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Investors Fear that Bitcoin will Hit Below $6.5k

Recently, the crypto market has posed fluctuations that are driving traders off their radar. The crypto giant Bitcoin (BTC) is showing a downward trend that is a worry for investors and traders alike. As of Nov. 25, the price of BTC has fallen close to $6,500, showing new heights of losses.  In just about 24hours, statistics on trading charts indicate that the value of BTC against the dollar has dropped 7%. Looking at the BTC/USD value chart over one week shows a 20% fall and a 30% drop over the past month.  Theories behind the Drop of BTC  Different enthusiasts […]

The post Investors Fear that Bitcoin will Hit Below $6.5k appeared first on CoinBeat.

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Recently, the crypto market has posed fluctuations that are driving traders off their radar. The crypto giant Bitcoin (BTC) is showing a downward trend that is a worry for investors and traders alike. As of Nov. 25, the price of BTC has fallen close to $6,500, showing new heights of losses. 

In just about 24hours, statistics on trading charts indicate that the value of BTC against the dollar has dropped 7%. Looking at the BTC/USD value chart over one week shows a 20% fall and a 30% drop over the past month. 

Theories behind the Drop of BTC 

Different enthusiasts have raised different theories as to why BTC has been losing momentum. Tuur Demeester, Adamant Capital founder, blames it on U.S investors. He argues that these investors are forcing the market lower on purpose to record a negative performance for the end-of-year tax obligations. 

Another argument reflects on the CME gap bounce. Traders are optimistic as they foresee a slight short-term improvement is the BTC/USD value due to a “gap” in the Chicago Mercantile Exchange (CME) Group’s Bitcoin Futures. When an asset, in this case, BTC, closes a session at a specific price and opens the next at a different price, this creates a gap. Some traders believe that this gap will be filled by closing the gap to its previous value. 

Investors Worried BTC Price Could Drop Further

According to a report, if the ongoing trend does not change, it is likely that the value may drop to a dangerous low of $2,500. Traders and investors are keenly following now that BTC is just about hitting the $6,500 mark. Why is this? 

According to analysts, $6.5K is the cut-off for miner profitability. Therefore, investors are keenly eyeing the direction BTC takes with miners bound to defend prices above $6,500 before BTC halving. 

According to a Twitter update from a renowned professional trader:

“Whatever movements there are now (whether we go back to $7,800 before any further downwards movements), I do believe that the asset $BTC is one of the few bullish assets macro wise for the coming years.”

The BTC Trend Effects on Altcoins 

Due to BTC drop, altcoins are suffering alike, showing a decline of between 5% and 10%. Ether (ETH) fell 9.8%, whereas Litecoin (LTC) indicates a 5% drop. 

With the overall value of the cryptocurrency falling to $183 million, this market is raising the heat for investors and traders.   

Source: https://coinbeat.com/investors-fear-that-bitcoin-will-hit-below-6-5k/?utm_source=rss&utm_medium=rss&utm_campaign=investors-fear-that-bitcoin-will-hit-below-6-5k

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Buyer of Jack Dorsey’s ‘genesis tweet NFT’ reportedly detained in Iran

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Iranian Cyber Police have reportedly arrested Bridge Oracle CEO Sina Estavi, according to a tweet pinned to Estavi’s Twitter account.

A rough translation of the tweet reads:

“The owner of this account was arrested on charges of disrupting the economic system by order of Special Court for Economic Crimes. Official judicial authorities will provide additional information.”

The same tweet is also pinned to the official account of Bridge Oracle, a Tron Network-based public oracle system. At the time of writing, the price of Bridge Oracle’s native token, BRG, has taken a sharp dive, crashing by more than 65%, according to data from TradingView.

Bridge Oracle is said to be a Malaysia-based blockchain company, but Estavi’s other venture, cryptocurrency exchange Cryptoland, was operating in Iran. Cryptoland’s Twitter account shares the same pinned tweet. No further information was shared publicly by the authorities.

Estavi is known for his heated bidding battle with tech entrepreneur and Tron CEO Justin Sun to buy Jack Dorsey’s first-ever tweet as an NFT. Twitter’s first tweet is dated March 2006 and reads, “Just setting up my twttr.”

