bitcoin

Sunday, July 3, 2022

Bitcoin addresses in loss hit all-time high amid $18K BTC price target

More entities than ever are underwater at current prices, but there is little consensus over conditions improving yet.

Bitcoin (BTC) meandered into the weekly close on July 3 after weekend trading produced a brief wick below $18,800.

*BTC/USD 1-hour candle chart (Bitstamp). Source: TradingView*

Bollinger bands signal volatility due

Data from Cointelegraph Markets Pro and TradingView followed BTC/USD as it stuck to $19,000 rigidly for a third day running.

The pair had gone light on volatility overall at the weekend, but at the time of writing was still on track for the first weekly close below its prior halving cycle’s all-time high since December 2020.

The previous weekend’s action had produced a late surge which saved bulls from a close below $20,000.

Momentum remained weak throughout the following week’s Wall Street trading, however, and traders were unconvinced about the potential for a significant relief bounce.

“Looking for a push down to the lower support zone at $18,000 while we are below $19,300. Quick scalp and tight invalidation,” popular Twitter account Crypto Tony wrote in an update to followers on the day.

“I can't really trust this move because it's ‘weekend pa,’” fellow account Ninja continued in part of a further post, adding that “if bulls can't push to $19.7k, I don't think the dump is over.”

Up or down, incoming volatility was being keenly eyed by commentators as the weekly close drew near. Popular analyst Matthew Hyland noted that the Bollinger bands indicator was signaling that price conditions would soon become more erratic.

#Bitcoin Bollinger Bands tightening on the daily time frame as displayed on the width indicator: pic.twitter.com/c0bqmMfdSi
— Matthew Hyland (@MatthewHyland_) July 3, 2022

On daily timeframes, BTC/USD traded near the bottom Bollinger band, threatening a drop below as an expression of volatility similar to that which occurred in May.

*BTC/USD 1-day candle chart (Bitstamp) with Bollinger bands. Source: TradingView*

Underwater addresses surpass March 2020 peak

Fresh data meanwhile showed just how much pain the average hodler was going through after the worst monthly losses since 2011.

According to on-chain monitoring firm Glassnode, the weekly moving average number of unique BTC addresses now at a loss reached a new all-time high of 18.8 million on July 3.

As Cointelegraph previously reported, in previous capitulation events, 60% of the supply needed to see unrealized losses.

*Bitcoin addresses in loss chart. Source: Glassnode*

"Almost $40 Billion in Bitcoin Net Realized Losses since May 1st," analytics account On-Chain College summarized as June came to a close.

"Some have quit, some have stuck around. One thing is for sure- if you've been in this space over the last year and you're still here, you've been through quite a lot of volatility."

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

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Bitcoin's inverse correlation with US dollar hits 17-month highs — what's next for BTC?

Market pundits anticipate the dollar rally to either stall or correct by the end of 2022, benefiting Bitcoin.

Bitcoin (BTC) has been moving in the opposite direction of the U.S. dollar since the beginning of 2022 — and now that inverse relationship is more extreme than ever.

Bitcoin and the dollar go in opposite ways

Notably, the weekly correlation coefficient between BTC and the dollar dropped to 0.77 below zero in the week ending July 3, its lowest in seventeen months.

Meanwhile, Bitcoin's correlation with the tech-heavy Nasdaq Composite reached 0.78 above zero in the same weekly session, data from TradingView shows.

*BTC/USD and U.S. dollar correlation coefficient. Source: TradingView*

That is primarily because of these markets' year-to-date performances amid the fears of recession, led by the Federal Reserve's benchmark rate hikes to curb rising inflation. Bitcoin, for example, has lost over 60% in 2022, while Nasdaq's returns in the same period stand around minus 29.72%.

On the other hand, the dollar has excelled, with its U.S. dollar index (DXY), a metric that measures its strength against a basket of top foreign currencies, hovering around its January 2003 highs of 105.78.

