Bitcoin (BTC) price plunged by about $3,400 in an hour, warning traders that corrections during a parabolic move are likely to be sharp. Data from Glassnode shows that the fall resulted in the liquidation of Bitcoin futures long positions worth about $190 million on Binance within an hour, the largest to date.
In a strong uptrend, corrections are swift but short-lived because investors who expect the rally to continue use the dips to buy.
Binance US CEO Catherine Coley believes the Bitcoin could climb to “$75,000 to $100,000” by the end of this year. Meanwhile, investor Raoul Paul is even more positive as he anticipates Bitcoin to hit anywhere between “$400,000 to $1.2 million” in 2021 if the bull trend continues.
The huge bullish projection in BTC price is largely due to the institutional adoption of Bitcoin. In a recent interview with BBC, Galaxy Digital founder and CEO Mike Novogratz said: “As the institutions move in, there just is not a lot of supply […] There are a lot more than 21 million millionaires out there.”
While the retail traders may have missed out on Bitcoin’s rally, they are coming back with a vengeance by buying altcoins that have surged to multiyear highs in the past few days. This has pulled Bitcoin’s dominance to below 69%.
However, will the rally in Bitcoin and the altcoins continue or is it time for a few days of consolidation or correction? Let’s analyze the charts of the top-10 cryptocurrencies to find out.
Bitcoin’s most recent leg of the uptrend had pushed the relative strength index (RSI) deep into the overbought territory, suggesting frenzied buying by the traders. Usually, such a phase is followed by a shakeout and that is what happened today.
The BTC/USD pair plummeted to an intraday low at $27,762.34, just below the 38.2% Fibonacci retracement level at $28,382.75. This sharp fall was aggressively purchased by the bulls as seen from the long tail on the day’s candlestick.
If the bulls manage to sustain the price above the 20-day exponential moving average ($26,737), it will suggest that the sentiment remains positive and the bulls are buying on dips.
However, after the large range day today, the pair may enter a period of consolidation for a few days before starting the next trending move. The pair may remain range-bound between $34,786.04 and $26,000.
Contrary to this assumption, if the price breaks below the 20-day EMA, it will suggest that traders are rushing to the exit and that could pull the pair to the 50-day simple moving average at $21,578.
Ether (ETH) easily surmounted the $800 to $840.93 overhead resistance on Jan. 3, which shows aggressive buying by the bulls. The momentum continued today and the biggest altcoin reached an intraday high at $1,156.456.
If the bulls can sustain the price above $1,000, it will increase the prospects for a rally to $1,260 and then to the all-time high at $1,420.
However, the long upper and lower shadows on today’s candlestick suggest profit booking at higher levels and accumulation at lower levels. After the large range today, the ETH/USD pair may consolidate in a tight range for a few days before starting the next trending move.
If the price does not dip below $840.93, it will suggest that traders are not closing their positions. In such a case, the bulls may attempt to resume the uptrend. This positive view will invalidate if the pair breaks below the 20-day EMA ($731).
XRP is currently consolidating in a downtrend. After a sharp fall, if the price fails to rebound, it suggests a lack of urgency among traders to buy. A consolidation near the support increases the risk of a breakdown.
The downsloping 20-day EMA ($0.322) and the RSI near the overbought territory suggest that the path of least resistance is to the downside.
If bears sink the price below the $0.169 support, the XRP/USD pair could resume the downtrend towards the next target at $0.10.
Contrary to this assumption, if the consolidation resolves to the upside and the pair rises above the 20-day EMA, it will indicate that the selling has exhausted and a relief rally may be underway.
Litecoin (LTC) bounced off the $124.1278 support on Jan. 2 and resumed the uptrend. The altcoin surged above the first target objective at $160 and hit an intraday high at $173.3312 today where it witnessed profit booking.
However, the positive thing is that the bulls aggressively purchased the dip to $140, which suggests that the sentiment remains positive. The rising moving averages and the RSI close to the overbought territory suggest bulls are in control.
After the large range day today, volatility may contract and the LTC/USD pair may consolidate in a tight range for the next few days.
If bulls can push the price above $173.3312, the pair could rally to $184.7940. The first sign of weakness will be a break below the 20-day EMA ($122.96).
