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Elon Musk tweets BTC price bottom? 5 things to watch in Bitcoin this week

Republished by Plato

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Bitcoin (BTC) is nearing $40,000 this week as “Dogefather” Elon Musk deals out pure pain to hodlers — what’s next?

After a traumatic weekend for many crypto investors, Monday is setting the stage for the next chapter in the wild 2021 bull market.

Cointlegraph takes a look at five factors which could shape what Bitcoin and altcoins do next.

Musk tweet hits key Bitcoin technical level

It’s all about one man yet again this week: Elon Musk. In characteristic fashion, the Tesla and SpaceX CEO caused uproar on Twitter when he came out bearish on Bitcoin.

BTC/USD sold off immediately on news that Tesla was halting BTC payments for its products, but for Musk, this was not enough.

Further tweets over the weekend, including criticism of Bitcoin’s decentralization and how he “believes in crypto,” added fuel to the fire.

It was a hint that Tesla may already be planning to sell its holdings, however, that caused the most misery. Bitcoin fell to near $42,000, retesting this previous all-time high level before steadying as Musk stressed that no sale had occurred.

“To clarify speculation, Tesla has not sold any Bitcoin,” he wrote on Monday.

BTC/USD chart with Twitter events highlighted. Source: Twitter

With Musk versus the cryptocurrency community beginning to look like a full on war, Bitcoin is thus unsurprisingly volatile as all eyes remain on the Twitter battlefield.

At the time of writing, Bitcoin was trading at around $44,800, still down 8.7% over the past 24 hours.

As analyst Alex Krueger noted, however, the clarifitication tweet may be unwittingly acting as a local bottom signal, as Musk posted it just as BTC/USD hit a key 61.8 Fibonacci retracement level.

“Elon Musk must be an outstanding technical analyst,” he commented.

“His ‘Tesla has not sold any Bitcoin’ tweet was posted exactly at Bitcoin’s key technical level, the 61.8 fib ($42,845).”

BTC dominance falls below 40%

Musk’s activities have had a detrimental impact on Bitcoin and altcoins alike.

Despite continuing to praise Dogecoin (DOGE), even the meme-based token failed to avoid losses over the weekend, with the majority of large-cap altcoins following Bitcoin down.

There were some less significant losses, such as those of Cardano (ADA), which on Saturday was still bucking the overall downtrend to even post new all-time highs.

In terms of bearishness, however, nothing shows how much the average Bitcoin holder is suffering like market dominance.

On Monday, Bitcoin’s overall market cap share dipped below 40% for the first time since June 2018.

Bitcoin market cap dominance chart. Source: CoinMarketCap

Already on the way out, dominance was dealt a significant blow thanks to the recent Bitcoin price pressure, while alts such as Ether (ETH) benefitted.

“The Bitcoin dominance is still falling,” popular Twitter trader The Moon summarized over the weekend.

“The alt season is not over yet. But my gut feeling is that the end is near!”

Bitcoin fundamentals provide calm

For all the nerveracking price action, meanwhile, nothing provides a bullish counterpoint to the current Bitcoin narrative than its network fundamentals.

Even after its $42,000 dip, Bitcoin is more attractive than ever for miners, and its network security is therefore also more solid than ever before.

As Cointelegraph reported, both hash rate and difficulty have staged a miraculous recovery in recent weeks, reclaiming all-time highs after a miner washout caused its own brief price crash.

The weekend proved to be no different, with weekly average hash rate topping 180 exahashes per second (EH/s) for the first time.

Bitcoin 7-day average hash rate chart. Source: Blockchain

Difficulty is still on track to increase by over 10% at the next automated readjustment in 11 days’ time. The previous readjustment on May 14, at 21.5%, was the largest positive shift since June 2014.

“Bitcoin’s mining difficulty hitting an all-time high just after tesla’s announcement is a chef’s kiss,” Alex Thorn, head of firmwide research at crypto merchant bank Galaxy Digital, said last week.

Dollar bounces at support

Taking a break for crypto-specific triggers, the wider macro picture may yet provide some inspiration for price trajectory.

