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MicroStrategy’s Michael Saylor Says Spot ETF Approvals Have No Bearing On Bitcoin Strategy

MicroStrategy co-founder and former CEO Michael Saylor has stated that potential Spot Bitcoin ETF approvals will not influence the company’s “Bitcoin Strategy.”

MicroStrategy Has A Unique Bitcoin Offering

During a discussion with Bloomberg on August 2, Saylor stated that even if the SEC approves the spot Bitcoin ETF applications, it would not affect his company’s offerings. According to him, MicroStrategy’s Bitcoin offering offers a unique proposition that the spot Bitcoin ETFs cannot emulate. 

Saylor echoed similar sentiments during the earnings call on August 1 when he stated that MicroStrategy’s unique “Bitcoin operating strategy” will make it stand out even when spot Bitcoin ETFs arrive. 

The ex-CEO explained that, “We can tap into leverage because we’re an operating company, which an ETF couldn’t do so we view it as being beneficial to the entire ecosystem.”

However, he believes these spot ETFs are good for the crypto industry as they will welcome institutional investors who boast more than enough liquidity into the space.

Differentiating his company’s offering from spot ETFs, he stated:

We are a unique instrument, we are the sportscar whereas the spot ETF is going to be the supertanker. Spot ETFs will serve another set of customers in a synergistic fashion to grow the entire asset class.

MicroStrategy had filed an application to the SEC to sell up to $750 million in Class A common stock. Saylor also confirmed that his company would use the potential proceeds of this stock sale to “acquire Bitcoin.” 

Bitcoin (BTC) price chart from Tradingview.com (MicroStrategy)

MicroStrategy’s Chief Financial Officer, Andrew Kang, had also confirmed that the proceeds from the proposed sale will be used for “the purchase of Bitcoin as well as the repurchase or repayment of outstanding debt.”

Saylor’s Faith In Bitcoin Paying Off

Saylor’s MicroStrategy, which happens to be one of the largest holders of Bitcoin, started buying the cryptocurrency in 2020 as a hedge against inflation. The company’s purchases largely resulted from Saylor’s faith in the token as he continued to advocate for it despite the recent market conditions in the crypto market.

Saylor stepped down as the CEO a year ago just to focus on the company’s Bitcoin purchasing strategy. This strategy seems to be paying off as it provides an edge for the company over its competitors, with the MSTR stocks rising tremendously since MicroStrategy’s adoption of Bitcoin. 

As revealed by Saylor in a tweet, MicroStrategy’s stocks have risen by 254% since 2020 when it started buying Bitcoin, with this performance putting the company above some key assets and big tech stocks in terms of performance. 

Saylor is not relenting as he confirmed that the goal is to “accumulate as much Bitcoin as we can” when quizzed about how much more Bitcoin the company intends to add to their existing holdings of 152,800 BTC.

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DOJ Action Against Binance: A Hidden Blessing For Bitcoin And Crypto Markets?

The looming prospect of a U.S. Department of Justice (DOJ) action against Binance, the largest crypto exchange, may hold a silver lining for Bitcoin and the broader markets. Even if this sounds crazy at first, there are good arguments for it.

Rumors have been swirling for weeks about a potential DOJ action against Binance, a threat that has cast a long shadow over the markets, leading to increased volatility and uncertainty among investors. Yesterday’s report by Semafor has rekindled the rumor, but also gave it a new perspective, hinting that these developments may be a blessing in disguise for Bitcoin and crypto markets.

According to the Semafor report, the DOJ is contemplating fraud charges against Binance but is also weighing the potential repercussions to consumers and the crypto market at large. Citing sources familiar with the matter, the report suggests that federal prosecutors are concerned that an indictment could trigger a “bank run” similar to the calamitous fate that befell the now-bankrupt FTX platform.

This fear arises from the concern that a potential indictment could lead to a rapid withdrawal of funds, causing consumers to lose their money and potentially trigger a wider panic in the Bitcoin and crypto markets. To circumvent such a catastrophe, the prosecutors are exploring other options like levying fines or establishing deferred or non-prosecution agreements.

