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Bitcoin’s drop to $10,000 isn’t reason enough to sell

It feels weird writing about Bitcoin’s drop to $10,000 since usually, the headlines are all about Bitcoin’s rise above $10,000. However, with the market as bullish as it is now, a drop to $10,000 seem

The post Bitcoin’s drop to $10,000 isn’t reason enough to sell appeared first on AMBCrypto.

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It feels weird writing about Bitcoin’s drop to $10,000 since usually, the headlines are all about Bitcoin’s rise above $10,000. However, with the market as bullish as it is now, a drop to $10,000 seems to be much worse than it actually is, compared to a rise over it. Even so, how bad is it?

The sentiment to sell has been rising over the past few weeks, even when the price was over $11,000 and briefly over $12,000, but with last week’s drop to $10,200, and no jumps in the time since the need to sell has become a desperation. According to data from Chainalysis Market Intel, the amount of Bitcoin held on exchanges has reached its highest point in the last two months. 

With the price drop, there is a need to sell held Bitcoin. Owing to the drop, more hodlers are putting their BTC on exchanges, possibly with sell orders triggered at just below the trading price of Bitcoin to quickly sell off their bags if a big price decline ensues and takes the price below $10,000 or lower still.

Bitcoin held on exchanges | Source: Chainalysis

On the flip side, there has been a stark and severe drop in BTC inflows to exchanges during the same time. Inflows to exchanges have dropped from over $1.25 billion Bitcoin to just around $750 million, a 40 percent drop. This would mean that the selling sentiment in the market has passed for now. 

At this point, it is prudent to look at reasons to hold, in light of historical data. According to a report by Ecoinmetrics, a key indicator to look at for Bitcoin’s price trajectory going forward, keeping in mind its recent swing, is the 200-day moving average.

Breaking down your investing strategy based on this one factor and Bitcoin’s price in relation to it, you can either go long, when the current price moves above the 200 DMA, or go short, when the current price moves below the 200 DMA. If this strategy were followed since June 2013, 15 long positions would result in 11 profit positions, with the upside as low as 100 percent to as high as 4,000 percent. Losses on these long positions would be as high as – 20 percent.

Bitcoin after the 2020 halving | Source: Ecoinmetrics

Another report from Ecoinmetrics looked at the possible growth trajectory for Bitcoin based on its current halvings, in light of the past few halvings. This trend would place Bitcoin as high as $41,000 by December 2020, and at $100,000 by April 2020. Again, this is purely based on how the market moved following the halvings of 2012 and 2016, and the current market has changed since then, but it would be prudent to look at these numbers before selling fast. 

Yes, there’s a need to sell, but looking at exchange flows, this need has been surpassed. Although it cannot be ascertained why the need to sell has died down so quickly, especially given how far the price has come in the past few months, but it can be assumed that those who aren’t in the mood to sell have looked at either the 200-day trend, or the halving growth trajectory, or perhaps some other investing strategy and have decided this isn’t the right time to sell.  

Source: https://eng.ambcrypto.com/bitcoins-drop-to-10000-isnt-reason-enough-to-sell

Blockchain

Bad guys can’t cash out their loot in 2016 Bitfinex hack

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Assets stolen from Bitfinex crypto exchange in a hacking incident back in 2016 will take over a century to be cashed out, blockchain intelligence firm Elliptic said in its latest report.

On Thursday, the company published a statement about the infamous hack that resulted in Bitfinex losing 120,000 bitcoin (valued today at around $7 billion). It detailed nearly 80% of the illegally obtained funds are still in the hacker(s) wallet.

The remaining 21% have been moved around by the malicious cyber attackers that have only managed to launder 4% of their total haul, which is approximately $270 million.

A roadblock for the attackers

Elliptic pointed out that the reason for their thesis is the evolution of crypto tracking tools, regulations, and law enforcement methodologies that make stolen or ill-gotten digital assets very challenging to cash out today.

The intelligence company explained that the hackers used “peel-chains” to exchange the stolen funds. In this method, crypto tokens are moved around numerous times, moving fast from wallet to wallet, and only a small amount of the bitcoin is “peeled off to their actual destination along the way.”

Back then, it was extremely hard to track crypto-assets laundered using this method. But today, the emergence of automatic tracing systems capable of determining the ultimate source or funds in an address makes the job a lot easier for the authorities.

The hacker after the cyber attack

After the successful attack on Bitfinex in 2016, the laundering process started in 2017 through the largest darknet market that time – Alphabay. Later that year, it was shut down by law enforcement, prompting the move to Hydra – the biggest illegal marketplace today.

Cryptoslate cited part of the report from Elliptic, stating, “After a hiatus in 2019, the launderers returned to Hydra in 2020 and are currently depositing $3 million of the stolen bitcoin every month.”

According to the report, to date, there is now approximately $72 million worth of the stolen cryptocurrency sent to Hydra.

