Bitcoin Mining In China To Usher Historic Moment, Will BTC Be Affected?

Sino Global Capital has been posting reports on Bitcoin, China, and the changes that are taking place within the Asian Giant. Today, most of the BTC miners in the Chinese province of Sichuan will turn off their machines. This has created another variable in the already uncertain crypto market.

At 0:00 on June 20, the mining farms in this province will be powered off. This territory host one of the largest Bitcoin mining operations in the world, 8BTCnews claimed. Thus, some miners expect a dark age for this sector to begin.

8BTCnews claims that the effect of this crackdown has started to ripple across the BTC mining sector. The top ten Bitcoin mining pools by hashrate, AntPool, Poolin, Binance, Huobi Pool, and others, record important losses in their computing power. These losses go from 16%, 21%, 25%, and even as high as 31.19% in the last day.

Overall, the Bitcoin network has an average computing power of 129.52 EH/s. Almost a 30% dropped from its all-time high. This has been reflected on BTC’s Mempool and its transaction cost, at the time of writing, sits at some of its lowest levels in 2021 with 19 sat/vB ($0.96) for a high priority transaction. The minimum fee is the elusive 1 sat/vB.

Bitcoin BTC BTCUSD
Source: Mempool Space

Bitcoin Mining Outlook, Complete Darkness?

Sino Global Capital presents an objective view of a situation that could be interpreted as only bearish for Bitcoin. The investment firm claims that although part of the BTC mining operations is shutting down, some will remain.

Moreover, a portion of the miners with large side operations was already leaving the country, the medium and small-sized seem more likely to stay. The miners on the move expected a crackdown since March 2021. Thus, they made the necessary preparations.

As more crypto mining bans came in May from Beijing, Qinghai, Inner Mongolia & Sichuan, with the stated goal of achieving financial stability, Chinese miners accelerated their process of migration to other countries.

Sino Global Capital believes China is tackling sectors that jeopardize national economic stability, Bitcoin mining, and crypto trading with leverage. The country could also be targeting activities that enable corruption at a state level.

Miners have adopted 3 measures: they began selling their equipment, stay and see how regulations play out, migrate. The investment firm expects the distribution of the miners on the move to vary.

The overseas migration destinations of Chinese miners are diverse, evenly distributed among North America, Central Asia, Russia, Northern Europe and North Africa. This is actually positive and greatly increases the decentralisation of the bitcoin network.

Nic Carter, a partner at Castle Island Ventures, agrees that the migration of BTC’s hashrate out of China will bring more decentralization to the network. Additionally, Carter believes BTC mining activities could be moved to places where they will operate with 100% renewable energy.

At the time of writing, BTC trades at $35,562 with sideways movement in the daily chart. In the 7-day and 30-day charts, BTC has 4.4% losses, respectively.

Bitcoin BTC BTCUSD
BTC moving sideways in the daily chart. Source: BTCUSD Tradingview

The Missing Ingredient From A Full On Bitcoin Reversal

Bitcoin price is back around $35,000 and has failed to retake $40,000 despite several low timeframe reversal signals building.

When looking back at past breakdowns following significant rallies, there could be a missing ingredient needed for a full on reversal, and it could have to do with the Bollinger Bands.

All About The Bollinger Bands And How To Use Them Effectively

The Bollinger Bands are named after the tool’s creator, John Bollinger. The tool has a variety of use cases as it applies to technical analysis, but is most notably used for measuring volatility. When the two outer bands – standard deviations of a simple moving average – begin to contract and tighten, it signals a massive release of energy is coming soon enough.

Related Reading | Could The Golden Ratio Provide Clues To The Bitcoin Bottom?

When the outer bands do expand, they also act as support or resistance, and the middle-SMA does the same. The middle-SMA can also be used reliably as a buy or sell signal when price action closes through it.

But it is that support and resistance that the outer bands often supply that might be crucial to forming a proper Bitcoin bottom and one that holds for new highs.

bitcoin bollinger bands

Bitcoin price action might require a touch of the lower BB as it has during past bear phases | Source: BTCUSD on TradingView.com

Why Bitcoin Price Action Might Need The Momentum Of The Lower Band

In the chart above, a touch of the upper band after “riding the bands” to new local highs has always resulted in a short-term top. Crossing through the middle-SMA from there switches from bull to bear market, and the downtrend doesn’t end until the bottom Bollinger Band it tapped.

The 2017 bull market peak resulted in a sharp selloff, but then price action hung around the middle band for nearly a year before the deep plunge in late November 2018. From there, Bitcoin “rode the bands” again but this time on the way down.

Related Reading | How Extreme Fear In Crypto Correlates With Bitcoin Bottoms

When the middle-SMA was finally reclaimed, the top cryptocurrency shot right back to $14,000 and hit the upper band once again. Losing the middle-SMA once again started a bearish phase. A bull run likely would have blossomed sooner but COVID had other plans, and after Black Thursday instead the buy signal stuck.

From there, Bitcoin rocketed to above $60,000 where the current all-time high now set. Bitcoin price is once again simply hanging around and might need to touch the lower Bollinger Band to gain enough momentum to push through resistance and reclaim highs.

As history has shown, however, getting back above that middle-SMA means a lot, and is the first step toward bulls restarting the rally again.

Featured image from iStockPhoto, Charts from TradingView.com

Bitcoin Mining Council: We Need To Tackle Negative Media Narratives

The Bitcoin Mining Council has publicized its aim to tackle negative media narratives.

