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TON Community: ‘No One Can Prevent the Launch of TON’

Developers of the TON blockchain are still considering deployment, despite injunctive ruling by the U.S. court.

Fedor Skuratov, a spokesperson for TCF, the organization behind the TON blockchain, told Cointelegraph that the recent unfavorable decisions by the U.S. court did not catch them by surprise:

“The community was ready for this (or another) scenario. We have several options, including the launch of TON by TCF [TON Community Foundation]. I will say more, no one (no one) can prevent the launch of TON by any other entity, person or community, cause TON is a decentralized open-source solution. Already, there are two different test networks, and within the community, there is at least one group planning to launch.”

“No One Can Prevent the Launch of TON”

TCF believes that they can bypass the SEC and the U.S. courts by forking TON’s mainnet. By doing this, the blockchain would be legally decoupled from the original project. In the event of this occurring, original investors may have to settle for the assets issued on this forked network instead:

“The issue of what will be recognized as the core network (Mainnet) is a matter of community recognition exclusively. We are considering, among other things, the option in which we will negotiate with TON investors on the topic of converting their rights to grams in the Telegram’s originally mentioned TON into rights for other grams.”

At this point, it is not clear whether the proposed solution was approved by Telegram founder, Pavel Durov. Considering that the TON blockchain is an open-source project, however, his opinion may not even matter.

The interview with Fedor Skuratov was conducted by a Cointelegraph contributor Stephen O’Neal.

Bitcoin Hash Rate Drops Almost 45% Since 2020 Peak

The Bitcoin (BTC) network hash rate has just taken a steep plummet and is now down almost 45% from its 2020 peak.

The network’s hash rate sank from 136.2 quintillion hashes per second (EH/s) on March 1 to 7.5.7 EH/s today, March 26, according to data from Blockchain.com. 

Coin.dance — another analytics site for the coin’s blockchain — reveals a similar pattern, if less stark. The site reported a 2020 peak of roughly 150 EH/s on March 5, today down to 105.6 EH/s — a 29% decrease.

Bitcoin network hash rate, April 19, 2019–March 27, 2020

Bitcoin network hash rate, April 19, 2019–March 27, 2020, Source: blockchain.com

Hash rate and difficulty

The hash rate of a cryptocurrency is a parameter that gives the measure of the number of calculations that a given network can perform each second. 

A higher hash rate means greater competition among miners to validate new blocks; it also increases the number of resources needed for performing a 51% attack, making the network more secure.

After a volatile month in which Bitcoin saw dramatic, if short-lived, losses of as high as 60% to around $3,600 in mid-March, the network’s difficulty yesterday decreased by close to 16%. 

Difficulty — or how challenging it is computationally to solve and validate a block on the blockchain — is set to adjust every 2016 blocks, or two weeks, in order to maintain a consistent ~10-minute block verification time. 

This has a close connection to the network’s hash rate. Typically, when the network sees a low level of participating mining power, the difficulty will tumble — while in periods of intense network participation, it rises, working as a counterbalancing mechanism.

As reported yesterday, the last downward adjustment in difficulty was on February 25 of this year, when the coin’s price was around $9,900. Just three days later, it dropped to around $8,800, and by March 14, to nearly $4,800 — and as low as $3,600 on some exchanges, as noted above.

Interpreting the data

Theis relationship between price, hash rate, and difficulty has historically generated a trend that some analysts refer to as a “miners’ capitulation cycle.” 

The theory holds that while Bitcoin’s price remains high, and mining is profitable, both hash rate and difficulty inch upwards until they reach a threshold at which miners are squeezed and forced to liquidate more and more of their holdings to cover their expenses — leading to an increased supply of Bitcoin on the market. 

The “capitulation point” — at which some can no longer afford to keep mining altogether — then involves a decline in hash rate (reflecting lower participation) — as can be seen today —  and a subsequent reset in the network’s difficulty.

According to data from btc.com, Bitcoin’s difficulty is currently forecast to decrease by a further 16% in 14 days’ time.

Bitcoin Price Facing New ‘Death Cross’ Suggests No $10K BTC Before May

Bitcoin (BTC) is trading at $6,670 representing a 1% gain in the last 24 hours but a gain of 14.66% off the weekly open at $5,815. Looking at performance relative to its peers, Ether (ETH) and XRP both underperformed versus Bitcoin last week against the U.S. dollar and have continued to do so. 

As a result, Bitcoin dominance is up 1.5% and pushing to reclaim 68% as there has been a general flight to safety in Bitcoin, although dominance is still down some 4% for the highs of the year at around 70%.