*BTC/USD vs. DXY vs. NDAQ weekly price chart. Source: TradingView*

Will dollar rise further?

The Fed appears compelled to increase benchmark rates based on how traders have priced the front-end derivative contracts.

Notably, traders anticipate the Fed to raise the rates by 75 basis points (bps) in July. They also bet Fed won't raise rates beyond 3.3% by this year's end from the current 1.25%-1.5% range.

However, a push to 3.4% by the first quarter of 2023 could have the central bank dial back its aggressive tightening.

That could result in a 50 basis point cut by the end of next year, as shown in the chart below.

*Changes in Fed's interest rate target. Source: TradingView*

An early rate cut could happen if the inflation data cools down, thus limiting investors' appetite for the dollar, according to Wall Street analysts surveyed by JPMorgan. Notably, around 40% see the dollar ending 2022 at its current price levels — around 105.

Meanwhile, another 36% bet that the greenback would correct ahead of the year's close.

"Foreign exchange is not a linear world. At some point, things flip," noted Ugo Lancioni, head of global currency at Neuberger Berman, adding:

"I personally have a bias to short the dollar at some point."

Bitcoin to bottom out in 2022?

In addition, the dollar's ability to continue its rally for the rest of 2022 could be hampered by a classic technical pattern.

First spotted by independent market analyst Agres, the DXY's "double top" pattern is partially confirmed due to its two consecutive highs and a common support level of 103.81.

As a rule of technical analysis, the double top pattern could resolve when the price breaks below the support and falls by as much as the structure's maximum height, as shown in the chart below.

*DXY daily price chart. Source: TradingView*

As a result, DXY's double top profit target comes to be near 101.8, down over 3.25% from today's price.

"The dollar is extremely overbought and overheated," explained Agres, adding that its correction in the coming sessions could benefit stocks and cryptocurrencies.

"Finally, looking like it [DXY] will topple down hard. In perfect confluence for a melt-up scenario. When [the] dollar goes down, stocks and crypto rally."

Meanwhile, Bitcoin's "MVRV-Z Score" has also fallen into a range that has historically preceded sharp, long-term upside retracement. This on-chain indicator predicts that Bitcoin could bottom around $15,600 in 2022.

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Saturday, July 2, 2022

Bitcoin indicator that nailed all bottoms predicts $15.6K BTC price floor

The MVRV-Z Score is a tried and tested bottom indicator, but it is not back at base yet, one analyst warns.

Bitcoin (BTC) needs to go lower before putting in a macro bottom, one of the market’s most accurate indicators shows.

Data from sources including on-chain analytics firm Glassnode shows Bitcoin’s MVRV-Z Score is almost — but not quite — signaling a price reversal.

MVRV-Z Score inches towards macro bottom

Amid ongoing debate whether if, or when, BTC/USD will go beyond its current macro lows of $17,600, new figures suggest that the market easily has further to fall.

As noted by Filbfilb, co-founder of trading suite Decentrader, the MVRV-Z score is now in its classic green zone, but not yet at the point which has accompanied price bottoms in the past.

MVRV-Z measures how high or low the Bitcoin spot price is relative to what is referred to as its “fair value.”

It uses market cap and realized price data along with standard deviation to create what has turned out to be one of the most efficient Bitcoin top and bottom prediction tools.

MVRV-Z has caught every macro top and bottom on BTC/USD in its history, and done so with an accuracy of two weeks, data resource LookIntoBitcoin notes.

The metric has only gone below its green zone a handful of times, the last being in March 2020, but more downside pressure would deliver a repeat performance.

“This chart is *the one* for me,” Filbfilb commented about the latest readings.

“We normally bottom when MC

Bitcoin MVRV-Z Score chart. Source: Glassnode

$16,000 bottom zone gains traction

$15,600 would tie in with various existing predictions of where Bitcoin is due to bottom.

