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Bitcoin Price ‘Likely’ Bottomed in $3.7K BitMEX Crash, Says Tone Vays

Bitcoin (BTC) likely reached its low when it hit $3,700 earlier this month, veteran trader Tone Vays has forecast as markets remain up 70%.

In the latest episode of his Trading Bitcoin YouTube series on March 29, Vays repeated his previous claim that, logically, BTC/USD should bottom at 20% of its 2019 highs — $2,800.

Vays on $2.8K: “I don’t think it’s likely anymore”

This could occur before May’s block reward halving and not endanger Bitcoin’s long-term perspective, he said, but a dive after that event could have grave consequences.

After March 12, when BTC/USD bounced off 15-month lows of around $3,700, Vays now thinks that Bitcoin will not return to put in lower levels.

“I don’t think it’s likely anymore,” he summarized.

“Because I think this incident, this event earlier this month was close enough $2,800 that I’m no longer expecting $2,800.”

Bitcoin Price 1-year chart showing dip to 70% of highs

Bitcoin Price 1-year chart showing dip to 70% of highs. Source: Coin360

BitMEX crash limited Bitcoin price losses

Since the bounce, Bitcoin has broadly maintained higher support, with the recovery reaching almost 90% in the subsequent two weeks.

Continuing, Vays suggested that in fact, $2,800 would have appeared during the dive and that it was only the crashing of derivatives giant BitMEX which prevented it.

“If BitMEX did not go down, we probably would have $2,800 and maybe even lower,” he said. 

“It’s very possible that if BitMEX didn’t crash, the selling would have just accelerated, but right now, I’m under the assumption that the low is in.”

At the time, BitMEX itself denied that it played a role in facilitating a wave of sell-offs which only ended when it went offline.

Cointelegraph Exclusive: Former CFTC Chair Looks to Digital Dollar Beyond COVID-19 Stimulus

The digital dollar has been the talk of the crypto world this week. Drafts of the COVID-19 stimulus bill first included and then discarded the creation of digital dollar wallets; a digital distribution method that would enable direct aid to citizens. 

The version of the “Coronavirus Aid, Relief, and Economic Security Act” that became law on March 27 features no mention of the digital dollar. While the proposed digital dollar lives on in at least one bill sponsored by Senator Sherrod Brown (D-OH), a United States central bank digital currency (CBDC) seems like it will have to wait for now. 

The Digital Dollar Project

This week’s emergency legislation is not the first time that U.S. lawmakers have raised the prospect of a CBDC and will not be the last.

Two notable advocates for a digital dollar are J. Christopher Giancarlo and Daniel Gorfine. The pair worked together at the Commodities and Futures Trading Commission (CFTC), where Giancarlo served as Chair. Gorfine led the commission’s FinTech innovation office, LabCFTC. 

Both Giancarlo and Gorfine left the CFTC in the summer of 2019. They made headlines in October for an op-ed advocating a digital dollar and, subsequently, for their launch of the non-profit Digital Dollar Foundation in January. 

As the crypto world reacted to the prospect of the digital dollar envisioned by Congress, the Digital Dollar Project announced its inaugural advisory board. 

Cointelegraph spoke with Giancarlo and Gorfine about Congress’ recent interest in a digital dollar as well as their plans for the Digital Dollar Project.

New legislation may be hasty, but project “heartened” to have people talking

Though the project had been part of conversations with policymakers, Giancarlo said the language surrounding a digital dollar in the recently proposed legislation was not from them. “We did not have anything to do with what was in the House bill,” he said.

Giancarlo continued to explain that the digital dollar would be useful in a crisis, but its development will probably need more time than the current emergency aid demands: 

“The United States has to proceed thoughtfully, intelligently, deliberately. We advocate pilot programs as a way to explore the utilization of the digital dollar and how it can be used, including how it can be used in a crisis. But I think one needs to be very cautious about trying to launch something as big as this amidst a crisis.”

Gorfine saw the task of distributing money to U.S. citizens in need of aid as a good use case for a digital dollar, but suggested that the present crisis might be too soon for such an implementation.

“This crisis has demonstrated that some of our processes don’t seem to match a 21st-century leading economy in terms of capabilities. It’s not surprising that there’s now focus on whether there are better, more efficient ways to go about moving funds,” explained Gorfine. “It’s also important that pursuing something like this doesn’t become a distraction from getting necessary funds out in a really expedient fashion.”

