institutions have begun to fear such aspects of Bitcoin, the Bank of Finland encouraged economists to study the “marvelous structure” of Bitcoin.

In a paper entitled “Monopoly without a monopolist: An economic analysis of the Bitcoin payment system,” Bank of Finland researchers wrote:

“Bitcoin is not regulated. It cannot be regulated. There is no need to regulate it because as a system it is committed to the protocol as is and the transaction fees it charges the users are determined by the users independently of the miners’ efforts. Bitcoin’s design as an economic system is revolutionary and therefore would merit an economist’s attention and scrutiny even if it had not been functional. Its apparent functionality and usefulness should further encourage economists to study this marvelous structure.”

Global impact

As mentioned above, Hileman described Bitcoin as an economic miracle, but a “minor” one. However, at this stage in which the market valuation of Bitcoin has surpassed that of major banks at $166 bln and the liquidity of Bitcoin is higher than that of most stock markets, it is difficult to justify any aspect of Bitcoin as “minor.”

Bitcoin has had a major impact on the global financial system over the past eleven months, and it will continue to transform the finance industry at a rapid pace. Already, institutional investors have begun to move into the Bitcoin market. Coinbase CEO Brian Armstrong revealed that approximately $10 bln in institutional money are awaiting to be invested in digital currencies such as Bitcoin.

“Over 100 hedge funds have been created in the past year exclusively to trade digital currency. An even greater number of traditional institutional investors are starting to look at trading digital assets (including family offices, sovereign wealth funds, traditional hedge funds, and more). By some estimates there is $10 bln of institutional money waiting on the sidelines to invest in digital currency today,” wrote Armstrong.

Economic miracle

Naturally, as major hedge funds and large-scale investment banks shift towards Bitcoin, general consumers and casual investors will follow. Then, Bitcoin will no longer be a minor economic miracle but a major one, which will inevitably shape the finance sector in the long-term.

Leading economies like the US, Japan and South Korea have already recognized Bitcoin as a legal currency and store of value, providing regulations to cryptocurrency exchanges, businesses and investors.  

As a currency, Hileman also noted that Bitcoin is increasingly being used in the luxury markets, to process or settle large transactions without the expensive and inefficient services of banks.

“If you’re only paying a $2 transaction fee on a piece of art that’s worth tens of thousands, the fee is basically zero. But if you’re paying two or three percent on a piece of art of that value, then the numbers can go up quite a bit,” added Hileman.

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Price Analysis, October 25: Bitcoin, Ethereum, Bitcoin Cash, Ripple, Litecoin

The views and opinions expressed here are solely those of authors/contributors and do not necessarily reflect the views of Cointelegraph.com. Every investment and trading move involves risk, you should conduct your own research when making a decision.

* BTC/USD, ETH/USD and LTC/USD market data is provided by the HitBTC exchange.

In August 2017 Bitcoin split in two, which resulted in the appearance of Bitcoin Cash, and yesterday the network experienced the second fork, Bitcoin Gold. Whether this is an advantage or disadvantage for Bitcoin is up for debate. Both sides have their own explanations.

However, as traders, we look for historical precedence and attempt to trade using it.

After the first fork, Bitcoin prices took off, rallying from a low of $2,621.75 on Aug. 2 to an intraday high of $4,975 on Sep. 2. That is a blistering 89.75 percent rally in a month.

If history were to repeat itself, Bitcoin should rally to $10,443 by Nov. 24. That figure looks a little doubtful because most traders expect Bitcoin to fall now that the fork has been completed. They expect money to shift to the altcoins. We did see a spark of it in the last two days. However, that rally fizzled out.

Can the rumor of Amazon accepting Bitcoin become a reality and give another boost to the cryptocurrency? We have to wait and watch for it.

However, what do the charts forecast? Is it time to shift from Bitcoin to altcoins or will Bitcoin again attempt to resume its rally? Let’s find out.

