Bitcoin Price Skyrockets to $8.7K Confirming Previous Bottom Signals

Bitcoin (BTC) price just made a $1,200 rally towards $8,700, leaving bears and shorts behind. Several signals were pointing towards a potential trend shift and price reversal, while the overall market sentiment was still extreme fear. 

Crypto market data. Source: Coin360

The majority of the market was looking for lower levels to buy and most often when the majority expects one thing, the opposite happens.

However, what were the reasons behind this latest push?

CME gaps closed and Bakkt volume kicks in

BTC/USD CME chart. Source: TradingView

Gaps on charts are often used by traders to define targets and trades. Approximately 90% of the time these gaps are closed before the market moves further. In the case of Bitcoin, the digital asset showed two CME gaps after the rally from $3,200 earlier this year. The first one was a gap between $8,500 and $9,000 and the second one was between $7,330 and $7,450. 

The first gap closed by the breakdown of the descending triangle, while the second gap was closed by the dropdown a few days ago and closed to the dot. This leaves one open gap which is situated at the $11,800 level, way above the current price. 

As noted in earlier articles, CME futures expiration dates often provide volatile days. Today was one of those days, and this is likely why BTC price made its move. 

Interestingly enough, Bakkt futures provided a new all-time high, as 640 contracts were traded during on Oct. 23, 2019, an increase of 653% compared to the previous day. The next day, another 330 contracts traded. 

These signals show that there’s demand and interest at these levels for Bitcoin, as there’s never been such a high level of volume on a day on Bakkt futures since the launch.

Bullish divergences suggest a bottom was in order

BTC/USD daily chart. Source: TradingView

On the daily timeframe, numerous potential bottom signals were shown for the first time since the top in June 2019. Bitcoin was able to hold an important support level at $7,400, which has been acting as support in June 2019 as well.

Alongside with the bounce, bullish divergences were building as Bitcoin price moved within a falling wedge structure. Bullish and bearish divergences generally mark a potential top and bottom forming in the chart. This phenomenon was observed during the December 2017 peak and the December 2018 bottom.

The chart is showing these bullish divergences for the first time on the daily time frame since the top in June 2019 and this provided an additional explanation of the massive rally that took place today. 

Remarkably, the last dropdown brought Bitcoin price closer to the 0.618 Fibonacci level, which is an important level for Fibonacci and Elliott Wave traders.

Weekly chart back above the 100-week moving average

BTC/USD weekly chart. Source: TradingView

The weekly chart is also providing several bullish arguments after this dropdown. The 100-week moving average (WMA) was lost during the recent dropdown. However, Bitcoin gained it back during the most recent push. 

The 100-WMA is an important indicator of market sentiment and confirmation of the direction of the market, as we can see in the history of the chart.  

Going back to the start of the bull market in 2016, confirmation was needed on the 100-WMA before the price could continue rallying. This confirmation was given by a small “trap” below the 100-WMA but closed above it.

The same approach seems to be happening here, as Bitcoin clearly dropped below the 100-WMA and immediately bounced back up within the week.

Additionally, some sideways trading could occur after this before a new rally towards the halving begins. This could imply a potential target of $17,000-20,000 prior to the halving.

Total market cap at a critical level

Total Crypto Market Capitalization chart. Source: TradingView

The total cryptocurrency market capitalization (including Bitcoin) is at a critical level and potential support. Holding this area between $180-205 billion would be a massive support/resistance flip, considering the importance of this level.

The area is an order block from November 2017, prior to the big boom in December 2017. This level was a significant level during several bounces in Q3 and Q4 of 2018. 

If the total market cap is able to claim this level as support now, the market is ready to aim for upper levels at $350 billion again and make another higher low, an essential indicator for upwards and bullish movements. 

Good signals are given, as the price and market capitalization bounced significantly earlier today. Similar to the Bitcoin chart, this chart is also providing bullish divergences indicating a potential bottom forming.

Interesting enough, the last time the bullish divergences appeared was in the period of December 2018. 

