This episode will look into the potential scenarios of bitcoin price movement after the halving. Will this dump start a reversal of the BTC price and we will see new lows or this was just a short squeeze and the price will hit the moon after the halving!
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Bitcoin is being dumped right before the bitcoin halving
Hello, guys. This is Wunderbit Trading and we are carrying on with our weekly Bitcoin and Ethereum price analysis. Let’s go straight into the content because the dump that happened during the weekend is all we’re caring about right now. So, as usual, in front of you, you can see four different charts and they are all related to Bitcoin. The one on the top left is the BTC futures, the one on the top right is the BTC dominance and the two at the bottom price for BTC/USD from different exchanges, Bitstamp and Binance.
So let’s start from the weekly overview, which you can currently see in front of you. And you can clearly see that on the spot market, we can see a dodgy candle appearing after the Sunday crash in terms of the cryptocurrencies. You can see that the volume spiked as well, obviously, because the crash happened during the weekend, we can see on the weekly that there is a small gap. However, if we go to daily candlesticks, you can see that this gap is much larger. It is almost 10 percent if we think about this.
And the price dropped and actually stopped at the 200 moving average, acting as a support. So let’s switch back all our predictions from the previous reviews and start our analysis.
Bitcoin Futures Price Analysis
As usual, we’re gonna start from the BTC futures on a daily time frame. So what we can see here is that the end of the week was quite optimistic for Bitcoin futures because we saw the breakout with a nice volume, a nice solid candlestick, and this happened on the 7th of May. And this was breaking the downward channel, the volume was picking up, so everything looked quite positive in terms of the BTC futures price.
However, during the weekend, on Sunday, in particular, there was a dump of Bitcoin and the price started trading on Monday next to the level of 200 moving average which is acting right now as support. So what to expect? As usual, we know that there is a 75 percent chance that this gap is going to be closed during this week. And if it is so, then there is potentially good profit to be made here, as I mentioned earlier, around 10 percent. And at the same time, if we go to the four-hour time frame, we can see that the price is currently below 50 MA, so there would be some resistance from 50 MA and also from this downward channel as well.
That is why we need to see another spike in the volume to actually close this gap. However, looking back to the daily, what we can see is that there is a potential scenario that during this week we’ll try to accumulate more in terms of bitcoins, the price will increase, but we might face the double top scenario here. So if the price is steadily going to rise, bounce slightly and then break through the resistance of 50 MA on the four hour time frame and also the resistance of a downward channel at the daily time frame, there is still now the new local high, which we’re facing as a resistance, and we might see this scenario of double top and the price will reverse and starts its retracement back in the downward channel. So this is scenario number one. And in this scenario, we’re closing the gap during this week but at the same time, we can see that the price is facing some strong resistance.
The other scenario is that we can currently retrace back to the level of 50 percent, at least, of Fibonacci retracement. So this will be somewhere around 7500, 7300 and then reattempt to find a new higher high, so there will be a retracement towards this area. And then we might see a small area of accumulation and only afterwards try to break it through. So this is the other potential scenario that we’re currently facing. It will depend on the bisection of today and tomorrow.
Currently, we don’t see any huge activity whatsoever. So the price is staying around the same area. Even if we go to the one-hour time frame, we’re still in a flat scenario where we would not be able to justify whether we go in further in terms of the retracement or we’re trying to fulfil the gap immediately.
So let’s look at the BTC dominance and once again, we’re going to start from the weekly time frame. The most important thing here is that it went in accordance with our predictions, so we went to form the double bottom over here. The BTC dominance smashed through the 200-day moving average as resistance with a nice solid candle. It carried on the 4th of May, so the second week in a row to go above the 50 MA as well.
So it seems like the BTC dominance will carry on increasing in the long term if our long term upward channel will be holding. What to expect here is that we would see some areas of resistance and obviously the previous high, so this is where we should expect to see some resistance for the dominance growth.
At the same time, we might see the retracement right now to check the 50 MA as support and start the upward movement in the BTC dominance from this area. So we should expect to see the BTC dominance decreasing to 66.3 and only then trying to carry on with the upward movement.
Bitstamp Bitcoin Price Analysis
So let me now look at the Bitstamp exchange and the long term scenario for the BTC. We’ll start from the weekly time frame. Currently, the price did not reach the strong resistance level, strong resistance trend which is coming from the peak of 2018 prices. And during the weekend, because of a dump, the dodgy candle was formed, so it showed indecisiveness of the market at this particular level.