In the end, Estavi successfully purchased the NFT for more than $2.9 million, or 1,630 Ether (ETH). Dorsey converted the proceeds to Bitcoin (BTC) and donated them to a charity organization in Africa.

Earlier this year, Estavi was sued by former Bitcoin.com CEO Mate Tokay for allegedly failing to pay him for his services. In his claim, Tokay also alleged that there’s an inconsistency between the purported and actual circulating supply of BRG.

Cointelegraph reached out to Bridge Oracle for comment. This article will be updated should they reply.

Coinsmart. Beste Bitcoin-Börse in Europa
Source: https://cointelegraph.com/news/buyer-of-jack-dorsey-s-genesis-tweet-nft-reportedly-detained-in-iran

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Bank of America to Settle Stock Trades on Paxos Network

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Source: https://cryptobriefing.com/bank-america-settle-stock-trades-paxos-network/

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Is Bitcoin nearing another Black Thursday crash? Here’s what BTC derivatives suggest

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Bitcoin’s 51.4% crash in March 2020 was the most horrific 24-hour black swan event in the digital asset’s history. The recent price activity of the past week has probably resurrected similar emotions for investors who experienced the Black Thursday crash. 

Over the past week, Bitcoin’s (BTC) price dropped 29% to reach a three-month low at $42,150. $5.5 billion in long contracts were liquidated, which is undoubtedly a record-high in absolute terms. Still, the impact of the March 2020 crash on derivatives was orders of magnitude higher.

To understand why the current correction is less severe than the one in March 2020, we will start by analyzing the perpetual futures premium. These contracts, also known as inverse swaps, face an adjustment every eight hours, so any price gap with traditional spot markets can be easily arbitrated.

Sometimes, price discrepancies arise during moments of panic due to concerns about the derivatives exchange’s liquidity or market makers being unable to participate during times of extreme volatility.

Bitcoin perpetual premium/discount vs. spot price, March 2020. Source: TradingView

On March 12, 2020, the Bitcoin perpetual futures initiated a much larger descent than the price on spot exchanges. This move is partially explained by the cascading liquidations that took place, creating a backlog of large sell orders unable to find liquidity at reasonable prices.

The aftermath of the bloodbath resulted in futures perpetual contracts trading at a 12% discount versus regular spot exchanges. BitMEX, the largest derivatives market at the time, went offline for 25 minutes, causing havoc as investors became suspicious about its liquidity conditions.

By comparing this event with the most recent week, one will find that sustainable price discrepancies are very unusual. Even a temporary 12% gap doesn’t occur, even during the most volatile hours.

Bitcoin perpetual premium/discount vs. spot price, May 2021. Source: TradingView

Take notice of how the perpetual contracts reached a peak 4% discount versus regular spot exchanges on May 13, although it lasted less than five minutes. Market makers and arbitrage desks could have been caught off guard but quickly managed to recoup liquidity by buying the perpetual contracts at a discount.

To understand the impact of those crashes on professional traders, the 25% delta skew is the best metric, as it compares similar call (buy) and put (sell) options’ pricing. When market makers and whales fear that Bitcoin’s price could crash, they demand a higher premium for the neutral-to-bearish put options. This movement causes the 25% delta skew to shift positively.

Bitcoin options 25% delta skew, March 2020. Source: Skew

The above chart displays the mind-blowing 59% peak one-month Bitcoin options delta skew in March 2020. This data shows absolute fear and an incapacity to price the put (sell) options, causing the distortion. Even if one excludes the intraday peak, the 25% delta skew presented sustained periods above 20, indicating extreme “fear.”

Bitcoin options 25% delta skew, May 2021. Source: Laevitas

Over the past week, the skew indicator peaked at 14%, which isn’t very far from the “neutral” -10% to +10% range. It is indeed a striking difference from the previous months’ negative skew, indicating optimism, but nothing out of the ordinary.

Therefore, although the recent 29% price drop in seven days could have been devastating for traders using leverage, the overall impact on derivatives has been modest.

This data shows that the market has been incredibly resilient as of late, but this strength might be tested if Bitcoin’s price continues to drop.

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/is-bitcoin-nearing-another-black-thursday-crash-here-s-what-btc-derivatives-suggest

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