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Bitcoin Caught A Cold, Is The Bull Market Over?
Coronavirus And The Bitcoin Safe-Haven
The Coronavirus is spreading around the world. The World Health Organization just upped their rating of the illness to a major global threat. The impact of the virus is more economic than anything else, catching the cold is little more than a bad case of the flu. Regardless, the spreading threat has the global equities market in free-fall and gold moving higher. Thinking about gold and the safe-haven trade you’d think Bitcoin would be moving higher too, but it’s not, proving its value as a safe-haven is dubious.
What’s Bitcoin doing now? Moving lower and setting a new low at the late-January support target. The move is gaining momentum so it is possible we’ll see lower prices in the near future. There is some support at the $8,500 level and it may hold, we can expect this level to be tested thoroughly in the least. If $8,500 fails a move down to $8,000 is the likely scenario, a move below $8,500 is a different story. At that -point the long-term outlook will come into question.
The Long-Term Outlook
The long-term outlook for Bitcoin and cryptocurrency in general is bullish. In the general sense, the advancement of the ETH 2.0 project that is scheduled (again) for later this year will spark broader interest in the industry. In the specific sense, the Bitcoin halving is still on the horizon. The halving is just over two months away and should propel BTC above the $12,000 and $14,000 levels at least.
Looking to the BTC hash-rate, the hashing power attributed to BTC is still rising and only recently hit a fresh all-time high. At the current levels the hashing power is nearly double the 2020 peak showing a high-degree of confidence in the technology. Looking to BTC’s dominance, BTC’s dominance is down from the 2020 high but still above 60%. This also shows a high degree of market confidence, the number 2 coin Ethereum is only about 20% of the total cryptocurrency market.
The Trade Today?
The best trade to make today is no trade at all. With BTC testing one support target the prudent thing to do is wait to see how that support target plays out. If BTC is able to stabilize and bounce from $8,500 buying, bullish and long positions are recommended. If BTC fails to find support and falls to new lows it may be time to go short. The risk for bears is that BTC is on a bullish path, there are catalysts ahead, and the coronavirus will go away, sooner or later.
Market Update: Cryptocurrency Market Cap Sheds $90B, Margin Calls Spike, Futures Slide
Digital currency markets have been consolidating since Thursday’s massive price drop after more than $90 billion was erased from the cryptoconomy. Crypto markets saw some brief gains on Friday but prices have been meandering just above current support levels. At the moment, traders and crypto proponents face uncertainty amidst the ongoing coronavirus scare and economic fallout.
Crypto Markets Consolidate at Support Levels
Cryptocurrency prices have seen better days as BTC was over $9,100 per coin seven days ago. On March 12, otherwise known as ‘Black Thursday,’ BTC dropped from the day’s $7,648 high to a low of $3,870 per coin. The swift downfall shook investors to the core, but soon after BTC jumped back above the $5K region and it’s been hovering above this price zone ever since. The cryptoconomy was just over $245 billion on March 1, 2020. All 5,000+ coins in existence have lost roughly $90 billion since then.
At the time of publication on March 14, BTC is trading at $5,354 but prices have been between the $5,000 to $5,700 range during the last 24 hours. BTC is down 5.7% in the last 24 hours and 41% for the last seven days. Reported trade volume for BTC today is $10 billion, but Messari.io’s “real volume” stats show $2.4 billion. Lots of BTC traders are hedging with stablecoins like tether (USDT) which captures 75% of today’s BTC trades. The USDC stablecoin commands 1.56% of BTC trades and PAX has around 1% as well. This is probably the first time ever that USDC and PAX have been a top-five trading pair with BTC.
Top 10 cryptocurrency market caps on March 14, 2020.
