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Bullish ‘Great Reset’ for BTC: 5 things to watch in Bitcoin this week

Republished by Plato

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Bitcoin (BTC) is looking stable at the start of a new week after recovering from a drop to $43,000 — what’s in store?

After last week’s 20% drop from all-time highs, opinions are divided over what the future might look like for Bitcoin price action in the short term. Macro factors are encouraging, but naysayers insist that a major crash is still a distinct possibility.

Cointelegraph highlights five factors which could be set to influence BTC/USD in the coming days.

Fresh stimulus, fresh buy-ins?

Macro is looking to deliver a perfect storm for alternative assets, led by the United States. President Joe Biden’s $1.9 trillion stimulus package has passed lawmakers, who gave the green light for yet another unfathomably large money printing exercise to begin.

Traditionally a boon for Bitcoin, the huge increases in the dollar supply includes direct payments to eligible Americans, this time of $1,400.

The third such “stimulus check,” or “stimmy” as it is popularly referred to, could easily find its way into the Bitcoin ecosystem if historic trends repeat themselves this year. As Cointelegraph reported, in 2020, amounts equal to stimulus check payouts began appearing on exchanges soon after regulators approved them.

While it was a niche phenomenon a year ago, March 2021 is an entirely different playing field for Bitcoin and altcoins, with prices exploding and with them publicity in recent months.

Coupled with the ongoing appeal and controversy of social media-inspired stock trading, the potential impact on cryptocurrency more broadly from the U.S.’ “free money” could hardly be more obvious.

“In the US a $1.9 trillion stimulus package is on the way. That’s more than all the cash currently sitting on the US Treasury account at the Federal Reserve,” on-chain analytics service Ecoinometrics summarized to Twitter followers.

“This is good for Bitcoin.”

Stocks and DXY climbing

On the topic of stocks, these have been rallying once again after a global bond sell-off last week had regulators concerned.

So too has the strength of the U.S. dollar currency index (DXY), which continues its climb from late last week after hitting lows of 89.67. At the time of writing, DXY measured over 91 for the first time since Feb. 8.

A strong DXY tends to come hand in hand with price problems for BTC/USD, a persistent trait that characterized much of last year.

DXY 1-hour candle chart. Source: Tradingview

With the temporary boost of the stimulus package likely to wear off sooner rather than later, however, the status quo may not endure for long.

“There is little doubt in my mind that central banks will eventually lean quite hard against a sustained rise in yields,” Deutsche Bank strategist Jim Reid in an admonitory note to clients quoted by Reuters.

“They simply can’t afford to see it happen with debt so high.”

Trader on BTC price: “Relax”

Within Bitcoin, much attention is still being given to “the dip” across social media and further afield.

After hitting lows of just above $43,000 over the weekend, bulls were left disappointed that previous bottoms around the $44,000 had not constituted a definitive floor.

Against a backdrop of unbelievable performance since March 2020, however, the dive of $15,000 from all-time highs of $58,300 last month seemed almost like a non-event for some.

“The panic of yesterday was so unnecessary. Welcome to the markets, dips happen. Part of the game,” Cointelegraph Markets analyst Michaël van de Poppe wrote on Monday.

“We just continue grinding and Bitcoin is just starting. Relax.”

In a fresh video update, Van de Poppe noted that the net balance on exchanges is still decreasing, indicating that buyer appetite is clearly present at current levels and investors are making the most of cheaper levels to accumulate, not sell.

“You shouldn’t be worrying at all about this correction as this is just a very healthy and natural correction that we’re seeing on the markets here, especially given that we’ve just anticipated a run from $10,000 to $58,000 in just a matter of months,” he said.

For bulls, it is important to avoid a deeper drop to take liquidity below the $42,000 level. Should Bitcoin avoid this, a chance to move higher remains.

BTC/USD 1-hour candle chart (Bitstamp). Source: Tradingview

A “full reset” for bearish Bitcoin indicators

For Bitcoin metrics, the dip has also been a positive, rather than negative sign. Most prominent among them is the spent output profit ratio (SOPR), which benefited from a “reset” as BTC/USD returned to the mid $40,000 range.

As Cointelegraph reported, SOPR provides a window into trader mentality — once it turns negative, it indicates that anyone selling BTC is selling it at a loss.

“The daily Bitcoin Spent Output Profit Ratio (SOPR) has seen a full reset, and turned negative for the first time in five months – investors were on average moving BTC at a slight loss, indicating profit-taking has abated,” on-chain monitoring resource Glassnode said in a series of tweets at the weekend.