After plunging late last week, the strength of the U.S. dollar is returning. The U.S. dollar currency index (DXY) is bouncing off familiar support — surges in its strength tends to provide teething problems for BTC/USD.

U.S. dollar currency index (DXY) 1-day candle chart. Source: Tradingview

At the same time, stocks are bullish in China but performing averagely in Europe and the U.S. Coronavirus, with localized peaks in some jurisdictions but fewer cases in others, joins the melting pot.

Among traders, however, it is inflation that is a key issue. A broad global rebound from the time of lockdowns and other restrictions creates problems for those attempting to engineer it — specifically, the U.S. Federal Reserve and other central banks.

“The global economic recovery is well under way; that’s what’s fueling the inflation fears,” Olivier d’Assier, Qontigo head of APAC applied research, told Bloomberg.

After stock markets’ rip roaring year, he added, appetite for profit taking will be understandably increasing.

Bitcoin still beats its last bull market

Is it 2013 or 2017 in terms of the Bitcoin bull market?

Among the industry’s best-known names, there is no hint of bearishness — all that remains to do is analyze the nature of the current retracement and compare it to years past.

This week, stock-to-flow creator PlanB notes that for all the Musk drama, Bitcoin is still performing better than during its 2017 run to $20,000. This despite the $42,000 dip officially being Bitcoin’s biggest this bull cycle and since the cross-asset crash of March 2020.

“Today feels like 2017 bull market (esp. during the fork war),” he tweeted on Monday, invoking memories of the birth of Bitcoin Cash (BCH).

“It’s not a straight line to the next ATH, but a lot of volatility (multiple -30% dips). HODL.”

BTC/USD stock-to-flow chart as of May 17, 2021. Source: Digitalik

Calling for calm and zooming out is a key feature among seasoned Bitcoiners. As Cointelegraph reported last week, stock-to-flow remains unviolated by Musk or any other episode of downward volatility.

An accompanying survey meanwhile revealed that a majority of 35,000 respondents believe that BTC/USD will still hit $100,000 this year.

Coinsmart. Beste Bitcoin-Börse in Europa
Source: https://cointelegraph.com/news/elon-musk-tweets-btc-price-bottom-5-things-to-watch-in-bitcoin-this-week

Blockchain

Bitcoin Should Be In Every Portfolio, Says Mexico’s Third Richest Man

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The arrival of the death cross does not seem to scare Michael Saylor, who bought $500 million just when this terrifying pattern was forming. But Michael Saylor is not the only one who thinks so. Ricardo Salinas Pliego, the third richest man in Mexico, also believes that Bitcoin is an excellent investment.

During an interview with the director of Blockchain Land, José Rodríguez, Ricardo Salinas Pliego assured that Bitcoin is as solid an investment as gold. He explained that the debate about its nature is not so crucial for those who know its properties.

In my opinion, all the advantages that bitcoin has are enough to make the gold of the modern world … There is no point in discussing whether it is a currency or not.

There Will Be Only 21 Million Bitcoins, And That Is Key to Everything

Ricardo Salinas argues that the fact that Bitcoin is finite, easy to transport, and enjoys extreme liquidity internationally are compelling reasons to consider it as an asset worth taking into account when building an investment portfolio.

In fact, Salinas explains that from his point of view, every investor should own Bitcoin:

Bitcoin is an asset that has international value, which is traded with enormous liquidity worldwide. For that reason, it should be in any portfolio.

Ricardo Salinas is a vocal Bitcoiner. He was one of the first prominent Latin American businessmen to talk about Bitcoin and support it in social networks. He also revealed that 10% of his liquid investment portfolio was held in Bitcoin, which is obviously no small thing considering his fortune.


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But What About Altcoins?

But for now, it seems that Salinas’ relationship with Bitcoin admits no competition. When asked about the potential of Ethereum and other altcoins, Salinas was unconvinced that they can outperform Bitcoin.

Regarding Ethereum, he explained that its weakness lies in its inflationary nature.

The scarcity of Bitcoin, the 21 million, is the key to everything. That is why I mention Ethereum. Because as long as it does not have a finite amount of issuance, I will not believe them because they can issue more, and the asset depreciates.

