Bitcoin hit a fresh all-time high Friday as investors continued to scoop up some of its limited supply. The ether futures market also hit records as derivatives traders check out the second-largest cryptocurrency by market capitalization.
- Bitcoin (BTC) trading around $39,304 as of 21:00 UTC (4 p.m. ET). Gaining 0.64% over the previous 24 hours.
- Bitcoin’s 24-hour range: $36,579-$41,962 (CoinDesk 20)
- BTC below the 10-hour but above the 50-hour moving average on the hourly chart, a sideways signal for market technicians.
New all-time highs are again the topic of the day on Friday, the third straight day the price of bitcoin hit a record level. Around 15:00 UTC (10 a.m. ET), the price of bitcoin changed hands at $41,962, according to CoinDesk 20 data. Price has dropped since, at $39,304 as of press time.
“BTC is currently in price discovery with a lot of demand and limited supply,” Joel Edgerton, chief operating officer of Bitflyer USA. “Everyone that holds bitcoin thinks it will go higher, so they hold.”
According to data aggregator Glassnode, bitcoin’s current circulating supply is at 18,594,037 BTC – and investors seemingly can’t get enough of the world’s oldest cryptocurrency.
“The continued relentless money flows into BTC from institutional and some retail buyers provides significant positive drift,” said Chad Steinglass, head of trading for derivatives firm CrossTower. “As more and more coins are locked away in long-term investments and are essentially removed from circulation, squeezing available inventory tighter and tighter.“
“Everyone without BTC is afraid of missing out and wants to buy,” Bitflyer’s Edgerton added. “Borrowing [U.S. dollar] stablecoins to buy BTC is the crypto carry trade.”
The top three stablecoins – tether (USDT), U.S. dollar coin (USDC) and dai (DAI) – collectively have a market capitalization of $28 billion, much of which consists of tether – $22,916,992,958, according to CoinGecko.
“The doors are fully open and the buying pressure has been building up massively this whole year based on macro cycles, COVID-19, the U.S. election and a feeling of general anxiety,” said Henrik Kugelberg, an over-the-counter bitcoin trader. “In the short term I expect a setback of perhaps 15%, but it will just be a bump in the massive bull run – $100,000 this year is totally possible!”
Action in the bitcoin derivatives market was heavy as well. Jason Lau, chief operating officer for San Francisco-based exchange OKCoin, noted almost $1 billion in liquidations occurred there Thursday. “The majority of these liquidations were longs and it was the third-highest amount since November.”
At BitMEX alone, over $100 million in liquidations have occurred on the venue’s bitcoin market over the past three days, with $65 million buy liquidations signaling short-oriented traders got squeezed versus $42 million in the crypto equivalent of a margin call for long positions.
In the options market, Denis Vinokourov, head of research at brokerage Bequant, noted that traders are liking the $36,000 strike price for bitcoin.
“Given the outsized focus on bitcoin’s $36,000 options strike for the end of January options expiry, which comes with a raft of optionality plays and risks, this disconnects bitcoin from fundamentals, so to speak,” Vinokourov told CoinDesk. “It will be interesting to see whether the market will be able to compartmentalize this bitcoin risk away from the rest of the market.”
Ether futures at $3.7 billion in interest
Ether (ETH) was down Friday, trading around $1,159 and slipping 6.5% in 24 hours as of 21:00 UTC (4:00 p.m. ET).
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On Jan. 1, ether futures open interest, or OI, on major derivatives venues was at $2 billion. On Thursday, OI had ballooned 85% to a record $3.7 billion according to aggregator Skew. Binance was leading the way with $820 million in OI, over 20% of the total ether futures market.
“ETH still hasn’t touched its previous all-time high of over $1,400,” noted Brian Mosoff, chief executive officer of investment firm Ether Capital. “To date, there has been less access to invest in ether versus bitcoin. As we await the pending launch of the CME [ether] futures, community members who are more crypto-native and have less restrictions about how to hold ETH are likely looking to front-run the launch.”
Digital assets on the CoinDesk 20 are in the red Friday. Notable losers as of 21:00 UTC (4:00 p.m. ET):
- Oil was up 3%. Price per barrel of West Texas Intermediate crude: $52.48.
- Gold was in the red 3.4% and at $1,848 as of press time.
- The 10-year U.S. Treasury bond yield climbed Friday jumping to 1.110 and in the green 2.5%.
JP Morgan: Bitcoin Needs to Reclaim $40K Soon or Momentum Will Fade
Bitcoin has to endure and overcome the $40,000 boundary in order to avoid a consequent major price correction. JPMorgan strategists say that otherwise, the major cryptocurrency might suffer investment outflow.
The $40K Is the Key to Future Prospects for BTC
According to a JPMorgan Chase & Co report, cited by Bloomberg, this level is an omen to more eventual losses.
The major financial institution strategists led by Nikolaos Panigirtzoglou said that the cryptocurrency is at risk of further losses and an outflow of trend-following investors unless it can “break out” over the $40K frontier. The team added that the pattern of demand for BTC futures and the $22.9 billion Grayscale Bitcoin Trust might help determine the perspective.
“The flow into the Grayscale Bitcoin Trust would likely need to sustain its $100 million per day pace over the coming days and weeks for such a breakout to occur,” the strategists commented on Friday.