In its inaugural meeting which was hosted on Twitter Spaces, the council discussed bad press that has been surrounding Bitcoin and its mining in the past weeks. The China crackdown has led to the shut down of a number of mining farms. Mining has been restricted in regions like Inner Mongolia and miners are having to look for new places to set up operations in the meantime.

Concerns over energy consumption and pollution from mining activities have been rocking the space for a while. People have called for there to be more options for green and efficient Bitcoin mining. Movement from fossil fuel energy to more sustainable energy like hydropower for mining activities have been strongly encouraged.

Related Reading | MicroStrategy Sells $500 Million Notes To Buy Bitcoin

In light of these issues, Michael Saylor, CEO of MicroStrategy, formed the council with other prominent members in the space.

Bitcoin Mining Council Mandate

Saylor had created the council in response to ongoing debates about Tesla accepting Bitcoin payments. The debates were mostly about if Tesla had examined the energy expenditures involved with Bitcoin mining before making such a move.

With prominent founders such as Galaxy, Riot, MicroStrategy, and a host of others, a lot of attention was on the first BMC meeting to see what the outcome would be.

The council which was announced about a month ago held its first official meeting on Twitter yesterday. The meeting was open to the public and anyone could join in. With over 7,000 listeners in attendance, the council went on to outline the council’s objectives.

Bitcoin price chart

Bitcoin price chart | Source: BTCUSD on TradingView.com

The Bitcoin Mining Council (BMC) stated that its purpose is not to be a regulating body of any kind. They are not here to tell anybody what to do. It is to be a forum that is open to all miners. There is no fee required to join. The members just have to agree to be transparent about their energy mix and hash rate sizes for research and educational purposes.

Its mandate is to promote transparency, share best practices, and educate the public on the benefits of Bitcoin and Bitcoin mining, according to the website.

Curbing Negative Media Narratives

Talking about the negative press that has been surrounding mining, the members focused on getting ahead of the media.

There were also issues regarding whether public companies involvement would be good or bad for mining. Not wanting smaller operations to get swallowed up by bigger ones and discouraging people from getting into it.

CEO Michael Saylor was less concerned about board members or activists pressures. Highlighting that he was more worried about negative media narratives around Bitcoin mining might influence political decisions. This, he believes, would create real barriers to entry in some jurisdictions

Related Reading | Billionaire Tim Draper: Bitcoin Will Reach $250,000 By The End Of 2022

Saylor is quoted saying, “You could be a maximalist and say I’m against organization as a matter of philosophy, but if you get sued by a multibillionaire that wants to sue an individual Bitcoin developer and you get buried in $10 million in legal fees, you’ll be wishing that there was an organized legal defense fund for you. Basically, we can’t expect to succeed if we’re disorganized.”

This raised major points as to why the council is needed. It could act a form of protection for smaller miners. Having basically a coalition behind them should any issues arise that they are too small to handle or ill-prepared for.

According to Saylor, the BMC is not here to fix Bitcoin. It’s simply here to protect it from the people who misunderstand it. The BMC wants to help keep the negative narratives from influencing political decisions against Bitcoin.

Featured image from Bitcoin Mining Council, chart from TradingView.com

Why China’s Crackdown On Bitcoin May Be Just Beginning

Bitcoin mining activities might be coming to an end as the industry is used to knowing them. The Asian giant has decided to step up its regulations on this sector; many miners have decided to migrate to friendlier countries.

Investment firm Sino Global Capital stated via Twitter that China could be increasing its interventions in its markets. Thus, they have taken stricter control measures to “protect investors”. As a consequence, the Bitcoin and crypto industry in China is “showing sings of cooling down”.

China seems to have two targets in the crypto industry BTC mining and leverage trading. Sino Global Capital sees Chinese regulators making these items a priority in the short term. The firm’s report claims:

To prevent scammers from making a comeback and intentionally manipulating the market, there is still a high probability that there will be more supervision rules implemented one by one.

Usually regarded as FUD (Fear, uncertainty and doubt), this time China’s measure against Bitcoin seem to be materializing. The industry’s balance, at least in the mining sector, could shift. This sector could completely migrate west.

In the U.S., cities such as Miami and Texas could welcome the Bitcoin mining operations. Francis Suarez, Miami’s Mayor, seems to be in negotiation with some miners. The city has nuclear power as part of its electricity grid and could offer attractive rates. Suárez said:

Bitcoin miners want to get to a certain kilowatt price per hour, and we’re working with them on that.

China Targets Bitcoin Trades With Leverage

Bitcoin-based derivatives traders that use leverage could see the worst take. Sino Global Capital records report from people that have “received calls from the police”. The local authorities apparently are inquiring about the citizens crypto related activities.

Exchange platforms might take measures to avoid the authority’s scrutiny. Huobi, one of China’s main exchange, will reduce its leverage offer from 125x to 5x, according to Sino Global Capital. For its newest customers, the measures is even harder, they won’t be able to use any leverage.

As predictable, China as target different sectors and markets, including TradFi. The report indicates that two major securities exchanges, FUTU and Tiger, won’t continue to provide Bitcoin related data.

Both confirmed that their latest App releases have suspended CME BTC market information and trading functions. FUTU’s customer service said that in response to regulatory requirements, the provision of market information and transactions have been suspended.

The investment firm believes the Chinese government finds “speculative” Bitcoin trading as a threat to the nation’s economic and financial stability. Thus, they have adopted these measures.  Sino Capital concludes that there is growing trend of introducing more crypto regulations.

