We might see another dip to 5000, before going north
• Bitcoin and Ripple testing key resistance levels
• Factom initiated a liquidation procedure
We might see another dip to 5000, before going north
The spread of COVID-19 suggests a global recession is underway, something many economists have already alluded to. In fact, the International Monetary Fund [IMF] recently claimed that the Coronavirus pandemic would cause a global recession in 2020, something Morgan Stanley’s Chetan Ahya also hinted at.
While everyone’s busy blaming COVID-19 for the recent market crash, there have been other arguments echoing lately – “The global markets, especially the U.S, had this coming, with or without Coronavirus.”
Interestingly, Bitcoin advocate Andreas Antonopolous, on a recent podcast, was of a similar opinion. He claimed that the U.S economy is profoundly sick and well overdue for a massive recession. He added,
“And of course, it’s been pushed over the edge by COVID-19 and certainly the measures of, of isolation that we need to take are, are going to make this one of the sharpest, and most severe recessions.”
With all this was happening, the crypto-community continued to reiterate its stance, saying that this is the right time for the world to embrace cryptocurrency as a medium of exchange. With India’s Yes bank crisis and the Fed’s unlimited bond-buying plan, the argument only gets stronger, with points of contention arising not just in the United States, but elsewhere as well.
Antonopolous also opined that Bitcoin is currently being tested on its core principles, adding that the coin was created for something like this given the fact that BTC was born during a financial crisis.
However, an important question arises here. If Bitcoin were to be looked at as an alternative, the king coin should have technically stood by its ‘safe-haven’ narrative and also stayed uncorrelated to traditional markets as it proposes to. Now that we are in a crisis, things turned out differently, with Bitcoin and other cryptocurrencies following some of the same patterns as Gold, S&P500, and other stock assets.
This question, however, has been addressed by many in the community. The CEO and founder of Avanti Financial Group, Caitlin Long, in a recent podcast with Anthony Pompliano, noted that be it Bitcoin or gold, the safe-haven story is something that cannot be judged on just a one or two-week movement cycle. In fact, according to many, assets such as Bitcoin and Gold are in no position to provide shelter or respite for the short-term.
Thus, the question of ‘Is Bitcoin the answer to the financial crisis’ remains debated over. Since Bitcoin does not stand by its promise in the present situation, the community will have to wait for a longer-term analysis to prove Bitcoin’s use-cases.
Crypto Fear & Greed Index grew by 8 points overnight, but it is still in the “extreme fear” zone. RSI went up, but so far in the neutral zone.
The altcoins not only supported the first coin but also increased their growth. For example, Ethereum (ETH) jumped more than 14% to $170 a day. Other currencies are mostly showing more modest growth, but the whole market is in the “green zone”.
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His comments were delivered during an interview with Rebecca Quick on CNBC’s “pre-market” morning news and talk program “Squawk Box”.
When Quick asked Novogratz if he was putting any money into the markets right now, this was the reply:
“I have a big Bitcoin position. I continue to add to it partly because I think this is an amazing environment for both being long gold and long Bitcoin.
“Nancy Pelosi came out today to talk about another trillion dollars of stimulus.
“Money is growing on trees right now. I learned as a little kid that money really doesn’t grow on trees, and so we have a global money printing orgy going on.
“And maybe it’s necessary, but at one point that comes home to roost, and so I think hard assets are going be a big buy. Gold [and] Bitcoin are my two favorites…
I bought some Starbucks a few days ago just because I figured it was down a lot, people will come back and drink coffee, and it’s an iconic brand, but I’m not putting a lot of money yet in the stock market. It felt like the easier trade for me was gold and Bitcoin.”
On April 2, Novogratz was interviewed on CNBC’s “Closing Bell”.
In that interview, Novogratz started by talking about the huge amount of interest in Bitcoin that he is currently seeing from institutional investors (such as hedge funds) and high net worth individuals:
“I am seeing investors I never saw before — hedge fund investors, high net worth investors — getting into Bitcoin for the first time.”
He then mentioned that he had been recently saying on Twitter that he feels this is the year for Bitcoin to shine (due to all the money printing being done in 2020 by the world’s central banks):
“I said this in a tweet: ‘this is the year for Bitcoin’, and if it doesn’t go up a lot by the end of the year, I think I might just hang my spurs because it doesn’t go up now, you know, I’m not sure when it will.”
He also said says that the huge amount of money printing being done at the moment, mostly in order to fight the economic harms of COVID-19, is going to devalue fiat currencies, and that he expected Bitcoin to double in value within the next six months:
“We’re seeing real flows in the Bitcoin.