Following BTC is ethereum (ETH) which is trading for $127. The price per ETH is down 4.4% today and down 47.9% for the week. Reported volume for ETH is around $3.1 billion but “real trade” volume on Saturday is about $659 million according to Messari.io. XRP captures the third-largest market cap today and each XRP is swapping for $0.15 per coin. XRP lost 6% in the last 24 hours and 36% for the last seven days of trading. The stablecoin tether (USDT) holds fourth position on March 14 and the coin is swapping with more than two-thirds of the entire cryptoconomy.
BTC/USD market on March 14, 2020.
Bitcoin Cash (BCH/USD) Market Action
Bitcoin cash (BCH) holds the fifth position today after being knocked out of fourth spot by tether (USDT). BCH is down 4.7% on Saturday and the coin lost over 50% during the course of the last week. The top trading pair with bitcoin cash on March 14 is tether (USDT) which commands more than 65% of BCH trades. This is followed by BCH trading pairs like BTC (19%), USD (10%), KRW (2.3%), and ETH (1.3%). At the time of publication, bitcoin cash (BCH) is swapping for $171 per coin.
BCH/USD market on March 14, 2020.
Charts show BCH is holding the consolidation period after support was broken on March 12. BCH is still up 16.3% for the last 12 months, but most of the yearly gains are gone. During the last 90 days against the USD, BCH is down 17% and against BTC the price is down 14%.
Over $100 Million in Margin Calls
While crypto markets lost more than $80 billion, news.Bitcoin.com reported that more than $2.2 billion was liquidated from traders on Bitmex, Okex, Huobi, Binance, and FTX. Additionally, according to a report written by Nathan DiCamillo, the firm Genesis Capital called for $100 million in collateral from about 40 different customers. During the last two years, cryptocurrency lending solutions have been extremely popular.
Blockfi had to make some margin calls and reports say Genesis Capital called for $100 million in collateral from about 40 different customers
The recent market carnage has caused other margin calls from firms like Blockfi as well. “With downward price movement, portions of our USD loan book experience margin calls (and liquidations, in some cases),” Blockfi’s CEO Zac Prince wrote on Thursday. “Issuing a margin call or selling a client’s assets is never something that we want to do and our system is designed with both our clients’ interests and Blockfi’s risk management top of mind.”
Miner Dumps Coin from 2020 Just Before Market Slide
Crypto observers have noticed 1,000 BTC that was mined on August 24, 2020 was recently sent to a Coinbase wallet on March 10. Earlier in the day, a user named ‘whoamisoon’ posted a thread to bitcointalk.org claiming to be the owner of the coins. The individual said he used to mine BTC for a hobby and found out he had 1,000 coins sitting on an old USB drive.
He asked the forum visitors about how he could sell the BTC and obtain his BCH from the address as well. “I mined some bitcoin for a little bit, a long time ago; back when it was still possible to mine with GPU — I haven’t been active here for a long time,” the person wrote. The crypto community has been discussing the alleged sale on forums and social media and they believe he obtained at least $7-8K for the coins or roughly $8 million.
Derivatives Market Open Interest Dives
On March 13, crypto derivatives analytics provider Skew.com reported on the market carnage that took place on Thursday. “Bitcoin finally caught up with Wall Street crashing 39% yesterday during one of the most memorable and hectic trading session in its young history,” Skew tweeted. “Nearly $50 billion bitcoin futures were traded across crypto exchanges with two exchanges – OKEx & BitMEX – > $10 billion and eight > $1 billion. Total open interest – the number of outstanding futures positions opened at the close – collapsed nearly 50% to $2 billion,” the analyst added.
Data stemming from the Bakkt Volume Bot shows that open interest declined significantly as well. An announcement from CME Group made a few people believe that the derivatives giant ceased trading BTC futures but this was not the case. CME simply closed the old school “Chicago trading floor” due to the spread of the coronavirus. Bitcoin futures and options continued but open interest in these products dropped significantly.
All Eyes on the Hashrate and Halvings
Crypto proponents and traders haven’t seen prices this low since March 2020 and a good number of individuals thought the cryptoconomy was about to see another bull run. Now supporters are focused on the hashrate and thinking about the halvings coming up.