Total realized losses for Feb. 27 alone were $243 million from wallets taking a hit on their balance.

Bitcoin adjusted SOPR chart. Source: Glassnode/ Twitter

Beyond SOPR, derivatives funding rates saw a “reset” of their own last week as a major options expiry date came and went on Friday. Short traders, with that, are effectively paying long positions once again, rather than the other way around.

The combined impact of these two phenomena is only good for Bitcoin, with historical precedent serving to support the theory that their current behavior is a bullish signal.

No greed, just light fear

A final round of resets focuses on sentiment rather than numbers. In an update, market insight firm Santiment noted that Bitcoin was getting its most negative press on social media in five months.

Far from being a cause for concern, however, the implication could be that a BTC buy-in is a prime move to capitalize on overly cautious investor mood.

“Buying into crowd fear can lead to rewards,” Santiment wrote on Twitter.

“And albeit only mildly fearful, #Twitter’s #Bitcoin commentary is at the most negative ratio in about 5 months, according to our algorithm. After last week’s retrace, the bearish narrative has returned.”

Bitcoin weighted social sentiment chart. Source: Santiment/ Twitter

In a breath of fresh air, meanwhile, the popular Crypto Fear & Greed Index, previously near all-time highs, has almost halved in a matter of days.

Based on multiple factors, Fear & Greed aims to process sentiment to provide a rough idea of when crypto markets are overly bearish or unreasonably bullish.

At the time of writing, the index measured 38, its lowest level since September 2020.

Source: https://cointelegraph.com/news/bullish-great-reset-for-btc-5-things-to-watch-in-bitcoin-this-week

Blockchain

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

Republished by Plato

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Mike Novogratz, a veteran investor, and a huge Bitcoin supporter noted the U.S. is currently in a good economic position. Still, the nation can face a major competitive disadvantage unless it engineers a digital dollar soon.

The Importance Of An E-Dollar

Novogratz, chief executive of digital merchant bank Galaxy Digital GLXY, underlined the value that a digital dollar could bring to the US. In a Friday interview with MarketWatch, he stated:

”To me it is an existential crisis, we need a digital dollar.”

Furthermore, the investor expressed his view over the current COVID pandemic and the negative impact on the U.S. market and the world, in general. He referred to the trillions of dollars of monetary and fiscal spending done to help eliminate the worst of the economic aftershocks the disease caused:

”If our fiscal and monetary policy starts looking like it’s from a Banana Republic…you are going to run into some Minsky moment where confidence breaks down.”

With his statement, Mike Novogratz referenced Hyman Minsky, who exposed a view in the recent past that a period of distortions in the financial system eventually ends very badly.


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The existence of a digital dollar sounds even more important after some stock-market investors have been warning about a surge in US inflation in the past weeks.

The Competition With China

During the interview, Novgorotz claimed that while in the U.S., the development of an e-dollar is still under question and researches, China has fired the first salvo on the digital currency front.

The biggest economy in Asia conveys great support to its digital yuan. According to some experts in the field, its new currency is a weapon that the country can use to compete with the U.S. and other developed economies.

As CryptoPotato recently reported, PayPal CEO Peter Thiel said that Bitcoin could be used as a Chinese financial weapon against the U.S.

In the meantime, Novogratz said that there is ”zero evidence of the Chinese government buying Bitcoin” much less weaponizing it, referring to the comments made by Peter Thiel:

”Sometimes he likes to say things that are provocative.”

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Source: https://cryptopotato.com/bitcoin-bull-mike-novogratz-predicts-existential-crisis-unless-the-us-creates-a-digital-dollar/

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Blockchain

Ripple becomes tidal wave, leads weekend pump and notches legal victories

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Amid a weekend pump carrying multiple cryptocurrencies higher, Ripple’s XRP looks to be leading the way with a push as high as 30% on the daily — carried on the back of a string of legal victories and rumors of relisting at some exchanges. 

Where Bitcoin and Ethereum are up merely 2.7% and 3.4% respectively on the day, XRP climbed to $1.36 before retreating to $1.32, where it sits at the time of publication. The digital currency is now up 111% on a 7 day basis, and a staggering 544% on the year. The recent push has also buoyed XRP back into the top 10 cryptocurrencies by marketcap, behind only BTC, ETH, and BNB at #4.

