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Will Bitcoin price sink below $10,000 again? Bulls are waiting to load up ammo

Bitcoin price has been hesitantly testing the crucial $10,000 support only to face more buying activity from the bulls. With traditional and crypto markets bleeding heavily, will the support now finally cave to take BTC/USD pair below the $10,000 level. The crypto king has survived a tumultuous weekend and is barely holding the $10,200 mark. […]

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Bitcoin price has been hesitantly testing the crucial $10,000 support only to face more buying activity from the bulls. With traditional and crypto markets bleeding heavily, will the support now finally cave to take BTC/USD pair below the $10,000 level.

Will Bitcoin price sink below $10,000 again? Bulls are waiting to load up ammo 1
Cryptocurrency heat map by Coin360

The crypto king has survived a tumultuous weekend and is barely holding the $10,200 mark. Weekend charts are dominated by downwick candles on hourly charts. Other cryptocurrencies aren’t performing so well either. Ether posted a low of $300 after sliding down consistently for the past few days. Many crypto investors are worried about the burgeoning DeFi market that is fast approaching the unfortunate bubble stage. But what does all this mean for Bitcoin price? Let’s find out.

Bitcoin price has entered an unknown phase

Altcoin rally is already reaching stratospheric levels and prices are not justifying the ground realities of the projects. Even though it was a typical crypto market week with all its volatility, the market action has taken many traders by surprise. In what could be the start of cold crypto winter, investors are wondering whether Bitcoin price can provide some solace.

Will Bitcoin price sink below $10,000 again? Bulls are waiting to load up ammo 2
Bitcoin price chart by TradingView

The Bitcoin price is consolidating around $10,000 level

Bitcoin price has dropped almost 21 percent in the past two weeks. BTC/USD pair posted a low of $9,850 on 5 September only to bounce back slightly and trade above the $10,200 level. The volatile price action has created what many investors call the ‘Bart’ pattern.

Conventionally, a Bart pattern signifies a ‘pump-and-dump’ period where price rises and falls repeatedly only to trade around the mean. What’s worrying is that when the king of cryptocurrencies makes such an indecisive pattern, other crypto-assets also look vulnerable. The Bart pattern accompanied by large volumes has the potential to shake the entire altcoin space.

Bitcoin price posted a high of $12,450 which can be considered a top in Bart pattern. Identifying the bottom is crucial to know the start of the next bull rally.

The CME gap holds the key

Since Bitcoin is available for trading 24/7, the CME gap provides an interesting area of study. CME is closed for one hour daily which necessitates that trading clearances be done the next day. Orders which were placed when CME was closed can be unfilled for some time thus creating a gap.

The CME gap intervals can sometimes create a gap of $50 in the Bitcoin price. In case the price falls and touches the price bracket of unfilled orders, they can get filled during the price drop. However, the Bitcoin price has dropped sharply in the past few days.

The gap observed on 24 July stands at around $9,665, which is around $200 shy of the recent low posted by the BTC/USD pair. If there are significant orders pending in the $9,665 region, the wick can certainly move lower.

Weekly Fibonacci brings $7,000 in picture

The weekly 61.8 Fibonacci retracement mark stands at $7,033. This is a worrying prospect for bulls as the pullback can wipe out long-term bull positions. Most traders and investors entered the current market around $7,000 levels which means they will liquidate their positions and book profits in case the current fall exaggerates.

The prospect of touching the 61.8 percent retracement is quite frightening. However, there will be many bull entry points along this downward spiral that can reverse the downtrend. The fall to $7,000 would bring the March lows into the picture. Not to forget, the institutional investors are sitting on the fence waiting for the right moment to start large-scale buying.

Bears are getting stronger

If CME gap support at $9,600 doesn’t hold, the correction can run deeper. Unfortunately, such a scenario can bring the 61.8 percent Fibonacci support into play. That means the correction can go all the way up to $7,100. Anything south would mean the bull market for this year is over.

BitMex shows that Bitcoin futures are also not painting a rosy picture. The open interest has reached 800 million which is about the same as two weeks ago when Bitcoin price started dropping.

How can bulls make a comeback

The recent drop isn’t as dreadful as it looks. The $12,500 resistance is formidable and requires large-scale collective bull effort. The CME gap is partially filled as the price touched $9,850. The bounce back from $9,850 was swift which means bulls are eyeing buying opportunities. Trader AlanMasters also shares the same sentiment but initially, Bitcoin price has the potential to hit $9,081.