Polkadot (DOT) resumed the uptrend when it broke above the $9.50 to $9.89 overhead resistance on Jan. 3, but the rally hit a roadblock above $10.50 from where the price reversed direction today.
If traders buy the dip to the 38.2% Fibonacci retracement level at $8.4507, it will indicate strength. The bulls will then try to resume the uptrend. If they can push the price above $9.50, a retest of $10.5169 will be on the cards.
On the contrary, if the bears sink the price below the $8.4507 support, the correction could extend to the 50% retracement level at $7.8125. A break below this support will suggest that the momentum has weakened.
Bitcoin Cash (BCH) bounced off the 20-day EMA ($340.94) on Jan. 2 and soared above the $370 overhead resistance on Jan. 3. That opened the gates for a rally to the $497 to $515.35 resistance zone.
However, traders aggressively booked profits at higher levels today, which has dragged the price back towards the breakout level at $370.
The upsloping moving averages and the RSI in the positive territory suggest that bulls have the upper hand. If the BCH/USD pair rebounds off this support, the bulls may again attempt to push the price to $515.35.
This positive view will be invalidated if the bears sink and sustain the price below $353. Such a move will suggest that the markets have rejected the higher levels and that could lead to a range-bound action.
Cardano (ADA) rebounded off the 20-day EMA ($0.173) on Jan. 2 and resumed the uptrend on Jan.3 when it broke above $0.1966315. Today, the altcoin surged to an intraday high at $0.2399022, but the bulls could not sustain the higher levels.
The Doji candlestick pattern today suggests indecision among the bulls and the bears. While the bears are selling at higher levels, the bulls continue to buy on dips.
After the large range day today, the volatility could subside in the next few days as the bulls and the bears battle it out for supremacy.
The upsloping moving averages and the RSI close to the overbought zone suggest advantage to the bulls. The ADA/USD pair may resume its up-move if the bulls can sustain the price above $0.21.
A break below the 20-day EMA will be the first sign of weakness and the correction could deepen if the 50-day SMA ($0.155) support cracks.
Binance Coin (BNB) turned down sharply from the $43.2029 levels today, which suggests profit booking at higher levels. However, the upsloping moving averages and the RSI in the positive zone suggest that the trend remains up.
If the price rebounds off the 20-day EMA ($35), it will suggest that traders continue to accumulate on dips. The bulls will then try to resume the uptrend and propel the price to the target objective at $50.
Contrary to this assumption, if the bears sink and sustain the price below the 20-day EMA, it will suggest that the momentum has weakened and traders are not buying on dips. That could pull the price down to $32 and result in a few days of range-bound action.
Chainlink (LINK) broke above the descending channel and the $13.28 overhead resistance on Jan. 3. This opened the doors for a rally to $16.39 and the altcoin hit an intraday high at $15.644 today.
However, the long wick on today’s candlestick shows that traders aggressively booked profits at higher levels but the positive sign is that the LINK/USD pair found buying support near the 20-day EMA ($12.36).
If the price sustains above $13.28, the bulls will again try to push the price to $16.39 and then to $20.1111. Conversely, if the price slides below the moving averages, the pair may drop to $11.29 and then to $10.
The long wick on today’s candlestick suggests that the bulls failed to sustain Bitcoin SV (BSV) above the $181 overhead resistance as the bears defended this level aggressively.
The price has currently dropped below the moving averages. If the bears sink the price below $160, the BSV/USD pair may drop to the support of the range at $146.
Conversely, if the price rebounds off the current levels and rises above $175, the bulls will make one more attempt to propel the pair above $181. If they succeed, a rally to $215 is possible.
However, the flat moving averages and the RSI just below the midpoint are not signaling an advantage either to the bulls or the bears.
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.
Market data is provided by HitBTC exchange.
Altcoins rally while Bitcoin bulls are thwarted by resistance at $34K
As the prospect of the Biden administration passing massive stimulus packages to help get the United States economy going again, conversations about Bitcoin becoming a reserve currency are beginning to pop up again.
Although Bitcoin’s recent volatility has some analysts saying BTC is a cyclical asset rather than a hedge, the price recent movements have caught the eye of retail investors who have shown a renewed interest in cryptocurrencies in general.
Even the Bank of International Settlements has acknowledged that digital currencies may have use and the organization has outlined plans to roll out a variety of central bank digital currency trials this year.