What Does This Mean For Bitcoin And Crypto Markets?

Interestingly, some crypto market analysts and commentators view this ongoing saga as a potential boon. Macro analyst Alex Kruger, in a recent Twitter post, speculated, “Too Big to Jail? Call me crazy but this seems bullish if true.” This statement captures the sentiment that if Binance is considered too important to be hit with crippling charges, the DOJ could explore less harmful alternatives.

A similar view is held by renowned analyst Pentoshi, who said, “It doesn’t mean they won’t drop the hammer either. I think calling it “bullish” is a bit extreme since they are considering dropping the hammer. And if not billions in fines and CZ likely gone. But I def don’t think it’d as bearish as headlines first said at all. Bullish would be no DoJ involvement.”

The prospect of the DOJ acting against Binance could also provide a much-needed clarity to the market. If Binance were indeed vulnerable to a bank run, it would quickly become apparent whether the exchange holds sufficient reserves.

However, so far, Binance has impressively weathered previous “stress tests”, as highlighted by CEO “CZ” in a Twitter post in mid-December last year after the Mazars audit rumors, stating, “We saw some withdrawals today (net $1.14b ish). We have seen this before. Some days we have net withdrawals; some days we have net deposits. Business as usual for us.”

This sentiment is echoed by CryptoQuant CEO Ki Young-Ju who shared data supporting the strength of Binance’s user balances despite constant rumors of insolvency. He stated:

I’ve heard about the ‘bank run/insolvency risk on Binance’ a hundred times for years, but their user balances always tell a different story.

Binance reserves

At press time, the BNB price stood at $239.5.

Binance BNB price

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Bitcoin Price Stuck In Range But Here’s Why Bulls Are Safe?

Bitcoin price is moving lower below $29,500. BTC could start a fresh increase if there is a close above the $30,000 resistance zone.

  • Bitcoin is slowly moving lower below the $29,500 pivot level.
  • The price is trading below $29,300 and the 100 hourly Simple moving average.
  • There is a key bullish trend line forming with support near $29,100 on the hourly chart of the BTC/USD pair (data feed from Kraken).
  • The pair could attempt a fresh increase toward the $29,750 resistance zone.

Bitcoin Price Starts Fresh Decline

Bitcoin price struggled to clear the $30,000 resistance zone. BTC started a fresh decline below the $29,750 and $29,500 support levels.

There was a close below $29,200 and the 100 hourly Simple moving average. The price even spiked below the $29,000 level. A low is formed near $28,932 and the price is now consolidating losses. The price is now trading near the 23.6% Fib retracement level of the downward move from the $30,000 swing high to the $28,932 low.

Bitcoin is now trading below $29,300 and the 100 hourly Simple moving average. There is also a key bullish trend line forming with support near $29,100 on the hourly chart of the BTC/USD pair.

Immediate resistance is near the $29,275 zone and the 100 hourly Simple moving average. The first major resistance is still near the $29,450 level or the 50% Fib retracement level of the downward move from the $30,000 swing high to the $28,932 low.

Bitcoin Price

Source: BTCUSD on TradingView.com

The next major resistance is near the $29,750 level, above which the price might rise toward the $30,000 resistance zone. A close above the $30,000 resistance zone could start a decent increase. In the stated case, the price may even surpass the $30,400 resistance.

More Losses In BTC?

If Bitcoin fails to clear the $29,450 resistance, it could start a fresh decline. Immediate support on the downside is near the $29,100 level and the trend line.

The next major support is near the $28,750 level, below which the price could accelerate lower. The next support is near the $28,40 level. Any more losses might call for a move toward the $28,000 level in the near term.

Technical indicators:

Hourly MACD – The MACD is now gaining pace in the bearish zone.

Hourly RSI (Relative Strength Index) – The RSI for BTC/USD is now below the 50 level.

Major Support Levels – $29,100, followed by $28,750.

Major Resistance Levels – $29,450, $29,750, and $30,000.