Global crypto policies are tightening: The Basel Committee on Banking Supervision has demanded that cryptocurrencies carry the toughest bank capital rules of any asset, according to Financial Times.

At the time of writing, BTC trades at $36,463 and trending downwards in the daily chart. The first cryptocurrency by market cap seems to be reacting to a dropped in the stock market. BTC must hold the line at current levels, or it risk going further down in the short term.

Bitcoin BTC BTCUSD
BTC on a downtrend in the daily chart. Source: BTCUSD Tradingview

TA: Bitcoin Trims Gains, What Could Trigger Fresh Drop To $35K

Bitcoin price started a fresh decline after it failed to stay above $40,000 against the US Dollar. BTC is moving lower and it could even decline towards $35,000 in the near term.

  • Bitcoin started a fresh decline from well above the $40,000 pivot level.
  • The price is now trading well below $39,000 and the 100 hourly simple moving average.
  • There is a major bearish trend line forming with resistance near $38,500 on the hourly chart of the BTC/USD pair (data feed from Kraken).
  • The pair is likely to continue lower if it fails to stay above the $37,200 support zone.

Bitcoin Price Extends Decline

Bitcoin failed to stay above the key $40,000 support zone and started a fresh decline. BTC broke the $39,500 and $38,500 support levels to move into a short-term bearish zone.

The price traded below the 50% Fib retracement level of the upward move from the $34,822 swing low to $41,380 swing high. It is now trading well below $39,000 and the 100 hourly simple moving average. There is also a major bearish trend line forming with resistance near $38,500 on the hourly chart of the BTC/USD pair.

An immediate support on the downside is near the $37,200 level. It is near the 61.8% Fib retracement level of the upward move from the $34,822 swing low to $41,380 swing high.

Bitcoin Price

Source: BTCUSD on TradingView.com

If there is a downside break below the $37,200 support, the price may even struggle to stay above the $36,500 support. Any more losses could open the doors for a move towards the $35,000 support zone in the near term.

Fresh Increase in BTC?

If bitcoin stays above the $37,200 support, it could start a fresh increase. An initial resistance on the upside is near the $38,200 level.

The first major resistance is near the $38,500 level and the bearish trend line. A successful break above the trend line could lead the price towards the $39,500 resistance zone and the 100 hourly SMA. A close above the 100 hourly SMA is must for a fresh increase above the $40,000 resistance zone in the coming sessions.

Technical indicators:

Hourly MACD – The MACD is slowly moving into the bearish zone.

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

Major Support Levels – $37,200, followed by $36,500.

Major Resistance Levels – $38,200, $38,500 and $40,000.

Could The Golden Ratio Provide Clues To The Bitcoin Bottom?

Bitcoin and other assets often develop support and resistance around Fibonacci levels, either through extensions or retracement. The ratios are based on the Fibonacci sequence, which has ties to the Golden Ratio.

With the top cryptocurrency so tied to mathematics, the Golden Ratio could provide clues as to where Bitcoin is in its latest market cycle, and if a bottom has been put in.

Cryptocurrency And Mathematics: More Than Just Code And Geometrical Shapes

The Bitcoin code is built entirely on math, its distribution protocol also steeped in math, and just about everything else about it. The scarce supply of 21 million BTC is slashed in half every four years, and the sum of the event is often an imbalance of supply versus demand in favor of price appreciation.

Even chart patterns and technical indicators are little more than math – geometrical shapes drawn manually and statistics represented through graphical overlays and oscillators.

Related Reading | Fibonacci Day: How To Use Math To Trade Crypto

But could math also be used to find Bitcoin tops and bottoms? Among the most accurate tools for picking out the top of each market cycle is called the Pi Cycle indicator and is based on the mathematical constant. And according to one trader, the Golden Ratio is how to find each Bitcoin bottom on the way up during the bull market.

bitcoin golden ratio

The crypto asset has historically retraced to the 1.618 Fibonacci ratio | Source: BTCUSD on TradingView.com

How The Golden Ratio Could Act As The Bitcoin Bottom Before New Highs

According to the pseudonymous analyst, after fully recovering to the 1.0 Fibonacci ratio and breaking above it, Bitcoin then blasts through the 1.618 Golden Ratio, only to later retest it. Retesting it has resulted in the last major correction before the final bullish impulse that takes the cryptocurrency to its genuine cycle top.

Other tools related to math have called the cycle top, as mentioned above. However, the tool’s creator says the crossover to give the signal was so narrowly achieved, it leaves room for another cycle top a few months later.

Related Reading | Mathematical Mystery: Why Did The Bitcoin Rally Stop At The Golden Ratio?

Bitcoin price is trying to hold closer to $40,000 after a deep plunge to $30,000 and one of the worst monthly selloffs on record. But that selloff went right to the Golden Ratio as the cryptocurrency has during last market cycles and each time that was it for the downside.

Not only did the nascent digital asset reclaim highs, it more grew another 500% from the lows. As we now know math rarely is wrong when it comes to the cryptocurrency, and another similar percentage climb would take Bitcoin price well over $100,000 per coin.

Featured image from iStock Photos, Charts from TradingView.com

Iran Minister Proposes Kish Island As Crypto Exchange Hub

Iran’s ICT minister has made a proposal that the Persian Gulf island of Kish should be transformed into a crypto exchange hub.

Kish is an island off the Persian Gulf coast in Southern Iran, and it hosts one of the country’s free trade zones. Muhammad Javad Azari Jahromi, Iran’s information and communications minister, made the proposal during a visit to the island.