BTC/USD

We have not initiated any positions on Bitcoin for the past few days. Is this a good time to get back into the game?  

BTCIn our previous analysis, we had forecast Bitcoin to find support between the $5,350 to $5.500 zone. Today, the digital currency fell to $5,356.95 levels, where buying emerged. As there are two critical supports – from the trendline and the 20-day exponential moving average (EMA) – this can be a good entry point.

However, we want to buy on the way up and not on the way down. Therefore, please initiate long positions at $5,650.

We don’t expect a huge rally from the current levels. We expect a retest of the recent highs. Traders should book partial profits at $6,000 and raise the stops on the remaining positions to break even, if the cryptocurrency rallies according to our expectation.

On the other hand, if Bitcoin turns around and breaks below $5,350 it can extend its fall to $5,000 levels. Therefore, please keep a stop loss of $5,300.

The negative divergence on the RSI is a cause of worry. Therefore, we shall keep the allocation size 50 percent below normal. This is a very risky trade.

ETH/USD

Ethereum must have given some heartburn to our readers. It rallied from $275 to close to $320, and we could not catch it.

ETH

These volatile trades will be difficult to catch. At times, the support levels may break and at other times they may hold. The cryptocurrency had been falling for the past many days; therefore, we did not expect it to pullback so sharply.

Nevertheless, after the quick rally, Ethereum has given up most of its gains and is back below $300 levels.

Currently, the digital currency is likely to face resistance at the 20-day EMA and the 50-day SMA. It becomes bullish only on a breakout and closes above $315. Until then, we don’t see a reliable set up on it.

On the downside, the trendline is a formidable support, which is likely to hold. However, as the price is quoting below both the moving averages, we don’t consider it as a good level to initiate long positions.

That’s why we don’t recommend any trade on Ethereum at the moment.

BCH/USD

Bitcoin Cash is attracting some buyers at the current levels. There have been two attempts in the past three days to push the cryptocurrency higher.

BCHHowever, the 20-day EMA has been acting like a big hurdle on every pullback. If the price manages to break out of the 20-day EMA, it is likely to rally to the 50-day SMA, which is at $414, just above the upper end of the range.

However, the logical stop loss for this trade is below the lower end of the range at $280. This doesn’t give us a 1:1 risk to reward ratio. Therefore, it doesn’t seem to be a good idea to trade.

On the other hand, if the digital currency breaks down of the lower end of the range it can sink to $190.

XRP/USD

After a continuous fall from the $0.3 levels, Ripple is attempting to hold the $0.18 levels. An attempt to pullback faced resistance from both the moving averages.

XAs a result, the cryptocurrency is again back at the $0.2 mark. If Ripple breaks down below yesterday’s low of $0.18211, it will resume its downtrend. The next stop is likely to be $0.165, followed by a retest of $0.15.

On the other hand, any pullback attempt will face selling at the moving averages and the downtrend line. The digital currency will become positive only after it breaks out of $0.238 levels.

Currently, there is no bullish setup. Therefore, we suggest no trade on Ripple.

LTC/USD

Yesterday, Litecoin attempted to break out of the overhead resistance of $58; however, the bears pushed it back into the range.

LTCThe digital currency is again back into the range of $44 to $57.7.

The cryptocurrency will become bullish only on a breakout and close above the upper end of the range. We recommend a buy on Litecoin on a close above $57.7. Our target objective is $71. The stop loss for the trade can be kept at $51.

On the contrary, if the bears continue to pound the digital currency, it can fall to the lower end of the range at $44. Therefore, we recommend a buy only after the bulls are able to push Litecoin out of this range.

Posted on

Bitcoin, Ethereum, Bitcoin Cash, Ripple, Litecoin: Price Analysis, October 21

The views and opinions expressed here are solely those of authors/contributors and do not necessarily reflect the views of Cointelegraph.com. Every investment and trading move involves risk, you should conduct your own research when making a decision.