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Why Isn’t Bitcoin Outperforming Most Risk Assets? A Market Conundrum

Mike McGlone, Senior Commodity Strategist at Bloomberg Intelligence, has recently suggested that Bitcoin’s (BTC) underperformance compared to the stock market may be a warning sign for investors. 

BTC’s Failure To Outshine In A Bull Market

McGlone notes that Bitcoin has declined compared to the Nasdaq 100 stock index since its 2021 peak and April bounce. This waning performance may presage rising headwinds not only for Bitcoin but also for the broader crypto market. McGlone stated:

If Bitcoin truly is the “fastest-horse-in-the-race,” as some consider it to be, then it should logically be outperforming in an everything bull market. However, that is not the case. 

Notably, McGlone points to the most aggressive liquidity pull from central banks in history, which may be a significant factor in Bitcoin’s underperformance.

The Federal Reserve (Fed) is still sighting in 3Q, despite the producer price index finished-goods gauge at minus 3.1% and dropping from 2022’s 18.3% peak at its fastest pace since 1948, which may be part of what underperforming Bitcoin is “sniffing out,” according to McGlone. 

On a one-year basis to August 1st, Bitcoin is up just over 20%, similar to the Nasdaq, yet the crypto’s volatility is about two times greater.

McGlone believes Bitcoin’s underperformance may be a warning sign for the broader market. The fact that Bitcoin is not outperforming as it should be in an everything-bull market could indicate that more significant market issues are at play, particularly in the face of aggressive liquidity pulls from central banks.

Bitcoin And Ethereum Volatility At Historic Lows

In a statement shared with NewsBTC Luuk Strijers, the Chief Commercial Officer at Deribit, a prominent cryptocurrency derivatives exchange, has recently stated that the Deribit Volatility Index (DVOL) for both Bitcoin and Ethereum is currently trading at an all-time low. 

This is a significant development, especially since the DVOL for ETH is trading below the DVOL for BTC, which is a rare occurrence and may have been caused by the activity of a single large trader, commonly known as a whale.

Despite the current low levels of volatility, Luuk Strijers highlights that the market is anticipating a considerable upswing in volatility shortly. This expectation is driven by several factors, including the upcoming ruling on the Blackrock spot Exchange-Traded Fund (ETF) and the approaching Bitcoin Halving.

Strijers notes that Deribit has been observing signs of these expectations in the market, such as the significant steepness of the term structure, with June ’24 trades at approximately 50, and the enduring call skew. 

These indicators suggest that the market is anticipating increased volatility and potential price movements shortly, despite the current low levels of volatility.

The Blackrock spot ETF ruling is anticipated to impact the cryptocurrency market significantly. If approved, the ETF will allow investors to gain exposure to Bitcoin without directly holding the cryptocurrency, potentially increasing demand and driving up prices. 

On the other hand, if the ruling is not approved, it may lead to a temporary drop in prices and increased volatility. The approaching Bitcoin Halvening, which is expected to occur in 2024, is another factor contributing to the anticipation of increased volatility, according to Strijers. 

The Halvening is a significant event in the Bitcoin network that occurs roughly every four years, where the block reward for Bitcoin miners is cut in half. This tends to reduce the supply of Bitcoin on the market, potentially driving up prices and increasing volatility.

Despite the current low levels of volatility, Strijers suggests that investors and traders should remain vigilant and prepare for potential price movements and increased volatility in the cryptocurrency market.

Bitcoin

At the time of writing, BTC is trading at $29,100, representing a slight increase of 0.8% in the past 24 hours.

Featured image from iStock, chart from TradingView.com

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This Long-Term Bitcoin Price Average Is Setting ATHs

Bitcoin price is nowhere near setting new all-time highs, but an important long-term price average is doing so, day after day, month after month.

What is this moving average being referenced, and what does it setting new highs potentially mean?

Bitcoin moving average

Meet The Moving Train: The 50-Month Moving Average

As Bitcoin and the rest of the crypto market grind painfully sideways, a key measure using a moving average of BTCUSD price action is rising steadily, now at its highest point ever historically.