Kish has the infrastructure to emerge as a hub for international crypto exchanges in the region. Authorities need to start talks with neighboring countries.

The Persian Gulf island is a tourist location with over a million visitors each year. The government plans to make it a financial trade zone as well, which will further attract more people.

As the island’s excess energy can’t be sent to the mainland, the government allows it be used by crypto miners. According to a report from Financial Tribune, several mining farms are already up and running in the island.

Regulation Of Crypto Exchanges

Currently, trading of crypto is banned within the country, even though mining is allowed for licensed companies.

There are a few exceptions, however. In April, Iran’s Central bank authorized that the digital assets mined inside the country can be used for making payments of imports.

Policymakers in Iran are already at work for setting up the regulations for crypto exchanges, and the proposal from the ICT minister comes amidst it.

Related Reading | Looking Ahead: What Should EU Regulations for Cryptocurrency Sector Look Like?

However, regulating digital assets isn’t a simple task. And no state body wants to take full responsibility over it.

The High Council of Cyberspace cited certain concerns related to cryptocurrency mined outside the country. The deputy chief said,

It is not clear who has developed cryptocurrencies. We have no precise information about those who have invested in the digital currencies. As such, we do not encourage investors to put their money into digital assets.

He also said, “Cryptos could help the country bypass sanctions in a limited number of cases,” and emphasized that central banks should come up with an approach to this effect.

The Central Bank of Iran has said that it isn’t in a hurry to announce the regulations related to crypto.

The institution intends to collaborate with other government foundations, like the High Council of Cyberspace, on a roadmap.

Related Reading | How CABEI Will Support Implementation Of Bitcoin Law In El Salvador

Bitcoin Back To Going Up?

BTC has enjoyed a week of overall upwards trend at last, after the huge drop-off last month.

BTC crypto chart

BTC is 5% in the last 7 days | Source: BTCUSD on TradingView

It seems like the market is bullish again, but it’s unclear whether that is truly the case yet.

TA: Bitcoin Dips From $40K, Here’s Why Uptrend Is Still Intact In BTC

Bitcoin price started a downside correction from well above $40,000 against the US Dollar. BTC is now trading near a major support at $38,000, where the bulls are currently active.

  • Bitcoin started a downside correction after it failed to stay above $40,000.
  • The price is currently just below $39,000 and the 100 hourly simple moving average.
  • There was a break below a key contracting triangle with support near $39,900 on the hourly chart of the BTC/USD pair (data feed from Kraken).
  • The pair is likely to start a fresh increase unless there is a close below the $38,000 support=.

Bitcoin Price Revisits Key Support

Bitcoin topped near the $41,350 before it started a downside correction. BTC consolidated above $40,000 for some time before the bulls failed to protect the mentioned support zone.

The price declined below the $40,000 and $39,500 support levels. There was also a break below a key contracting triangle with support near $39,900 on the hourly chart of the BTC/USD pair. The pair even broke the $38,500 support level and the 100 hourly simple moving average.

However, the bulls are protecting the $38,000 support zone (the last breakout zone). The price is now consolidating above the $38,000 level. It is also just below $39,000 and the 100 hourly simple moving average. The 23.6% Fib retracement level of the recent decline from the $41,350 swing high to $38,154 low is also near the 100 hourly SMA.

Bitcoin Price

Source: BTCUSD on TradingView.com

The first major resistance is near the $39,750 level. It is close to the 50% Fib retracement level of the recent decline from the $41,350 swing high to $38,154 low.

The main resistance is now forming near the $40,000 zone. A clear upside break above the $40,000 zone is likely to set the pace for a fresh rally in the near term.

More Losses in BTC?

If bitcoin fails to clear the $39,750 resistance and $40,000, it could extend its decline. An initial support on the downside is near the $38,150 level.

The first major support is near the $38,000 level. A downside break below the recent low and the $38,000 level could open the doors for a larger decline towards $36,500.

Technical indicators:

Hourly MACD – The MACD is slowly moving into the bullish zone.

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

Major Support Levels – $38,150, followed by $38,000.

Major Resistance Levels – $39,500, $39,750 and $40,000.

Bitcoin To Reclaim $50,000: Legendary Technical Analyst John Bolinger

Technical analyst John Bolinger says that the price of Bitcoin is trying to move up. He pointed out that the first real target is the bottom side of the prior. This means the $48k to $50k range.

This was in response to a tweet from BigCheds on Twitter which posted a candlestick chart showing Bitcoin’s progression.

The account tagged John in a follow-up tweet and the later replied that bitcoin was going up to the $50k range.

At the end of the tweet, he says to “play it as it lays.”

Related Reading | Billionaire Tim Draper: Bitcoin Will Reach $250,000 By The End Of 2022

John Bolinger created Bolinger Bands. A technical indicator that is used widely across industry. The tool uses a set of trend lines plotted two standard deviations, positively and negatively, away from a simple moving average (SMA) of a security’s price. While the tool works great with its standard settings, it can also be calibrated to a user’s preferences.

  “Bottom in place, prices trying to move higher, first real target is the bottom side of the prior range, call it 48 to 50k.”

– Tweet from John Bolinger from his Twitter account @bbands.

Calling the price of Bitcoin is never an exact science. Forecasts are mostly just opinions and educated guesses made by analysts. They do this through analyzing past prices and movements of an asset over a period of time to try to gauge where the asset will go next.

When a reply to the tweet said that they were having a hard time being bullish on Bitcoin when it still hasn’t broken the $43k range, John Bolinger replied, “The market will let us know what to do, the rest is just opinion.”