Now that the Bitcoin fear index has flipped from “Extreme Greed” to “Fear,” some investors appear to be taking Warren Buffet’s advice of “buying when there is blood on the streets”.
Institutional investors are wary of future regulation
According to Chad Steinglass, head of trading at CrossTower, Bitcoin’s correction may have initially been triggered by critical comments fromU.S. Treasury Secretary Janet Yellen.
Prior to Yellen’s comments, Bitcoin was experiencing a “post-correction consolidation” and was “rangebound between $34,000 and $38,000” with traders “waiting to see which side of the range would be challenged or broken.”
Steinglass further explaind that Bitcoin’s next steps will be determined by the actions of institutional investors. He said:
“$31,000 was a pocket of strong support, so at least not everyone is selling. We’ll have to wait and see if that wall remains, or if institutions continue to accumulate. If they do, it’s likely that the trend will re-establish itself and continue. If they move to the sidelines waiting for more regulatory guidance, then their lack of buy flows will be acutely felt.”
Altcoins bounce back
Many of the top altcoins also recovered nicely from this week’s correction. Polkadot (DOT) rallied 7.09% to a daily high at $18, while Chainlink (LINK) posted a double-digit gain and topped out at $22.31. Tezos (XTZ) has also seen a surge in interest which boosted the altcoin by 15% to $3.36.
The overall cryptocurrency market cap now stands at $949.8 billion and Bitcoin’s dominance rate is 64.4%.
DeFi surge, rising TVL and new partnerships underpin Ren’s 100% rally
Interoperability between blockchains is rapidly becoming one of the buzz phrases being thrown around when discussing decentralized finance and the coins most likely to rally during an altcoin bull run.
The rapid growth of DeFi, its ever expanding total value locked and soaring ETH gas fees further highlight the sector’s need for a layer 2 option that also supports the ability to transact value across different networks.
REN’s open protocol is designed specifically to fill this need by providing interoperability and liquidity between the top blockchains including Bitcoin, Ethereum and Zcash.
Over the past three weeks the price of REN has increased by more than 200%, going from $0.251 on Dec. 27 to a new all-time high of $0.778 on Jan. 20 driven by a record $369 million in 24-hour volume.
Three reasons for the recent price surge in the price of REN include the announcement of a collaboration with Google, the continued increase in total value locked on the platform and the ability to earn passive income in multiple cryptocurrencies through the operation of a darknode.
Google software pivot boosts sentiment, addresses RENvm scaling issues
On Jan.19 the REN team tweeted:
Ren has been researching & building on @Asylodev, an open and flexible framework by @Google. @GCPCloud confidential computing relaxes RenVM’s economic constraints, allowing for an unbounded scaling solution. #RenVM.”
Not long after the tweet, REN price began to rally to a new all-time high. As mentioned in the tweet, Asylo is an open and flexible framework from Google designed to help build portable applications that run on Secure Enclave hardware.
The secure enclave hardware allows users to run general-purpose applications in a secure environment where both the data, and the application itself, cannot be compromised by anyone, including the user. This makes for a more secure experience for all parties involved and helps protect against malicious code and backdoor attacks.
Asylo also makes it possible to port an application from one type of hardware to the next, meaning that developers can support multiple implementations with relative ease, including Intel implementations, AMD implementations, and any others that appear in the future. The diversity of choice this allows is an important feature to ensure decentralization on the network.
Total value locked soars to a new high
Community engagement and added value are key factors when it comes to the long-term success of a blockchain project.
Since the release of the Ren virtual machine mainnet (RenVM) in May 2020, engagement on the platform has steadily increased as Bitcoin holders now had another way to bring their BTC to Ethereum and the growing DeFi space.
As seen in the chart below, the total value locked on the Ren platform reached a new all-time high of $653.6 million on Jan. 20 and a total of 14,670 BTC are locked on the platform to create renBTC.
The list of assets that RenVM supports continues to grow with BTC, Bitcoin Cash (BCH), Zcash (ZEC), Filecoin (FIL), Terra (LUNA), Dogecoin (DOGE) and Digibyte (DGB) currently available to transact on the Ethereum and Binance blockchains.
Development is currently underway to make it possible to interact on the Polkadot (DOT), Solana (SOL) and Cosmos (ATOM) networks as well, which would further enhance the interoperability provided.
