Connect with us

Blockchain

5 key reasons why Bitcoin will likely see new all-time highs soon

Republished by Plato

Published

on

The price of Bitcoin (BTC) has been under severe selling pressure by whales for the past two months, on-chain data reveals.

However, five key indicators suggest that major sellers are about to turn into hodlers or even accumulators of Bitcoin again, while institutional demand remains high. This is an explosive setup that may send Bitcoin to new all-time highs in the near term.

Whales stopped selling

The number of whales, which are Bitcoin addresses with a balance equal to or more than 1,000 Bitcoin, have declined by more than 10% since Feb. 8, suggesting a large sell-off of Bitcoin.

While the price of Bitcoin managed to see two all-time highs during the two-month dumping period, the overall price rise has significantly slowed down, with BTC finding strong resistance at around $60,000. Since March 31, however, large holders of Bitcoin have stopped selling.

Number of addresses with a balance equal to or greater than 1,000 BTC. Source: Glassnode

Portfolio rebalancing as a quarter ends is a typical time for sell-offs. As Bitcoin has seen a 104% price rise since the beginning of this year, this was to be expected.

Grayscale, the largest digital asset manager, announced on April 6 that it had just rebalanced its digital large-cap fund at the expense of selling Bitcoin.

If rebalancing is the major driver, and considering that the number of addresses holding equal to or more than 1,000 BTC is back at levels last seen at the end of 2020 — when the price started rising — whales could be finished selling for now.

Long-term hodlers selling Bitcoin are slowing down

When Bitcoin broke its previous 2019 high in October 2020, this begn one of the fastest, most prolonged increases in coin days destroyed (CDD).

The CDD on-chain metric expresses the “weight” at which long-term hodlers are selling. It is calculated by taking the number of coins in a transaction and multiplying it by the number of days it has been since those coins were last spent. This means that the higher the CDD is, the more volume is sold.

However, since the beginning of the year, selling by long-term hodlers is not only drastically slowing down but has almost come back to the level at which the sell-off was initially triggered in 2020.

Bitcoin coin days destroyed, 21-day moving average. Source: Glasssnode

This suggests that long-term hodlers have become increasingly confident in a higher Bitcoin price in the near term.

Miners have turned into Bitcoin accumulators again

Because Bitcoin miners’ revenue stream is newly mined BTC, they regularly have to sell their mined BTC to pay for their operational expenses such as electricity costs. However, some miners tend to speculate on the price.

By holding back on selling Bitcoin, they become net accumulators. This is expressed in the miner net position change metric, which shows the 30-day change of the supply held in miner addresses.

Bitcoin miner net position change. Source: Glasssnode

The last time miners were hesitant to sell their Bitcoin was right before a major price increase almost three months ago. This positive change suggests that miners expect higher prices in the near future.

Institutional demand remains high

Despite material selling pressure from whales, institutional demand for Bitcoin has not slowed down. The net transfer volume of Bitcoin from/to exchanges is deep in the red, almost at a historical low, meaning that more Bitcoin is currently being withdrawn from exchanges than deposited.

This is a sign that these coins are moving to cold storage. This is typical for institutions, as they tend to make long-term investments and prefer safer custody solutions rather than leaving them on an exchange.

Bitcoin net transfer volume from/to exchanges, 14-day moving average. Source: Glasssnode

Since the pandemic, there has been a historic supply crunch of exchange Bitcoin balances. It has become even more material as institutions have started to accumulate in greater quantities since November 2020.

This is made clear by the large continuous drop in Bitcoin balances on exchanges over the past few months, particularly Coinbase, which is a frequent choice for institutions.

Bitcoin balance on exchanges. Source: Glasssnode

Meanwhile, Coinbase released its quarter one earnings and outlook yesterday, in which it states:

“Assets on Platform of $223 billion, representing 11.3% crypto asset market share, includes $122 billion of Assets on Platform from Institutions. … We expect meaningful growth in 2021 driven by transaction and custody revenue given the increased institutional interest in the crypto asset class.”

Not only is it certain that institutions have materially added to their revenue, but this data also shows Coinbase’s confidence that this trend of buying is likely not going to stop soon.

Weekly ascending triangle close to a break

Since the beginning of February, a weekly ascending triangle has formed. Statistically, this chart pattern gives a higher likelihood of breaking to the upside than to the downside.

If the price were to break to the upside, the size of the triangle suggests a potential breakout target toward $79,000. While neither the break to the upside nor the price target is a certainty, it is a chart worth keeping an eye on alongside major on-chain signals.

BTC/USD 1-week candle chart. Source: TradingView

Strong forces in the market — whether they are long-term hodlers, miners or whales — are all showing signs of confidence in an increasing price of Bitcoin.