Bitcoin Price Crash

The price of Bitcoin crashed in response to the Chinese government cracking down on crypto mining in the country. With mining facilities being closed down in Xinjiang, Inner Mongolia, and Qinghai provinces.

Bitcoin price chart from February till date

Bitcoin price surged after the Tesla announcement in February | Source: BTCUSD on TradingView.com

Bitcoin seems to be on a path to correction since then but not without some bumps along the way.

Elon Musk Tesla Comments

Elon Musk had announced that Tesla would stop accepting payment in Bitcoin for cars in May due to environmental concerns related to mining.

As expected, market reaction to this announcement was not favorable as the coin took a downturn. There was a prompt sell-off of coins in reaction to this news, dragging the price down, although not by a large margin.

Tesla’s announcement that they were accepting Bitcoin for cars back in February gave the market a huge boost. Pushing the coin into the $40k range. An uptrend that would continue until Bitcoin hit its all time high.

So it’s no surprise that the announcement that they will not be accepting Bitcoin payments had the opposite effect on the coin.

Related Reading | MicroStrategy Sells $500 Million Notes To Buy Bitcoin

The electric automotive manufacturer has stated that they will resume Bitcoin payments when mining operations transition to more sustainable energy.

Bitcoin Adoption Could Help Get It Back To $50k

Last week, the crypto space was abuzz with the news of El Salvador accepting Bitcoin as a legal tender. The country recorded an exponential increase in the amount of Bitcoin remittances from citizens overseas sending money back home to loved ones.

Following this, other South American countries like the Bahamas has said that they are considering making Bitcoin a legal tender.

Tanzania’s president has also called for the central bank to start developments for crypto adoption.

Faith in the market is going back up as institutional investors are continuing to buy Bitcoin.

A culmination of these events has led to a price increase but not much as the coin is still struggling to break $41k.

Featured image from Blockchain News, chart from TradingView.com

Bitcoin Bulls Reclaim Cloud But Stormy Days Still Ahead

Bitcoin price is struggling to hold above $40,000 and is now below it. On the three-day timeframe, the top cryptocurrency is also well back within the Ichimoku cloud, suggesting there’s more support now built below.

However, it is worth noting that if the indicator is to be read correctly, even through there’s an attempt at a recovery underway, stormy days are still ahead for crypto bulls hoping for a rebound right back into the previous rally.

Bitcoin Price Recovers Cloud, But A Storm Could Be Brewing

Bitcoin price action has been confusing as of late, locked in a tight trading range. The leading cryptocurrency by market cap is no longer in the low $30,000s, or at as much risk of a plunge below the now crucial support level.

Related Reading | Why Bitcoin Could Slingshot Back To Lows Before Gaining Momentum

From $30,000 to $40,000 is a full 25% recovery, however, thus far the once trending asset has lacked the same upside strength as the start to this year. Negative sentiment has kept prices at bay, and although there’s been a recent recover, that all could soon change.

bitcoin ichimoku cloud 2A naked look at the Ichimoku shows BTC back in the cloud | Source: BTCUSD on TradingView.com

The top cryptocurrency has bounced back into the three-day cloud on the Ichimoku indicator, a sign that so far support is working. Bitcoin price has also recovered above the Tenkan-Sen, also called the conversion line.

This is a fast moving line that when above the baseline suggests the market is bullish and when below it, bearish. Currently there’s a bearish crossover following the deep 50% plummet in May. Price action also might have made it back into the cloud, but the cloud itself is also turning red after a “kumo” twist.

What The Ichimoku Really Says “At A Glance”

A twist in the kumo or cloud is always significant and is a tell the trend has changed. The Ichimoku is also a diverse tool that considers not just price, but time itself.

The Chikou span or lagging span, shows support and resistance and is plotted backward several trading sessions. Running resistance and support across what the span suggests gives the primary levels that Bitcoin must hold or break for a larger move.

bitcoin ichimoku cloud

The same chart, but with more detailed analysis included | Source: BTCUSD on TradingView.com

Using time analysis, Bitcoin spent a similar time topping out its bullish impulse before turning back bearish. Most corrections during a primary uptrend play out as ABC corrections according to Elliott Wave Theory.  A comparable amount of time was spent bottoming right after as was spent during the topping process, and Bitcoin began its new uptrend – however COVID had other plans.

Related Reading | What The Last Leg Up In The Crypto Bull Market Could Look Like

After another phase of consolidation, Bitcoin recovered the long term uptrend support line, and could soon retest it. The Ichimoku currently supports the theory.

Back in late 2019 there was a bearish kumo twist much like there was just days ago. Support and resistance, and even time itself all match up well. There’s also a crossover of the Tenkan-Sen and Kijun-Sen, which suggests price action is currently leaning bearish on the three-day timeframe.

Featured image from iStockPhotos, Charts from TradingView.com

Survey: Hedge Funds Intend To Hold $300 Billion In Crypto Within 5 Years

A global survey of Chief Financial Officers has revealed that hedge funds are planning to hold 7% of their wealth in crypto within the next 5 years.

Reuters has described the survey results as a major vote of confidence for cryptocurrency assets within the current market environment.

The Hedge Funds Crypto Survey

Financial administrator Intertrust conducted the survey with over 100 CFOs participating from all over the globe. Chief Financial Officers, or CFOs, are executives who are responsible for managing their company’s finances.

As per Intertrust, the results of the survey indicate that hedge funds plan to increase their crypto assets in the next five years.