Both thought that the current dilemma would at least get people talking about a digital dollar. According to Giancarlo:

“It’s clear that as the public sector talks about seeking to find ways to get money into people’s hands efficiently, effectively, quickly, and also to get money in the hands of people who are either underbanked or unbanked, the value of a digital dollar becomes quite clear as a delivery mechanism.”

Broad ambitions for bringing the dollar into the 21st century

Even if the current stimulus doesn’t see any new forms of aid distribution, the digital dollar project plans to see its broader goals through. 

Not aiming to publish a white-paper or push any particular coding agenda, Giancarlo and Gorfine still see a broad reboot of the dollar as necessary if it is to remain vital into the 21st century. Giancarlo said:

“The dollar’s preeminence as a reserve currency is based upon it being a unit of account for most of the world’s things of value — commodities, currencies, benchmarks — and all of those are going through a digitization revolution. And we really believe the dollar needs to go through a digitization as well.”

Gorfine was similarly taken with the prospect of money transforming for the internet age:

“Just as today, we can send an email with information halfway around the world in a fairly frictionless and efficient way with relatively few intermediaries — the same now seems to be true with sending information about value and about specific or unique ownership over value. The idea that we’ve been able to move that information more efficiently from one computer effectively to another with fewer or at least different types of intermediaries seems to be a real trend that’s going to impact all aspects of financial markets and services. And to that end money is not immune.”

Technological remains undetermined

The project remains uncertain as to specific technologies, with its founders still hesitant to say what sort of blockchain it would run on, or any other technical specifications. They described the project’s mission as more dedicated to providing information on potential technical trade-offs. 

Gorfine said the task at hand was to get to work:

“Kicking the tires to find out what some of the potential benefits could be, what some of the challenges will be, how you design this, and what are the tradeoffs based on those design choices.”

Regarding the appearance of the language “digital dollar” in recent bills and the uncertainty as to whether this would be a blockchain-based CBDC, Giancarlo gave a more nuanced explanation of the Digital Dollar Project’s terminology: 

“We’ve been using the phrase ‘digital dollar’ quite consistently to refer to a US central bank digital currency. While other people say, ‘well the dollar’s already digital’ — it is indeed electronic, but when we refer to digital dollars we refer to something that is tokenized, has the full faith and credit of the United States government and is minted and distributed the same way that fiat is minted and distributed through the existing financial market banking infrastructure.”

The Digital Dollar Project, as the pair laid out in current objectives, is aiming to promote comprehensive pilot programs to figure out the real-world implications of different technical options.

Relationship to potential competitors

One question that arises when talking about a U.S. Fed-backed digital currency is what would happen to the many existing digital assets pegged to the dollar, including Tether’s USDT, Circle’s USDC or Binance’s BUSD. The United States is a notoriously tricky jurisdiction for many crypto firms to operate within anyway. Would the government try to suppress use of these preexisting stablecoins if they were to compete with an official digital dollar? Or, more simply, would demand for such coins shift?

Gorfine denied that the project’s proposed digital dollar would compete with existing stablecoins: “There are big differences when you’re talking about a central bank digital currency, which is a central bank liability, as opposed to tokenization of bank money, which is something you see more with stablecoin projects. They’re certainly not intended to be competitive with one another.” 

Many governments have looked to CBDCs as ways of modernizing their money. The European Central Bank and the International Monetary Fund have shown interest in the prospect. Sweden and the Bahamas seem well on their way to developing, respectively, an e-krona and a sand dollar. China’s digital renminbi seems to be the biggest direct competitor or even threat to the United States.

Giancarlo and Gorfine said that they had been following the development of China’s CBDC, but declined to view it as a competitor. “The Digital Dollar Project takes no view on the development of other either competing central bank digital currencies or cryptocurrencies or stablecoins. It just proposes that it’s in the U.S.’s interest to create a central bank digital currency,” said Giancarlo. He continued to elaborate on the unique approaches different governments take in their major projects:

“We have a view that if you look at development of CBDCs around the world, they’re all driven in ways that are appropriate to their national characteristics. When China does something big, whether that’s build a blue-water navy or to develop a digital Yuan, it’s driven by the Communist Party. When Europeans do something big, it’s generally driven by the public sector. When we in America do something big, whether it’s land a man on the moon or build the internet, it’s always done in a public-private partnership. We think something as big as the digital dollar should be built in a public-private partnership.”

