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Bitcoin price stuck at $32K–$35K: Likely outcomes of BTC ‘flush’ drop

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In the short term, the crucial technical resistance level is $35,500. Throughout the past 24 hours, Bitcoin has continuously rejected at that level. When Bitcoin rose to around $35,500 on Binance earlier on Jan. 13, it saw an 8% drop shortly thereafter, indicating that there is strong selling pressure.

A pseudonymous trader known as “Byzantine General” outlined that there are additional sell orders on Coinbase in the $36,500–$37,000 range, saying “I’m still not taking bets” and adding that he is “casually buying dips with spot.” There is significant uncertainty in the market due to the large price swings between $31,000 and $35,000 with no breakouts or bearish invalidations. The trader also noted that Bitcoin is currently at “VWAP” resistance, with high selling pressure at key resistance levels.

The price of Bitcoin (BTC) is ranging between $32,000 and $35,000 after the big flush drop on Jan. 12. Traders remain mixed around BTC’s short-term trajectory due to various conflicting signals. Some are bullish because of the quick recovery from $30,500 and Grayscale reopening its products to new investors. Others are cautious due to the continuous rejection at the $35,000–$36,000 resistance range.

However, the overall sentiment around Bitcoin has been increasingly positive over the past 24 hours. The swift correction from $41,000 to $30,500 flushed a lot of overleveraged buyers and long contracts. Prior to the correction, the Bitcoin futures funding rate was hovering at over 0.1% most of the time, meaning that the market was significantly overleveraged and overwhelmingly long.

The futures funding rate is a mechanism that balances the market by rewarding buyers when the market is majority short and sellers when the market is majority long. In the Bitcoin futures market, the average funding rate is 0.01%. This means that long contract holders have to pay 0.01% of their position every eight hours to their short-seller counterparty. Because the market was overleveraged for such a long time, when the first big drop happened, the price of Bitcoin began to plummet as consecutive liquidations occurred.

Following the drop, the futures market has become significantly less heated, and most derivatives products have normalized after seeing a rise in interest. Although the Bitcoin futures market’s open interest still remains near its all-time high, the market is healthier than before. This increases the probability of a renewed rally in the foreseeable future.

Positive macro narratives surrounding Bitcoin

According to Ki Young Ju, CEO of trading data platform CryptoQuant, many institutional investors bought Bitcoin at around $30,000. As such, if the price of Bitcoin drops to the $30,000–$32,000 support range, institutions would likely protect that level with large buy orders. This is mainly why Bitcoin saw a large reaction from buyers on Coinbase and other major U.S. exchanges when it dropped to $30,500 on Jan. 12. “The Coinbase outflow on Jan 2nd was a three-year high,” wrote Ju. “Speculative guess, but if these guys are behind this bull-run, they’ll protect the 30k level. Even if we have a dip, it wouldn’t go down below 28k.”

Atop the likelihood of a prolonged whale accumulation at $30,000, there are two key macro narratives that could buoy the sentiment around Bitcoin. First, several mainstream media publications have reported that U.S. President-elect Joe Biden is expected to name Gary Gensler as the chairman of the Securities and Exchange Commission. Gensler previously taught a “Blockchain and Money” course, which has since been released for free on MIT OpenCourseWare. Considering this, Mechanism Capital partner Andrew Kang said that the “probability of #BTC ETF approval just went up significantly.”

If a Bitcoin exchange-traded fund is approved after years of rejection, it would lead to two things. First, it would further legitimize Bitcoin as an established asset class and a store of value. Second, it would enable accredited investors and institutions to reliably invest in Bitcoin. Currently, the Grayscale Bitcoin Trust and the Bitwise 10 Crypto Index Fund are some of the go-to institutional vehicles to invest in cryptocurrencies, including Bitcoin.

Grayscale has reported a significant increase in demand in recent months. On Jan. 12, Grayscale reopened its products to new investors, including investment in GBTC after closing it down in December 2020. If institutions were the main driver of the recent Bitcoin rally, new inflows into GBTC could result in a newfound uptrend in the near term. Coincidentally, it was during the period of the fund’s closure when BTC saw a relatively large correction.

What comes next?

In the foreseeable future, the bullish and bearish scenarios of Bitcoin revolve around two key levels: $30,000 and $35,500. As long as Bitcoin maintains $30,000 as a strong support area, the probability of a breakout above $35,500 increases. A clean move above $35,500 would likely mean a continuation of the rally, which could result in a new leg upward beyond its current all-time high.

Traders and technical analysts say that the current price trend of Bitcoin is quite similar to when Bitcoin dropped to around $16,000 in late November 2020. At that time, Bitcoin consolidated for two weeks before finally breaking out and rallying to $20,000. The BTC price could see a similar trend where it bounces off of the $30,000 support and attempts to break the $35,500–$36,000 resistance range in the near term.