The moving average in reference is the 50-month moving average (50MA). To calculate the span, simply take the last 50 months worth of BTCUSD closing prices, add them together, then divide them by the 50 (the number of months worth of data in the period).

Traders use moving averages for a variety of reasons. This includes as trend-following tool, as trend lines, and for timing entries and exits. Such signals trigger when price passes above or below the span, or if two moving averages crossover one another in a two-moving average system. These are called a golden cross or death cross.

What The 50MA Hitting ATHs Means For Bitcoin

The 50-month moving average making new all-time highs, general means the primary trend is still up. The chart above shows the long-term uptrend clearly without the noise of candlesticks or price action. With the candlesticks turned back on, Bitcoin is above the span — another bullish sign.

BTCUSD closed above the 50MA back in March 2023 and has since held above it for several months. Notably, Bitcoin lost this level for the first time back in June 2022. Meanwhile, the top cryptocurrency bottomed precisely at the 50MA in 2018 and again in 2020.

The 50MA is currently at $26,353 and could act as support of retested. If lost, it could be a sign the longer-term trend is turning bearish. The 200-week moving average, another similar high timeframe price indicator that is used widely in technical analysis, is also at a similar level and trending upwards.

This chart originally appeared in Issue #14 of CoinChartist (VIP). Subscribe for free.

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KuCoin Shuts Down Bitcoin And Litecoin Mining Pools Amid Market Turmoil

KuCoin, one of the world’s largest cryptocurrency exchanges, has temporarily halted its KuCoin Pool service, effective August 15, 2023, until further notice. The move is part of KuCoin’s business strategy and aims to ensure the security and integrity of users’ assets.

KuCoin Urges Users To Backup Mining Records

During the suspension, users will retain complete access and control over their assets, and all other KuCoin offerings will remain operational as usual. 

However, users who are involved in cryptocurrency mining are advised to transition their Bitcoin (BTC) and Litecoin (LTC) miners to alternative mining pools before the deadline to ensure uninterrupted earnings.

KuCoin has also advised users to back up and preserve their mining records and associated data before August 27, 2023, as failure to migrate to alternative mining pools within the specified timeline could affect their mining revenue. 

Nevertheless, KuCoin Pool will not be held accountable for any potential earnings lapses resulting from users’ failure to migrate to alternative pools.

The temporary suspension of KuCoin’s mining pools may cause some disruption in the crypto market, as mining plays an important role in the ecosystem. Despite this, it is worth noting that KuCoin is just one exchange, and its suspension may not have a significant impact on the overall market.

KuCoin has assured its users that the suspension is temporary, and the company is working on a new strategy for its mining pool service. The company has also emphasized that the security and integrity of users’ assets remain its top priority, and it will take all necessary steps to ensure the safety of users’ funds.

Litecoin Halving Triggers Price Drop

Litecoin, one of the oldest and most popular cryptocurrencies, has completed its third block reward halving at a block height of 2,520,000, as reported by Colin Wu. The halving event has cut the mining reward in half, from 12.5 LTC to 6.25 LTC, as part of the cryptocurrency’s deflationary monetary policy.

The halving is a regular event that occurs approximately every four years and is designed to control the rate at which new coins are minted. By reducing the reward for mining new blocks, the halving helps to prevent inflation and maintain the scarcity of the cryptocurrency.

The current price of Litecoin is $89.12, which represents a 3.8% decline over the past 24 hours and a 10% decline over the past six months. The price drop may be related to market uncertainty surrounding the halving event, as well as broader market conditions.

KuCoin

Despite the short-term price decline, many analysts remain optimistic about the long-term prospects for Litecoin and the cryptocurrency market as a whole. The halving event is seen as a positive development that highlights the ongoing maturation of the industry and the growing recognition of cryptocurrencies as a legitimate asset class.

Litecoin has a strong community and a dedicated development team, which continue to work on improving the technology and expanding the use cases for the cryptocurrency.

