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Adamant Capital: Bitcoin in ‘Accumulation Phase’ Before Next Bull Run

Bitcoin Price Prediction 2019

A new report by Adamant Capital concludes that the bear market for Bitcoin might be nearing an end, with the currency entering an accumulation phase before the next big bull run.

Compared to the crypto winter of 2018, during which investors were forced to shed BTC or suffer losses as the currency fell from $20,000 to a relative low of $3000, the current market has traders much more optimistic about on the price outlook. Investors are now accumulating Bitcoin, putting pressure on bears who may be selling just ahead of another big price rally.

Tuur Demeester and Michiel Lescrauwaet, co-authors of the report, said that the current price point for Bitcoin should be appealing to investors,

“Now, at 75% below its 2017 all-time high, we believe the current bear market represents an exceptional opportunity for value investors.”

In what Adamant Capital refers to as the ‘accumulation phase’ for Bitcoin, the analytics firm expects BTC to trade in a range of $3000 and $6500, as bears unload their coins to willing bulls who are looking to lock in a discounted price for the number one cryptocurrency by market capitalization.

The report also concluded that retail investors took a bath in November 2018, capitulating any previously made gains–or submitting to significant losses–in a capitulation event that saw the price of Bitcoin fall 48 percent. While some of the cryptocurrency price fall can be attributed to the market uncertainty of Bitcoin Cash’s hash war, investors were also fatigued from nearly 12 months of bear market prices. The end result is a glut of investors looking to re-enter the market at a favorable condition, especially if they sold out at Bitcoin’s relative price low during last November.

Adamant Capital has made a point of tracking unrealized Profit and Loss and indicator of market performance, and reports that the most recent price rally has had a substantial impact on that metric,

“The recent price rally from $4,000 to over $5,000 markedly improved HODLer’s Unrealized P&L improving our reported sentiment value from capitulation to hope,”

The report, in particular, looks at the claim that retail investors (individual investors as opposed to professional traders or institutions) have largely left the market following the last year of losses. Such a situation would indicate that the well of bearish sellers for Bitcoin may be smaller than previously thought. Adamant Capital points to Google Trends data that indicates “apathy and disinterest” on behalf of retail investors, with searches for Bitcoin dropping to as low as March 2017 values.

Adamant also points to gradual decline in Bitcoin price volatility over the last several months, a factor that has historically been attributed to the actions of retail investors,

“High Bitcoin volatility can be a proxy for the involvement of trigger-happy retail speculators, whereas low volatility tends to coincide with phases of consolidation, apathy, and accumulation.”

With finicky retail investors gone, long-term holders have come to make up the majority of the market, a group that will be looking to accumulate more BTC at current prices and avoid succumbing to the bearish sellers.

The combination of price anticipation and investor makeup has led Adamant to conclude that Bitcoin, at its current price point, is back in “undervalued territory.”

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Analyst: Bitcoin Moving Average Points to More Gains Ahead

Bitcoin BTC 200 Day Moving Average

While the crypto markets are showing slight contraction, with Bitcoin holding trading above $5000 in the hope for renewed price action, several analysts are pointing to the 200-day moving average as a bullish indicator.

The most recent bull run for Bitcoin and the larger cryptocurrency marketplace gave BTC its best day of trading since the massive valuation increases seen during the final month of 2017. After a strong weekend of growth, BTC price shot to $4700 on April 1, and continued to gain an additional 20 percent on April 2 to take the currency above $5000. The next two days brought about a consolidation in trading, with the price of BTC fluctuating around the $5k as both bullish and bearish investors weigh in on establishing a new floor or ceiling for the coin.

However, the market price for BTC represents a substantial increase over prices experienced earlier in the year, when Bitcoin appeared to be destined for $3000 or lower. The recent price rally has given a strong indicator to analysts that the top cryptocurrency by market capitalization likely found its bottom at $3000, with the next movement representing a broader trend in how the coin will proceed into the remainder of the year.

New York-based Fundstrat Global Advisors finds that Bitcoin could be about to extend into a 200 percent price surge, making the currency worth $13,500 if current indicators hold true. According to the research firm, Bitcoin closed above its 200-day moving average on April 2nd for the first time in more than a year, mostly due to the massive price rally that initiated the price kick-off.