The international user question stands

Cointelegraph has previously asked the question of whether a digital dollar — especially one issued by the Fed and administered by Fed-member banks — would be able to operate outside of the United States. The language of recent bills promoting a digital dollar didn’t seem conscious of the prospect.

Giancarlo, for one, wanted to see the digital dollar functional outside of the United States. “What we propose would be a true central bank digital currency that would be utilized in international commerce as well as domestic commerce,” he said.

Cross-border payments, including remittances from workers sending money to families in other countries, is one of the major arguments in favor of cryptocurrencies at large. According to Gorfine, the Digital Dollar Project would like to streamline that process. He said: 

“There are three large categories of potential use cases when you talk about a U.S. CBDC. You’ve got kind of a retail payment use case or application. You’ve got a wholesale market. And then you’ve got international payments, which includes remittances.” 

Conclusion? Time

As with much of the rest of the conversation, Gorfine and Giancarlo took the long view. Rather than tacking on a digital dollar to an ongoing emergency, they wanted to see pilot programs to test how cross-border payments, financial inclusion, and other issues facing the digital dollar would play out in controlled environments.

Those of us interested in the fate of a digital dollar will just have to wait to see whether its recent brief appearance in landmark legislation will propel longer-term initiatives favoring it forward, or whether legislators will shelve the issue until the next catastrophe.

Digital Dollars, Bakkt CEO Scandal & a Continuing Pandemic: Bad Crypto News of the Week

Bitcoin has continued its recovery. It’s up around 23 percent over the last week, even as the Bitcoin clock continues its countdown. We’re now entering the last 50 days of a 12.5 BTC reward.

These are strange times for everyone but despite Bitcoin’s volatility, the digital coin seems to have held up. Marcel Pechman argues that Bitcoin was designed for a financial crisis and says that in the current pandemic, it’s working well.

Cryptocurrencies could work even better though if politicians would get their act together. The economic stimulus bill originally contained a requirement to create a digital dollar, but a 1,400-page update removed it. Rep. Maxine Waters and Sen. Sherrod Brown later submitted separate bills to reinstate the requirement. That’s almost as much whiplash as a week of crypto trading. The courts aren’t helping much, either. A United States District Court has ruled that Telegram can’t release its GRAM tokens. They’re unregistered securities, the court says.

Senator Kelly Loeffler, the former CEO of Bakkt, says that she had nothing to do with her portfolio’s sale of shares (and purchase of shares in teleconferencing companies) just before the market tanked. MakerDAO says that the Maker Foundation did not place winning bids in its recent debt auctions. That auction didn’t exactly take off. And in Texas, the State Securities Board is warning of the spread of pump-and-dump scams, hoping to cash in on the fear of COVID-19. Keep an eye out for those. In better news, Crypto.com has announced a new feature that enables invoicing in cryptocurrencies.

Over in Italy, which has suffered more reported COVID-19 deaths than any other country, Banco Sella is launching a Bitcoin trading service. The service uses its Hype platform to help the locked down nation buy Bitcoins and make transactions. If they so choose, Italians are also able to give those Bitcoins to the Red Cross. The organization announced that a crypto-fundraising round had met its $10,710 goal within three days. It’s now set a new goal of $26,000. China is also seeing the benefits of digital currency. Its central bank has finished developing the basic functions of an official digital currency. It’s now drafting laws to implement it.

Charles Hoskinson, CEO of Cardano developer, IOHK, is less happy with America’s Federal Reserve. He’s compared the Fed’s willingness to print money to the Onecoin scam.

In tech news, Solana and Chainlink have teamed up to build an oracle that can give a price update every 400 milliseconds. A new study has found that a blockchain could save the US pharmaceutical industry more than $180 million a year by tracking prescription drugs. Bitmain sold all of its new Antminer S19s in just 24 hours. They’ll start to arrive on May 11. Hm. 