Related: Bitcoin will see ‘long bear market’ says trader with BTC price stuck at $19K

In an update to Twitter followers at the weekend, meanwhile, popular account CryptoBullet included that area as one of several important support zones to watch.

$16,000, it confirmed, also marks the average deviation from Bitcoin’s 50-month moving average.

Some very important #BTC levels:

16k - Average Deviation from MA50 (-25%)

14k - 2019 Echo Bubble Top

12.2k - Celsius Liquidation

10.7k - Key Horizontal Level https://t.co/hEcnj8wsak pic.twitter.com/1Xke0F7WSe
— CryptoBullet (@CryptoBullet1) July 2, 2022

Bitcoin's relative strength index, or RSI, is already at its lowest ever, another indication of the oversold nature of a market now below its previous halving cycle's peak of nearly $20,000.

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

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Friday, July 1, 2022

June gloom takes on a new meaning in another 2022 down month

The addresses mainly run by active human traders have notched more than 147,000 addresses for the first time since November.

The market cap of Bitcoin (BTC) dropped another 33% in June, which is now beginning to numb the Twitter community. On the upside, many crypto traders who wanted out did so fairly aggressively from March to May. But, the less optimistic news is that the stagnancy in address activity may need to change for prices to get a running start on recovery.

Unlike April and May, the altcoin pack didn’t struggle tremendously more than Bitcoin. BTC’s 33% drop was pretty middle of the road in terms of corrections. In a vacuum, crypto bulls would prefer seeing altcoins continuing to lag, pushing more traders back toward Bitcoin as a relative “safe haven.”

Nevertheless, June was a tale of two halves. June 1-15 saw a massive 25% further downswing for Bitcoin. Comparatively, June 16-30 was looking up until the very end of the month, which now exhibits an additional 8% slide.

The $20,000 price level has shown to be both psychological support and resistance area. Therefore, a drop below (which could very well occur by the time this article is published) may quickly change traders’ outlook. Panic selling and overly eager buying should occur as soon as the $19,500 to $19,900 range is hit.

Social dominance has returned to Bitcoin and away from altcoins

So far, 2022 has served as a reality check for altcoins whose market caps have ballooned to astronomic levels in the past two years. As mentioned, Bitcoin was nothing special compared to alts in June, but it has held up better than most projects and even a few stablecoins. As a result, the spotlight shines bright on Bitcoin, as evidenced by a healthy community focus.

This phenomenon was reflected in the whole last week of June. Bitcoin was mentioned on Santiment’s social platforms at its highest rate in about four months, while the discussion around other popular assets like Ether (ETH) and Cardano (ADA) continues to diminish.

Trading returns still point to a major undervaluation of Bitcoin and most altcoins

The average 30-day trading returns on the BTC network are still very negative. And, as long they are in the yellow-green or green territory in the below chart, there is less risk in entering a Bitcoin position (or adding on to) than historical results.

Price freefalls tend to reverse if they go into the extreme low (green) territory, and that would be the ideal setup to watch for on Sanbase.

The number of whale addresses is growing rapidly

Another positive note for patient crypto hodlers, regardless of the asset, is that more and more Bitcoin shark and whale addresses are returning to the network. The addresses, mainly run by active human traders, sized 10 to 10,000 BTC, have over 147,000 addresses for the first time since November. Meanwhile, the very top-tier addresses owned primarily by exchanges (10,000 or more) showed over 100 addresses for the first time since December 2020.

And, speaking of supply moving on and off-exchange addresses, the overall trend shows BTC continuing to move away from exchanges after a brief worrisome rise in May. Now, well below 10% of coins sitting on exchanges, there is far less selloff risk (based on historical trends). And, to add to this, the amount of Tether (USDT) moving to exchanges has skyrocketed, implying more buying power at these suppressed prices.

