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The Striking Similarities Between The 2017 Bitcoin Peak And Now

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Bitcoin is now trading over $7,000 below its peak reached to start the year – a peak that is more than double its previous all-time high. And while believers in the cryptocurrency are certain this is just another pullback before more price discovery, the similarities between the 2017 top and now are undeniably striking.

Here’s how the two potential tops compare, but why this time still could be very different from the last.

Bitcoin Bubble Returns, But Is It Already Ready To Pop?

Outside of the crypto Twitter echo chamber, financial analysts and economists are once again beginning to warn that Bitcoin is a bubble, potentially being inflated even more so this time around as part of the “everything bubble.”

And while crypto enthusiasts are quick to write the notions of naysayers off as just plain wrong, the current price action since $42,000 was tapped, closely resembles the 2017 peak.

Related Reading | Bitcoin Trend Strength Suggests No End In Sight, Second Most Powerful Historically

2020 propelled Bitcoin into super-stardom, and from under $4,000 to more than $40,000 at the start of 2021. The entire parabolic move was reminiscent of the 2017 hype bubble that made the cryptocurrency a household name.

But the strength of the trend isn’t the only way the two rallies size up for comparison’s sake. In fact, the current price action, indicators, and even the patterns leading up to the recent peak, almost exactly match the top of the 2017 bull run.

bitcoin 2017 2021 top

Several similarities between the 2017 peak and now exist | Source: BTCUSD on TradingView.com

Could A Repeat Of 2017 Take Place, Or Is This Time Different?

In the chart above, the similarities are immediately visible: There’s a large rise up followed by a sharp peak. However, this happens so often in Bitcoin that the peaking behavior alone isn’t enough to go on.

What is more compelling, however, is the evening star pattern culminating with a tiny red doji at the top of the run, combined with a pair of technical indicators exhibiting similar readings.

After crossing down temporarily on the MACD, the final bullish impulse lasted roughly one month before the same tool crossed into the red. Bitcoin just crossed bearishly for the first time yesterday on the MACD since $20,000 was broken.

The MACD crossover was forecasted by the hidden bullish divergence on the RSI, which also matches up – then versus now. The fakeout down also coincided with price passing through the 20-day moving average both times.

The moving average on the way back down in 2017 was the last straw before things turned extremely bearish. Bitcoin is currently on the ropes against this same moving average, potentially ready to go down for the count.

Related Reading | Bitcoin Daily MACD Flips Red For First Time Since $20K Was Taken

In less than one month from the time the top pattern formed and indicators confirmed downward momentum, Bitcoin plunged from $20,000 to $6,000. Similar targets this time around would result in a crash to $20,000 at minimum.

And while such a move might shake out investors thinking it is the top, confirming $20,000 as resistance turned support would be extremely bullish for Bitcoin and likely leave that former trading range behind forevermore

Investing legend Sir John Templeton however warns that some of the costliest words an investor can murmur are “this time is different.”

Is this time different? Or is another » Read more

” href=”https://www.newsbtc.com/dictionary/bear/” data-wpel-link=”internal”>bear market coming? Only time will tell.

Featured image from Deposit Photos, Charts from TradingView.com

Source: https://www.newsbtc.com/analysis/btc/the-striking-similarities-between-the-2017-bitcoin-peak-and-now/

Blockchain

CBOE files to list Van Eck’s proposed Bitcoin ETF

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Globally leading exchange holding company, Chicago Board Options Exchange, or CBOE, has filed to list the Bitcoin exchange-traded fund proposed by asset manager, Van Eck.

CBOE filed a Form 19b-4 requesting permission to list the ETF from the U.S. Securities and Exchange Commission on Jan. 3. In the form, CBOE emphasizes the benefits an ETF would offer to retail investors over the spot Bitcoin markets, including custody:

“Exposure to bitcoin through an ETP also presents certain advantages for retail investors compared to buying spot bitcoin directly. The most notable advantage is the use of the Custodian to custody the Trust’s bitcoin assets.”

While CBOE did not reveal who its custodian is, the document notes its custodian is “a trust company chartered and regulated by [the New York Department of Financial Services].”

Once the SEC has formally acknowledged it is reviewing the application, the regulator has 45 days to deliver its verdict or extend the assessment deadline. The SEC can extend its deliberation period for up to 240 days before finalizing its decision.

If approved, the ETF would be the first crypto product offered by CBOE since February 2019, with CBOE having then ceased offering Bitcoin futures contracts. In December 2017, CBOE became the first regulated financial institution in the United States to offer Bitcoin futures contracts, beating out the Chicago Mercantile Exchange by just a couple of weeks.