The ascending triangle gives even more reason to believe that this move could be imminent and to the upside. While no one would mind a $79,000 Bitcoin price in the near future, a breakdown of the triangle is also a possibility that should be taken into consideration as not all key on-chain signals have fully aligned just yet.

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

Coinsmart. Beste Bitcoin-Börse in Europa
Source: https://cointelegraph.com/news/5-key-reasons-why-bitcoin-will-likely-see-new-all-time-highs-soon

Blockchain

$420M in leveraged long traders liquidated after XRP rallies to $1.96

Republished by Plato

Published

on

XRP holders couldn’t have asked for a better year as the cryptocurrency rallied almost 800% and flirted with a $2 level in the early hours of April 14. 

In addition to achieving its highest level since January 2018, this robust price increase signals that investors are not worried about the ongoing SEC “unregistered securities offering” dispute.

However, just 6 hours after rallying to $1.96, XRP price crashed by more than 20%. During an interview, DCG Group CEO Barry Silbert said it would be risky for exchanges and companies in the United States to relist XRP ahead of receiving the SEC’s blessing. These remarks may have contributed to the unprecedented $420 million long liquidations on derivatives exchanges today.

XRP price in USDT at Binance. Source: TradingView

Over the past couple of weeks, the primary catalysts for XRP’s rally have been victories in Ripple’s legal battles. Lawyers representing Ripple were granted access to internal SEC discussions regarding cryptocurrencies, and more recently, a court denied the disclosure of two Ripple executives’ financial records, including CEO Brad Garlinghouse.

Considering the recent rally, pinpointing a single reason for the price correction will likely be inaccurate. Nevertheless, the impressive $420 million long liquidations past 24-hours exceed those of Feb. 1 when XRP price crashed by 46% in two hours.

XRP futures aggregate liquidations. Source: Bybt

The only logical reason behind this staggering liquidation is excessive leverage used by buyers. To confirm such a thesis, one must analyze the perpetual contracts funding rate. To balance their risks, exchanges will charge either longs or shorts depending on how much leverage each side is demanding.

XRP perpetual futures 8-hour funding rate. Source: Bybt

The chart above shows that the 8-hour funding rate is surpassing 0.25%, which is equivalent to 5.4% per week. Although this is excessive, buyers will withstand these fees during strong price rallies. For example, the current upward price move lasted for almost three weeks, and prior to that another took place in early February.

Blaming the liquidations exclusively on leverage seems a bit extreme, although it certainly played its part in amplifying today’s correction.

Moreover, the record growth in XRP futures open interest was accompanied by a hike in the volume at spot exchanges. As a result, the eventual impact from more significant liquidations should have been absorbed by the increased liquidity.

Cascading liquidations will always take place in volatile markets. Thus investors should focus on how long it takes until the price recovers from it.

Fundamentally, a 10% or 20% intraday drop should not be interpreted differently. The correction depends on how many bids were previously stacked at exchange orderbooks and is not directly related to investors’ bullish or bearish sentiment.

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

Coinsmart. Beste Bitcoin-Börse in Europa
Source: https://cointelegraph.com/news/420m-in-leveraged-long-traders-liquidated-after-xrp-rallies-to-1-96

Continue Reading

Blockchain

Garry Tan’s 2013 investment of $300K in Coinbase is now worth $2.4B

Republished by Plato

Published

on

Garry Tan, a prominent angel investor and the founder of Initialized Capital, was one of the first investors to provide seed funding to Coinbase eight years ago. 

Less than a decade later, and after today’s highly anticipated Nasdaq listing for Coinbase’s COIN stock, Tan’s 2013 investment of $300,000 into Coinbase is now worth $2.4 billion.

Coinbase debuted on the Nasdaq on April 14 at $381 per share, making it one of the most hyped listings in the U.S. stock market of the year.

How did $300,000 become $2.4 billion?

In 2013, when Tan invested in Coinbase, it was unclear whether Bitcoin would be recognized as a global asset and an established store of value.

At the time, there were not many reputable exchanges, and the few that existed were often hacked. Tan’s investment took place before the monumental Mt. Gox hack that saw billions of dollars worth of BTC stolen.

Even after launch, Coinbase was not always in an uptrend. According to Coinbase co-founder Fred Ehrsam, from 2014 to 2017 the company faced numerous hardships. 

Ehrsam said:

“Over time, crypto grew, and so did the company. A simple #Bitcoin wallet evolved into individual and institutional products to support a blossoming cryptoeconomy. 2 nerds who met on the internet (yes, @brian_armstrong and I met on @reddit ) turned into a company of 1000+. There was serious hardship. In the 3 years between 2014 and 2017, the outside world thought crypto was dead. Over a third of employees left. Yet crypto kept building. @ethereum came on the scene and showed that crypto native applications were possible, opening up a whole new world of possibilities.”