A pseudonymous trader known as “Neko” said that Bitcoin’s rebound has been encouraging thus far. He anticipates BTC to retest $36,000 soon, which would leave the path open for a potential rally back to all-time highs above $42,000: “Very impressive buy backs shown. I’m really liking those wicks on the bottom side of those h4 candles. I think we have found the local bottom for now.”

Another variable to consider in the short term is that the so-called “Kimchi premium” in South Korea has started to decline. When Bitcoin saw trading over $40,000, the premium was consistently hovering over 5%. Ever since the drop, the premium has been hovering at around 2% to 3%. This could indicate that the retail demand for cryptocurrencies in the South Korean market has cooled down slightly following the correction.

Bitcoin has been trading lower on Coinbase as well, which is unusual, as it has been consistently higher than Binance throughout the rally. Coinbase also naturally has a higher BTC price than other major exchanges that use Tether (USDT), due to the minor difference between Tether and the U.S. dollar in the exchange market. Ideally, for the bull trend to resume, the premium on both South Korean exchanges and Coinbase would have to return.

Source: https://cointelegraph.com/news/bitcoin-price-stuck-at-32k-35k-likely-outcomes-of-btc-flush-drop

Blockchain

NextGen Blockchain Platforms Self-Organize to Win Government Contracts

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Over the past year, blockchain development communities have turned their attention towards winning government contracts.

Washington, DC. There is a huge opportunity presented by increased government spending on blockchain projects. According to Bloomberg Government BGOV200 Report, federal government spending reached $597 Billion in 2019. However, since new businesses face barriers gaining direct access to government contracts, many have joined the Government Blockchain Association (GBA) to introduce their cutting-edge blockchain platforms to the public sector.

Traditionally government program managers choose to work with the same few legacy companies. For example, there are currently over 4.1 million US Federal government contractors but of the $597 billion in prime contracts awarded in FY19, the top 10 government contractors received $173.4 billion according to Bloomberg Government. However, the COVID-19 Global Pandemic was a catalyst that necessitated governments from around the world look at bold and innovative new ways to solve problems from a more diverse community.

 In March of 2020 the US Department of Health and Human Services hosted a virtual Pandemic Response Hackathon. This hackathon idea completely changed the former process of government acquisitions. The slow pattern of the past was rewritten to adopt to the chaos, uncertainty, and urgency of COVID. Government contracts went from a centralized channel to open and decentralized solutions coming in from completely new sources. A new way of doing business was introduced to the world stage, and in November 2020 the Indian Ministry of Electronics and Information Technology (MeitY), National Informatics Centre (NIC) held their own up a GovTech Hackathon. Throughout 2020, countless examples of crowdsourcing solutions contested the traditional procurement processes.

Along with new paradigms in acquisitions, 2020 brought explosive growth of decentralized development communities and platforms. Decentralized communities operate on independently run servers, rather than on a centralized server owned by a business. Initially, most blockchain solutions were private-permissioned blockchains dominated by a single vendor. One of the most popular government blockchain solutions is Hyperledger Fabric. Though it is technically an open-source project, almost 80% of software changes to Hyperledger Fabric came from IBM, demonstrating an ongoing dependence on IBM to maintain the code.

Lately, next gen blockchain solution providers have been self-organizing into working groups and communities to compete in the contracts space. The largest and most engaged of these decentralized communities is the Government Blockchain Association, with members in over 500 Government Offices, thousands of public and private sector members in 120 Chapters, and more than 50 Working Groups, and 25 Communities of Interests. They also host regular online and in-person events to introduce blockchain solution providers to government officials, promoting this new diverse community.

Some of these next gen blockchain leaders include:

  • DragonChain – DragonChain is an enterprise and start-up-ready platform to build flexible and scalable blockchain applications. It has business-ready applications and developer-friendly integrations that support many applications including learning management systems, decentralized identity, and anti-fraud and compliance solutions.
  • NEM – A community that has developed two blockchains. They are NEM NIS1 and Symbol. NEM NIS1 is the original blockchain offering from NEM, created by the community, and optimized to be a developer’s sandbox. With zero downtime or major outages since 2015, NIS1 is the blockchain you can trust for all your project needs. Symbol is the next-generation enterprise-grade blockchain solution from NEM, purpose-built to help businesses cut costs, reduce complexities, and streamline innovation. With major upgrades in flexibility, security, speed and ease of use, the Symbol platform is the best-in-class blockchain enterprise solution.
  • Simba Chain – SIMBA Chain is a cloud-based, blockchain-as-a-service (BaaS) platform, enabling users across a variety of skill sets to implement decentralized applications (dapps). These apps allow secure, direct connections between users and providers, eliminating third parties. The easy-to-use platform is tailored for users, developers, government, and enterprises to quickly deploy blockchain dapps for iOS, Android, and the web.
  • TON Labs – TON Labs is the core developer of Free TON, comprised of a decentralized team focused on developing the infrastructure and free software for TON OS. TON OS is a full-fledged, vertically integrated technology stack that helps developers work easily with the blockchain and makes it simple and intuitive for users.