An average figure based on the responses shows that by 2026, funds aim to keep $313 billion in digital assets, which is around 7.2% of their total assets.

Related Reading | Nearly 1% Of Bitcoin Supply Is Now Wrapped In Ethereum

Another interesting finding from the poll is that 17% of the survey takers believe their funds will work with at least 10% of their assets as crypto, a figure that is around 3% higher than the average.

It’s unclear what the current crypto holdings by the funds look like, but one thing worth noting is that many big-names in the sector seem to already have invested appreciable amounts in digital assets.

Increasing Interest In Cryptocurrency

While huge volatility and uncertainty over regulation keep the majority of traditional asset managers skeptical about cryptocurrency, the hedge funds survey shows that there is still a growing interest in digital assets.

Executive Director at Quilter Cheviot Investment Management says hedge funds “are well aware not only of the risks but also the long-term potential” of crypto assets.

Related Reading | MicroStrategy Receives Over $1.5B In Orders For $500M Notes To Fund Bitcoin Purchases

Examples of firms that have already invested in digital assets include Man Group, Brevan Howard, and Renaissance Technologies. Some of the big-name fund managers who have also committed are Alan Howard and Paul Tudor Jones.

Another prominent case is Skybridge Captial, a US-based firm setup by Anthony Scaramucci, that invested into Bitcoin late last year. Due to trimming their investment early in April, Bitcoin became the largest contributor of their gains.

Overall, it is clear that there is a growing enthusiasm towards crypto assets in the industry.

Bitcoin Price

At the time of writing, Bitcoin price hovers over $39,280. The asset is down 11% in the past 30 days, but up 12% in the past 7 days. Here is a chart noting the change in the price of the cryptocurrency:

Bitcoin seems to be on an upward trend | Source: BTCUSD on TradinvView

While BTC seems to be back on track for going up, it’s not yet clear whether we are looking at a bullish market. Some experts believe we may be witnessing a bull trap.

Featured image from Unsplash, chart from TradingView

Billionaire Tim Draper: Bitcoin Will Reach $250,000 By The End Of 2022

Billionaire Tim Draper has doubled down on his prediction that Bitcoin will reach $250,000 by the end of 2022.

Draper first made this prediction in 2018 when Bitcoin’s price was still trending below $10,000. Being a venture capitalist and tech investor, Draper has always had faith in the coin. Always taking any opportunity he could to show his support for the coin whenever he could.

The venture capitalist believes that Bitcoin will become an accepted mode of payment everywhere. Which he believes is what will drive the coin price up to the point he predicted.

“I’m Going To Be Right On This One”

Tim Draper has always had strong convictions when it comes to Bitcoin. His support for the coin has never wavered. He believes that Bitcoin will be at the center of all of the world’s financial activities for the next 20 years.

Related Reading | Will A Large Spike In Bullish Sentiment Translate To A Bitcoin Rally?

He continues on to state that he believes that the price of the coin will keep going up. His reasoning for this being that “because there are only 21 million of them.”

This is in reference to the limited supply of Bitcoin. When Bitcoin was created, there were only 21 million coins created that would end up going into circulation. Meaning 88.3% of the entire supply has been minted, and it happened in a decade. This scarcity of the coin is one of the reasons so many people believe the price of Bitcoin will rise exponentially. Because there are only so much coins that can be mined or bought.

So far, about 18.5 million Bitcoins have been mined. Leaving only 2.5 million coins left to be mined. It is forecasted that it will take about 120 years for the last coin to be mined. With halvings occurring every four years.

Not Backing Down On His Bitcoin Prediction

Tech investor Tim Draper still believes Bitcoin will reach $250,000 soon. Only slightly adjusting his earlier forecasts by saying it will hit that price late 2022 or early 2023.

At 63, Draper has been in investing for most of his professional life. He made his fortune making early investments in Twitter, Tesla, and more. Not new to the workings of the financial markets, he has said that Bitcoin will be a big player in the space. He pointed out that Bitcoin has a lot of positive features, saying that this is what will draw the masses to the coin.

Bitcoin price chart

Bitcoin back below $40k | Source: BTCUSD on TradingView.com

With regards to Bitcoin being used as a form of currency, Draper is quoted saying;

“Bitcoin will be the currency of choice. Bitcoin is not as easy to move around, but eventually, it will be. Then you will have a choice and you will say, hey, do I want to pay the banks 2.5% to 4% every time I swipe my credit card or do I want a currency that’s frictionless, open, transparent, global, and not tied to any political force?”

Bitcoin’s viability as an everyday currency has always been a hot topic in the crypto world. The fees associated with sending the coin has long been a bone of contention when it comes to using it to pay for everyday items. And in bull markets, the fees go up significantly, where fees can cost more than the amounts being sent in small transactions.

Related Reading | Hall Of Fame Investor: Bitcoin Is In A “Bear Market”

Speaking about the stock market, Draper disclosed that the stock market was no longer image. His intent is to devote his portfolio to the crypto market instead.

The billionaire believes that other companies will follow in the footsteps of companies like Microsoft and PayPal who have begun payments using cryptocurrency.

Draper also gave his opinion on Elon Musk and how his tweets have been impacting the crypto space. Saying that Musk got this one wrong, though he believes Musk to be one of the most brilliant men in the world.

Musk’s tweets have been the sole driving factor in the tremendous price increase of Dogecoin. A coin that was created as a joke but is now one of the highest gaining coins in the world.