Key levels for BTC/USD

BTC USD daily chart. Source: TradingView

This bounce upwards can be stated as a bullish move, as the market bounced $1,200 upwards within one hour. However, for further bullish movements, Bitcoin still has to clear a few levels.

First of all, Bitcoin needs to close the weekly candle above the 100-WMA, which is considered an important indicator. The 100-WMA is currently resting at $7,800.

Additionally, the 200-Day moving average (DMA) and exponential moving average (EMA) are still moving above the current price levels. For more strength and a bullish outlook, the price of Bitcoin has to break above these daily moving averages. Currently, they are moving at $8,600 and $8,750.

Ultimately, the massive support at $9,200 has to be broken and flipped back to support, as Bitcoin will reclaim an important range then. If Bitcoin is able to get back in that range, we can conclude that Bitcoin made its bottom from the recent parabolic moves and is ready for further upwards continuation towards the halving event taking place sometime in May 2020. 

The views and opinions expressed here are solely those of the CryptoMichael 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.

China’s President Xi Urges Accelerated Blockchain Technology Adoption

China’s President Xi Jinping has called for the country to accelerate its adoption of blockchain technologies as a core for innovation. Xi made the comments at a Politburo Committee session on blockchain technology trends on Oct. 24.

Blockchain adoption promotes innovation

Xi stressed that the implementation of integrated blockchain technologies is key in promoting technological innovation and transforming industries. He told the committee:

“We must take blockchain as an important breakthrough for independent innovation of core technologies, clarify the main directions, increase investment, focus on a number of key technologies, and accelerate the development of blockchain and industrial innovation.”

Blockchain, not Bitcoin

Xi’s push for greater blockchain adoption comes against the backdrop of China’s long-standing aversion to — and a crackdown on — cryptocurrencies. Authorities in the country first banned ICOs in 2017, quickly followed by cryptocurrency exchanges.

There have even been reports that at least one government agency is considering a ban on cryptocurrency mining.

Digital currency arms race

Unsurprisingly, the one cryptocurrency that the Chinese government doesn’t seem to have an issue with is its proposed central bank digital currency (CBDC). Despite reports throughout the summer that the launch of this was imminent, officials from China’s Central Bank last month said that there was no timetable for the launch of the CBDC.

Meanwhile, Facebook’s Mark Zuckerberg has been referencing the threat of Chinese superiority in the digital currency space in an attempt to sell U.S. lawmakers his plans for the Libra stablecoin.

“China is moving quickly to launch a similar idea in the coming months. We can’t sit here and assume that because America is today the leader that it will always get to be the leader if we don’t innovate,” he argued in an official statement. 

Now Is A Great Time To Visit Cointelegraph’s Unblocked Facebook Page

After being banned for more than a month, Cointelegraph is once again accessible via Facebook.

There were more questions than answers when the block took effect on September 18. Facebook has a hardline anti-crypto policy when it comes to paid advertisements, but ours was a community page for distributing reported news, boasting more than 700,000 likes.

It’s not clear what happened to initiate the block. Facebook’s policy for pages of this kind revolve around prohibiting “misleading, fraudulent or deceptive” information, and they “must not facilitate or promote online gambling, online real money, games of skill, or online lotteries without our prior written permission.” None of these apply to the content we produce and distribute.

Our Instagram page remained live and active throughout this time, even though Facebook owns that company as well.

A Facebook rep shared via email that the Cointelegraph page was unpublished in error and is live once again. That means there’s never been a better time to visit us on Facebook and give us a like.

US Congressman Warns: Crypto May ‘Displace or Interfere With Dollar’

The United States congressman who said the country should ban cryptocurrency returned to publicly slating the phenomenon this week.

Sherman: Crypto could “achieve its objectives”

During the latest hearing over Facebook’s Libra digital currency on Oct. 23, Brad Sherman used his chance to speak to deliver fresh criticism of cryptocurrencies such as Bitcoin (BTC) and their alleged use cases. 

Sherman, who was already well known as an opponent of any money that challenges the U.S. dollar’s role as a global reserve currency, built on his previous claims from May when quizzing Facebook CEO Mark Zuckerberg.