The good point is that the candle closed right at the level of 50 MA as a support for the weekly time frame. So now it depends quite a lot on whether the price will carry on the retracement or the bulls will try to hold this ground and then try to actually go towards this level of resistance, which has come from the downward trend from the 2018 peaks. So let’s go to the daily time frame. What we can see here that during this dump on Sunday, the price touched the 200 MA acting as a support. Currently, there is not much going on in terms of the actual movement. It seems like everyone is currently waiting, whether another big move will be in either of the directions. But at the same time, there are a couple of important things that I wanted to share with you.
First of all, the volume during this downward movement, and it seems like we are coming to the same levels of this bottom and this accumulation. So if they are similar, we may assume that this is the face of redistribution which is starting right now. So it seems like the positions which were bought during this dump in March, they’re currently closing. At the same time what we should expect from this phase is that we might end up in a horizontal channel, which will be from these bigs to these bottoms, where the price will hold for some time. We might see some resistance when the price will come towards the area of 10000 but the most important level would be 10500, so somewhere in between those two levels, we should expect some strong resistance and, obviously, the big volumes coming in due to the redistribution of positions.
So the long term predictions currently are that we might see the horizontal movement of Bitcoin in between those prices for some time. This first movement, an upward movement, will go in accordance with the closing of the gaps on the BTC futures. So this is one thing in favour of the upward movement in the short term trend this week. The other scenario which is possible is obviously the retracement that we should keep in mind. So if we are talking about the retracement of the overall upward movement that we saw from March, then the rough estimation would be the proper retracement of 50 percent will end up in the region of 7000 dollars for the BTC. However, going for that, we need to break the 200 MA, the 50 MA, which both are acting as support right now. Based on the RSI, we can see that it is now recharging, so that is in support with the short term retracement.
Binance Bitcoin Price Analysis
However, let’s go to Binance and look at the short term time frame, so starting from four hours, what we can see here is obviously the very sharp decrease in the price of Bitcoin starting from the 8th of May, so during the weekends, we saw this dump which broke the 50 MA, and it’s now acting as a resistance. At the same time, if you go to the hourly time frame, not much is actually happening right now. We can see the slight divergence on the one-hour time frame so the price was decreasing while the RSI was increasing, however, we can still see that we’re currently stuck in that channel, and the breakout of this channel will determine whether, in the short term, the price will go up or go down. So currently we are just monitoring the situation.
There is probably the link with the bitcoin halving, which is going to happen quite soon, and that is why the market is currently very quiet and indecisive. So the market is waiting for someone from the big movers to make their first move.
Binance: Ethereum Price Analysis
Okay, let’s go to Ethereum right now. And as usual, in front of you, you can see the Ethereum uses the T price chart from Binance. And we’re looking at the weekly time frame. So I will switch all our predictions from the previous reviews off and we’ll see what actually was happening during the previous week.
So, once again, we saw a very nice and steady increase in the price of Ethereum going consecutively up for five weeks in a row. However, the previous week, due to the weekend dump closed below the 50 MA, the volume was as good as the previous week, so we can see that the Ethereum is trading quite nicely in terms of the volume. Let’s look at the daily scenario and at the same time we’ll switch back our predictions from the previous reviews. First things first, there was a bit of accumulation in this area as we determined last time. We saw that the price went here twice, so that was the first shadow and this was the second week that touched this accumulation zone based on the volume. And then we saw a nice increase and a nice spike, however, the price could not move any higher. So if you entered the position here, this would be a nice area to actually close it. And on a more local time frame, you could have actually seen this. So we broke the 50 MA with a nice volume and nice candle, so we were expecting in the price to go higher, however, we saw a very tight resistance, so you can see that the price is struggling quite a lot to go through. And on this second attempt, in particular, that would have been a good point to determine that the price is not going any higher and to exit the position.
So this would mean that you would get a profit of around 7 percent if you did that. Once again, what to expect here is, first of all, we broke down below the upward channel. That is quite important. So on the one hand, it looks like the trend is starting to reverse. We can see the lower high was formed so we can roughly put it like this at this particular moment. What to expect is we need to see the retracement of the drop. If we assume that we’re starting a downward channel and at the same time that the BTC dominance is actually increasing, so the less attention will be paid to altcoins, what to expect is the price can go back towards the upward channel, but if we will not be able to break the 50 MA, it will act as a resistance and we might see the beginning of the downward movement. So, this would be quite important for this week in the Ethereum price to either try to go back into the upward channel and try to break the resistance levels which formed or to start its descent and start its replacement.