After a record-breaking hit near $42K in the first week of January, Bitcoin suffered a significant price correction with almost $12K in just a short time, leaving investors pondering the reasons. JPM strategists said that the primary cryptocurrency has been in a similar situation last November when it passed the $20,000 test.
Furthermore, a significant flow of institutional money entering the Grayscale trust has encouraged the BTC rally claimed, JPM specialists. They’ve also noted that trend-following traders “could propagate the past week’s correction” and “momentum signals will naturally decay from here up till the end of March” if BTC price doesn’t break the $40,000 milestone.
Breaking the $40K Limit and Replacing Gold?
Amidst both volatile behavior and opinions on BTC, recently, JPMorgan shared another possible Bitcoin scenario. As CryptoPotato reported, analysts from the financial institution have claimed that the cryptocurrency has taken portions of gold’s market share which could lead to price losses for the bullion.
Back then, strategists said that institutional investors had shown significant transfers from gold ETFs to bitcoin, thus suggesting adverse price developments for the noble metal.
Both bitcoin and gold have one thing in common – their rather limited supply – which had encouraged investors to think that the digital asset might replace the precious metal to an extent in the future.
Analysts said that since October, “money has poured into Bitcoin funds and out of gold, a trend that’s only going to continue in the long run as more institutional investors take a position in cryptocurrencies.” Still, the bold suggestions remain more of a speculation, while BTC remains quite volatile.
Bitcoin Exchange Owner Sues Australian Banks For $290K For Accounts Closure
The legal battle comes as the Aussie man allegedly suffered significant losses in his crypto business after the banks, Westpac and ANZ, shut down his accounts, local media reported Monday.
According to the proceedings filed at the ACT Civil and Administrative Tribunal, Allan Flynn alleged that the banks’ action was illegal as they closed his accounts without any prior warning or reason.
20 Accounts Closed In Three Years
Flynn owns an AUSTRAC-registered crypto exchange with about 450 customers. Using the platform, he helps his clients to purchase crypto assets like Bitcoin.
The Australian Financial Review revealed that the complainant has had about 20 of his accounts shut down in the last three years by more than five Australian banks, including CBA, NAB, ING, and Bendigo Bank, to mention a few.
Following the continued account closures, Flynn said he opened new accounts with Westpac and ANZ while informing the banks that the account was for crypto transactions. But both accounts were closed after almost a year of running them. He said he received a message from Westpac saying his account would be closed in five days. His effort to open another account with Westpac was not successful.
He requested to know why his account was closed and why he couldn’t open a new one, and the bank told him that he was “under investigation for cryptocurrency fraud.”
Flynn said Westpac offered him a compensation of AUD$250 for not providing “reasonable notice” before closing the account. However, he hasn’t “seen a cent of it either.”
Not The Only One
For one thing, cryptocurrencies and exchanges are legal in Australia, and there’s no law prohibiting banks from rendering services to crypto traders. However, Flynn noted that he is not the only victim of this unlawful discrimination.
“I am by no means alone or the first. I know of at least one other trader who has had accounts closed more than 60 times,” he said, adding that “how am I supposed to run a lawful business if I can’t get a bank account?”
According to the report, Flynn demands a total settlement of AUD$375,000 from the banks, with the hearing expected to take place in late March.
He is seeking AUD$250,000 for stress and inconvenience and AUD$125,000 for emotional distress and reputational damage. Aside from closing his accounts, Flynn alleged that an ANZ employee informed other banks and his clients that he was fraudulent.
Cardano Price Analysis: 18 January
Cardano’s price has surged by a massive 133% in the last 15 days and the rally shows signs of more upward movement. Trading at $0.378 ADA is ranked the sixth-largest cryptocurrency in the world in terms of market cap. The cryptocurrency has witnessed a reduced volatility phase leading to fairly stagnant price movement.
Due to the formation of a bullish pattern, ADA’s outlook is overall bullish and suggests a price surge upwards of 10 -30% in the mid-to-long term.
Cardano 4-hour chart
As seen in the chart, ADA’s price has formed a bullish pennant with the price already breaking out of the pattern on January 16. Since the breakout, ADA has surged approximately 20% to where it currently stands. Although the general outlook is bullish, there might be a retest of the supports at $0.3579 and $0.3455, pushing the price higher.
With the price already surging 20% from the pennant, we can expect another 40% surge on the table. Hence, a long position would better serve the profits that are yet to come.
Supporting this is the constant inflow of volume despite the stagnant movement in price as seen in the OBV indicator. Following this, there is the RSI indicator that shows a retreat from the overbought zone due to the recent breakout from the pennant.
Lastly, the MACD indicator showed a dip in both the MACD line and the signal indicating a decrease in buying momentum. It also shows that these lines might undergo a bearish crossover soon.
With bitcoin trending sideways, this is the time for altcoins to surge higher. Rightfully so, altcoins are surging without a stop in sight, hitting new all-time highs – especially the DeFi coins. With ADA’s bullish pattern, there is a high chance for it to surge to $0.5333 or 67%. On the other hand, a drop below 0.240 would indicate failure of the uptrend and a continuation of the downtrend.
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