Featured image from Bitcoin News, chart from TradingView.com

TA: Bitcoin Consolidates Above Support, Here’s What Could Trigger Fresh Rally

Bitcoin price is trading in a positive zone above the $40,000 level against the US Dollar. BTC is likely to start a fresh rally if it clears the $41,200 resistance zone.

  • Bitcoin remained in a positive zone above the $39,000 and $40,000 levels.
  • The price is currently well above $39,000 and the 100 hourly simple moving average.
  • There is a major contracting triangle forming with resistance near $40,650 on the hourly chart of the BTC/USD pair (data feed from Kraken).
  • The pair is likely to start a fresh rally once it clears $40,650 and $41,200.

Bitcoin Price Remains Elevated

Bitcoin started a fresh increase after it broke the key $38,500 resistance zone. BTC even climbed above the $40,000 resistance zone and it settled well above the 100 hourly simple moving average.

However, the price seems to be struggling above the $41,000 level. There were two attempts to gain strength above $41,000, but the bulls failed. The recent high was formed near $41,384 before the price corrected lower. It dipped below $40,500, but the bulls were active near $39,500.

A low is formed near $39,476 and the price is now consolidating in a range. It is trading above the 23.6% Fib retracement level of the recent decline from the $41,384 high to $39,476 low.

On the upside, an immediate resistance is forming near the $40,450 level. It is near the 50% Fib retracement level of the recent decline from the $41,384 high to $39,476 low. The first major resistance is near the $40,650 level. There is also a major contracting triangle forming with resistance near $40,650 on the hourly chart of the BTC/USD pair.

Bitcoin Price

Source: BTCUSD on TradingView.com

A clear upside break above the triangle resistance could spark bullish moves. The next resistance is near the $41,200 level. A close above $41,200 level is likely to stage a move towards the $43,500 level.

Dips Limited in BTC?

If bitcoin fails to clear the $41,200 resistance, it could start a downside correction. An initial support on the downside is near the $40,000 level.

The first major support is near the $39,80 level and the triangle lower trend line. A downside break below the triangle support could push the price towards the $38,500 support level and the 100 hourly SMA.

Technical indicators:

Hourly MACD – The MACD is likely to move back into the bullish zone.

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

Major Support Levels – $39,800, followed by $38,500.

Major Resistance Levels – $40,650, $41,200 and $43,500.

Bitcoin Bull Trap: Bears Begin To Dig Claws Into Crypto Trend

Bitcoin price is on the rebound, but after such a sharp fall and more than 50% retracement, any reversal must be considered a potential bull trap until much higher prices are reclaimed.

Further adding credence to the theory of a potential bull trap, a trend strength indicator very clearly shows that bears are in charge, and are ready to bring out the claws if needed to swat crypto prices back into hibernation mode.

Only Up Season Is Over: Bears Now Control Bitcoin Trend

After such a strong year for bulls in 2020 and a even more powerful start to 2021, expecting “only up” in crypto isn’t uncommon. That’s exactly why the selloff in May was so severe – few saw it coming.

Technicals warned that something violent was coming, but because sentiment was so bullish the bearish signals were ignored. But technicals are rarely wrong so long as a certain set of rules are followed.

Related Reading | Bitcoin Bulls And Bears Alike Beware Of Potential Pump And Dump Fractal

For example, the Average Directional Index is a trend strength measuring tool that commonly reads alongside a Directional Movement Index. Simply put, the ADX measures the trend and the DMI says who is in favor: bulls or bears.

bitcoin ADX 3d

Trend changes are extremely clear on the three-day chart | Source: BTCUSD on TradingView.com

In the chart above, there’s no denying the bears are still fully in control of Bitcoin, despite the short-timeframe showing from bulls. Dating back to the start of the bear market, the ADX and DMI have provided reliable signals about which side of the trade is most dominant.

How To Read The ADX And DMI To Gauge Crypto Trend Strength

The chart above also shows the DMI- falling below the ADX, which is an indication that the trend is growing in strength.  Falling below a reading of 20 tends to reset a trend and signal its end.

All signs suggest that bears only now have control over the top cryptocurrency by market cap for the first time since April 2020 and aren’t likely to let go so easily.

bitcoin ADX 3d

Could there be several bullish divergences before a reversal? | Source: BTCUSD on TradingView.com

On shorter timeframes, the ADX reached a reading of 70 showing just how powerful bears have been. The trend strength matches the initial power that pushed Bitcoin to above $14,000.

Related Reading | Why Bitcoin Could Slingshot Back To Lows Before Gaining Momentum

From there and above, with each successive local high, the daily bull trend weakened until bears finally made their attack. Each divergence in the chart above shows the trend weakening in action. It also could suggest that bears might have several weakening peaks with deeper lowers before any sort of real reversal is on the table.

For now, the recent rally in Bitcoin to back above $40,000 might be little more than a bull trap set by playful bears just out of hibernation.

Featured image from iStockPhoto, Charts from TradingView.com

Nearly 1% Of Bitcoin Supply Is Now Wrapped In Ethereum

As wrapped Bitcoin approaches 189,000 BTC, the leading form of BTC on Ethereum now makes up for nearly 1% of the total supply of the cryptocurrency.

The total supply of WBTC was only around 4,000 coins last June, and today it is 47 times that. The gigantic growth has made the token the most popular form of Bitcoin on the Ethereum blockchain.

WBTC touches the 1% mark | Source: Arcane Research

Overall, around 240,000 BTC has been tokenized into Ethereum protocols, of which 80% of the supply comprises of WBTC.