Cryptowallet and donation app, BABB, is waiving its fees for people raising funds for COVID-19 causes. On YouTube, a fake Brad Garlinghouse is offering to give away 50 million XRP tokens. And thanks to blockchain artist Robness, the crypto art community is tackling big questions about the nature of art.

Finally, Scarlett Sieber of CCG Catalyst Consulting Group, has been discussing the arrival of open banking in America, and Joel has been asking whether staking might be the answer to crypto’s mining problems. If only all of the world’s problems could be solved so easily.

Check out the audio version here:

Joel Comm is an internet pioneer, New York Times best-selling author, futurist speaker and co-host of The Bad Crypto Podcast. That’s a fancy way of saying he writes words, says things and loves to play with cryptos.

The views, thoughts and opinions expressed here are the author’s alone and do not necessarily reflect or represent the views and opinions of Cointelegraph.

Bitcoin Price Rejects $6.9K, But Is a Correction Now Imminent?

The price of Bitcoin (BTC) has shown a strong surge in the past weeks, as the price rallied from $3,750 to $6,900. However, the crucial $6,900 level wasn’t broken to the upside and confirmed as resistance. A similar move occurred on the equity markets, as the United States’ equity markets surged 25% in one week, but saw a sharp selloff of 4% in the last trading hour, going into the weekend. 

These movements lead to the general question: is there more blood to come for Bitcoin and crypto? 

Crypto market daily performance

Crypto market daily performance. Source: Coin360

Bitcoin price can’t break $6,900

The daily chart is showing a clear rejection at the $6,900 level, which is generally not a bullish perspective to look for. For bullish momentum, this area at $6,900 needed to be cleared, through which targets of $7,800 and $9,200 were back on the table. 

BTC USD 1-day chart

BTC USD 1-day chart. Source: TradingView

However, the breakout didn’t occur, and therefore the price is now seeking support levels. Main areas to watch for are the $5,600-5,800, $4,750-4,900 and $4,250-4,400. All these zones are substantially higher timeframe support levels and should be used for potential long opportunities.

On the upside, the resistances are easily found through levels too. These levels are $6,350-6,400, $6,550-6,575 and $6,850-7,000. Breaking through the last resistance at $6,850 would certainly reintroduce bullish momentum. 

Weekly timeframe rejects at 100-Week Moving Average 

BTC USD 1-week chart

BTC USD 1-week chart. Source: TradingView

The weekly timeframe is indicating a clear picture. The resistance is the 100-Week MA at $6,900, the support levels are found at the 200-Week MA ($5,500-5,700) and 300-Week MA ($3,900-4,000).

Given that the price harshly rejected from the 100-Week MA, further downside is likely to be expected from the markets. 

But what does this chart tell us more? Well, markets in general mature and take longer to reach their new peak after the previous cycle. This statement means that the current cycle will take longer than the last cycle. 

The Bitcoin markets have seen several cycles, through which 2012-2014 was the first cycle, which saw the market rest on the 100-Week MA. The second cycle from 2014 to 2018 took four years and found support at the 200-Week MA.

BLX Index 1-week chart

BLX Index 1-week chart. Source: TradingView

Given that the price of Bitcoin is showing a bearish outlook — while still having a positive correlation to the equity markets — further downwards momentum is unsurprisingly expected. 

Alongside with that information, there’s also a conclusion to be drawn from the previous cycle. Every cycle takes longer than the previous one, due to the maturity of the markets. 

Combining these arguments results in the conclusion that the current cycle usually will take longer than the previous one. In other words, a bottom formation in the $3,800-4,000 area for several months wouldn’t be a surprise to investors, after which the bull market begins in 2021 and lasts through 2025-2026.

A breakdown of the 200-Week MA at $5,575-5,800 is necessary for a test of the 300-Week MA. If such a breakdown occurs in the coming weeks, then we can see a significant drop towards $3,800-4,000 as the next target as momentum builds. 

Relief bounce on equity markets 

Dow Jones Index

Dow Jones Index. Source: TradingView

Equity markets have seen similar moves as in the cryptomarkets, and have seen one of the most significant surges in a period of a week. The Dow Jones index surged 25% in one week despite a new record of jobless claims and a skyrocketing number of confirmed coronavirus cases. 