“I’m not here to be anti-Facebook; I was anti-cryptocurrency back when you were anti-cryptocurrency,” he told Zuckerberg.

Continuing, Sherman nonetheless appeared to give unlikely weight to the idea that a disruptive financial instrument can succeed in taking power away from the dollar.

“Cryptocurrency either doesn’t work, in which case investors lose a lot of money, or it does achieve its objectives perhaps and displaces the U.S. dollar or interferes with the U.S. dollar being virtually the sole reserve currency in the world,” he said.

Tired dollar arguments

As Cointelegraph reported, Sherman has made it known he is no more a fan of Libra, which he called the “Zuck Buck” in July than Bitcoin or any other cryptocurrency.

His comments coincided with a dramatic slide on Bitcoin markets, however, with BTC/USD plunging 8% to hit levels not seen since before Facebook published Libra’s whitepaper in June 2019.

Sherman added that he thought the dollar was a poor choice for criminals, contradicting various findings that showed fiat remains preferable for money laundering and financing of terrorism over publicly-traceable Bitcoin.

ING Bank Proposes Security and Privacy Trade-Off for Corda Blockchain

ING announced that researchers at the financial services firm have solved a security and privacy issue on blockchain software firm R3’s Corda blockchain.

On Oct. 23, ING’s distributed ledger technology team presented its white paper, called “Solutions for the Corda security and privacy trade-off: having your cake and eating it,” where it reportedly found a solution to improve the security and privacy trade-off on Corda, an open-source blockchain platform.

Zero-knowledge proofs allow for greater privacy and security

The white paper states that currently, the content of each transaction on the Corda blockchain is revealed to a validating notary to be able to achieve consensus. Being able to observe the content of transactions may raise privacy concerns. ING director Mariana Gomez de la Villa explained:

“In the case of the validating one, the notary sees the contents of a transaction before it determines if the information is correct, which means participants lose privacy. […] A non-validating notary doesn’t see a transaction’s content, which creates a security risk where the notary could sign off the wrong transaction if a malicious participant builds an invalid transaction. However it protects participants against double-spends, an attack where someone could spend the same asset twice, as does the validating notary.”

ING’s solution introduces a zero-knowledge proof (ZKP) notary service to validate transactions, that can purportedly evaluate the validity of a transaction without compromising on safety and without revealing any private contents.

In the cryptography world, ZKP is known as a method that allows one party to prove to another party that a statement is true without giving up any additional information. Zero-knowledge proofs were defined for the first time in a 1988 paper published by researchers from MIT and the University of Toronto as “those proofs that convey no additional knowledge other than the correctness of the proposition in questions.”

ZKPs allow for greater privacy on public blockchains and could fuel growth in blockchain adoption by reducing the expensive and time-consuming process of setting up private networks.

ING CEO says the bank might cut ties with Facebook

Cointelegraph reported previously that ING CEO Ralph Hamers stated that banks may be inclined to stop working with social media giant Facebook if the firm goes ahead with the planned launch of its Libra stablecoin. Hamers explained that banks such as his have a rather low-risk approach:

“We are such a large, regulated institution that you don’t want to risk anything. […] We’ve said we’ll take a look and see how this develops.”

US Congressman: Default Reaction to Bitcoin, Blockchain Must Be ‘Yes’

U.S. Congressman Patrick McHenry, who represents North Carolina’s 10th District, says he wants regulators’ default reaction to crypto innovation to be “yes.” 

The Congressman — who goes by the moniker of “Mr. Fintech” on Capitol Hill — made his remarks during an interview for Laura Shin’s Unchained podcast, published on Oct. 22.

Reintroducing the Financial Services Innovation Act

McHenry related his observations of the cryptocurrency space’s development, underscoring that the Bitcoin’s enormous value had become swiftly apparent. He soon recognized, he said, that regulators’ responses would struggle to keep pace with the wealth of new ideas:

“My conclusion was, any action by the government — really up until the last 2, 3 years — would be negative, would impair innovation and would restrict the development of cryptocurrencies and their enormous value, now and in the future.”