* BTC/USD, ETH/USD and LTC/USD market data is provided by the HitBTC exchange.

 

Only a few months back, the market capitalization of the whole cryptocurrency universe crossed the $100 bln mark. Now Bitcoin alone has crossed the $100 bln mark.

In doing so, it has increased its dominance to 58.5 percent, a level last seen in May this year. This shows that money is pouring into Bitcoin, whereas altcoins are getting hammered.

At some point in the near future, once the leader tires out, other popular coins are likely to offer an excellent buying opportunity.

Is Bitcoin nearing a top? Are altcoins ready to follow the leader? Let’s find out.

BTC/USD

Bitcoin is on fire. It has been consistently rising for the past two days. Can this rally continue? We don’t have any existing positions in Bitcoin, should we establish one at the current levels?

BTC

Bitcoin has reached a critical resistance level from the channel line. It has not been able to breakout of this channel since June of this year. A breakout of the ascending channel gives it a target of $8000, equal to the depth of the channel. However, this level is unlikely to be reached in the short-term. Therefore, we have to work with intermediate targets.

The breakout from the range of $5391.4 to $5875 gives the cryptocurrency a minimum target objective of $6359. If this level is crossed, then the next possible level is $6845.

Our higher targets will be invalidated if the virtual currency turns down from the current levels.

As the risk to reward ratio is not attractive, we don’t recommend any fresh trade. However, investors carrying positions from lower levels should keep a stop loss of $5600.

Once Bitcoin breaks out and sustains above the channel, the stops can be raised to about $5800 levels and then trailed higher.

On the downside, $5875, the earlier resistance, will act as a strong support.

ETH/USD

Ethereum has been falling for the past six days. However, we expect it to hold the $275 to $286 zone, which has served as a strong support for the past month and a half.

ETH

We don’t recommend buying on the way down. We should wait for the next day or two to confirm that the support zone is holding, because a break of this support can sink Ethereum to $252 levels.

If, however, the support holds, the digital currency is likely to trade in a range for a few days, then attempt to start a new uptrend.

Presently, we don’t find any buy setup, therefore we don’t suggest any trade on Ethereum at the moment.

BCH/USD

While Bitcoin is roaring ahead to new highs, Bitcoin Cash has not found any buying support from the bulls. However, selling has subsided, which has resulted in small range days.

BCH

Presently, the digital currency is attempting to hold the $282 to $300 support zone. If Bitcoin Cash breaks this level, it will sink towards lows of $190.

On the other hand, a breakout of $400 will signal a change in trend. Therefore, we recommend a long position only at $410, with a stop loss of $350. The target objective is $530.  

XRP/USD

We don’t hold any positions in Ripple. The digital currency is currently attempting to hold the $0.20 levels. However, buying interest has declined following the sharp reversal from $0.3 levels.

XRP

If Ripple breaks below $0.2, it’s likely to fall towards $0.15 levels, where we recommend to initiate long positions because it has not broken down of $0.145 on a closing basis since June this year. However, this trade should be taken on the way up, after Ripple confirms a bottom. Please don’t try to catch a falling knife and enter when the cryptocurrency is falling. The stop loss can be kept $0.126.

On the other hand, if the virtual currency holds the $0.2 levels, it will again attempt to rally towards $0.3. But, we don’t find a reliable set up to trade this. Hence we don’t recommend a long position until Ripple falls to $0.15 levels and holds it.

LTC/USD

On Oct. 18, though Litecoin fell to $53 levels, it quickly climbed back higher and closed above $57.7. It has since then managed to stay above this support level. However, presently the cryptocurrency is threatening to fall into the range once again.

LTC

If Litecoin breaks below $57 and is unable to climb back quickly, it will invalidate the current bullish setup.

However, if the cryptocurrency finds support at the current levels and turns up, a long position can be initiated at $63. The stop loss for the trade can be kept at $55 and the profit objective is $71.