As discussed in the previous article, bubbles pop usually provide a 38-50% retrace in the first drop. The Dow Jones index dropped 40%, hit a robust yearly level at 18,000 points, and bounced upwards with 25%. 

Crucial levels to be watched are the 21,750-22,000 and 23,000 points areas. The moment that these levels are rejected, further downwards momentum is likely to occur. Given that the equity markets have seen a positive correlation with other markets recently, further downwards momentum can, therefore, be expected from the cryptomarkets as well. 

The bullish scenario for Bitcoin 

BTC USD 2-hour chart bullish scenario

BTC USD 2-hour chart bullish scenario. Source: TradingView

The bullish scenario is straightforward but less likely to occur given that the price just lost a significant support level and trend.

However, the moment that the price of Bitcoin can break through $6,600 and reclaim that level as support, further upwards momentum is warranted. The reasoning is that the previous support level can be confirmed as support again, turning the recent drop into a fake-out. 

If such a reclaim occurs to the market, it’s expected to see continuation towards $7,500 or $7,800.

The bearish scenario for Bitcoin

BTC USD 2-hour chart bearish scenario

BTC USD 2-hour chart bearish scenario. Source: TradingView

Unfortunately, the bearish scenario is more likely to occur at this moment. Price rejected at the $6,900 barrier, consolidated at that level for several days and broke down. The price of Bitcoin also lost an uptrend, which all indicates that there’s more downwards momentum to come.

However, in the short-term, there’s a possibility that the price of Bitcoin will retest some upper levels for confirmation of resistance. The levels to be watched are the $6,375-6,400 level (monthly level) and the $6,550-6,600 level (which is the previous support). 

If the price of Bitcoin rejects at either of the two levels, further downwards momentum is warranted with the next potential pivot points being $5,600 and $5,750-5,800.

As discussed previously, it’s likely to expect further downside on all markets given the economic instabilities around the globe. It’s crucial to remain solvent and patient in these markets. Markets can remain irrational longer than you can remain solvent. 

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.

Donald Trump Just ‘Advertised’ Bitcoin After Fed Creates $6 Trillion

Bitcoin (BTC) gained ironic support from United States President Donald Trump on March 27 after he appeared to say he supported manipulating the dollar.

In a press conference quoted by various Twitter commentators, including Blockstream CSO, Samson Mow, Trump defended the Federal Reserve printing more than $6 trillion.

Trump: the dollar is “our money, our currency”

“The beautiful thing about our country is $6.2 trillion — because it is 2.2 plus 4 — it’s $6.2 trillion, and we can handle that easily because of who we are, what we are,” he said.

“It’s our money; we are the ones, it’s our currency.”

While Trump did not provide any further explanation of his train of thought, he appeared to endorse the Fed providing the astronomical sum of liquidity for the U.S. market. In turn, the dollar supply would be heavily expanded.

It is this form of meddling in the money supply that forms a central tenet of Bitcoin as a financial solution. The coronavirus epidemic emboldened its supporters, who watched on as the Fed admitted that it had “infinite” money.

“How much did we pay Trump to advertise #Bitcoin?” Mow summarized.

Bitcoin versus U.S. 10-year bond returns

Bitcoin versus U.S. 10-year bond returns. Source: Skew.com

$6 trillion reality sinks in

Reactions to the giant $6.2 trillion meanwhile continue to appear, as various cryptocurrency users showed their surprise. Hodlonaut, the organizer of last year’s Lightning Torch transaction relay, argued that under an unlimited money situation, paying taxes made no logical sense.

Caitlin Long, the ex-Goldman Sachs executive who subsequently pioneered friendly Bitcoin regulatory approaches in Wyoming, described the monetary intervention as killing capitalism.

She also warned that the Fed’s balance sheet would more than double before the coronavirus crisis abated to more than $10 trillion. 

“In short-term, huge dollar demand bc short-covering, but it won’t last,” part of a tweet posted on Friday read.

For scale, $6 trillion is the equivalent of the entire U.S. gross domestic product in 1990, or enough to buy almost 70% of the world’s gold supply at spot price.

Bitcoin Was Heading for a Big Upsurge, Traders Explain What Changed

With the firm recovery of the Dow Jones Industrial Average and Bitcoin defending the $6,400 support level with strength, crypto traders anticipated the Bitcoin price to rebound to at least the mid-$7,500 area in the short term. In the past 48 hours, however, they have started to lean toward a resumption of a bearish trend for Bitcoin, as the relief rally of the dominant cryptocurrency is seemingly coming to an end.