The long term, if we think about the retracement, once again, we can draw the Fibonacci retracement tool and the golden pocket will be around the first accumulation zone which is between 135 and 140 US dollars. At the same time, let’s look in the history a bit, how it was actually working. So, for example, we can take the previous huge move to the bottom and you can see that the price started its reversal right at this area of the golden pocket between 61 and 65 percent of Fibonacci retracement. So, if this is something similar, which may occur, then the long-term analysis for the downward trend could be that we can see the price going back towards the area of accumulation, so between 135 and 140 ETH/USDT.
Once again, the overall conclusion that for this week, at least for Monday and Tuesday, we’ll just monitor the market will look where the price will go. We’ll see if this price can be confirmed by any large volume movements, so if we can see any large bulls or bears participating in the market to determine the direction of the further price movement. And only then we’ll make sure that we’ll follow one of the scenarios described in today’s review.
That was it for this week. Thank you very much for watching, guys. Please subscribe to our YouTube channel and smash like button if you like the content. Also, subscribe to our Telegram channel to receive the daily reviews of BTC and Ethereum prices. Best of luck with your trading.
Thailand SEC Bans Meme Coins, Fan Tokens, NFTs
Local exchanges in Thailand had been given a deadline until July 11 to submit their new rules for listing tokens that complies with the new guidelines from the Thailand Securities and Exchange Commission (SEC).
“The Securities and Exchange Commission (SEC) Board has approved the new rules that prohibit digital asset exchanges from providing services in relation to utility tokens and certain types of cryptocurrencies. The rules also specify that the exchanges set a requirement to be imposed in the event that digital tokens issued by their own exchange or related persons are listed on the exchange. In this regard, the token issuer who fails to comply with the white paper and relevant rules in substance could risk having such tokens delisted from the exchange. This new regulatory guideline aims to enhance protection of digital asset traders’ interest.”
The Thai SEC also added that listing rules prohibits local exchanges from providing services that have these following characteristics:
(1) Meme Token – having or no clear objective or substance or underlying, and whose price runs on social media trends.
(2) Fan token: tokenized by the fame of influencers.
(3) Non-Fungible Token (NFT): a digital creation to declare ownership or grant of right in an object or specific right. It is unique and not interchangeable with digital tokens of the same category and type at the equal amount.
(4) Digital tokens which are utilized in blockchain transactions and issued by digital asset exchanges or related persons.
Along with this move is their previous announcement of regulating Decentralize Finance (DeFi) projects in the country, including the issuance of digital tokens.
In the previous announcement, liquidity provider tokens, governance tokens, or tokens issued to those transacting in DeFi projects “must be licensed and must abide by the specified rules”.
The new regulation stipulates crypto exchanges, digital-asset brokerages, digital asset-dealers, private fund managers and investment advisors must be licensed by the Ministry of Finance.
Thai SEC states that, “For traders, it is best to study the DeFi project before getting involved in both technical and security aspects.” They also added that traders “should check whether the service provider is a digital-asset business that is licensed and regulated by the SEC or other regulatory agencies under law.”
This article is published on BitPinas: Thailand SEC Bans Meme Coins, Fan Tokens, NFTs
After Bitcoin U-Turn, Nigeria Plans To Launch Central Bank Currency This Year
According to Reuters, the Central Bank of Nigeria (CBN) plans to launch a digital currency pilot as soon as the end of this year.
Last month, the CBN Governor, Godwin Emefiele, made a U-turn on Bitcoin and other cryptocurrencies by saying he will “allow” them. Previously, the CBN had sought to restrict the cryptocurrency sector by imposing regulatory sanctions on monetary businesses that serviced cryptocurrency exchanges.
In a turn of fortunes, it now looks as though Nigerian officials are embracing blockchain technology. All the same, in what may well turn into a showdown between private and public cryptocurrencies in the future, arguments against central bank offerings remain as pertinent as ever.
The Nigerian Central Bank Digital Currency Has Been Years In The Making
Despite Nigeria’s purported aversion to fintech, it’s emerged that the central bank has been working on a digital currency for the past two years.