The issue of the inflationary design of some currencies is of special importance to Ricardo Salinas. Latin American governments have abused the power to artificially issue money, which has damaged the purchasing power of the people in the long run.

Look, I started my professional career in 1981. Back then, the [Mexican] peso was 20 to 1 [dollar]. Today, on the other hand, we are at 20,000 to the dollar. And that’s here, in Mexico, but if we do it in Venezuela, Argentina or Zimbabwe, the figures lose all proportion.

As Bitcoin is a global and finite asset, it is safe from manipulation by any government, group of developers or centralizing power entities.

But there is always a little space for other projects. He said that Monero and Zcash are interesting because of the privacy that they offer.

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Coinsmart. Beste Bitcoin-Börse in Europa
Source: https://cryptopotato.com/bitcoin-should-be-in-every-portfolio-says-mexico-third-richest-man/

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Blockchain

Indian authorities finally capture ‘Crypto King’

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Makarand Pardeep Adivirkar, also known as “Crypto King” — a notorious Indian criminal who trades cryptocoins for drugs — was finally arrested by Indian police.

Indian Narcotics Control Bureau (NCB) arrested Adivirkar for suspicions of buying drugs from the Darknet using Bitcoins. NCB said that Crypto King buys from both Indian and European drug peddlers.

Surprising discovery

According to the results of the investigation, the authorities found 20 LSD blots in Khardoni Village, Malad. The psychotropic substance was discovered to originate from Europe and was purchased using cryptocurrency.

They also found out that his chosen method was to receive cash and send bitcoins on marginal profits using his digital wallet.

NCB is set to conduct further investigation on the case. As of the moment, the bureau has not yet disclosed the specific criminal charges against Adivirkar.

Another crypto criminal

Adivirkar wasn’t the first “crypto criminal” arrested in India. Recently, a man dubbed as “Superman 29”, whose real name is Kais Mohammad, was arrested for illegally processing $25 million worth of bitcoins.

He was later found guilty of money laundering, operating a money transmitting business without a government permit, and other strings of money-related crimes.

Authorities said that he was the head of Herocoin, an illegal currency money service business that offers bitcoin-to-cash services. The business charges 25%, which is very high compared to the usual rate in the market.

Undercover agents foiled his illegal business by posing as clients who pretended to run businesses related to human trafficking, the dark web, and prostitution.

Fortunately, authorities outlawed Mohammad’s operations, and as a punishment, the “Superman” will have to spend two years behind bars.

Image courtesy of Cointelegraph News/YouTube

Source: https://bitcoinerx.com/blockchain/indian-authorities-finally-capture-crypto-king/

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Ukraine Parliament modifies virtual assets bill to regulate cryptocurrencies 

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The updated draft law included measures such as ownership disclosure, making KYC procedures mandatory, and the need to obtain government authorization. 

The Digital Transformation Committee of the parliament recommended the adoption of the updated version, which they released just this week. 

Stricter measures

The draft law provided specific definitions of virtual assets, which include “intangible good”, an object of civil circulation, something that can “certify property to non-property rights” and “rights to claim other objects of civil rights.” 

One of the major regulations that the bill suggests revolves around cryptocurrency platforms and exchanges. 

According to the bill, crypto-related companies would be required by law to obtain approval from the Ministry of Digital Transformation. 

They are also required to present their ownership structure and show their financial transactions, which would drastically decrease the possibility of illegal actions. 

Criticisms on the draft

Representatives from the National Securities and Stock Market Commission (NSSMC) and the National Bank of Ukraine (NBU) criticized the modifications on the bill.

According to them, more changes are needed because the current bill is still filled with many loopholes and errors that would certainly cause serious problems. 

They also added that the bill didn’t clearly define the specific roles of regulators and the mechanism for coordinating market activities is not clear. 

Another criticism that the bill received is that it is not in line with international standards and lacks clear protection for investors against illegal activities. 

The MDT, which proposed the modified bill, assured officials that the contents of the bill serve the best interest of the country. 

Image courtesy of Cointelegraph News/YouTube

Source: https://bitcoinerx.com/bitcoin/ukraine-parliament-modifies-virtual-assets-bill-to-regulate-cryptocurrencies/

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