Ethereum seeing far more negativity than any other large-cap asset

Not to be ignored, Ethereum has had a well-documented 76% retracement since its all-time high in November. When looking at the ratio of positive vs. negative commentary being scraped by our social data algorithm, there appears to be a stunning dropoff in positive comments in early June. The 37% price drop between June 9 and 13 was the culprit and the last straw for many traders. As counterintuitive as it may seem, these “last straws” is what the community at Santiment expects to see for the market to stage a comeback.

Cardano is also seeing the equivalent of slowly rolling tumbleweeds around its network. The number of unique addresses interacting on the Cardano network is down to its lowest in about a year. The sentiment is gradually sinking for Cardano as well, which is likely due to a simple absence of discussion more than anything.

Traders heading into the second half with extreme skepticism

It is hard for the trading community to find any excitement in the abysmal price performances that continue to persist month after month in 2022. Yet, price surges happen when the mainstream casts the most doubts. Still, nothing is for certain in a sentiment-driven and often self-perpetuating sector like cryptocurrency. But, the more the crypto community is leaning bearish and proclaiming its crypto winter time, the higher the chance of a recovery underway.

Cointelegraph’s Market Insights Newsletter shares our knowledge on the fundamentals that move the digital asset market. This analysis was prepared by leading analytics provider Santiment, a market intelligence platform that provides on-chain, social media and development information on 2,000+ cryptocurrencies.

Santiment develops hundreds of tools, strategies and indicators to help users better understand cryptocurrency market behavior and identify data-driven investment opportunities.

Disclaimer: The opinions expressed in the post are for general informational purposes only and are not intended to provide specific advice or recommendations for any individual or on any specific security or investment product.

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Bear market? “So what,” says World Chess Champion Garry Kasparov

Cointelegraph sat down with Chess Grandmaster Garry Kasparov at Consensus 2022 to get his thoughts on the crypto and NFT market.

Garry Kasparov, the Russian chess grandmaster and chair of the Human Rights Foundation, doesn’t appear at all bothered by the current crypto bear market. Kasparov, who is also a long-time Bitcoin supporter, told Cointelegraph during Consensus 2022 “so what” in regards to his thoughts on the bear market. Kasparov added that he thinks 99% of all coins are “crap,” yet he expressed that both Bitcoin (BTC) and Ethereum (ETH) are already integrated into traditional financial markets due to recent price fluctuations. He said:

“They'll lose a bit more, but they’ll also gain more, which shows that these are already being integrated into the financial system. This is what the whole history of the stock market is about. It's about people making tons of money and then losing a lot of money. But right now,even without recognizing it, the financial markets have already incorporated Bitcoin and Ether and other related currencies into the system.”

NFT market will rebound

Kasparov also remains confident that the market for nonfungible tokens, or NFTs, will make a comeback as the world becomes more digital. While the market for NFTs has certainly slowed from its peak, a recent industry report from DaapRadar showed NFT sale volumes at $3.7 billion in May. Although volumes were down 20% from April, Kasparov believes that the NFT market will rebound as the world continues to rely on digital transactions.

Kasparov further shared his thoughts on why he launched an NFT collection last December with the NFT marketplace 1Kind. According to Kasparov, he wanted to understand how the process worked in addition to having his life digitally displayed. He said:

“I think the collection is pretty unique. It's probably the first attempt to have my entire life displayed from the early days of my childhood, to the shift of my career from being a professional chess player to a political and human rights activist.”

According to Kasparov, the scoresheet from the game he played and won against Soviet chess grandmaster, Anatoly Karpov, sold for 51 ETH. “The big item in my collection was my score. November 9, 1985 was when I became the World Chess Champion.”

Check out the full interview on our YouTube channel, and don’t forget to subscribe!

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Tether continues to reduce commercial paper in sharp reduction since March

The stablecoin issuer announced its intentions of removing all commercial paper from its reserves last month as it countered rumors, and it remains on schedule so far.