Darknodes, passive income and a decreasing supply
The third driving force behind the recent price appreciation of REN relates to the Ren token use case and how it can help users earn passive income. RenVM is a network of virtual computers that make up a virtual machine, which are also referred to as Darknodes.
REN token holders who wish to operate a darknode need to lock up 100,000 REN which wiil enable them to process transactions on the network and earn a fee in the form of the token transacted. Thus, a darknode operator has the opportunity to earn passive income in the form of multiple different cryptocurrencies from one location.
As can be seen in the above graphic, 17.13% of REN’s total supply is currently bonded on the platform and supports the operation of darknodes.
During the most recently completed cycle, the network as a whole earned $839,128 in fees in the form of BTC, ZEC, FIL and BCH. The total network fees collected since the launch of the RenVM equals $2.975 million.
The continued addition of new tokens and interoperability with new blockchains will likely see increased usage of the network and an increase in the amount of fees earned. At the current price of $0.6157 it costs $61,570 to operate a darknode.
As activity on the network increases, the amount of fees generated will also increase, making it even more lucrative for token holders to operate a darknode. This has the potential to lead to further price appreciation from REN as every new darknode results in a direct decrease in its circulating supply.
The views and opinions expressed here are solely those of the author and do not necessarily reflect the views of Cointelegraph.com. Every investment and trading move involves risk, you should conduct your own research when making a decision.
Denarius Announces Beta of Kronos Wallet and Private Decentralized Chat
Kronos, a new application beta from the developers of Denarius (D), provides people a way to socialize and transact without a central authority. This new proof of concept takes decentralization, blockchain and privacy to the next level.
“Blockchains like Bitcoin and Ethereum have paved the way of innovation for cryptocurrencies and new applications like Denarius (D): Kronos, to bridge the gap for a faster and cheaper way to transact and utilize cryptocurrency.” — James R. (Cryptocurrency User)
Kronos, a new application beta from the developers of Denarius (D), provides people a way to socialize and transact without a central authority. This new proof of concept takes decentralization, blockchain, and privacy to the next level. “Users” are able to freely join the Kronos Chat platform, as it is redundantly available due to it using peer-to-peer technology. Kronos has no downtime or possible banning of the platform. Examples of this in current history include, Amazon Web Services (AWS) taking down the Parler app’s platform hosting . Google Play Store and Apple App Store removing the Parler application . Signal App going offline . Whatsapp invasion of privacy …the list goes on.
Kronos is a secure cryptocurrency wallet but also chat reinvented. With the Kronos Chat you can chat and send cryptocurrency across the world in seconds. End-to-end encrypted messages and no storage of your chats, anywhere. Kronos Chat is powered by YOU by leveraging the latest peer-to-peer technologies. Censorship is everywhere and increasing daily. Kronos Wallet allows you to be truly free, with “self-moderation” you finally have the power to choose your own censorship while you socialize. Kronos stores only required data securely and locally, not on an unknown centralized server in the cloud. Kronos supports optional Two Factor Authentication (2FA) and One-time Password (OTP) Yubikey authentication and uses BIP39 technology for your cryptocurrency wallet with the most advanced and leading encryption technologies available today.
Bitcoin was the first cryptocurrency to solve the Byzantine Generals Problem, but transactions are slow. Ethereum created a smart contract platform, but transaction fees are expensive. Denarius stayed true to its roots by forking the original Bitcoin Satoshi code and modified the coin to become a faster and cheaper alternative to Bitcoin. Now Denarius with Kronos changes things. BTC, ETH, and D coins can be sent using the Kronos Wallet with more cryptocurrencies and tokens being added soon, possibly USDC, USDT, Namecoin (NMC), Devault (DVT), Primecoin (XPM), etc. Interplanetary File System (IPFS) integration and file uploading directly inside of the Kronos Chat also allows the user to upload files such as documents, images, and media directly inside of Kronos, ready to be shared via the plethora of IPFS public gateways available.
Bitcoin (BTC) created by Satoshi Nakamoto
Ethereum (ETH) created by Vitalik Buterin
Denarius (D) created by Carsen Klock
Bitcoin (BTC): https://bitcoin.org
Ethereum (ETH): https://ethereum.org
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