Even if the listing fails to impress, Coinbase has alluring financials

Coinbase is the first publicly listed major cryptocurrency exchange in the U.S. stock market and its availability on Nasdaq now provides mainstream investors with exposure to the crypto sector. Even if the listing fails to impress on day one, the company still has strong financials and user metrics.

Coinbase made $1 billion in the last quarter and has more users than every financial institution in the U.S. apart from JPMorgan, making it a highly compelling trade for investors in the traditional financial market.

Coinsmart. Beste Bitcoin-Börse in Europa
Source: https://cointelegraph.com/news/garry-tan-s-2013-investment-of-300k-in-coinbase-is-now-worth-2-4b

Continue Reading

Blockchain

German software developer donated $1.2M in ‘undeserved’ Bitcoin to political party

Republished by Plato

Published

on

A German national who reportedly sees his Bitcoin profits as “undeserved wealth” has donated more than $1 million to the country’s green political party.

According to Hamburg-based news outlet Die Zeit, Moritz Schmidt, a software developer from the northeastern town of Greifswald, has sent one million euro — roughly $1.2 million — to Germany’s green party, known as The Greens or Alliance 90. A party spokesperson said Schmidt had made significant gains during the Bitcoin (BTC) bull run but wanted to contribute to causes related to environmental and climate protection rather than HODLing his crypto.

“The donor has made it clear to us that he sees these profits as undeserved wealth that he does not claim for himself, but wants to use socially, for something that corresponds to his convictions,” said the Greens spokesperson. “In the meantime he sees the Bitcoin system critically, among other things against the background that the necessary arithmetic operations consume huge amounts of electricity.”

Records for the Greens show that Schmidt’s donation is the biggest the party has received this year, with the next highest contribution at 500,000 euro, or roughly $600,000. The funds will reportedly be used for the party’s federal election campaign and the state election campaigns in 2021.

The software developer is not alone in seemingly hoping the crypto industry will become greener. Many have criticized Bitcoin mining for its impact on the environment, with some estimates indicating the network consumes more energy than the entire country of Argentina. However, Mike Colyer, CEO of crypto mining firm Foundry Digital, said this week that he believes mining Bitcoin could eventually help the transition to a “world where 100% of our energy is produced from renewables.”

Coinsmart. Beste Bitcoin-Börse in Europa
Source: https://cointelegraph.com/news/german-software-developer-donated-1-2m-in-undeserved-bitcoin-to-political-party

Continue Reading
Blockchain4 days ago

How NFTs, DeFi and Web 3.0 are intertwined

Blockchain5 days ago

11% Of Business In Spain Use Blockchain Technology, Report

Blockchain4 days ago

XRP Price Analysis: 10 April

Blockchain4 days ago

Has the rally ended for altcoins like LINK, ADA, and NPXS?

Blockchain2 days ago

By The Numbers: The Rate Bitcoin Must Climb To Reach $100K By July

Blockchain2 days ago

NYSE celebrates historic ‘first trades’ with NFT series

Blockchain2 days ago

Whole Earth Coin (WEC) Set for IEO to Inject New Life Into Aging Infrastructure

Blockchain2 days ago

Bitcoin’s time has come: TIME magazine to hold BTC on balance sheet

Blockchain4 days ago

Kraken Daily Market Report for April 09 2021

Blockchain4 days ago

Watch these key technical levels as Bitcoin price nears $61,800 all-time high

Blockchain5 days ago

Uniswap, Monero, Ethereum Classic Price Analysis: 10 April

Blockchain2 days ago

USDT, USDC, and BUSD represent 93% of stablecoin market cap

Blockchain4 days ago

Oasis Foundation announces implementation of Tidal DeFi insurance platform

Blockchain2 days ago

Binance launches zero-commission tradable stock tokens

Blockchain2 days ago

NYSE Joins NFT Mania With Special First Trade Collection

Blockchain5 days ago

Real Estate Giant Teams up with Gemini to Buy Bitcoin and Allow BTC Rent Payments

Blockchain2 days ago

German digital stock exchange will list physical Litecoin ETP

Blockchain4 days ago

Bitcoin Bull Mike Novogratz Predicts Existential Crisis Unless the US Creates a Digital Dollar

Blockchain2 days ago

Boson Protocol concludes $25.8M public sale, token listed on exchanges

Blockchain4 days ago

How Ripple’s big win in court correlates with XRP’s 113% rally

Trending