The halving event is expected to further strengthen Litecoin’s position as a leading cryptocurrency and contribute to its long-term growth and success.

Overall, the completion of Litecoin’s third block reward halving is a significant milestone for the cryptocurrency and the broader industry.

While short-term price volatility is to be expected, the long-term outlook for Litecoin and cryptocurrencies, in general, remains positive, with many experts predicting continued growth and adoption in the years to come.

Featured image from Unsplash, chart from TradingView.com

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Buying Pressure Incoming? MicroStrategy Files Notice With SEC To Sell $750 Million In Stocks

In a recent development, MicroStrategy, a US-based software firm, has announced intentions to raise about $750 million through stock sales. According to the platform, which is currently one of the biggest corporate holders of Bitcoin, proceeds realized from the sale will be used to purchase more Bitcoin.

More BTC For MicroStrategy?

In a filing with the United States Securities and Exchange Commission on August 1, MicroStrategy disclosed that it has entered into a sales contract with three companies, namely Canaccord Genuity, Cowen and Company, and Berenberg Capital, with respect to the sale of MicroStrategy’s class A common stocks. 

Since MicroStrategy is a publicly traded company, the sales are expected to be available to the general public and to take place on the stock market. The firm is guaranteed easy access to capital since its stock will be offered to every interested investor. 

According to MicroStrategy, the proceeds raised from the proposed sale would be applied to different corporate objectives, which according to MicroStrategy’s Chief Financial Officer Andrew Kang, shall include “.. the purchase of Bitcoin as well as the repurchase or repayment of outstanding debt.”

Bitcoin (BTC) price chart from Tradingview.com (MicroStrategy)

Bitcoin Price Reaction To The News

MicroStrategy is a firm founded by Micheal Saylor and one of the largest holders of Bitcoin. The firm presently holds 152,800 Bitcoin valued at $4.5 billion at the current market price. The firm purchased an additional 12,333 Bitcoin during the second quarter of the year and another 467 in July.

It is currently one of the most prominent champions of Bitcoin with a bold investment strategy to boost its Bitcoin holdings regardless of whether or not the market is trending. 

Speaking to Investors following the announcement, Chairman and founder of the firm Micheal Saylor noted that their objective “is to find ways to generate incremental Bitcoin for our shareholders and do that with either cash flow from the business or do it through intelligent accretive financings of equity or debt or other intelligent operations.” 

In reaction to the announcement, the price of Bitcoin rose to about 2%, increasing from $29,200 to $29,771 at the time of writing. Shareholders in the company also benefited following the ongoing Bitcoin rally, with shares increasing to nearly 200% since the beginning of the year.

According to data from Google Finance, MSTR shares have risen from $145.02 per share on January 3 to $434.98 at the time of publication. 

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Bitcoin Funding Rates Most Positive Since Feb, Long Squeeze Soon?

Data shows that Bitcoin funding rates have risen to the greenest levels since February 2023, something that could increase the risk of a long squeeze.

Bitcoin Funding Rates Are At Highest Levels Since February

As pointed out by an analyst in a CryptoQuant post, longs have accumulated in the market recently. The “funding rates” is an indicator that keeps track of the periodic fee that traders on the futures market are exchanging between each other right now.

Related Reading: Bitcoin Addresses In Loss Soar To One-Month High Amid Mixed Market Indicators

When the value of this metric is positive, it means that the long contract holders are currently paying a premium to the short holders so that they can hold onto their positions. This kind of trend implies that the majority of the market shares a bullish sentiment.

On the other hand, the indicator being below the zero mark suggests the payments are flowing the opposite way: shorts are paying the longs. Naturally, here the bearish mentality is the dominant force.

Now, here is a chart that shows the trend in the Bitcoin funding rates since the start of the year:

Bitcoin Funding Rates

As displayed in the above graph, the Bitcoin funding rates have surged during the past day as the cryptocurrency’s price has recovered back above the $29,000 level.

The rise implies that new long positions have appeared on the market, and the gap between the shorts and longs has widened. Following this increase, the funding rates have hit highly positive levels not witnessed since back in February of this year.