“You know, it’s a hard asset… Money doesn’t grow on trades and right now feels like we crossed the Rubicon where everyone feels like money grows on trees.
“I think those tools are the wrong thing… we’re gonna debase the value of fiat…
“We should have doubled within six months. We really should have. This is the time. And maybe within the end of the year, retesting the old highs of $20,000.”
The crypto market opens the working week with a moderate positive. Bitcoin is growing by almost 2% and trades at around $7,700. Bitcoin has risen 7% over the past week. Trade volume in the Bitcoin network has increased by 17% over the last day. The Crypto Fear & Greed Index rebounded by 7 points during the day, switching from “extreme fear” to “fear” mode. This is quite a significant result, as the index has been extremely depressed since mid-March. The altcoins from the top ten show mixed dynamics waiting for new triggers.
From the technical analysis, the bulls got the upper hand as BTCUSD closed above the 50-day average on the daily charts last week. In February 2019, the same signal flagged the start of the 4-month rally, that quadrupled the Bitcoin’s price.
The leading altcoin Ethereum (ETH) rose over the week by more than 7%, approaching the $200 threshold. The technical picture for ETH is even more optimistic. Last week the Ethereum gained ground above the 50 and 200-day averages. Although this is not even close to the 2017 levels, the coin has returned to its growth track. And this cryptocurrency has every reason to do so, as the project is beneficial for the digital sector. Tezos (XTZ), Cardano (ADA), and Stellar (XLM) also show significant growth over the week with +16%, +25%, and +20% respectively.
There are only a few weeks left before halving, but so far, the main result of such an essential event for Bitcoin approach, is that investors are holding on to their positions. The rapid attack of $8000 could be a breath of fresh air for the first cryptocurrency and can open new horizons. However, we are witnessing only super cautious optimism among market participants. Everyone understands that central banks are desperately trying to support the economy, and they are doing so at the expense of the future.
Nevertheless, Pandora’s Box is open, and the unpleasant truth is that central banks and governments are only trying to put out the fire. The quarantine cannot last forever, sooner or later, everyone will have to work in the new high-risk environment before another outbreak of the disease. The question is: how many waves of the epidemic will the global economy withstand?
Cryptocurrencies will likely be just as vulnerable to global threats as other assets of any kind. However, the difference may lie in the future. After all, some assets may lose their buyers forever, while others will build a new structure on the ruins. In the new economy, there will be a much larger space for purely digital projects. Of course, no one needs most of the existing cryptocurrencies. Still, given the global trend towards self-isolation and the tighter digital control, many of the current leaders in the crypto market will take their place even (and especially) after the emergence of national cryptocurrencies.
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If that’s the case, bitcoin would need to spike to the five-figure range in less than two weeks. Can it be done? Is this enough time for the asset to truly make its mark?
The last time bitcoin was trading in the $10,000 range was last February. This held for a few weeks and then the currency fell victim to the hazards of the market as the coronavirus pandemic began to take over. Within a short period, the currency had lost thousands of dollars from its value and even (albeit briefly) traded in the high $3,000 range, suggesting that the currency had lost close to 70 percent in less than a month.
But now bitcoin is back on the warpath and is proving its resilience once again. At the time of writing, the number one cryptocurrency by market cap is trading for over $8,800, and many traders and enthusiasts around the world think this is just the tip of the iceberg for bitcoin.
Simon Peters – an analyst at crypto exchange e-Toro – explained in a recent interview that he’s confident bitcoin will add more than $1,000 to its price within the next week just prior to May’s highly anticipated halving. He comments:
We think it is likely the [bitcoin] price will go above $10,000 before the halving actually takes place. While the halving itself was always likely to drive the price up, the bitcoin bulls have decided not to wait around and are positioning themselves well ahead of time… As for how high it can go longer term, amid the deteriorating economic outlook for the U.S. economy and the likelihood of an ever increasing monetary supply, which weakens the U.S. dollar and stokes inflation fears, we believe it could easily test previous highs above $19,000 as investors look for safe-havens away from traditional assets.
Catherine Coley – chief executive of Binance U.S. – commented that bitcoin has always been bullish during its previous halving events, though she believes the one that occurred in 2016 was something of a fluke. This halving – which occurred in 2016 – didn’t result in much momentum for the world’s primary digital currency, and she says that the real test came later in 2017.