Cryptocurrency market 7-day view

Cryptocurrency market 7-day view. Source: Coin360

3-day Bitcoin chart

BTCUSD 3 Day chart

BTCUSD 3 Day chart. Source: Tradingview

Bitcoin is trading up against what is a fundamental decision point at $6.8K. This is previous support now acting as resistance and the top of a high volume node which is dissected by a diagonal resistance trend line, which dates back to mid-2019. 

Reclaiming $6.5K has been a sign of strength by the bulls who catapulted Bitcoin higher off the 200-week moving average in the mid $5Ks. Looking at the big picture, a meaningful break out of the $6.8K resistance would see Bitcoin first attack $7,200 — the 50% retracement of the 2020 lows to highs — but above that stands formidable resistance.  

“Death cross” looms

There is a so-called “death cross” taking place today overhead at $8300 where the 50-day moving average is crossing below the 200-day moving average, which is a crowded cluster of other former support levels, namely the 100-day and the 20-week moving averages. Alongside this is the 61.8% Fibonacci retracement level at $8K and yearly pivot at $8,100 and a high volume node, implying that it will be a real challenge for the bulls to break beyond this point.  

BTCUSD 3 Day chart

BTCUSD 3 Day chart. Source: Tradingview

The 3-day Bitcoin chart helps illustrate the persistently high volume being transacted by the bulls, albeit declining in its momentum, the volume at the 200-week moving average has resulted in the OBV printing the biggest surge to the upside in recent times and is indicative of real support around the mid $5Ks.

4-hour Bitcoin Chart

BTCUSD 4-hour chart

BTCUSD 4-hour chart. Source: Tradingview

The 4-hour Bitcoin chart shows a strong trend pressing Bitcoin up against the $6.8K resistance level with the structure arguably being in a rising wedge pattern, which is typically bearish when accompanied by decreasing volume as is apparent here. The RSI is also showing bearish divergence which adds to the bearish case. 

If the bulls are unable to regain the $6,800 level, the 200-week moving average is lying below at around $5,500 on a high volume node, which was previously front run in the last attempt to break $6,800. Should the bulls find their feet again, diagonal support will be found at $6,250.

Typically in Bitcoin’s history, we have seen a rally into the death crosses and depreciation into a golden cross.  If the bulls can break the $6,800 level, there is a high probability of selling pressure around $8K due to the confluence of previously lost support now likely to act as resistance.

Bitcoin market sentiment

The Crypto fear and Greed index, which is a metric deriving the sentiment in the market from various inputs, shows unsurprisingly that the market remains in extreme fear meaning that there is likely to be more market volatility on the way.  

The last time that fear was at these lows for any amount of time was in December 2018 at the lows of the 2018 bear market and interestingly also at the 200-week moving average. The 200-week moving average was ultimately a magnet for a retest although price never quite made it and was front ran, which was a good indicator the bottom was in. It is possible we are setting up for the same scenario again here.

Bitcoin Fear And Greed Index

Bitcoin Fear And Greed Index Source: Fear and Greed Index

The futures market also gives an insight into what the expectation is for the price of Bitcoin with contracts ending in June currently trading in backwardation with a discount from spot prices of around 1%. However, there is an expectation of some recovery and higher valuation for the September contract close. 

Bitcoin Futures Prices

Bitcoin Futures Prices Source: Skew

Perpetual swap funding also remains negative in the market, meaning that in order to achieve a synthetic cash position on a perpetual swap exchange, market participants are effectively paying an interest rate. 

Historically, there has been an inverse relationship between negative funding and propensity for the market to turn bullish so this may indicate that eventually those paying to be in a short position for longer periods while price remains flat above the 200 WMA will naturally be squeezed out. 

BTCUSD 15 Minute BItmex Funding chart

BTCUSD 15 Minute BItmex Funding chart. Source: Tradingview

Looking forward

With global uncertainty reaching all-time highs at present and with the commitment from central banks to provide “unlimited” liquidity in the form of debt, Bitcoin finds itself at ground zero in terms of its purpose for its creation.  

While global assets are depreciating in real terms, Bitcoin’s inflationary supply is due to be cut in half in May and once the dust settles on the global markets, it may be that there is a flow of idle dollars into the Bitcoin market. 

This macroeconomic backdrop could prove to be very beneficial to the price of Bitcoin. The key challenge is to maintain the 200-week moving average and miner’s revenue above production cost, which is presently the case.  