Decentralized blockchain projects include the Government Business Blockchain Platform (GBBP). This multi-blockchain platform allows solutions built on any blockchain to connect and become available to governments around the world. Sub-set eco-systems include Emergency Management, Healthcare Delivery, and Citizen Services. Blockchain applications can interconnect on the GBBP, providing identity management, logistics, asset management, payments, and many other blockchain services.

These examples demonstrate how blockchain providers are working together, self-organizing into decentralized entities to build public-facing blockchain solutions. GBA groups regularly host online meetings to discuss their projects. Anyone interested in joining the discussion can find out more on the GBA Events Calendar or Events List. Later this year the GBA will be bringing World-Class Leaders to Washington, DC for Government Blockchain Week on Sept 27 to Oct 1, 2021.

For more information attend a free online event called NextGen Blockchain Platforms on March 17, 2021 or send an email to support@GBAglobal.freshdesk.com.

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Blockchain

Robinhood Reports 6 Million New Crypto Traders in 2021

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In a blog post on Feb. 26 titled “Crypto goes mainstream” the retail trading app revealed that it had seen six million new customers on Robinhood Crypto so far this year.

The number of new monthly customers buying from its crypto platform in 2021 is 15 times the 2020 average.

“By comparison, this number peaked at 401,000 in a single month last year, with a monthly average of about 200,000 customers trading on Robinhood Crypto for the first time during 2020.”

Robinhood, which had to halt trading in late January due to overwhelming demand, offers just seven tradeable crypto assets; Bitcoin, Bitcoin Cash, Bitcoin SV, Dogecoin, Ethereum, Ethereum Classic, and Litecoin.

There are no trading size limits though it added that the average transaction size is around $500. The chart provided indicates that the average trade was around half of that at $200 to $250 for the previous year.

Retail Traders Surging

The app offers an intuitive user interface and educational articles that explain cryptocurrencies. It is targeted at newbies that may not have the technical knowledge to operate more advanced trading platforms.

It also offers zero-fee trading, but makes money on spreads between makers and takers.

The report reinforces the premise that retail has arrived after months of steady institutional investment which has pushed many high cap crypto assets including Bitcoin and Ethereum to their highest ever prices.

“The numbers are clear: 2021 has started with a crypto bang.”

In a Feb. 18 note from company CEO and co-founder, Vlad Tenev, it was revealed that the total value of customer assets on Robinhood (for all markets) exceeds the net amount of money they have deposited by over $35 billion. He added;

“While markets fluctuate, this tells me that our business model is working for everyday Americans.”

Crypto Correction Deepens

The Robinhood numbers are bullish for overall sentiment, but the crypto correction is deepening and March is usually a bearish month for markets.

Since its all-time high of $1.78 trillion on Feb. 22, total market capitalization has declined by 18% to $1.46 trillion today according to Coingecko.

Bitcoin has been leading the drop as usual with an 18.7% fall from its $58k peak last weekend to just over $47k at the time of press. Meanwhile, Ethereum has been hit even harder, retreating 27% from its ATH of over $2k to below $1,500.

Another 30% correction could be on the cards, echoing the one that occurred in early January when Bitcoin prices dropped below $30k before recovering to a new high. The bigger picture still paints a bull market.

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Source: https://cryptopotato.com/robinhood-reports-6-million-new-crypto-traders-in-2021/

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Kraken Daily Market Report for February 25 2021

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Overview


  • Total spot trading volume at $1.86 billion, near the 30-day average of $2.08 billion.
  • Total futures notional at $780.0 million.
  • The top five traded coins were, respectively, Bitcoin, Ethereum, Tether, Cardano, and Polkadot.
  • Strong returns from Lisk (+16%), Litecoin (+11%), Synthetix (+12%), Kyber Network (+11%), and Kava (+11%).