During that time, bitcoin spiked all the way to about $20,000 per coin. Coley explains:
In 2016, I didn’t participate in the halving and all things considered, it was a minor event. The real rally happened 18 months later… With unemployment and stimulus funding flooding [the] system, I think more people are looking for an alternative exposure to a market that’s unrelated to [the U.S. dollar].
The anticipated Bitcoin halving event is days away and predictions have flooded the market and media with each expert, expressing his or her view as to what will happen next once this historic feat is over. This year’s halving will see the reward for mining new Bitcoin blocks, slashed by 50% as the two previous events saw a reduction in the amount of Bitcoin entering circulation in the market.
It is no secret that the crypto market is filled with split projections and views from different cryptocurrency experts. As the halving event draws near, many experts have once again voiced their predictions on the price of the biggest digital coin after its halving.
Many people believe that most predictions about Bitcoin’s halving events are half right almost every time. While the details may not be strikingly close to the actual outcome, the general prediction, let’s say a ‘bullish run’ is almost expected, based on the history of this event. There have been many predictions over the years to which some do come to pass and this year looks no different. According to some experts, this year’s halving event will see the amount of supply entering the market shrink while its demand however stays the same, eventually driving the price high.
Bitcoin’s halving event has seen the price of the digital coin rise unprecedentedly afterward in the first two events back in 2012 and 2016. History plays a vital role in assessing and predicting the behavior of an asset and the market for outcomes and so the question being asked this year is whether history will repeat itself and send the price of Bitcoin over the moon after the halving. Many experts have also argued that history alone cannot be the basics of this year’s halving predictions as sentiments, in the crypto market, is just as strong as the former. A lot of predictions about this year’s Bitcoin halving have been made and this piece takes a look at the top three.
The first prediction which is talked about the most is Dan Morehead, the Founder, and CEO of Pantera Capital. In a letter to investors last month, Mr. Morehead stated that Bitcoin was going to peak 12 months after the halving event in August 2021, at $533,431. He added that, that was only “if history were to repeat itself” and that there is more than a 50-50 chance that the price of Bitcoin goes up and if it does, it will go up big.
Preston Pysh, a Warren Buffett expert and the founder of Buffett’s Book in an interview with the tech podcast host, Nathan Latka, stated that the price of Bitcoin may hit $300,000 after this year’s halving event.
According to Pysh, both previous halving events were followed with insane bull runs and expects the same this year, with Bitcoin rising in a month or two after the event. He stated that the basics for the Bull Run will be the market forces of demand and supply and nothing else. Pysh added that there is going to be a scarcity of Bitcoin since its miner’s reward will be sliced by 50% and as its mining becomes difficult, its demand will go up. Pysh chipped in the effects the global pandemic is having on financial markets as cited Bitcoin as a ‘safe haven’ for investors.
Jesse Powell speaking on the halving event stated that he hears a lot of people talking about history and correlation and to him, the price of Bitcoin will reach $100,000 after the event, and maybe $1 million. “That’s what’s correct”, he added. According to him, miners will be forced to increase the selling price of Bitcoin.
While most traders focus on bitcoin’s spot price, zooming out on a more extended timeframe reveals a bullish trend for the cryptocurrency. As Twitter user The Moon points out, bitcoin’s one-year average price just reached an all-time high.
Based on The Moon’s analysis, bitcoin’s 365-day moving average has crossed $9,531.
This time last year, BTC was in the middle of a parabolic move that would eventually take the price to a high near $14,000 in late June.
Then, just a few months ago, BTC crashed below $4,000 in a mass coronavirus-driven liquidation event. Neither the upper end or lower band of the yearly price range has been reached since.
Bitcoin’s quadrennial halving came and went on May 11, producing the third “quantitative hardening” for the blockchain network. Post-halving, bitcoin miners now receive 6.25 BTC per block rather than the 12.5 BTC they’ve grown accustomed to over the past four years.
With bitcoin’s inflation rate cut in half, proponents believe the digital asset will become scarcer and thus more valuable. If history is any indication, they’re probably right.
Although bitcoin’s price tends to fall after the halving, the supply cut is a significant tailwind over the next six-to-twelve months. Bullish expectations are magnified by the number of new users joining the network and the percentage holders who are simply accumulating and not moving their BTC.
Data from Glassnode suggest bitcoin holders are taking matters into their own hands by moving BTC out of exchanges and, possibly, into hardware wallets. Bitcoin’s daily active addresses and new addresses are also on the rise.
The bitcoin price has rallied more than 12% since the halving took place on Monday. Year-to-date, the price is up roughly 37%, making BTC the best-performing major asset of 2020. By comparison, spot gold is up 14.2% over the same period