Assuming the 200-week moving average will be retained and $8K will be the resistance expected, Bitcoin may find itself trading sideways between the $6K and $8K for some time before a decisive move. The backdrop couldn’t be a better time to talk about the halving and in a few weeks that will present itself as being an imminent event that could be the catalyst to take Bitcoin back above resistance; time will tell with 49 days remaining until Bitcoin reward halving.

Bitcoin Price Inches Higher to $6.7K on $2 Trillion Stimulus Agreement

Bitcoin (BTC) price is continuing to move higher on March 25 alongside U.S. equities markets, which yesterday saw a historic 11%+ rise on news of a potential multi-trillion-dollar economic stimulus package. This was the single biggest daily rally since 1933. 

At press time, BTC price is attempting to establishing a higher foothold at $6,700 while Dow futures and are up over 114 points, according to Bloomberg Markets.

The strong relief rally on March 24 also showed that investors anticipate that the stimulus package will help to stem bleeding markets and restore confidence to investors. 

Crypto market daily performance

Crypto market daily performance. Source: Coin360

Earlier, the price surged to $6,832, nearly surpassing the previous new daily high at $6,905 before spending the remainder of the day trading in the $6,500 to $6,750 range. 

BTC USDT 4-hour chart

BTC USDT 4-hour chart. Source: TradingView

Currently, there is support at $6,500, a point aligned with the ascending trendline but if the price falls below the trendline there is support at $6,451 where the 50% Fibonacci retracement level sits. 

At the time of writing, the 4-hour chart shows the relative strength index (RSI) remains in bullish territory at 61. 

BTC USDT daily chart

BTC USDT daily chart. Source: TradingView

On the daily timeframe, the MACD histogram shows increasing momentum and the Chaikin Money Flow oscillator (CMF) is also above 0 and rising in tandem with the price. As Bitcoin price works its way toward setting a high above $6,905, the 61.8% Fibonacci retracement level ($7,088) is likely to be a challenging resistance level to overcome.

If the price can push above this level, traders anticipate Bitcoin will continue its stair-step pattern on toward $7,650. For day traders a breakout above $7,685 is likely to see the price rise to the upper Bollinger Band arm at $6,983, or even $7,088. 

In the event of a reversal that pushes the price below $6,450, there is also strong support and a high volume VPVR node at $6,200. 

Bitcoin daily price chart

Bitcoin daily price chart. Source: Coin360

Altcoins also posted moderate gains as the Bitcoin price pushed higher toward $7,000. Litecoin (LTC) gained 3.73%, Ether (ETH) added 3.16% and Monero (XMR) rallied 7.72% to $47.02.   

The overall cryptocurrency market cap now stands at $185.9 billion and Bitcoin’s dominance rate is 65.6%.

Keep track of top crypto markets in real time here

Telegram Denied: Court Sides With SEC, Grants Injunction Against Issuing GRAMs

A United States District Court has granted an injunction against Telegram, preventing the company from issuing its GRAM tokens at the present time.

Court says that GRAMS are securities under Howey test

Per a March 24 filing granting the Securities and Exchange Commission’s request for a preliminary injunction, the Court wrote that:

“The Court finds that the SEC has shown a substantial likelihood of success in proving that  the contracts and understandings at issue, including the sale of 2.9 billion Grams to 175 purchasers in exchange for $1.7 billion, are part of a larger scheme to distribute those Grams into  a secondary public market, which would be supported by Telegram’s ongoing efforts. Considering the economic realities under the Howey test, the Court finds that, in the context of that scheme, the resale of Grams into the secondary public market would be an integral part of the sale of securities without a required registration statement.”

The SEC and Telegram: A Hate Story

The Telegram court case has been ongoing since October last year, following the 2018 initial coin offering (ICO) for the Telegram Open Network (TON).

As with many ICOs, the SEC has taken the stance that under the 1934 Howey Test, such offerings constitute the sale of unregistered securities.

Telegram had held that since it filed a Form D 506(c) Notice of Exempt Offering of Securities prior to the first round of its offering, it was authorized to sell tokens to accredited investors.

However, the Court noted in granting the injunction that since Telegram intended for the Gram tokens to reach the secondary market, disqualifying them from exemption: 

“Telegram’s sale of Grams to the Initial Purchasers, who will  function as statutory underwriters, is the first step in an ongoing public distribution of securities and, as such, Telegram cannot receive the benefit of an exemption from the registration requirement under either section 4(a) or Rule 506(c).”