It’s far better, he continued, for Capitol Hill to slowly become more informed about the industry “rather than rush to go kill — or try to kill — an idea.”

As the industry has evolved, he argued that we’ve entered a different phase: one that now needs smarter regulation and increased certainty from the Commodity Futures Trading Commission (CFTC) and the Securities and Exchange Commission (SEC), as well as a clarification from the U.S. Treasury and IRS in regard to taxing authority. 

“Real government work still needs to be done,” he noted.

To this end, he has this week reintroduced the Financial Services Innovation Act. The bill proposes the creation of financial service innovation offices within each of the ten different federal offices that deal with financial service issues.

The bill, he said, will ensure that regulators are “innovation-forward and situated to say yes rather than no. I want the default to be yes, not no.”

Working for, not against, innovation

McHenry outlined that the creation of these offices would establish something similar to what other jurisdictions call a “regulatory sandbox.” His proposed term, “permanent beta testing,” would work on the same principles. 

Regulatory agencies would be able to offer innovators in the crypto space to enter into an enforcement compliance agreement: once accepted, this would allow them to provide services under a modified compliance plan, with certain waivers for out of date measures or unduly burdensome. 

For agencies such as the SEC and CFTC and others, he argued that the bill represents a necessary step to establishing a regulatory process that works with, not against, innovation.

As reported, McHenry told lawmakers this summer that:

“The world that Satoshi Nakamoto, author of the Bitcoin whitepaper envisioned, and others are building, is an unstoppable force.”

Ripple Adds Four Members to Regulatory Team, Joins Blockchain Association

San Francisco-based blockchain startup Ripple has announced three new appointments to its global regulatory team and that the company will be joining the Blockchain Association.

Per an Oct. 22 blog post, Ripple has onboarded four new members — Craig Phillips, Michelle Bond, Ron Hammond and Susan Friedman — to its global regulatory team based in Washington D.C. Michelle Bond will also sit on the board of the Blockchain Association.

Execs with financial sector regulation backgrounds

Phillips joined Ripple from the United States Treasury Department, where he served as Counselor to the Secretary and worked on the Executive Order 13772, a presidential executive order that establishes a series of standards designed to manage regulatory actions that impact the financial sector, as well as intends to advance economic growth. At Ripple, Phillips will advise on strategic regulatory opportunities.

Prior to Ripple, Bond served as the global head of policy at blockchain and head of global regulatory affairs and public policy at Bloomberg, and Senior Counsel at both the Securities and Exchange Commission and the U.S. Senate Banking Committee.

Friedman worked as the Senior Advisor to CFTC Chairman Heath Tarbert in his previous capacity as Treasury’s Assistant Secretary for International Markets, while at Ripple she will serve as an international policy counsel. Ron Hammond joins Ripple as a manager of government relations, having previously served as a Legislative Assistant to Representative Warren Davidson.

More changes and industry participation

Ripple’s membership in the Blockchain Association will also put it in contact with many of the regulators and lobbyists working in the space. The association is a non-profit organization that consists of blockchain advocates and promotes adoption of blockchain technology around the globe.

As recently reported, Ripple went through a rebranding as it fused three of its services — xRapid, xVia and xCurrent — into RippleNet offering. The company reportedly believes that moving from a suite of services to offer a network to its customers is a natural evolution of its strategy due to the growth of its user base and development of its standard.

Bitcoin Futures: Institutional Long Positions Value Doubled in October

One class of investors has more than doubled the value of the long positions it holds in Bitcoin (BTC) futures contracts this month. 

Institutions settle in for the long term

According to fresh data from analyst Skew Markets on Oct. 22, the value of institutional investors’ long positions went from below 500 BTC ($4.11 million) on Oct. 1 to over 1,000 BTC ($8.23 million) on Oct. 16.

The gains reverse a decline in institutional longs from September. The launch of Bitcoin futures from Bakkt coincided with open interest falling from around 1,300 BTC.

“For reference, institutions include pension funds, endowments, insurance companies, mutual funds & portfolio/investment managers whose clients are predominantly institutional,” Skew clarified. 

What lack of interest?