In a note to clients, Fundstrat explained that closing above the 200-day moving average has been a historically bullish indicator for BTC, with a win-ratio of 80 percent compared to that of 36 percent when the coin trades below,

“Based on bitcoin’s trading history, a move above the 200-day moving average for bitcoin is meaningful statistically. When bitcoin is above its 200-day moving average its win-ratio is 80% compared to a mere 36% when it is below its 200-day.”

Fundstrat continued that trading above the 200-day moving average significantly increases six-month forward returns, which average 193 percent compared to a “measly 10% when below its 200-day moving average–hence, being above the 200-day moving average is a big deal.”

While investors, both bullish and bearish, attempt to sort through what the most recent price rally means for the valuation of Bitcoin, most community members are looking at market conditions differently than they did in 2017. Compared to that time, cryptocurrency adoption has grown substantially, with major companies such as Facebook and J.P. Morgan Chase now providing a new face of confidence for the industry.

The fear that cryptocurrency may once again find itself over-extended, with coin prices vastly outweighing the actual valuation and impact of the technology has been dwindling since the start of the year. Already industry hopefuls and cryptocurrency enthusiasts are finding reasons to own crypto outside of what they can accomplish through price speculation.

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Report: Bitcoin Wallet Activity Spiked Week Before Bull Run

Bitcoin Wallet Activity Price Rally 2019

Despite analysts scrambling to find the reason behind Bitcoin’s most recent price rally, during which the currency increased 25 percent in the span of days, one firm is pointing to wallet activity as a sign of increased adoption.

According to market intelligence firm Flipside Crypto, digital wallet activity for Bitcoin and other cryptocurrencies saw a spike in activity over the previous two weeks. The wallet activity gives some indication in an uptick of user activity and industry adoption, even before the most recent bullish turn in valuation.

Historically, around 40 to 50 percent of circulating Bitcoin has been held in wallets that are inactive for greater than a month, likely due to the bulk of investors keeping their coins on exchanges. However, Flipside Crypto reports that figure falling to only 10 percent since March 15, showing a significant increase in user activity over the last several weeks.

“If you are a crypto optimist, that’s good news,” Eric Stone, co-founder of Flipside, told Bloomberg. “There are more people warming up to the idea of buying Bitcoin.”

Stone also reports that the wallet activity and price movement for the most recent rally has been less attributable to the activity of whales. Instead, the sharp increase in wallet activity from accounts that have typically been dormant indicates a broad-based “waking up” of many smaller investors. Cryptocurrency investors, likely those who have remained inactive or price-stricken during 2018’s ongoing bear market, are now taking greater interest in market price movement.

While the previous 12 months may be referred to as a “crypto winter” for the marketplace, this week’s exponential price rally and data surrounding wallet activity contributes to a more holistically driven valuation, as opposed to the action of whales. Stone points out that the plummeting price of BTC in November 2018, when Bitcoin fell 40 percent, was the result of a few whale investors shifting positions. More price movement has given a much different indication, with Flipside Chief Executive Officer Dave Balter telling Bloomberg,

“We see this move much more valid than a few whale moves in October. This probably signifies a change in perception or confidence in this asset class.”

Some analysts have pointed to a massive BTC buy spread across several exchanges as being the primary catalyst for Bitcoin’s price movement. Community members have interpreted this as indication of institutional investors at long last entering the market of cryptocurrency, likely ahead of increased mainstream adoption building throughout 2019.

With the possibility of a Facebook Coin looming over the industry’s head, it is clear that cryptocurrency has turned a corner in terms of developing real world interest. While crypto, overall, may still represent a niche digital asset class, the boom that could follow major developments such as Facebook are too enticing for large capital investors to pass up.

Brian Kelly, speaking yesterday with CNBC, called for Bitcoin to continue to $6000 off the most recent price rally, and predicted that the market as a whole had found its bottom as coin prices have continued to rise throughout most of 2019.