When the metric hit its high values back then, the cryptocurrency’s price had formed a local top and had started on a steep decline. The reason that the market reversed its trend even though the futures market traders were bullish was perhaps due to a long squeeze.

A “squeeze” is an event where a sharp swing in the price sets off a high volume of liquidations at once. Such liquidations only end up providing further fuel for the price move, thus prolonging it and causing even more liquidations. As such, liquidations can be imagined to cascade during a squeeze.

Whenever the futures market becomes overheated, the chances of this mass liquidation event taking place can go up. Generally, a squeeze is more probable to effect the side that has the larger amount of contracts. Naturally, this side would be reflected in the funding rates.

As the indicator’s value is highly positive right now, a long squeeze could have reasonable chance of happening. If one does take place in the near future, then the Bitcoin market could go down in a similar way as it did back in February.

BTC Price

At the time of writing, Bitcoin is trading around $29,500, up 1% in the last week.

Bitcoin Price Chart

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Why Is Bitcoin Price Up Today?

Bitcoin (BTC) saw a significant resurgence over the past few hours after hitting the lowest price since June 21 at $28,641 yesterday. At press time, BTC has experienced a 3.7% hike from its low. In fact, BTC even brushed past the $30,000 mark, indicating a substantial shift in market sentiment. So, the question begs.

Why Is Bitcoin Up Today?

“The entire short build-up of the past couple days just got wiped,” tweeted analyst Byzantine General. Data from Coinglass backs this claim and shows that BTC short positions amounting to $27.8 million were liquidated yesterday, followed by an additional $13.45 million today. This accounts for the most significant short liquidation since July 14, undeniably playing a significant role in the current price movement.

BTC total liquidations

But perhaps the most influential reason for the sudden shift in market sentiment was MicroStrategy’s recent announcement. The company stated that it will conduct stock sales worth $750 million. After the announcement, the Bitcoin community was abuzz with speculation that Michael Saylor might make additional, gigantic BTC purchases.

“As with prior programs, we may use the proceeds for general corporate purposes, which include the purchase of Bitcoin as well as the repurchase or repayment of our outstanding debt,” said Andrew Kang, MicroStrategy’s CFO during a recent earnings call. While it remains unclear if the entire proceeds will be funneled into Bitcoin, the likelihood of a substantial chunk is certain. Directly after this announcement, Bitcoin surged by 1.6% within one hour.

On-chain analysis firm Santiment tweeted: “Bitcoin has breached back above $30k once again, with assistance from the many traders who capitulated during the past week of price declines. Volume is rising to kick off August, & this psychological resistance cross may shift sentiment positive.”

The chart shared by the firm shows that yesterday trading volume picked up steam again, rising to the highest level since six weeks. Also, the lowest amount of profit / loss taking in 7 months indicates a capitulation event.

Bitcoin sentiment shift

Analyst @52Skew added that the Bitcoin on the Binance spot market experienced a “real spot demand” which he wanted to see for a strong price reaction. “Note the limit bid wall that pushed up price; typical with PvP conditions to force limit chasing. Marked notable liquidity on the orderbook,” the analyst stated.

What’s Next?

However, he also cautioned that the 4-hour chart is so far looking like a classic Swing Failure Pattern (SFP) into a higher time-frame support / resistance. The Swing Failure Pattern, or SFP, is a type of reversal pattern where traders target stop-losses above a key swing low or below a key swing high to manipulate the price direction by generating enough liquidity.

Bitcoin SFP pattern

Nevertheless, the market appears to be brimming with anticipation. As per @DaanCrypto: “If price starts ranging here I’d look for another sweep of the lows and consolidation there. $28.5 & 29.5K are the areas of interest.” Meanwhile, a break above the resistance zone at the monthly and weekly open between $29,236 and $29,300 would validate a bullish scenario where the price targets $30,000.

Bitcoin resistance chop

At press time, BTC wasn’t able to reclaim the red resistance zone and was trading at $29,606.

Bitcoin price