Bitcoin futures were thought to have taken a longer-term break from being top of the agenda for institutional investors in the face of last month’s Bitcoin price downturn

Despite assumptions on sentiment, industry players have more recently begun to dispel the myth that interest is waning. 

As Cointelegraph reported, Grayscale, the world’s largest crypto-focused asset manager, went on record to confirm that clients had steadily been pouring in funds throughout 2019. 

“We see institutional investors invest with us all the time and that’s been the case for a long time now,” the firm’s director of sales and business development Rayhaneh Sharif-Askary added in an interview earlier this month. 

Nonetheless, other sources have quizzed the impact of institutions on Bitcoin. This week, CoinShares chief strategy officer, Meltdem Demirors, suggested custody practices, in particular, posed questions.

Binance Joins Council of Internet Giant Kakao’s Blockchain Project

Klaytn, a blockchain project led by internet giant Kakao, announced that cryptocurrency exchange Binance is joining its governance council.

In a joint press release shared with Cointelegraph on Oct. 22, Binance announced that it is joining the governance council of the service-centric blockchain project, Klaytn, to further push for the mass adoption of blockchain technologies.

Binance joins 24 other member companies such as LG Electronics, Unionbank of the Philippines and Celltrion, to make key decisions for Klaytn’s business and technical developments. 

According to the press release, Binance is the first blockchain firm to join the council. In addition to working on the network’s governance, the exchange will also participate in consensus node operation. 

Ground X, the blockchain arm of Kakao, launched the mainnet of its Klaytn platform on June 27 and hopes that the platform, which focuses on decentralized apps, will drive blockchain adoption in South Korea. 

The Klatyn network raised nearly $300 million in two different initial coin offering rounds earlier this year. The network’s blockchain technology will form a base for a blockchain-based payment system that Ground X developed in tandem with Irish startup Festy. 

Hyundai’s blockchain arm cooperates with Kakao

Cointelegraph previously reported that Hdac Technology, the blockchain arm of South Korea’s largest car manufacturer Hyundai Motor Group, was looking to cooperate with local blockchain businesses such as Ground X, hoping to further develop its plans to establish joint funds with financial companies “to discover and foster small but promising blockchain companies.”

Bitcoin: ‘Most Dramatic’ 2020 Halving Could Cut Supply by $63M a Week

Bitcoin (BTC) advocates continue to focus on the May 2020 block reward halving this week as the impact on price becomes more apparent.

Analysts excited for high-stakes halving

In a Twitter discussion beginning Oct. 18, commentators noted that next year’s event will reduce the amount of new Bitcoin in circulation up to $63 million per week at current prices.

The block reward refers to the amount of new Bitcoins miners receive for mining a new block. Currently 12.5 BTC, after the halving, the reward will fall to 6.25 BTC.

Previous halving events have triggered upward price motion, leading to suggestions that 2020 will be no different. Additional studies, notably the popular Stock-to-Flow model, have corroborated the theory that Bitcoin price must surge as the mining reward decreases.

Comparing historical data, Crypto Rand noted that the 2012 and 2016 halvings removed $302,400 and $8.19 million per week from circulation respectively. 2020’s “most dramatic” halving, the analyst forecast, will remove $63 million.

Investor Alistair Milne broadly agreed, adding that at its current price of $8,200, there will be $51.7 million less in new Bitcoin each week.

“To those that think Bitcoin’s inflationary schedule is less effective with time … At current values (~$8200), 2020’s halving will remove $51.7million/week of newly mined Bitcoin from the sell-side,” Milne summarized on Monday.

Price on track for gains

As Cointelegraph reported, Bitcoin’s drop to $8,200 placed it firmly in line with the Stock-to-Flow model’s expectations. Previously, when the price was higher, it was effectively “front-running” the historically accurate measure. 

Nonetheless, the positive outlook is not shared unanimously. In an interview earlier this month, Jihan Wu, co-founder of mining giant Bitmain, warned the halving may not necessarily lead to the return of bullish sentiment. 

“There are many uncertainties, but now is a good time to invest in crypto mining,” he said. Bitmain plans to operate the world’s biggest Bitcoin mining farm in Texas, the company revealed in a press release on Monday.