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Messari CEO: ‘Wealth Transfer’ Will Take Bitcoin (BTC) to $50,000

Bitcoin BTC Price Prediction Messari

As the crypto markets enter their second straight day of bullish price movement, with Bitcoin trading above $5000 for the first time since last year, a number of analysts are weighing in with their prediction for the future of crypto asset value.

Ryan Selkis, founder and CEO of the cryptocurrency research firm Messari believes that Bitcoin will continue to climb in the coming years, gaining over 1,000% to reach a valuation of $50,000. Specifically, Selkis cites the mass “wealth transfer” that is going to occur in the coming years, as the baby boomer generation gives way to millenials, both in terms of capital and wealth inheritance.

Selkis referred to this mass movement of wealth in a tweet published on Mar. 28, just days before Bitcoin took off in price. According to Selkis, millenials stand to inherit $30 trillion in wealth from their baby boomer generation parents, which presents a vast amount of capital that could influence cryptocurrency,

“There’s a $30 trillion “great wealth transfer” expected in the next 20+ years (millennials inheriting money from their parents).

If 1% of that goes into cryptocurrencies, crypto will be a multi-trillion dollar asset class.

That’s the conservative case for $50k+ bitcoin.”

Messari’s CEO refers to the $50,000 prediction for BTC as “conservative,” explaining that his numbers only assume a 1 percent investment by millennials in the money they will be inheriting from their parents. Selkis also assumes that millennial generations will have far greater interest for investing in digital assets and cryptocurrency, a stat-line that has been largely confirmed over the last year through various polling organizations.

Millennials, on average, are both more interested in cryptocurrency and invested in the industry of digital assets. While cryptocurrency has its appeal to a younger generation–more upside in terms of reward, despite the increased investment risk of highly volatile assets–education and lack of understanding tends to be a sticking point for the industry as a whole. The majority of polled investors, moreso in older generations, report lacking a basic understanding of Bitcoin, cryptocurrency and digital assets–a feature that could be hampering the investment potential more-so than just age differences.

Mati Greenspan, senior market analyst for cryptocurrency trading and social platform eToro, agreed with Selkis’s prediction that wealth transfer would benefit the market for Bitcoin,

“The current market cap of bitcoin is around $73 billion. If an additional $300 billion were to flow into bitcoin than it could easily increase the total market cap by 10 to 20 times the incoming capital.”

However, some analysts continue to remain skeptical on the state of cryptocurrency and Bitcoin, despite the growing adoption and valuation throughout 2019. While the entry of Facebook and J.P. Morgan Chase into cryptocurrency, via stablecoins, has been hailed as a positive movement for the industry, others see it as a way of circumventing established currencies. Bitcoin and other top cryptos may continue to see their market share decline if Facebook and mainstream companies develop their own coin projects, thereby giving their massive user bases little reason to invest in or use BTC.

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Bitcoin (BTC) Price Analysis: Another Bearish Break!

Bitcoin recently formed higher lows and found resistance at $6,600 to create an ascending triangle before breaking down. This signals that a downtrend is underway, likely the same height of the formation that spans $800.

The 100 SMA is still above the longer-term 200 SMA, though, so the path of least resistance is to the upside. This suggests that the breakdown could still prove to be a fakeout and bitcoin might still be able to climb back inside the triangle. Then again, price has fallen below both moving averages as an early indication of bearish momentum.

RSI has hit oversold conditions, though, so sellers might need to take a break from here and let buyers take over. Similarly stochastic is heading down but dipping into oversold territory to reflect bearish exhaustion and a possible return in bullish pressure. Price could simply pull back to the broken triangle bottom at $6,400 for a retest before resuming the drop.

Risk appetite appears to be in play in global financial markets so far this week as traders look forward to the talks between the US and China. This has lifted stocks and commodities, likely drawing investors away from cryptocurrencies for the time being. Of course the outcome of the talks could still change all that later in the week.

However, consolidation could also carry on as traders hold out for the SEC decision on the bitcoin ETF applications next month. Any hints on how their ruling might turn out could also push cryptocurrency prices around.

In the absence of any other catalysts, bitcoin traders could also take cues from overall market sentiment, although it’s not clear how it might react to changes in risk appetite. It is helpful to note that bitcoin and some of its peers were able to take advantage of capital controls in Greece a few years back, and the situation in Turkey is looking more or less similar.