Tether is reducing its commercial paper holdings on pace with plans, the stablecoin company reported Friday. It has reached the target sum of $8.4 billion in commercial paper, as per intentions first disclosed last month, and will continue to reduce its holdings in the immediate future.

On July 31, $5 billion of Tether’s commercial paper holdings will expire, leaving the company with $3.5 billion dollars’ worth in its portfolio. As a result, treasury reserves will make up a larger proportion of the company’s reserves, the report emphasized.

Tether stablecoin USDT had about $20.1 billion in commercial paper backing as of March 31. The company’s quarterly assurance opinion stated that the percentage of commercial paper in its reserves was falling and its reserves were fully backed.

The stablecoin became depegged for a brief time in May amid broad market turbulence. On June 15, two days after cryptocurrency lending platform Celsius announced it was halting withdrawals, Tether issued a statement to refute rumors that 85% of that portfolio was Asian and Chinese commercial paper trading at a significant discount. Tether stated at that time that it had a goal of reducing its commercial paper portfolio to zero. The USDT market cap fell to an eight-month low, at below $70 billion, a few days later.

1/
I have been open about the attempts from some hedge funds that were trying to cause further panic on the market after TERRA/LUNA collapse.
It really seemed from the beginning a coordinated attack, with a new wave of FUD, troll armies, clowns etc. https://t.co/hhcsgHV1Ow
— Paolo Ardoino (@paoloardoino) June 27, 2022

Those are not all of Tether’s stability woes, however. Tether chief technology officer Paolo Ardoino said in a long Twitter thread Monday that the stablecoin was “under attack” from hedge funds. He went on to say the same hedge funds “believed and helped all the FUD spread by the truthers in the past months [and] years.”

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Argentina carries out crypto wallet seizures linked to tax delinquents

Argentinian tax dodgers are seeing their cryptocurrency wallets seized by the local tax authority.

Argentina’s tax authority has seized more than 1,000 cryptocurrency wallets linked to delinquent taxpayers in the country.

According to a report from local media outlet iProUP, courts across Argentina authorized the seizure of 1,269 cryptocurrency wallets belonging to citizens with outstanding debt to Argentina’s Federal Administration of Public Income (AFIP).

AFIP signaled its intent to go after cryptocurrency wallets belonging to tax delinquents in May, ordering cryptocurrency exchanges and payment service providers to deliver monthly reports on users of their platforms.

Crypto services were requested to verify the identity of clients and keep records of user accounts as well as detailed financial statements including income, expenses, and monthly balances.

With these firms supplying this information to the tax authority, AFIP has been able to enforce embargoes on the holdings in wallets linked to errant taxpayers over the past few months.

AFIP’s current standard operating procedure typically targets bank accounts and other liquid assets to recoup debts as the first port of call. If a taxpayer cannot settle their debt or is unbanked, the AFIP will look to seize other assets belonging to the individual.

Argentina’s crypto plans have been put on hold after its central bank stepped in to stop recent offerings from two of the largest financial institutions in the country. https://t.co/3VXpoZ0pSk
— Cointelegraph (@Cointelegraph) May 6, 2022

The Covid-19 pandemic gave some respite to Argentinians who were in the crosshairs of the AFIP, as a 19-month moratorium on asset seizures was enforced to alleviate financial pressures on citizens.

The move comes as Argentinians continue to adopt cryptocurrency as a means to combat surging inflation, a devaluing peso and general economic malaise. A recent Reuters report citing data from Americas Market Intelligence noted that Argentina has seen an increase in cryptocurrency adoption eclipsing other South American countries, driven by citizens looking for a safe-haven against rising inflation.

While Argentina’s tax authority hones in on the digital assets of non-compliant tax payers, its government and central bank have been at odds over the treatment of cryptocurrencies.

President Alberto Fernandez made headlines by highlighting the potential for cryptocurrencies to help combat inflation in August 2021, just as Argentina’s central bank president Miguel Pesce hinted at forthcoming regulation of the industry and its intersection with the conventional financial system.

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