In a sentence that may deliver a blow to many issuers of tokens through the ICO model, the Court rejected Telegram’s argument that the Gram would become a commodity once actualized and therefore fell outside the purview of the SEC. 

“The Court rejects Telegram’s characterization of the purported security in this case. While helpful as a shorthand reference, the security in this case is not simply the Gram, which is little more than alphanumeric cryptographic sequence. Howey refers to an investment contract… that consists of the full set of contracts, expectations, and understandings centered on the sales and distribution of the Gram. Howey requires an examination of the entirety of the parties’ understandings and expectations.”

Concluding that the court must stop the delivery of GRAM tokens, the filing reads:

“The Court also finds that the delivery of Grams to the Initial Purchasers, who would resell them into the public market, represents a near certain risk of a future harm, namely the completion of a public distribution of a security without a registration statement.  An injunction, prohibiting the delivery of Grams to the Initial Purchasers and thereby preventing the culmination of this ongoing violation, is appropriate and will be granted.”

This is a breaking story and will be updated.

Bitcoin Price Eyeing $7,000 After Fed Says it Has ‘Infinite Cash’

Bitcoin (BTC) and gold showed clear signs of strength on March 24 as the United States Federal Reserve revealed the true extent of its money printing. 

Having cleared $6,000 on Monday, BTC/USD went on to hold ground at around $6,500. At the same time, gold rallied, as market analysts suggested its recent selloff was over.

Fed: We have “infinite cash”

The precious metal traded at around $1,572 at press time, a daily improvement of 1.35%. 

Bitcoin versus gold 1-year chart

Bitcoin versus gold 1-year chart. Source: Skew.com

For gold, the rebound echoed behavior during the financial crisis of 2008, Goldman Sachs highlighted, quoted by Bloomberg. Then, as now, the Fed removing barriers to dollar liquidity ultimately sent the precious metal shooting higher.

As various sources reported, the Fed will now embark on a giant buyback exercise which will be worth $125 billion each day — or a massive $2.5 trillion per month. 

Aimed at shoring up the U.S. economy, the scheme is akin to flooding the market with “new” dollars in what has become the biggest money printing experiment in U.S. history. 

Treasury Secretary Steven Mnuchin has already described the liquidity on offer to businesses and banks as “almost unlimited.” 

In an interview with CBS on Sunday, Neel Kashkari, president of the Federal Reserve Bank of Minneapolis, went further still, saying:

“There is an infinite amount of cash in the Federal Reserve. We will do whatever we need to do to make sure there’s enough cash in the banking system.”

Fed going “full Zimbabwe”

This, in turn, has emboldened gold bugs and Bitcoiners alike, who argue that fiat is rapidly unraveling as a trustworthy financial instrument. In a tweet following the news, PlanB, the creator of Bitcoin’s stock-to-flow price model, described the Fed’s actions as the central bank going “full Zimbabwe.”

Bitcoin stock-to-flow price model as of March 24

Bitcoin stock-to-flow price model as of March 24. Source: PlanB/ Twitter

It’s timing, he noted, was pertinent — just 50 days before Bitcoin’s supply is due to drop to new lows of 6.25 BTC per block. 

Stock-to-flow calls for an average Bitcoin price of around $100,000 between 2021 and 2024. PlanB has demonstrated that the model remains intact, despite BTC/USD dipping below $4,000 last week.

Online Petition Asking for Ross Ulbricht’s Release Gathers 275K Signatures

A petition calling on the White House to release Ross Ulbricht, the creator of the dark web marketplace Silk Road, has gathered more than 275,000 signatures.

FreeRoss.org — an initiative created by a group of Ulbricht’s family, friends and supporters — has said that the momentum continues to grow and that they feel that a solution “could come soon.” 

Through an update on the online petitions website released on March 19, FreeRoss.org claimed Ross is “doing fine”. They have also reported that visits were canceled for 30 days, as a preventive measure against the COVID-19 pandemic.

The online petition hopes to reach 300,000 signatures.

Ross not being “treated fairly”

The group of family and friends of Ulbricht assured that the double life sentence without parole is a “miscarriage of justice,” and he was “not treated fairly,” claiming to have the support of more than 200 organizations including many members of the cryptocurrency community.

Additionally, Ulbricht’s supporters accuse the federal investigators of corruption, in addition to prosecutorial misconduct and constitutional violations.