The CBN Director of Information Technology, Rakiya Mohammed, echoed what many other countries have mentioned in the past. That is, Nigeria will not be left behind in the technological revolution.
“We’re all aware that about 80% of central banks in the world exploring the possibility of issuing central bank digital currency, and Nigeria cannot be left behind.”
One of the reasons given for the CBN’s previous anti-Bitcoin position was a need to protect its citizens. In 2018, the CBN said that there is no legal redress if things go wrong in an unregulated market. There was also the usual spiel of links to illicit activity such as money laundering and terrorist financing.
Mohammed sells the idea of a central bank digital currency on it bringing financial inclusion and having the backing of the Nigerian government.
“If you have a central bank digital currency that is backed by the government, then people can make transactions online without fear of any default.”
Is This The End For Privacy?
As previously mentioned by billionaire investor Ray Dalio, governments will do all they can to maintain monopoly control of their money, even if that means outlawing the competition.
“every country treasures its monopoly on controlling the supply and demand. They don’t want other monies to be operating or competing, because things can get out of control.”
Anthony Pompliano rubbished this idea saying governments cannot ban Bitcoin. But he concedes that a scenario of coordinated global action could make life difficult for Bitcoin users.
And as cryptocurrencies continue to make their mark in the world of finance, regulators and policymakers may soon be forced to show their hand on the matter.
Unlike private cryptocurrencies, which operate on decentralized networks, central bank digital currencies would be issued and controlled by a central bank. This enables them, and by extension national governments, to track every transaction in their economies.
Liberal commentators view this situation as a significant blow to privacy. What’s more, as noted with several U.K banks refusing crypto transactions recently, central digital currencies have the potential to bring about a dystopian future in which transactions deemed “against the state” also get refused.
Why this is a ‘tremendously positive’ thing to have happened to Bitcoin
China may no longer be the hub of Bitcoin’s mining activity it once was, as several bitcoin mining farms in the country were shut down by its government, in the last few months. As of yesterday, 26 mining farms in the Sichuan province lost power following orders from the local government to terminate their power supply
Most Bitcoin mining farms relied mainly on the three Chinese provinces of Sichuan, Xinjiang, and Inner Mongolia, for powering their mining activities. Sichuan is known for its abundant supply of cost-effective hydroelectric power generated by vast dams.
With the Chinese government’s inhibitory stance on mining farms, the Bitcoin community is afraid of its adverse impact on Bitcoin’s prices and hash rate. Following the most recent shutting down of the Sichuan mining farms, the hash rate had dropped by nearly 17 percent, even though it later recovered.
This may not be a cause for worry, however, according to analyst and partner at Castle Island Ventures, Nic Carter. In April, when the mines in the Xinjian province were shut down, Carter had discussed his thoughts on this on a Twitter thread. He had emphasized that this was not a big concern.
Lastly – to those ppl who think a China ban of mining would kill bitcoin – this is what it would look like – blocks would be slow for a while and that’s it. Banning mining in 1 place doesn’t make bitcoin any less secure – no “required” threshold for hashrate.
— nicolás carretero (@nic__carter) April 17, 2021
In a more recent discussion on this topic on a YouTube video, Carter spoke about the ban on the Sichuan mining farms and provided a larger perspective on China’s policy and its impact on Bitcoin. Further, he debunked the idea regarding the ‘linear relationship’ between hash power and security. According to him, Bitcoin’s security was intact and would remain so, even if the hash rate were to drop by 50 percent, especially if the drop is a temporary one.
Another noteworthy development was that due to China’s actions several mining operations were beginning to move to other regions of the world.
Another interesting fact is that Bitdeer, led by Jihan Wu, does not own any mines in China. He foresaw the blow and set up multiple mines in the United States, Northern Europe, and South Asia. He even warned miners not to underestimate the government’s carbon neutral in April.
— Wu Blockchain (@WuBlockchain) June 19, 2021
In his video, Carter too discussed this phenomenon and added that this may just be what Bitcoin needs. He said,
“…it’s tremendously positive, both from the ecological narrative perspective and then from the perspective of eliminating this outside risk factor of a state-level attack on bitcoin … so it’s a tremendous turning point, and in my view a huge opportunity, both for individual miners and for the bitcoin community to reset these narratives which have been used against bitcoin.”
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