The rally flies in the face of a lawsuit from the Securities and Exchange Commission, which charges that XRP’s $1.3 billion ICO was an “unregistered securities offering.” The news led multiple exchanges to delist the currency, and XRP lost its place as the 3rd largest currency by marketcap, at time looking as if it would even fall out of the top ten. 

The bad news for XRP didn’t stop with the SEC, either. In March Ripple CEO Brad Garlinghouse announced that the company would be “winding down” its relationship with Moneygram — a once highly-touted partnership that investors often pointed to as proof of the digital currency being on a path towards becoming “the standard” for payments and settlement.

Despite the deluge of negative headlines, it appears all buyers needed was a small ray of hope to jump back in — and they’ve gotten exactly that. Ripple lawyers have notched two victories in their legal battle against the SEC, including winning access to internal SEC discussion history regarding cryptocurrencies, and a court denied the SEC the ability to disclose the financial records of two Ripple execs, including Garlinghouse.

Ripple executives themselves seem heartened by the news, with CTO David Schwartz saying the US isn’t “prepared” to regulate cryptocurrencies (a possible dig at the ongoing legal proceedings).

All in all, it’s just another week for one of the most controversial cryptocurrencies in the space.

Coinsmart. Beste Bitcoin-Börse in Europa
Source: https://cointelegraph.com/news/ripple-becomes-tidal-wave-leads-weekend-pump-and-notches-legal-victories

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Blockchain

Why this OlympusDAO’s product could be amongst DeFi most lucrative

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Taking the market by storm, OlympusDAO’s native OHM is up 95.8% this week alone and 31.1% in the past two weeks. At the time of writing, OHM is trading at $812,76 with 7.3% profits in the 24-hour chart.

With a market cap of just $68 million, OlympusDAO might have gone unnoticed by many investors. However, it has a mechanism called Bonds which promises to be one most important and lucrative in the DeFi sector.

According to research firm Messari, this protocol is attempting to create a stable currency backing every OHM with DAI and OHM-DAI. The objective is to maintain a “fundamental check on inflation” and a currency with an undiluted purchasing power.

Unlike Tether and other stablecoins, OHM is not pegged to any other asset. Its stability is achieved via the DAO (Decentralized Autonomous Organization) when it alters variables to obtain more profitability for stakers.

This is done via the sales contract connected to the protocol’s treasury and a liquidity pool (OMH-DAI) on decentralized exchange Sushiswap, as shown below. Messari explains:

When OHM trades above 1 DAI, the protocol mints and sells new OHM. When OHM trades below 1 DAI, the protocol buys back and burns OHM. In each case the protocol makes a profit. Olympus DAO distributes these profits 90% to OHM stakers pro rata and 10% to a DAO.

OlympusDAO OHM
Source: Messari

How OlympusDAO’s bonds operate

The Bonds are a treasury component to get liquidity with it users can trade Stake Liquidity Provider tokens to get OHM directly with the protocol, as an OlympusDAO developer explained.

Once the trade is completed there is a vesting schedule of 5 days. During this time, the user can redeem the tokens but has incentives to get them at a discount. The latter is determined by the number of bonds in the protocol, more bonds are equal to a lower discount.

Via this mechanism, as the developer said, OlympusDAO restrains its own growth, to have become “steadier”.

The liquidity from a bond is locked in the treasury and used to back new $OHM. That liquidity now belongs to the market and, by extension, the token holders. The more liquidity the protocol builds up, the more confident holders can feel.

The users are basically contributing to OlympusDAO by adding liquidity. In retribution, the user gets a reward in OHM at a much cheaper price during a specific period. That way, both the user and the protocol can benefit.

OlympusDAO offers LP a variety of strategies around OHM which they can leverage to obtain a bigger profit than on the spot market. The developer claims:

All of this serves to create a long-term, sustainable bootstrapping mechanism for the protocol, with participants as the main beneficiaries. A good system shouldn’t offer one opportunity to “make it”; it should offer them in perpetuity with diminishing returns. This is how you produce wealth; slowly, through compounding gains.

Ethereum is trading at $2096,58 with a 1.2% profit in the 24-hour chart, after dropping from its ATH at $2,198.

OlympusDAO OHM Ethereum ETHUSD
ETH with small profits in the 24-hour chart. Source: ETHUSD Tradingview

Coinsmart. Beste Bitcoin-Börse in Europa
Source: https://www.newsbtc.com/news/why-this-olympusdaos-product-could-be-amongst-defi-most-lucrative/

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