Much data from the imbalanced buy and sell orders on major exchanges like BitMEX and the decline in the total open interest of Bitcoin futures point toward lacking demand from buyers. Historically, when the Bitcoin price came close to a full-blown capitulation phase as seen in December 2018, it required months of accumulation in a low price range to recover over a lengthy period of time.

The last time Bitcoin dropped to the low-$3,000s region, it took around four months to begin a gradual recovery to the $7,000 to $8,000 area. There are concerns that Bitcoin’s price may have recovered a little too quickly after dropping to $3,700, and as the biggest whales in the crypto market like Joe007 explain, such a short-term, V-shape recovery after a massive correction never occurred in the crypto market in the past.

Top trader explains why Wall Street’s pain is translating to a painful Bitcoin correction

Speaking to Cointelegraph, cryptocurrency trader and technical analyst Eric Thies said that the struggle of Wall Street and institutional investors directly affected the price trend of Bitcoin. As the stock market in the United States took a hit, the open interest across major futures exchanges including CME dropped off substantially. In futures trading, the term “open interest” refers to the total amount of long and short contracts open at a certain time.

According to data from Skew, aggregated open interest for all Bitcoin futures contracts — which include CME, BitMEX, Binance, OKEx and Huobi — fell from more than $4.2 billion to just $2 billion since March 1.

Bitcoin futures aggregated open interest drop

Based on the data, Thies emphasized that the drop in the volume of the futures market led the price of Bitcoin to correct, causing mayhem in the entire cryptocurrency market:

“With last week’s plummet, many were initially left scratching their heads. But it makes complete sense from a logical point of view. Looking at the facts of the situation: Bitcoin was looking bullish prior to the breakdown; this is Bitcoin’s first ‘recession.’ […] Point being, that since futures carry such a heavy weight of the volume in the market, guess what’s going to happen when wall street is getting destroyed… Bitcoin also gets shredded. And last week was a very interesting point to be made.”

Some strategists in the U.S. seem to believe that the stock market has not reached its bottom yet. The coronavirus pandemic is still expanding, and the U.S. overtook China as the most infected country in the world. The negative impact the Bitcoin futures market is having on the price trend of BTC is unlikely to subside anytime soon, adding to the selling pressure on the market as a result.

Why Bitcoin was initially en route for a relief rally and is now at risk of another correction

Several renowned traders who have predicted multiple market cycles throughout the history of Bitcoin such as PentarhUdi foresaw the Bitcoin price drop to sub-$6,000 coming when the price of BTC was still hovering above $10,000 in February.

The 200-week moving average mentioned by PentarhUdi on Feb. 10 was $5,800. However, a cascade of liquidations on BitMEX and other exchanges led Bitcoin’s price to free fall to $3,600.

Following the correction, PentarhUdi noted that Bitcoin could recover to up to $8,500, which technically presents a 200-day simple moving average. Then, the trader said that BTC remains vulnerable to a second correction to sub-$3,000s, adding:

“Amid global financial panic, Bitcoin price aggressively attacks Weekly SMA200 and bottom triangle line of previous chart. I see this might not end as well as I thought. As the bearish potential of global markets is huge.” 

From $5,200, Bitcoin saw a decent recovery to around $6,900 but was rejected at a historically strong resistance level. It is now at a borderline negative year-over-year, and in the short term, Thies told Cointelegraph that he now leans toward a bearish outlook:

“One additional interesting point from the event is that it was on 3/13/20 and the low was $3,850. Looking at the charts, the closing price of 3/13/19 was the exact same number. From the pricing standpoint, it is interesting that BTC is now borderline negative for YOY gains since the implementation of futures went live in 2017. I’m watching carefully here since I’m actually leaning unfortunately bearish at the moment.”

The bottom of bitcoin could be lower

Bitcoin has shown less correlation with the U.S. stock market since March 25. While the Dow Jones surged by more than 6% on Thursday, the price of Bitcoin remained relatively stable. Venture capital investor and partner at Placeholder Chris Burniske said that, purely based on technicals, Bitcoin could retest the lows at $3,000.

