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Tuesday Trades: Too Much Volatility? Welcome to Crypto

Bitcoin hits $29,000. Coinbase sued over XRP Sale. Bitfinex CTO: Bitcoin dominance is inevitable.

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Good morning. For those who have witnessed volatility for the first time, welcome to crypto. It’s a part of life here. 

Welcome to Tuesday Trades, part of our new series: BitPinas Daily. We will look at the price of Bitcoin, Ethereum and the major cryptocurrencies. Crypto is global, but sometimes news that matters happens while we sleep. So we bring to you what’s happening in our space here and abroad. 

Market Price as of January 5, 2021:

Bitcoin $31,516 -4.62%
Ethereum $1,025.65 5.67%
Tether $0.99 -0.3%
XRP $0.23 4.55%
Litecoin $152.07 -4.69%
SLP $0.018 -1%

Bitcoin closed January 4, 2021, at $31,516 per BTC. We’re up 20% in the last 7 days and 11% since the year began. This number is also 9% below the previous all-time high price of $34,684 that was hit on January 3, 2021.

Bitcoin’s market capitalization stands today at $603,840,346,341 which is 67.2% of the entire cryptocurrency market.

On the table above, there’s the cryptocurrency SLP. If you wonder what that is, check out this article: Playing Axie Infinity vs Minimum Basic Salary in the Philippines.

Table of Contents.

What crash?

Bloomberg: Bitcoin’s Rally Comes to a Halt as Prices Fall Most Since March

Bitcoin fizzled in Monday trading as the famously volatile cryptocurrency pulled back after a spectacular new-year rally.

Prices fell as much as 17% in the biggest drop since March before recovering. The losses are small in the context of Bitcoin’s broader rally, with a 50% jump in December alone. After a parabolic 2020, the digital currency had started the new year with a bang, surging as high as $34,000 and hitting all-time highs on Sunday. (Joanna Ossinger)

Bitfinex: Bitcoin Retracement is Unsurprising

Paolo Ardoino, CTO at Bitfinex said the retracement of Bitcoin is unsurprising yet may be short-lived.  

“Today we’ve seen some profit taking. We are not making predictions, but this may be short-lived; based on the sentiment among traders on Bitfinex, we perceive that the overall bullish sentiment around Bitcoin hasn’t changed.”

Ardoino also said the prevalence of high frequency trading firms are there to mitigate such sharp falls. “Through their role as intermediaries, HFT’s thereby immediately provide buying pressure in response to such a sharp price drop. Having thick order books and healthy liquidity also helps.”

Banks

Coindesk: Crypto Markets Jump on OCC Approval for Banks to Use Blockchains

Cryptocurrency prices jumped Monday evening after the U.S. Office of the Comptroller of the Currency (OCC) issued a letter approving U.S. banks to use public blockchain networks. The letter addressed national banks and federal savings associations participating as nodes on a blockchain and storing or validating payments made in native digital assets or stablecoins. 

The OCC’s letter stands in contrast to a bill introduced in the last Congressional session that would have required stablecoin issuers to obtain bank charters. (Zack Voell)

Binance

Cointelegraph: Binance hits record high of $80B in daily volume as crypto markets surge

Changpeng Zhao, the chief executive of Binance, the world’s largest crypto exchange by trade volume, reported a record of $80 billion in 24-hour trade activity on Jan. 4. On Twitter, CZ compared the recent activity to the volume posted during the last record-breaking bull cycle, noting that the past day of trade equates to four-time the volume processed on the exchange from Nov. 15, 2017 to Dec. 15, 2017. (Samuel Haig)

DeFi

Cointelegraph: ‘Insane’ ETH fees delay launch of Aavegotchi NFT game

Decentralized finance project Aavegotchi is pushing back the mainnet launch of its non-fungible token digital collectible game due to high activity on the Ethereum blockchain. According to a Tweet from its team today, Aavegotchi will be postponing the Jan. 4 launch of its game in response to the “insanely high gas costs” and “extreme volatility” on Ethereum. The project also stated it will “most likely” migrate to the Matic Network — a smart-contract platform and layer two scaling solution for Ethereum. (Turner Wright)

#CryptoPH

BlockchainSpace Discusses Axie Scholarships

Do you want to play Axie Infinity but don’t know where to start? Or maybe you don’t have the funds? Enter Axie Scholarships. In the Blockchain Space Axie Academy, they will provide you a loan of 3-Axie Teams, education on the game and SLP Farming, crypto education, community building and support. 

Peter Ing, the head of Blockchain Space discussed the Axie Scholarship Model, why it is popular, and the value proposal of these types of endeavors to increase play-to-earn and crypto adoption. (Blockchain Space)

What else is happening

  • Open interest on Bitcoin derivatives reached an all-time high on Sunday (MK Manoylov, The Block)
  • Square says new FinCEN wallet proposal will inhibit crypto adoption and hinder law enforcement efforts (Saniya Moore, The Block)
  • DeFi Hits Historic $17.5 Billion Locked, But ETH Is Still Flowing Out (Alexander Behrens, Decrypt)

This article is published on BitPinas: Monday Trades: Too Much Volatility? Welcome to Crypto

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Source: https://bitpinas.com/news/tuesday-trades-too-much-volatility-welcome-to-crypto/

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JP Morgan: Bitcoin Needs to Reclaim $40K Soon or Momentum Will Fade

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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.

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Source: https://cryptopotato.com/jp-morgan-bitcoin-needs-to-reclaim-40k-soon-or-momentum-will-fade/

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Bitcoin Exchange Owner Sues Australian Banks For $290K For Accounts Closure

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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. 

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Source: https://cryptopotato.com/bitcoin-exchange-owner-sues-australian-banks-for-290k-for-accounts-closure/

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Cardano Price Analysis: 18 January

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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

Source: ADAUSD, TradingView

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.

Source: ADAUSD TradingView

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.

Conclusion

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.

Source: https://ambcrypto.com/cardano-price-analysis-18-january

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