February 25, 2021 
 $1.86B traded across all markets today
 Crypto, EUR, USD, JPY, CAD, GBP, CHF, AUD 
XBT 
$50966. 
↑2.4% 
$762.3M
ETH 
$1632.3 
↑0.19% 
$296.7M
USDT 
$1.0006 
↓0.04% 
$200.7M
ADA 
$1.1165 
↑6.3% 
$184.1M
DOT 
$34.439 
↑2.2% 
$81.3M
LTC 
$201.51 
↑11% 
$48.0M
USDC 
$1.0002 
↑0.0% 
$32.8M
LINK 
$28.183 
↑0.17% 
$27.8M
XRP 
$0.4724 
↑0.9% 
$25.2M
XDG 
$0.0548 
↓3.8% 
$20.9M
BCH 
$548.38 
↑3.9% 
$12.8M
ATOM 
$19.931 
↑1.6% 
$12.7M
FLOW 
$20.923 
↑0.6% 
$10.5M
KSM 
$247.75 
↑1.9% 
$9.43M
UNI 
$25.939 
↑2.7% 
$8.71M
ALGO 
$1.1156 
↑5.2% 
$8.13M
XLM 
$0.4195 
↑3.7% 
$7.97M
GRT 
$1.9406 
↑2.3% 
$7.9M
XTZ 
$3.7846 
↑7.1% 
$7.01M
LSK 
$3.2797 
↑16% 
$5.94M
XMR 
$212.06 
↑3.4% 
$5.39M
AAVE 
$379.16 
↑3.1% 
$4.4M
DAI 
$1.0013 
↓0.02% 
$4.22M
TRX 
$0.0495 
↑3.4% 
$4.18M
EOS 
$4.0613 
↑4.6% 
$4.06M
DASH 
$241.44 
↑1.6% 
$3.81M
SNX 
$21.426 
↑12% 
$3.64M
ICX 
$1.7554 
↑4.4% 
$3.14M
QTUM 
$5.6487 
↑6.4% 
$3.13M
NANO 
$5.9207 
↑2.0% 
$2.97M
WAVES 
$10.571 
↑7.5% 
$2.67M
FIL 
$36.790 
↑0.5% 
$2.62M
ZEC 
$137.80 
↑5.2% 
$2.48M
YFI 
$34949. 
↑3.3% 
$2.13M
BAT 
$0.5247 
↑2.1% 
$2.03M
SC 
$0.0110 
↑1.7% 
$2.02M
OMG 
$4.9844 
↑5.3% 
$1.84M
OXT 
$0.5219 
↑2.9% 
$1.8M
MANA 
$0.2640 
↑6.8% 
$1.77M
KAVA 
$3.7938 
↑11% 
$1.24M
COMP 
$447.99 
↑2.5% 
$1.19M
KNC 
$1.8100 
↑11% 
$1.0M
ETC 
$11.998 
↑1.0% 
$927K
PAXG 
$1786.2 
↓1.3% 
$845K
REP 
$35.801 
↑8.3% 
$840K
KEEP 
$0.3718 
↑7.3% 
$838K
CRV 
$2.2404 
↑3.9% 
$629K
ANT 
$4.6311 
↓2.3% 
$546K
GNO 
$141.87 
↑5.5% 
$436K
STORJ 
$0.6493 
↑9.3% 
$412K
BAL 
$39.290 
↑1.9% 
$345K
REPV2 
$28.291 
↑11% 
$305K
MLN 
$40.612 
↑3.0% 
$277K
TBTC 
$53227. 
↑0.9% 
$85.0K


#####################. Trading Volume by Asset. ##########################################

Trading Volume by Asset


The figures below break down the trading volume of the largest, mid-size, and smallest assets. Cryptos are in purple, fiats are in blue. For each asset, the chart contains the daily trading volume in USD, and the percentage of the total trading volume. The percentages for fiats and cryptos are treated separately, so that they both add up to 100%.

Figure 1: Largest trading assets: trading volume (measured in USD) and its percentage of the total trading volume (February 25 2021)

Figure 2: Mid-size trading assets: (measured in USD) (February 25 2021)

Figure 3: Smallest trading assets: (measured in USD) (February 25 2021)


#####################. Spread %. ##########################################

Spread %


Spread percentage is the width of the bid/ask spread divided by the bid/ask midpoint. The values are generated by taking the median spread percentage over each minute, then the average of the medians over the day.

Figure 4: Average spread % by pair (February 25 2021)



.


#########. Returns and Volume ############################################

Returns and Volume


Figure 5: Returns of the four highest volume pairs (February 25 2021)


Figure 6: Volume of the major currencies and an average line that fits the data to a sinusoidal curve to show the daily volume highs and lows (February 25 2021)



###########. Daily Returns. #################################################

Daily Returns %


Figure 7: Returns over USD and XBT. Relative volume and return size is indicated by the size of the font. (February 25 2021)



###########. Disclaimer #################################################

The values generated in this report are from public market data distributed from Kraken WebSockets api. The total volumes and returns are calculated over the reporting day using UTC time.

Source: https://blog.kraken.com/post/8057/kraken-daily-market-report-for-february-25-2021/

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