Tim Draper calls for Ulbricht’s release

On December 14, 2019, Cointelegraph reported the words of billionaire investor Tim Draper, who called for the release of the Silk Road founder during an interview with Fred Schebesta of the Crypto Finder video podcast:

“He’s been in jail for a while. Get him out. I cry when my cat goes into a cage, it tears my heart out when these prisoners go into cages.”

‘This Will and Needs to Be Bitcoin’s Year’ Says Mike Novogratz

With vast swaths of the world markets in virtual lockdown amid the coronavirus pandemic, some predict that the shocks rippling through the global economy in early 2020 may yet come to dwarf the magnitude of the 2008 financial crash.

Just as Bitcoin (BTC)’s creation is bound up with 2008 and the Great Recession, Galaxy Digital founder Mike Novogratz sees this year as make-or-break for the cryptocurrency.

In a tweet posted on March 22 — just hours after the United States Congress failed to reach a bipartisan agreement on a proposed $2 trillion economic support package — Novogratz wrote:

“$BTC will continue to be volatile over the next few months but the macro backdrop is WHY it was created.  This will be and needs to be BTC’s year.”

Never let a good crisis go to waste

Earlier this month, traditional markets had suffered their worst blows since 1987 — a plummet mirrored in Bitcoin’s 60% drop to lows of around $3,600 on some exchanges.

As the pandemic enters its fifth week — exacerbated by collapsing demand and a price-war in the oil sector — spooked investors have continued their sell-offs overnight. 

Asian stocks have slumped in the fallout from the stalemate in Congress, with Wall Street futures crashing to hit their downside limit of 5%. 

Ten days ago — with investors deserting even “safe-haven” commodities such as gold — Novogratz argued that Bitcoin was no less vulnerable to the impact of the frantic liquidations:

“[Bitcoin] was always a confidence game. All crypto is. And it appears global confidence in just about anything has evaporated.”

Yet his latest tweet now points to the potential opportunities for the cryptocurrency amid the economic crisis.

In this view, Bitcoin — as a censorship-resistant medium of exchange and non-inflationary unit of account —  was designed precisely as an alternative to the faltering world monetary system. 

In a tweet that followed his remarks on Bitcoin yesterday, Novogratz had appealed to a stalling Congress not to repeat the “first failure of TARP” — the controversial bailout fund passed in 2008, which some consider to have left the structural weaknesses of the system virtually intact.

Taking note of Bitcoin’s apparent decoupling from COVID-stricken traditional markets earlier this week, Changpeng Zhao — the CEO of crypto exchange Binance — had similarly argued that the pandemic should be understood as a trigger, rather than the root cause, of a visibly fragile world economic order.

Did BTC Miners Crash Bitcoin Price With 51 Days Before the Halving?

Bitcoin (BTC) price has started to show strength in its recovery since the black Thursday selloff this past week, but is this something we can expect to continue? Or is this a dead cat bounce on the way down to lower lows?

In today’s analysis I’m looking not only at the charts, but also at the possibility of large Bitcoin miners being the cause of the 50% price drop on March 12, after supporting data emerged last week suggesting that short-term holders sold a whopping 281,000 BTC, which resulted in the crash.

Daily crypto market performance. Source: Coin360.com

Daily crypto market performance. Source: Coin360.com

Did miners dump over a quarter of a million BTC?

In an article published by Coinmetrics on March 17, on-chain data supported the fact that short-term BTC holders were most likely responsible for the selling rather than new holders.

The figures they quoted included 281,000 BTC was on the move after 30 days of holding, compared to 4,131 that hadn’t been touched for over a year before being moved.

This data might suggest to some that it was weak hands that FOMO bought in during Bitcoin’s 30% price rise at the beginning of 2020. However, one has to consider the possible motives at play for such a large amount of Bitcoin being sold off cheap.

This to me opens up the very real possibility that the same people responsible for Bitcoin’s price rise this year, were the same people responsible for its fall.

As can be seen in the chart below, Bitcoin had been trending in a downward parallel channel since June 2019 — a trend that seemed to bottom on Jan. 4, 2020, which saw the Bitcoin price take off in a new ascending channel.

This new impetus for Bitcoin’s price was welcomed, but not questioned. Why did Bitcoin start to rise? Was it the upcoming halving, which is now just 51 days away? Was it the mining difficulty increase? Was it renewed institutional interest? However, what if it was all of these things combined, but with a twist.

What if the miners stopped selling Bitcoin?

There are 1,800 new Bitcoins mined every day, and between the period of Jan. 4 and Mar 12, there would have been 122,400 Bitcoin mined. This is about 50% of the amount that was revived by short term holders, and you don’t get more short term than freshly mined BTC.