That validates the historical cycles of Bitcoin, which show that Bitcoin has never recovered in a V-shape pattern from a near 60% correction within a three-week span. For Bitcoin to maintain a bullish trend at a macro level over the medium to long term, a retest of lows and a stable accumulation phase lasting several months is critical.

Echoing the logic of other experienced traders, Burniske said that the plunge of Bitcoin through the 200-week moving average, which typically served as a historical support level for BTC, leaves the dominant cryptocurrency vulnerable to another big pullback:

“Lots of people are asking where BTC bottoms. The short of it is I wouldn’t be surprised to see a retest of our 2018 lows near $3,000. Historically, I’ve relied on the 200 week moving average (yellow line below) as our bear market bottom, but we fell through that at ~$5,500 last Thursday.”

The unprecedented weakness in the altcoin market can be considered another signal of the lacking appetite for high-risk assets and cryptocurrencies in general, as trader DonAlt said: “BTC looks like it could go up, down or sideways. Alts look like they could go down, down or down.”

When Bitcoin is on track for an actual relief rally, altcoins tend to front-run Bitcoin, as seen in December 2019 when Bitcoin started to recover from $6,400 to over $7,500. Bitcoin is now essentially in the same price range; it has rebounded from $6,400 and rose to as high as $6,950, but major altcoins the likes of Ether (ETH) and Bitcoin Cash (BCH) have barely moved against both Bitcoin and the U.S. dollar.

Strategists predict the U.S. stock market continuing to be rattled by the economic consequences of the coronavirus pandemic. New reports show that the virus outbreak in the U.S. may just be starting — and like China in the early days, there is a high probability that the U.S. may take more than two months to recover.

Starbucks CEO Kevin Johnson explained that the recovery of the U.S. from the coronavirus could be delayed by a week or two compared to China, based on the contrast in containment efforts.

With record-high jobless claims and the rapidly expanding coronavirus outbreak, both the U.S. stock market and Bitcoin — primarily due to the declining futures market open interest and volume — remain highly vulnerable to another leg down in the foreseeable future.

Bitcoin Price Holding $6.5K as Media Calls New ‘Bull Market’ in Stocks

Bitcoin (BTC) continued to trade near $7,000 on March 27 after traditional markets showed bullish signs and the Dow Jones had its best day in 87 years.

Cryptocurrency market daily overview

Cryptocurrency market daily overview. Source: Coin360

BTC trades in $400 corridor

Data from Coin360 and Cointelegraph Markets showed BTC/USD trading in a wide corridor between $6,500 and $6,900 overnight on Thursday.

Bitcoin 1-day price chart

Bitcoin 1-day price chart. Source: Coin360

Having preserved support at the lower end, Bitcoin saw its third consecutive day above $6,000 as coronavirus misery appeared to abate for some parts of the world’s financial system.

They were building on the success of the Dow, which on Wednesday saw its biggest one-day growth since 1933 at 20%. For the Wall Street Journal, this was even enough to call a bull market.

That, in turn, followed an announcement from the United States Federal Reserve to print unlimited amounts of money, something which immediately pumped markets but rattled Bitcoin proponents.

While Bitcoin continued to fluctuate, data suggested that traders were not in the mood to sell — according to monitoring resource Glassnode, exchange balances were at an eight-month low as of Thursday.

“Despite the volatility, #Bitcoin holders appear to be withdrawing their funds from exchanges. Outflow has been increasing daily since March 18,” the company summarized on Twitter.

Van de Poppe: no bull market yet

Since it crashed to near eighteen-month lows on March 12, BTC/USD had recovered 80% at press time. 

In a potentially tongue-in-cheek forecast, trader and entrepreneur Alistair Milne demonstrated that the pair may even have the potential to hit $9,000 as soon as next week. 

For Cointelegraph Markets analyst Michaël van de Poppe, however, Bitcoin still had a lot to prove in order to ditch its bear market behavior.

While he called the 80% gains “tremendous,” in a video update on Thursday, he said that levels above $6,900 still remained untouched.

“I don’t feel that Bitcoin is in any bullish market right now, given that we’ve lost pretty substantial support and we didn’t reclaim anything at all,” he summarized.

Keep track of top crypto markets in real time here

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.