Why The Need For WBTC?

Tokenized BTC is becoming increasingly popular because the Bitcoin blockchain lacks some functionality that Ethereum does not.

As the Ethereum DeFi ecosystem is highly lucrative, it’s not surprising that investors are looking to get their hands on some of those yields.

WBTC isn’t the only BTC token on Ethereum. HBTC and RENBTC are some of the other examples. However, only WBTC is noticing such massive growth.

Below is a chart that visualizes the difference between WBTC and other tokens:

WBTC runs away from the rest | Source: Dune Analytics

As is clear from the chart, the competition of the token is largely stagnant, and drastically lesser in circulation, making up for only 20% of the total BTC supply on Ethereum.

Related Reading | Privacy Protection: The Future of DeFi

BadgerDAO

BadgerDAO is a decentralized autonomous organization that aims to build the products and infrastructure necessary to bring Bitcoin as collateral to other blockchains.

BadgerDAO has played an important part in Wrapped Bitcoin’s rise above its competition. The platform currently has $632 million in tokens locked in.

There are 13 vaults (called “setts”) in total on the website where you can deposit your tokens. A lot of these setts are liquidity pairs of WBTC and some other token. As a natural consequence, not all the value is locked under the wrapped token.

Nonetheless, there is a WBTC-only sett that is powered by Yearn Finance. The vault is now the biggest one on the platform with about $200 million tokens deposited.

Badger offers quite low price-to-earning ratio | Source: BadgerDAO

The above chart is from a BadgerDAO report that shows that they have one of the lowest price-to-earning ratios when compared to other DeFI businesses.

Related Reading | Top 10 DeFi Projects in Q2 2021

Bitcoin Price

In the past 30 days, the value of the cryptocurrency has dropped by 14%.

However, the general trend seems to have changed towards up in this past week of June so far. Below is a chart showing the variation in the cryptocurrency’s value:

BTC seems to be on a slight upward trend | Source: BTCUSD on TradingView

As per a Voyager Digital survey, 87% of the respondents plan to buy more cryptocurrency in the coming months. 7 out of 10 respondents also believe market sentiment is bullish in the next three months.

However, other investors like Rich Bernstein feel that we are looking at a bearish market.

Will A Large Spike In Bullish Sentiment Translate To A Bitcoin Rally?

With such a large spike in bitcoin sentiment recently, a bitcoin rally could be underway.

Bitcoin has been fluctuating between $30k and $40k for a while now with no real significant movement either up or down. This has come in light of the market crash experienced over a month ago. The asset lost about 50 percent of its value and a lot of investors have had to take a step back and reevaluate their crypto positions due to this.

Related Reading | Hall Of Fame Investor: Bitcoin Is In A “Bear Market”

While significantly large drops in price in a short period of time is not new to crypto-natives, it is new to the investors who have just got in. Every bull market, bitcoin experiences a large influx of first-time investors. Most of them FOMO-ing into the market. Once the expected crashes start happening, they get scared and start getting rid of their coins.

What An Increased Bullish Sentiment Could Mean

With an asset as volatile as bitcoin, price movements can very much be tied to investors sentiment. Humans are mostly governed by emotions so it is no surprise that this spills out into other parts of our lives like investing. Feeling very positive about something is a reason why a lot of investors buy assets.

A large portion of the decision making can be attributed to research but sentiment, either good or bad, can most often be a deciding factor.

Bitcoin chart from TradingView showing market crash

Bitcoin price crashed about 50% in May | Source: BTCUSD on TradingView.Com

Once people start feeling like the market is about to have a good run, they invest into the market. This in turn shows other investors that people still have faith in the coin. And the cycle continues leading to a bull run.

How Fear And Greed Affect Market Prices

Investors are mostly driven by two emotions when they are putting money in the market; fear and greed.

When investors are scared of what an asset might do, this could lead to them putting way less money into that asset than they normally would. Not wanting to lose their money. It does not matter if there is a reason to be scared of not. If investors do not have faith in an asset, they will not put money in it.

Then on to greed, this is the ultimate market mover.

The dictionary definition of greed is as follows; an intense and selfish desire for something, especially wealth, power, or food.

Investors are in the market to make money, as much as possible in as little time as possible. While long-term hodling might be the best move when it comes to investing, it doesn’t change the fact that people want money now. And they want a lot of it.

Related Reading | MicroStrategy Sells $500 Million Notes To Buy Bitcoin

This is where greed comes in. The more money you want to make, the more money you have to put into the market. The more money put into an asset, the higher the value of that asset.

Arcane Research has a Fear and Greed Index with which it measures investors fear relative to greed. And it has been in the extreme fear zone for quite a while. This has been in line with market prices. Bitcoin has been stagnating a bit for a while. People are not putting money in it.

But a recently released index from Arcane Research has shown that investors sentiment has finally moved out of the extreme fear into fear. This signals that investors are finally starting to come out of hiding.

 

Chart from Arcane Research showing the fear and greed index

 Fear and Greed Index up from  13 last week to 38 | Source: Fear and Greed Index on Arcane Research

 

Lightning Network Sets New Record

The Bitcoin Lightning Network exceeded 1,500 BTC for the first time ever yesterday on the network.

Speculations are this spike is due to the increased number of small bitcoin transactions being made on the network after El Salvador made bitcoin a legal tender.

With optics like these and news of adoption rocking the space, a market rally may be in the horizon for bitcoin.

Featured image from Forbes, bitcoin chart from TradingView.com, Fear and Greed Index chart from Arcane Research