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Investors Are Selling Bitcoin: Will It Stop the Coin’s Rally?

Big investors and companies are selling their Bitcoins (BTC) at an all-time high price. This has triggered the massive selloff of the flagship crypto, thus affecting its value.

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Jan 05, 2021 at 15:02 // News

Is the bullish trend over?

Big investors and companies are selling their Bitcoins (BTC) at an all-time high price. This has triggered the massive selloff of the flagship crypto, thus affecting its value.

Huge amounts of the original cryptocurrency have been changing wallets and exchanges at its new all-time highs. According to Onchain data, several cryptocurrency exchange platforms have been nearly emptied. 

Crypto is on the move

In a period of 1-month, more than 87,950 BTC (worth over $2.84 billion) have been withdrawn from various giant exchanges around the world.

For instance, during the past month, Coinbase has registered about 84,558 Bitcoin being withdrawn. About 5,715 BTC were withdrawn from Okex, and more than 2,599 BTC have left Huobi cryptocurrency exchanges. In the past 7-days, over 72,725 Bitcoin have left centralized exchanges and an inflow of approx. 5,890 BTC has been recorded, as per the data from Viewbase transaction tracker.

On December 13, 2020, unnamed crypto-wallet also moved over 32,350 Bitcoin (about $625 mln at that time) to another unidentified crypto-wallet and was one of the largest Bitcoin transfers of the year, according to Whale Alert, a digital currency tracking and analytics firm. The transfer happened immediately after the BTC price skyrocketing from $17,600 to $19,200.  Similarly, a transfer occurred and an unidentified cryptocurrency user shifted about $1 bln in Bitcoin from Silk Road Darknet wallet.

Bitcoin_Price_is_falling_due_to_selloff.jpg

Long-term hodlers sell their BTC

Bitcoins that are 12-years old were also finally moved. On January 3, this year, 1,000 BTC (more than $340 million) were split into portions and then shifted to another Bitcoin address. The community waits to see if these coins will be sold or spent on the open market.

An institutional investor Nigel Green, CEO of DeVere, a financial advisory company based in the United Kingdom, sold half of his BTC assets during Christmas when the price skyrocketed to new highs of about $25k. 

His decision to sell is not in any way connected to lack of belief in BTC or the concept of cryptocurrencies but rather profit-making. It is a rather normal behaviour in the market. Many investors normally sell in periods when the prices of cryptocurrencies are high and rebuy when their prices decline, to be in a profit-taking position.

Time for profit-taking

Investors and users are draining Bitcoin from exchanges to hold it in a noncustodial fashion. When a lot of users hold tokens non-custodially, it becomes beneficial for the whole community since it leaves fewer funds on exchanges which are vulnerable to large coin thefts especially during this period when there is a lot of excitement in the market due to high prices. It is also believed that investors are removing liquidity from crypto exchanges to avoid any roaming upper barrier.

On the other hand, when a massive selloff occurs, it often affects the price of the asset negatively. That was exactly what happened to Bitcoin when it broke 10% down in a couple of hours after breaking the $34,000 resistance level. Among the reasons for such a drop was also a shift of interest to altcoins such as Ethereum, having pushed it beyond the $1,000 barrier.

However, the price seems to have stalled around $31,000, triggering the thought that a correction might be short-term. According to the data by CoinMarketCap, Bitcoin is trading at $31,400 at the time of writing.

BTC_chart.jpg

This makes further perspectives of the BTC price unclear. If it goes past the $30,000 support level, a further decrease is likely. If it manages to stall, there might be another rally, though not so massive as the previous ones. Generally, most analysts tend to believe January will resemble a price rollercoaster just like it was back in 2018, with the possibility of a lasting bearish trend in the second half of the year.

But still, some supporters believe that further digitization will strengthen the position of cryptocurrency, making it rally to new all-time highs. Among the most positive forecasts was that from PlanB, the creator of the stock-to-flow model, who believed that Bitcoin will hit $100K by December 2021.

What do you think, where will the BTC price go next? Let us know in the comments below!

Source: https://coinidol.com/investors-selling-bitcoin/

Blockchain

Research Reports ‘Altseason’ Upon Us, But Not For XRP or EOS

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In its latest ‘State of the Network’ bulletin, industry data provider Coin Metrics has delved into altcoins and their impressive performance so far this year.

It acknowledged that many of the hot altcoins that surged during the 2017 crypto boom are now ‘dead and gone’, and have been replaced by a new breed of DeFi assets. It added that with new capital flowing into Bitcoin and Ethereum, some of that money may start flowing into altcoins.

The report acknowledged that institutional investment has largely been behind the current rally and institutions are very wary of altcoins.

“Altcoin investing is largely considered a retail phenomenon. Similar to penny stocks, it’s often driven by individual investors looking for outsized gains.”

XRP and EOS Missing The Party

Looking at returns since the beginning of December 2020, Bitcoin and Ethereum have outperformed most other Layer 1 blockchains, it noted. However several high-cap crypto assets have also performed well hitting their own all-time highs.

There are two notable exceptions to this trend; Ripple’s XRP and Block.one’s EOS.

The glaring red charts for these to former darlings of crypto show that XRP has lost 54.6% since December 1, and EOS has dumped 7.5% over the same period.