 

Image courtesy of Cointelegraph News/YouTube

Coinsmart. Beste Bitcoin-Börse in Europa
Source: https://bitcoinerx.com/blockchain/bad-guys-cant-cash-out-their-loot-in-2016-bitfinex-hack/

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Three reasons why Cardano is going on this price trajectory

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Rising trade volume across spot and derivatives exchanges have supported Cardano’s ongoing price rally over the past few weeks and months. The altcoin, at the time of writing, was trading at the $2.32-level, with the crypto gaining by 20% in 24 hours to touch one ATH after the other. The aforementioned hike in price and trade volume were evidenced by the increase in market capitalization as well.

Thanks to the aforementioned factors, Cardano is now ranked third among the market’s top-10 altcoins, based on data from CoinMarketCap.

What’s more, based on the attached chart, currently there is more ADA staked than in the past 30 days. In fact, it is at nearly half a million. With 100% of its HODLers profitable at the press time price level, ADA’s rally is likely to be a long one, especially with the altcoin’s staking rewards data offering a similar conclusion. With a relatively high percentage of ADA staked, a direct relationship has emerged between staked ADA and ADA’s price.

While the current on-chain sentiment is slightly bearish, the net network growth stood at a positive 5%. Further, while there has been a slow drop in large transactions, that could mean that more retail traders are buying ADA v. HODLers and institutions. Unless trade volume drops and cascading sell-offs occur, the price is likely to hold at its current price level.

In the case of Cardano, the concentration by large HODLers has remained largely below 30% and this is key to its ongoing rally. Top memecoins and altcoins that are rallying like DOGE, LINK, BNB, and ETH, among others, have a high concentration by large traders. This is essential to supporting the price at its key levels.

$80 billion worth of large transactions have transpired over the past week and the inflows are anticipated to increase even more. Less than 15% HODLers have held ADA for over 12 months, despite YTD gains of over 500%. And, ADA’s HODLers are lower in numbers than expected. Ergo, the short-term ROI could be the key reason for the short HODLing duration.

Based on data from Messari, the ROI over the past week was nearly 40%.

Why Cardano's price rally is a long one

ADA short-term ROI || Source: Messari

In the past year, the ROI was over 700%. This is a relatively high gain for HODLers, despite several dips.

ADA’s latest developments and the increasing demand in the second phase of the altseason make it one of the hottest altcoins to buy and HODL. In fact, one can argue that ADA continues to remain undervalued at the press time price level.


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Source: https://ambcrypto.com/three-reasons-why-cardano-is-going-on-this-price-trajectory

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Data shows the ‘Bitcoin price drops ahead of CME expiries’ claim is a myth

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Historically, activity surrounding the Bitcoin (BTC) monthly futures and options expiry has been blamed for weakening bullish momentum. A few studies from 2019 found a 2.3% average drop in BTC price 40 hours before the CME futures settlement date. 

However, as Cointelegraph reported in June 2020, the effect faded away. While 2020 seems to have rejected the potential negative impact of CME expiries, so far, the current year appears to validate the theory. Bitcoin’s price has been suppressed ahead of futures and options expiry in the first three months of 2021.

Bitcoin performance before and after CME expiry, USD. Source: TradingView

Some investors and traders have pointed out that Bitcoin’s incredible rally after the recent futures and options expiry dates has become a trend.

BTC has effectively rallied in the days following the expiry, but expanding this analysis uncovers a less-than-satisfactory trend.

Three consecutive events don’t prove a trend

The past 13 months have been nothing short of spectacular for Bitcoin, as the cryptocurrency posted 788% gains. August 2020 turned out to be the worst month, as BTC presented a 7.5% negative performance. Thus, choosing random starting points within the month will likely show a similar positive trend.

For example, if one uses the “last quarter” moon phase as a proxy, the odds that a rally takes place after each event are very high.

Bitcoin performance after “Last Quarter” moon, USD. Source: TradingView

As depicted above, indeed, Bitcoin rallied after five out of the last six instances. The only conclusion might be that positive trends are the norm rather than the exception during bull runs.

Although there might be some explanation to the reason behind Bitcoin’s end-of-the-month underperformance, these are only hypotheses.

While market makers and arbitrage desks could benefit from suppressing the price after a rally, other forces, including leverage futures longs and call option holders, would balance that out.

Bitcoin price did not drop in three of the last seven expiries

Therefore, it makes sense to analyze the potential price suppression ahead of the expiry instead of looking for explanations for a rally during a bull market.

Bitcoin performance before and after CME expiry in 2020, USD. Source: TradingView

Both October and December 2020 expiries failed to present any negative pressure ahead of such dates. Meanwhile, the 12% positive performance on the five days that preceded the most recent April 30 expiry also puts a big question mark on how meaningful the CME event really is.

Considering there hasn’t been a price decrease ahead of monthly futures and options expiries in three of the last seven instances, this evidence should put a nail in the coffin of the unfounded myth.

As mentioned earlier, trying to develop theories on why sellers acted more aggressively on specific dates is unlikely to yield results.

As shown above, Bitcoin’s price failed to underperform in three out of the last seven expiries. A 57% success rate should not define a trend when a positive performance after a specific date has been proven common during a bull run.

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/data-shows-the-bitcoin-price-drops-ahead-of-cme-expiries-claim-is-a-myth

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