Report: Facebook Could Use Fiat-Pegged Stablecoins for Libra

Facebook is reportedly open to the idea of using national currency-pegged stablecoins for its forthcoming Libra project.

According to Reuters on Oct. 20, David Marcus, the head of the Libra project for Facebook and CEO of Facebook’s wallet service Calibra, said that Libra could use various fiat-based stablecoins, instead of the initially proposed token. 

Speaking at a banking seminar on Sunday, Marcus reportedly stated that the main goal of the project was to create a more efficient payment system and that it was not opposed to looking at alternative approaches. Marcus said:

“We could do it differently,” he said. “Instead of having a synthetic unit … we could have a series of stablecoins, a dollar stablecoin, a euro stablecoin, a sterling pound stable coin, etc […] We could definitely approach this with having a multitude of stablecoins that represent national currencies in a tokenized digital form […] That is one of the options that should be considered.”

The originally proposed backing for the Libra token was a basket of various national currencies including the U.S. dollar, euro, Japanese yen, British pound and Singapore dollar.

The project needs agility amid a hostile regulatory environment 

Marcus reportedly noted that the aforementioned stablecoins were not the Libra Association’s preferred option for the project, but said that it must remain agile.

The association — the project’s governing body — has lost several key members in recent weeks, including such major payment and e-commerce firms as PayPal, Visa, eBay, Mastercard and Stripe. 

According to United States Treasury Secretary Steven Mnuchin, the firms left the Libra Association because the project was “not up to par” with American Anti-Money Laundering standards.

Indeed, Libra is continuing to face pressure from global regulators, who are voicing increased skepticism over the project and its possible effect on global financial stability. 

Financial ministers and central bank heads from the G20 countries have recently raised concerns that global stablecoins could negatively affect the sovereignty of monetary policy, particularly in developing nations. On Oct. 18, German Federal Minister of Finance Olaf Scholz said that global regulators should prevent Libra’s issuance outright.

Facebook CEO Mark Zuckerberg will testify about the project before the U.S. House of Representatives Financial Services Committee on Oct. 23.

HTC Launches Exodus 1S, First Phone That Can Run a Full BTC Node

Taiwanese electronics giant HTC has launched its new smartphone Exodus 1s, enabling users to run a full Bitcoin (BTC) node on mobile.

First smartphone to support full Bitcoin node

In line with an announcement in May 2019, HTC launched the Exodus 1s at the Lightning Conference in Berlin on Oct. 19 and started selling the first devices during the even using the Lightning payment network, the firm said in a press release to Cointelegraph.

The new Exodus 1s is a lower-cost version of the pioneering HTC’s blockchain-powered phone Exodus 1, which recently added support of Bitcoin Cash (BCH). Priced at €219 ($233), the new device is available to buy using Bitcoin, Ether (ETH), Litecoin (LTC), Binance Coin (BNB) and Bitcoin Cash, the firm said.

Apart from featuring buy, sell, send, receive, trade and lend and borrow options, HTC claims that the Exodus 1s is the first-ever smartphone capable of running a full Bitcoin node.

Initial availability

The product will be initially available for users in Europe, Taiwan, Saudi Arabia and the UAE, while other regions such as Taiwan, Switzerland and Germany will see launches at a later date, the firm noted.

Phil Chen, Decentralized Chief Officer at HTC, stated that full nodes are the “most important ingredient in the resilience of the Bitcoin network,” noting that by launching the Exodus 1s the firm has lowered the entry barrier for any person to run a node and participate in the global network.

Exodus 1s’s predecessor Exodus 1 and “the first native blockchain phone” was announced for presale on Oct. 23. 2018 and was available in 34 regions, including the U.S., U.K. and Hong Kong.

In mid-September, decentralized offline crypto sales firm Pundi X introduced its Blok on Blok blockchain smartphone at the IFA trade show in Berlin. On Oct. 8, South Korean electronics giant LG was reported to be developing its own blockchain phone in response to Samsung’s Klaytn blockchain smartphone.