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Bitcoin (BTC) Price Analysis: Down to the Last Lines of Defense

Bitcoin just can’t seem to catch a break these days as it once again found itself nearing long-term support at $6,000. A break below this region could mean a prolonged decline for the cryptocurrency.

The 100 SMA is below the longer-term 200 SMA to confirm that the path of least resistance is to the downside. In other words, the drop is more likely to persist than to reverse. However, the gap between the moving averages has narrowed to signal weaker bearish momentum.

RSI is also dipping into oversold territory on its move down, suggesting that sellers could soon take a break and allow buyers to take over. Stochastic is also indicating oversold conditions and looks ready to turn higher soon, possibly taking bitcoin along with it.

In that case, bitcoin could recover to the nearby inflection points at the moving averages. It could also revisit the latest highs around $8,500, but it’s also worth noting that lower highs were seen since the beginning of the year.

Many say that the reason for the latest slide was the SEC announcement to delay their decision on bitcoin ETF applications for September. However, this news actually broke out earlier on and it was likely the prevailing FUD (fear, uncertainty, doubt) sentiment that drew more sellers in.

Besides, risk aversion has returned to financial markets on China’s announcement that they would match the latest set of tariffs to be imposed by the US on August 23. This has led to more safe-haven flows and unfortunately, bitcoin has been moving to the tune of risk sentiment as well.

With that, traders dumped riskier holdings like cryptocurrencies and returned to lower-yielding assets in anticipation of more uncertainty for businesses. Traders might hold out until the actual SEC decision on bitcoin ETFs before pushing this coin in a particular direction.

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Bitcoin (BTC) Price Analysis: Wedge Resistance Holding, Support Next?

Bitcoin appears to be blocked at the top of its daily falling wedge formation.

Bitcoin has formed lower highs and lower lows to create a falling wedge pattern on its daily chart. Price is hitting a roadblock at resistance and might be due to test support once more.

The 100 SMA is still below the longer-term 200 SMA to indicate that the path of least resistance is to the downside. This means that the selloff is more likely to resume than to reverse. Price also came close to testing the 200 SMA dynamic resistance and is tumbling below the 100 SMA dynamic inflection point.

RSI is also heading south so bitcoin might follow suit while sellers remain in control. Stochastic is also heading lower to indicate the presence of selling pressure. Both oscillators have a bit more room to slide but are nearing oversold levels to signal potential exhaustion among sellers and a possible return in bullish pressure later on.

At the same time, the gap between the moving averages is starting to narrow to reflect slower bearish momentum. An upward crossover could bring buyers in and spark an upside break from the wedge resistance. This chart pattern spans $6,000 to around $12,000 so the resulting uptrend could be of the same height.

Bitcoin has had a rough ride in the past few days since it was bogged down by the HitBTC outage and negative remarks from Krugman. South Korea’s plans to tax cryptocurrency exchanges also weighed on prices. Still, some say that this also marks a much-needed pullback from consecutive weekly gains.

Institutional interest remains strong but probably not enough to make it to the headlines these days. Having the spotlight turn back to these kinds of updates could bring more gains for bitcoin and its fellow cryptocurrencies as funds from institutions could bring more liquidity and stronger volumes, likely drawing retail traders to reopen long positions.

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Bitcoin (BTC) Price Analysis: Are Bulls Ready to Charge Again?

Bitcoin has pulled back on its climb over the past couple of days, but seems ready to resume the climb from here. Applying the Fibonacci extension tool shows the next potential upside targets.

The 38.2% extension lines up with the swing high around the $8,500 level but stronger bullish momentum could take bitcoin to the 50% extension at $8,629. From there, a continuation of the uptrend could lead to a test of the 61.8% extension at $8,912 or the 78.6% extension at $9,316. The full extension is located at $9,831.50.

The 100 SMA is still above the longer-term 200 SMA on this time frame, confirming that the path of least resistance is to the upside. In other words, the uptrend is more likely to resume than to reverse.

However, the gap between the moving averages appears to be narrowing, indicating weakening bullish momentum. If this keeps up, bitcoin could be due for a larger pullback to the next area of interest closer to the 200 SMA dynamic inflection point.