Ripple’s problems started when it finally lost the battle with the SEC and the selloff began. Since its late November high of almost $0.70, XRP has dumped almost 60% to today’s sub $0.29 prices. There have been reports of Ripple executives selling their stashes, while Grayscale dissolved its XRP Trust as confidence in the company dwindles.

Block.one’s problems have not been as bad, but they have had them. Company CTO Dan Larimer announced his resignation earlier this month and there has been very little on the development or product front for the project.

Over the past year, EOS has lost 23% on a chart that has been flat for months. Since its February 2020 high of $5.40 it has dumped 50%, and since its giddy all-time high in April 2018 of over $22, EOS has been smashed 87%.

Top Altcoins so Far in 2021

Those that are enjoying the altseason sun include Polkadot, Binance Coin, Chainlink, and of course Ethereum, though it shouldn’t really be termed an altcoin any longer.

Coin Metrics highlighted Cardano, Decred, and Dogecoin as three that have made three figure gains since December one, outperforming Bitcoin itself.

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Source: https://cryptopotato.com/research-reports-altseason-upon-us-but-not-for-xrp-or-eos/

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Perpetual Protocol emerges as sixth-largest DEX after just one month

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Perpetual Protocol, a DeFi project offering decentralized perpetual contracts using the layer-two Ethereum scaling solution xDai, has emerged as the sixth-largest DEX by weekly trade volume after operating for only one month.

Based on data from Dune Analytics shared by Perpetual Protocol, the DEX’s weekly trade volume of more than $299 million would rank the project above the likes of Synthetix, dYdX, and Kyber, and below Balancer.

The milestone was shared in a blog post celebrating the project’s first month of operation — a period in which the DEX drove more than $500 million in total volume and generated more than $500,000 in trading fees.

All trading fees generated by the protocol are currently sent to an insurance fund designed to secure the protocol, with the project planning to divert 50% of fees to PERP stakers once its staking pool has launched.

In the blog post, Perpetual Protocol noted that it spent only $183 to execute 179,000 transactions as gas fees on xDai are just one-one-hundredth of those on the Ethereum mainnet. With Perpetual Protocol covering the gas fees of its traders, the DEX would have had to pay out $18,300 in fees if it was operating directly on Ethereum.

XDai is one of several L2 scaling solutions that are offering an alternative to the heavy fees associated with operating directly on the Ethereum mainnet, with Synthetix recently launching the first stage in its transition to optimistic roll-ups.

Looking ahead, Perpetual expects to introduce limit order functionality during the first quarter of 2021, and will also launch staking in February.

Decentralized exchanges emerged as a cornerstone of the crypto ecosystem during DeFi’s Q3 2020 boom, with leading DEX Uniswap now processing almost $1 billion in volume each day and regularly surpassing many major centralized exchanges by trade activity.

Despite the booming volume, the DEX sector is currently dominated by a handful of platforms — with roughly half of the combined DEX trade activity taking place on Uniswap, and 90% of combined volume transpiring on the four largest platforms.

DEX market share: Dune Analytics

Source: https://cointelegraph.com/news/perpetual-protocol-emerges-as-sixth-largest-dex-after-just-one-month

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TA: Ethereum Corrects Lower, Why Dips In ETH Remain Attractive

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Ethereum traded as high as $1,437 before starting a downside correction against the US Dollar. ETH price is approaching a key support at $1,340 and $1,320.

  • Ethereum surged above $1,400 and traded towards the $1,440 zone.
  • The price is currently correcting lower from $1,437, but it is well above the 100 hourly simple moving average.
  • There is a major declining channel forming with support near $1,340 on the hourly chart of ETH/USD (data feed via Kraken).
  • The pair could correct further, but the price is likely to remain stable above $1,340 and $1,325.

Ethereum Price is Correcting Gains

Yesterday, we saw a sharp increase in Ethereum above $1,350 and $1,400. ETH price traded above the $1,420 resistance, and traded as high as $1,437 before starting a downside correction.

There was a short-term downside correction below the $1,400 level. There was a break below the 23.6% Fib retracement level of the upward wave from the $1,215 swing low to $1,437 high. Ether is now trading below the $1,380 and it is approaching a couple of important supports at $1,340.

Ethereum Price

Source: ETHUSD on TradingView.com

There is also a major declining channel forming with support near $1,340 on the hourly chart of ETH/USD. An immediate support is near the $1,325 level, where the bulls are likely to take control.

The 50% Fib retracement level of the upward wave from the $1,215 swing low to $1,437 high. If there is a downside break below $1,325, there are chances of a drop towards the $1,280 level. The 100 hourly simple moving average is also near the $1,280 support zone. Any more losses could lead the price towards the $1,250 and $1,220 support levels.

Fresh Increase in ETH?

If ethereum remains stable above $1,280 support zone, it could start a fresh increase. An initial resistance is near the $1,400 level and the channel upper trend line.

A close above the channel resistance could open the doors for more gains towards the $1,440 level. A clear break above the $1,440 zone could clear the path for a push towards the $1,500 resistance zone in the coming sessions. The next key target could be near the $1,550 and $1,580 levels.

Technical Indicators

Hourly MACDThe MACD for ETH/USD is now slowly gaining pace in the bearish zone.

Hourly RSIThe RSI for ETH/USD is correcting lower below the 50 level.

Major Support Level – $1,280

Major Resistance Level – $1,400

Source: https://www.newsbtc.com/analysis/eth/ethereum-corrects-lower-eth-1280/

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