BTC USD daily chart. Source: TradingView

BTC USD daily chart. Source: TradingView

Why would miners crash the market?

I’m not going to pretend that I know any of this for a fact, this is just a theory with a lot of supporting data. But I will throw a few reasons that would make sense for larger miners to crash the market before continuing with my analysis.

  • To liquidate leveraged competitors (many smaller miners hedge on leverage platforms like Bitmex);
  • To increase their market share ahead of the halving (because of the above);
  • To shake out big manipulators (PlusToken scammers, Institutional investors) prior to the halving.

I believe the above to be plausible reasons, especially if you consider how much hashing power comes out of China, a nation that pretty much has a crystal ball when it comes to the Coronavirus outbreak, as the first cases where being reported there back in November 2019.

This almost creates a perfect storm of conditions to execute the black swan event that was able to simultaneously gain dominance in the market, and regain control of the price. After all, if miners have no control over the price, then the halving will have no impact.

If in doubt, zoom out

BTC USD daily chart Source: TradingView

BTC USD daily chart Source: TradingView

When you zoom out on the Bitcoin 1-day chart, it’s almost obvious where miners could have stopped selling. The breakout at the beginning of the year just looks like a bump in the road, as we have since resumed the same downward channel we were in for the entire second half of 2019.

We’ll never really know whether or not the above scenario is true because of the selloff. However, one thing that is definite is that the price bounced off the support of the descending channel at $4,400 as anticipated in last week’s analysis, so I am keeping these levels in mind looking forward to the week ahead.

At present, the price is holding above the middle of the channel, which is around $5,800. However, should this level fail to hold, then I expect $4,200 to be tested next week.

Should $5,800 continue to hold, then $7,200 is the key level of resistance for Bitcoin to push past and flip to support to be rid of this descending channel once and for all.

Mining difficulty reduction

BTC mining difficulty. Source: BTC.com

BTC mining difficulty. Source: BTC.com

Since the beginning of 2020, we have largely had the mining difficulty increase. This, in turn, seemingly saw the price rise, and as such, it seemed like a valid indicator.

However, next week we are set to see the year’s first double-digit adjustment, and unfortunately, it’s a negative one of -10.54%. Only time will tell if this will have a negative impact on the price of Bitcoin.

The yearly trend suggests that it might also just be correcting itself after such a dramatic selloff on the day it last increased. Bitcoin has a history of punishing its holders prior to big rewards, and the next chart might help you visualize what could be in store over the coming weeks and months.

BTC Rainbow Chart Source: Blockchain Centre

BTC Rainbow Chart Source: Blockchain Centre

Similar to the stock to flow ratio chart, only this one I feel helps convey an important message, and that message is “Keep buying Bitcoin at these levels.”

Whilst this chart isn’t intended to be financial advice, and like the S2F model has most likely been based on hindsight, what it does show is potentially how long we might remain in the blue “fire sale” zone both ahead and beyond the halving.

As a Bitcoin hodler and trader, I take great comfort in one thing shown on this chart. There are many more buying opportunities than there are selling opportunities, so should the price of Bitcoin continue to slide next week, try to view it as an opportunity to buy more, rather than reflecting on how much of a rekt pleb you feel right now.

Bullish scenario

I said it last week, I’ll say it again, the CME gap still exists at $9,165. Whilst it feels almost impossible right now, 90% of CME gaps still fill, so there’s always a possibility.

However, being more realistic and looking at the week ahead, if Bitcoin can hold $5,800 as support then all eyes are on $7,200 as the key level to break out from.

From here, I would expect the next level of resistance to be present around $8,000 before we can even start to think about $10,000 again.

Bearish scenario

We can’t completely ignore all the global turmoil right now. Thus, if $5,800 fails to hold, I think it’s highly probable that we will revisit $4,200.

Falling below $4,200 is not a scenario I believe we need to consider. However, if this were to break, then $2,760 would be the last level of support I’d be looking at, as this would represent an 80% retracement from last year’s high of $13,800. If it fails to bounce there, then I would completely expect Bitcoin to go to sub $1,000 levels.

The views and opinions expressed here are solely those of @officiallykeith and do not necessarily reflect the views of Cointelegraph. Every investment and trading move involves risk. You should conduct your own research when making a decision.

Fundstrat & eToro Analysts Predict Coronavirus Crisis May Strengthen Bitcoin

What has been driving recent Bitcoin price action? Or perhaps more importantly, who? And why does it matter? 