This happens to line up with a former resistance level around $6,800 to $7,000 and the rising trend line connecting the lows since June. This might be the line in the sand for a correction, though.

RSI is already pulling up after recently reaching oversold territory, suggesting that bulls are ready to charge again. A bit of bullish divergence can also be seen as price made higher lows while RSI had lower lows since the second week of July.

Stochastic is also turning higher after reaching oversold levels, which means that buyers could take control of bitcoin price action again.

Cryptocurrencies have had a rough start to the week as the catalysts haven’t been exactly positive. For one, HitBTC announced an outage due to hardware problems, sparking fears of a hack even though they assured clients that their funds are safe. This led traders to be more skeptical in reacting to news that South Korean authorities are looking to end tax breaks to cryptocurrency exchanges, which could weigh on activity and profitability.

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Bitcoin (BTC) Price Analysis: Where Bulls Are Waiting

Bitcoin broke below the short-term support levels at the triangle and rising trend line, so bulls might need a larger correction before sustaining the climb. Price is still inside a new ascending channel forming on the 4-hour time frame and a test of support might be in the cards.

This channel bottom lines up with the $6,800 level and former resistance, which might hold as support moving forward. It’s also near the 200 SMA dynamic inflection point.

On the subject of moving averages, the 100 SMA is above the longer-term 200 SMA to indicate that the path of least resistance is to the upside. This confirms that the uptrend is more likely to resume than to reverse. However, bitcoin has tumbled below the 100 SMA dynamic inflection point to signal a bit of bearish pressure.

RSI is also heading lower to signal that sellers have the upper hand, but the oscillator is dipping into oversold territory to reflect exhaustion. Turning back up could bring buyers in, possibly allowing the mid-channel area of interest at $8,000 to hold.

Stochastic is also heading lower so bitcoin might follow suit, but it’s also approaching oversold levels. Turning back up could mean a return in bullish pressure and a bounce back to the channel top around $8,500.

Bitcoin suffered a sharp tumble after it was reported that authorities in South Korea are considering passing legislation to end tax benefits for cryptocurrency exchanges. They pointed to the strong surge in transaction volumes but the potential lack of security capabilities to guard against money laundering and illegal activity financing.

According to Hong Seong-ki, head of the country’s cryptocurrency response team South Services Commission:

While crypto markets have seen rapid growth, such trading platforms don’t seem to be well-enough prepared in terms of security. We’re trying to legislate the most urgent and important things first, aiming for money-laundering prevention and investor protection. The bill should be passed as soon as possible.

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Bitcoin (BTC) Price Analysis: Is That a Shallow Bearish Channel?

Bitcoin appeared to make a downside break of the consolidation pattern previously highlighted, but bulls rushed in to prop it back up. Price now seems to be forming a shallow bearish channel on the 1-hour time frame as it made lower highs and lower lows.

A test of the resistance is currently happening and a return in selling pressure could take bitcoin back down to the bottom at $7,800. Stochastic looks ready to turn after dipping briefly into overbought territory, indicating that selling pressure is about to return.

RSI, on the other hand, is treading sideways on middle ground to signal further consolidation. This could also keep bitcoin trading slowly inside the channel while waiting for the next set of catalysts.

The 100 SMA is above the longer-term 200 SMA to signal that the path of least resistance is to the upside. In other words, there’s a chance for an upside break of resistance. However, the gap between the moving averages is narrowing to signal weaker bullish momentum and a potential downward crossover.

If that materializes, bears could return and attempt another break lower. A move below the channel support could be enough to spur a steeper drop to the next longer-term support levels.

A new poll revealed that retail investors are still mostly wary of the risks involved in trading bitcoin. While a significant percentage have expressed interest, the survey by Gallup indicated that only 2% actually own it. In addition, the firm wrote:

“The price of bitcoin is back on an upswing after crashing earlier this year, causing some to say its bubble is again about to burst and others to argue that its value will only accelerate as more merchants inevitably adopt it.”

Others point to the hash rate as showing more bullish signs as it reflects a faster pace growth in the number of miners joining the bitcoin network.

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