SHA256 miner profits with an electricity cost of $0.12 per kWh recorded on March 14, 2020, at 11 a.m. EST. Block rewards will be slashed in half for BTC, BCH, and BSV miners during each network’s halving.
If crypto prices drop lower or even remain where they are today then big mining operations might have a hard time holding onto profits. BTC’s hashrate has dipped a hair but remains above 100 exahash (EH/s).
Where do you see the cryptocurrency markets heading from here? Let us know what you think about this subject in the comments section below.
Disclaimer: Price articles and market updates are intended for informational purposes only and should not be considered as trading advice. Neither Bitcoin.com nor the author is responsible for any losses or gains, as the ultimate decision to conduct a trade is made by the reader. Always remember that only those in possession of the private keys are in control of the “money.” Cryptocurrency prices referenced in this article were recorded on Saturday, March 14, 2020, at 11:30 a.m. EST.
Images via Shutterstock, Trading View, Bitcoin.com Markets, Twitter, Skew analytics, Fair Use, Pixabay, Bakkt Volume Bot, and Wiki Commons.
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Bitcoin’s Market Structure is Growing Highly Bullish After Breaking Through This Level
Bitcoin saw a notable breakout today after being caught within a prolonged bout of sideways trading over the past several days and weeks, with today’s upwards movement bolstering the cryptocurrency’s market structure.
One prominent trader is now that he believes that the cryptocurrency is bound to see further upside due to it breaking above the upper boundary of a descending channel, although it is imperative that bulls continue pushing it higher in order to confirm this possibility.
Bitcoin Breaks Through a Key Technical Formation as Analysts Eye Further Upside
At the time of writing, Bitcoin is trading up over 4% at its current price of $9,100, which marks a notable climb from daily lows of $8,700 that were set yesterday while BTC found itself caught within an incredibly tight trading range.
Today’s upwards movement marked a break above the heavy resistance that was previously suppressing its price action, which does seem to suggest that the crypto could soon see some further upside.
It is also important to keep in mind that this rally also marked a break above the upper boundary of a descending channel that the crypto had been caught within for a few days, which could also provide it with some near-term bullishness.
Teddy, a popular cryptocurrency analyst on Twitter, explained in a recent tweet that he is looking to long each of BTC’s upcoming dips due to the bullish break above this aforementioned descending channel.
“BTC – Price formed down channel – Broke upwards has pattern has bull bias – Reached 9150, previous support now resistance – Closed position – Shorting it? nah. Would much rather long a correction/retrace/pullback,” he explained.
– Price formed down channel ✅
– Broke upwards has pattern has bull bias ✅
– Reached 9150, previous support now resistance ✅
Shorting it? nah.
Would much rather long a correction/retrace/pullback pic.twitter.com/g7Xx84w20L
The key level that analysts are now watching in the aftermath of Bitcoin’s recent rally is $9,500, as its reaction to the resistance that exists at this level could provide significant insight into where it will trend next.
Cold Blooded Shiller – another prominent crypto trader on Twitter – spoke about this level in a recent tweet, noting that everything he sees seems to confirm that this is the key level bulls need to target.
“I think they’ll be a tendency to short $BTC early, everything I can see points to $9.5k being the true test point. Early entries could help fuel the run. Any failure to hold the 8925 breakout would just signal the end here for me. Hold that and I think we continue the grind,” he noted.
I think they’ll be a tendency to short $BTC early, everything I can see points to $9.5k being the true test point. Early entries could help fuel the run.
Any failure to hold the 8925 breakout would just signal the end here for me.
Hold that and I think we continue the grind. pic.twitter.com/xzXlIxM03s
— Cold Blooded Shiller (@ColdBloodShill) March 5, 2020
If Bitcoin faces a strong rejection at this level, it could spell trouble for the state of its ongoing uptrend. A break above this level, however, could lead to significantly further upside.
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