In January, Van Eck filed for SEC approval of a Bitcoin ETF. While Van Eck had previously filed for a BItcoin ETF in 2017, the firm also teamed up with SolidX — a blockchain firm that had been attempting to bring a Bitcoin ETF to market since 2015 — to file for a jointly issued ETF in 2018. The joint application was withdrawn in September 2019, with the two firms parting ways shortly after.

However, Van Eck’s latest filing has become the subject of a lawsuit from SolidX, who alleges Van Eck plagiarized their product.

Van Eck also filed for an ETF tracking the performance of prominent crypto firms on Jan. 21. The product would seek the price and performance of the Global Digital Asset Equity Index — which is run by its subsidiary MV Index Solutions.

As of this writing, the SEC is yet to approve any crypto ETF product.

Source: https://cointelegraph.com/news/cboe-files-to-list-van-eck-s-proposed-bitcoin-etf

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Coinbase custodies 11% of entire crypto capitalization

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Crypto data aggregator Messari has reported that the quantity of crypto assets stored in custody on U.S. exchange giant Coinbase surged in the last quarter of 2020.

Messari Crypto has revealed that as much as 11% of the entire crypto market capitalization was held with Coinbase custody at the end of last year. The Coinbase offers custody services for over 90 crypto assets, roughly half of which are tradable on Coinbase’s exchange.

The value of assets custodied with Coinbase spiked to roughly $90 billion in the fourth quarter of 2020 as the combined crypto capitalization more than doubled to tag $780 billion by 2021.

Despite the wide variety of assets supported by Coinbase Custody, Messari found that Bitcoin and Ethereum account for 83% of the cryptocurrency held with Coinbase.

While Bitcoin consistently represented 70% of the assets custodied with Coinbase during 2019 and 2020, Ethereum increased from 9% to 13% over the same period.

The findings were published in a report examining Coinbase’s anticipated public listing that was compiled by Messari researcher Mira Christanto.

Christanto reported that 95% of Coinbase trading revenues are from retail clients, who pay 30 times more than institutional customers. She also noted a pre-IPO valuation at 7% of the total crypto market cap which would equate to around $107 billion according to the sector’s current market cap of $1.54 trillion.

According to the S-1 report Coinbase submitted to the Securities and Exchange Commission on Feb. 25, the exchange posted a direct revenue of $1.1 billion in 2020 mostly from trading fees.

In a Feb. 25 blog post to its clients, Coinbase revealed that Bitcoin and other crypto assets have comprised a major share of its corporate treasury since the company’s founding back in 2012.

Source: https://cointelegraph.com/news/coinbase-custodies-11-of-entire-crypto-capitalization

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Leverage traders ‘flushed out’ by late-February crypto crash: Glassnode

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According to on-chain analytics provider, Glassnode, the late-February crypto market correction may have purged excessive leverage from the markets.

On March 1, Glassnode published a report analyzing the recent crypto crash — which was only the second significant crypto correction since the markets pushed into new record highs in late 2020.

Glassnodenoted the crash peaked with a 25% fall from the local top of $58,300 to $43,343. As such, the move was weaker than January’s dip which saw a roughly 30% retracement from $42,000 to less than $30,000.

The analytics provider suggested that these pullbacks are positive for the crypto markets overall, attributing the latest correction to liquidated leveraged positions held by risky speculators:

“Significant market corrections are positive events in that they flush out speculation, leverage, weak hands, and test holder conviction.”

The report added that several key market indicators were reset as BTC prices found fresh support, including futures open interest, futures funding rates, and the price premium for Grayscale’s investment products.

Futures open interest, which is the total number of outstanding contracts that have not been settled, dropped almost $4 billion or 22% from its peak of $18.4 billion. Glassnode also commented noted perpetual futures funding rates have also reset close to zero, which could indicate that traders are not willing to enter short positions, stating:

“Previous combinations of decreasing open interest and a reset of funding rates have indicated a flush in speculative trading has occurred.”

However, the report did note that open interest is still hovering roughly $2.5 billion above the previous peak of $3.9 billion on Feb. 21 — meaning there is still significant leverage within the market.

Glassnode also noted that shares in Grayscale’s Bitcoin Trust are trading at a discount compared to spot market prices for the first time ever, with investors paying a nearly 4% discount to access exposure to BTC through Grayscale’s trust.

It added that competing products such as Canada’s Purpose ETF could diminish Grayscale’s premium as more institutional products enter the market and close arbitrage opportunities.

At the time of writing, Bitcoin prices were up 5.3% over the past 24 hours, with BTC currently changing hands for $49,200.

Source: https://cointelegraph.com/news/leverage-traders-flushed-out-by-late-february-crypto-crash-glassnode

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