Lead Digital Strategist at Fundstrat David Grider and Platinum Account Manager at eToro Simon Peters break down Bitcoin’s next move, how the coronavirus and financial crisis may impact the halving, and how Bitcoin’s fundamentals will affect its long-term prospects.

Who Is Behind Bitcoin Price Movements?

Bitcoin has experienced an incredible amount of volatility over the past two weeks amidst the coronavirus pandemic and global financial crises. A Chainalysis report found professional traders and investors were usually the drivers behind recent major price movements, despite only moving about 5% of the total supply of Bitcoin.

David took issue with the vague label of “professional trader/investor”. He reminded us that traditional or institutional players are not the only ones who can drive the market with high volume trades:

“I think that probably you’ve seen an onboarding in 2016/2017 of a traditional, probably institutional, fund class to some degree but not very large, right. But still prior to that this was a very small market and I think that it’s still probably mostly dominated by early larger crypto whales, right.”

How Will the Coronavirus Crisis Strengthen Bitcoin?

Since the beginning of March Bitcoin has been heavily correlated with large movements in the stock market. When asked if the Bitcoin price drops in the past two weeks were the result of professional players liquidating their positions, Simon nodded his head in agreement.

He went on to explain how this shedding of weak hands could allow Bitcoin to eventually evolve into a hedge asset:

“We’ve seen this conversion of assets into cash, regardless of which market it is, but there will come a point where, due to this increasing amount that’s been pumped into the system, the cash is going to lose its value. Then as the virus no doubt stems down and the number of new cases that are being reported tails off, the question to investors then is, ‘what do I do with all this cash that I have?’ And then they may look into other assets that can hedge against that, essentially, with crypto possibly being one of them.”

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Bye $7K? Bitcoin Price Pull-Back Likely After Impressive 80% Rebound

It has been a tremendous week for Bitcoin (BTC), as the price of Bitcoin rebounded from $3,800 to $6,800. However, a harsh rejection on Friday put a stop to the rally as the price dropped $1,200 within two hours. 

These have been unusual movements from Bitcoin, as the equity markets in the United States didn’t show any strength during the week and the Dow Jones shed 4.5% on Friday alone. 

Crypto market daily performance

Crypto market daily performance. Source: Coin360

Bullish divergence plays out on Bitcoin 

As the previous article stated, a bullish divergence was shown on the chart. Divergences (both bearish and bullish) often indicate a temporary trend reversal. In this case, the 4-hour chart of Bitcoin was showing a clear bullish divergence. 

Alongside with the divergence was rock bottom sentiment, meaning the ingredients for a slight upwards rally, as occurred in the previous week. BTC price rebounded from $3,800 towards $6,940, a rally of 81%. 

BTC USDT 4-hour chart

BTC USDT 4-hour chart. Source: TradingView

The 4-hour chart is showing precise levels of resistance and support. The $5,600 area broke to the upside, which indicated continuation to the upside, leading the price to a high of $6,940.

The resistance area is quite clear and found between $6,400-6,900. Unfortunately, the price of Bitcoin couldn’t break through this resistance, which was required to flip the trend bullish.

At this point, the rejection looks to be a bearish retest of the previous support zone. A bearish retest means that the previous support is confirmed resistance and usually leads to further downwards momentum. 

BTC USD 1-day chart

BTC USD 1-day chart. Source: TradingView

The 1-day chart shows a clear picture, through which the bearish retest is seen. To become bullish, a breakthrough in the red resistance area is profoundly needed. Once the price of Bitcoin breaks through this zone and additionally reclaims the level as support, then the bullish momentum can return to the market.

However, at this point, the market looks to make a bearish retest after an 80% surge since the low at $3,800. The $5,600 support level is essential. If Bitcoin can hold this area as support, a possible new resistance test can occur.

The more the resistance zone gets tested, the weaker it becomes and vice versa. But, the trend is still down, and therefore, investors should keep in mind that lower levels are more likely to be tested for support.

Total market cap facing clear resistance at $185 billion

Total market capitalization crypto 1-day chart

Total market capitalization crypto 1-day chart. Source: TradingView

The total market capitalization chart is showing a brighter picture, as usual. It showed a clear downtrend through 2018 with lower highs and lower lows, indicating a bear market, while Bitcoin kept resting on the $6,000 support.

Currently, the chart is providing a similar situation here. The total market capitalization dropped below the $185 billion levels and dropped towards the next support zone (green areas) at $108-110 billion. 

Given that the market has seen such a big drop, it’s not unnatural to see a strong relief bounce after. However, this was met with an instant rejection at $185 billion, which is now confirmed resistance.

A bullish perspective would be the breakthrough of this resistance area, after which a confirmation of support would suggest further momentum upwards towards $240 billion. 

Unfortunately, with this latest rejection, it seems more likely to have tests downwards for support before any upwards momentum is warranted.

The bullish scenario for Bitcoin 

BTC USD 4-hour bullish scenario

BTC USD 4-hour bullish scenario. Source: TradingView

At first, the price of Bitcoin is currently hovering in between ranges, which makes it more difficult to give a clear cut view of the markets. However, the bullish scenario is straightforward.

The price of Bitcoin needs to hold the $5,600 level for support, as that’s a key point for the market. As long as that support holds, upwards tests of the $6,500-6,900 areas are likely to occur. 

The next step for bullish momentum would be the flip of the $6,500 area for support. Once that happens, a continuation of $7,500 is the next thing to look for. 

The bearish scenario for Bitcoin 

BTC USD 4-hour bearish scenario

BTC USD 4-hour bearish scenario. Source: TradingView 

The bearish scenario is still the likely scenario of the two. The rejection at $6,800 doesn’t show any strength, as any bullish momentum is only warranted through a breakthrough in that area. 

Given that the price didn’t, I assume the market will make a lower high at $6,400-6,600 area, after which further downwards momentum is warranted. The $5,500-5,600 area is a crucial point, as discussed previously. Once the price of Bitcoin breaks below this level, a severe drop is likely to occur. 

Is that a bad thing for the market? No, low prices will give investors tremendous opportunities to buy the assets relatively cheap again. Gold and silver have seen big shocks throughout the week as well. 

What are the levels to look for in case of a breakdown? There are three zones to watch for potential support, which are the $4,700-4,800 area, the $4,200 level and the $3,750 level.

The last two would provide a potential bullish divergence on the daily timeframe, which would make a strong signal for a bottom. An example is found in the bottom structure in December 2018.

All in all, it seems unlikely to have a bottom already, and further accumulation should be expected for the market. 

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

Bitcoin Price Did Not Crash 60% Due to Coronavirus, Says Binance CEO

The coronavirus pandemic was just the spark that ignited the current global economic meltdown, not its cause, the CEO of Binance says.

In a blog post on March 20, Changpeng Zhao, known as “CZ” in cryptocurrency circles, argued that coronavirus had shown that the world’s economy is far too weak.

CZ: The economy “should be stronger”

Asked whether he felt conditions this year were different from the global financial crisis (GFC) of 2008, he summarized:

“In 2008, there wasn’t a pandemic pausing global economy. But I believe the Coronavirus is just a trigger, not the root cause. Our economy should be stronger, at least strong enough to survive some shocks.”

Zhao was speaking as Bitcoin was increasingly decoupling from the misery facing traditional markets. After a historic daily fall last week in line with stocks indexes, this week saw a startling recovery which at one point neared 90%.

Since then, BTC/USD has cooled, trading down around 7% in the past 24 hours. Unlike the legacy system, however, Bitcoin is not “broken,” says Zhao.

At some point, investors will stop hoarding cash — a practice that has strengthened the dollar during coronavirus — and instead begin broadening their portfolios again. Among the destinations for wealth will be Bitcoin.

“Have people bought more bitcoin yet? No, in most cases. Many of them are still panicking over toilet paper,” Zhao continued. 

“These changes take time to propagate in the economy. Changes don’t happen immediately when a mass population is involved.”

A “safu haven”?

The comments echo those of Andreas Antonopoulos, the cryptocurrency educator who predicted the impact of a financial crisis on Bitcoin with uncanny accuracy several months ago. As Cointelegraph reported, Antonopoulos said that Bitcoin would initially fall hard, as investors exited crashing stocks, but then recover. 

Also favoring that sequence of events was John Bollinger, the creator of the Bollinger Bands volatility indicator, who argued that investors “sell what they can” under such circumstances. The intensity of Bitcoin’s fall, however, caught him off-guard.

“Truly did not see that coming, I thought it might act as a safe haven asset,” he tweeted at the time.

For Zhao, however, it was clear that Bitcoin will function as a safe haven in the future, given that its supply is fixed and cannot be manipulated like fiat currency.

“Don’t expect bitcoin to be guaranteed to go up when the Dow Jones index crashes, or vice versa,” he said. 

“It’s not a perfect inverse correlation product. If you want that, you should just short the Dow Jones Index futures.”