Will Bitcoin price sink below $10,000 again? Bulls are waiting to load up ammo 3
Bitcoin price chart by TradingView

The macro picture still favors Bitcoin. The weekly trend line is still firmly in the bull territory and small corrections are a healthy part of long-term bulls trajectories. Technically, the Bitcoin price can go as low as $8,500 and still maintain a bullish stance in the macro realm. An abrupt fall can weed out the sellers and prompt a quick buying interest around the $8,600 level.

Another way to understand the present retracing is through Bitcoin halving. The ‘re-accumulation’ that occurs after each halving results in price consolidation. First, the price breaks up, and then it retraces to trade within a range. Retests are also part of the stage when the price breaks upwards.

As for now, the $10,000 support level is holding strong. Despite the shaking ground underneath, the BTC/USD pair will start the week above the $10,000 slab.

Source: https://www.cryptopolitan.com/will-bitcoin-price-sink-below-10000-again/

Blockchain

US House Passes $1.9 Trillion COVID-19 Relief Package, $1,400 Direct Check Provisions Included

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This past weekend, the US House of Representatives passed President Biden’s $1.9 trillion stimulus bill, sending the piece of legislation to the Senate for a vote.

Some of the notable parts of the bill include increased funding for vaccine distribution and schools, direct funding to state and local governments, and $1,400 checks to Americans making less than $75,000 annually. While this aid is desperately needed by the American people, it brings up larger points about the direction the financial system is headed.

Sending out the Checks

Direct stimulus checks were one of the biggest campaign-promises from the Democrats during the Georgia Runoff Elections, and it seems that the US Government might be one step closer to delivering on that promise.

The bill, which includes a minimum wage increase to $15 per hour, passed in the House with a 219-212 vote down party lines. Despite support from 76% of voters, not a single Republican representative voted for the bill, along with two Democrats who broke with the party to vote no.

However, the current iteration of the bill is unlikely to be the version that President Biden will sign. Procedural roadblocks and a bit of Democrat inaction are preventing the minimum wage increase from passing the Senate, and more than likely, the minimum wage provisions will be removed. The bill will be sent back to the House to be voted on again, without the minimum wage increase, before landing on Biden’s desk. We are now over a month into the Biden presidency, and many Americans are wondering where those “Day One” payments are.

This newest relief bill, if passed, will be the third major stimulus bill passed by the United States government since the start of the COVID-19 pandemic. It comes after the December 2020 stimulus package, which extended the eviction moratorium, additional PPP loans, $600 direct payments to Americans, in addition to the previous $6.2 trillion CARES Act, which was passed in March of last year. However, the Federal Reserve pumping money into the economy does have repercussions, some felt rather quickly.

Money Printer Go Brrrr

The stimulus last year contained nearly $4 trillion getting pumped in to prop up various top financial institutions, sending waves throughout the international currency markets. The US Dollar started losing value shortly after the bill was signed into law and has been on the decline ever since. Since March of last year, the US Dollar has fallen 10.5% and 10.3% to the British Pound and Euro, respectively. While the new stimulus bill is considerably smaller, it is still likely it will affect Dollar in the coming months.

Worries regarding the devaluation of the dollar are nothing new, however. Cryptocurrency users have long pointed out the issues with the state being able to effectively print infinite money.

Bitcoin and other digital currencies have long touted the advantages of having a provably limited supply, where the minting of new coins is an algorithmic process that is defined in advance. And it seems like investors believe those types of systems may have some benefits.

As the major economies around the world continue to struggle, people may start looking towards cryptocurrencies as a safer place to hold their wealth rather than continuing to let it devalue.

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Source: https://cryptopotato.com/us-house-passes-1-9-trillion-covid-19-relief-package-1400-direct-check-provisions-included/

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Cboe Files With the US SEC Again to List VanEck’s Bitcoin ETF

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Yet another attempt for a US-approved Bitcoin ETF is on the horizon coming from the Chicago Board Options Exchange (Cboe). The organization’s filing with the SEC aims to build on a previous S-1 filing initiated by VanEck. 

  • CryptoPotato reported in late 2020 that the US investment giant with about $50 billion in AUM, VanEck, has filed for its latest S-1 form with the SEC to establish a Bitcoin ETF called The VanEck Bitcoin Trust.  
  • The company’s application indicated that the ETF’s shares would be traded on the Cboe BZX Exchange if approved. 
  • Although the Commission has not issued a formal response yet, Cboe has interfered with the application by filing a proposal of its own. 
  • It works as an addition to the previous attempt as the proposal “builds on VanEck’s earlier S-1 filing” and “represents the next steps in bringing what could be the first US Bitcoin ETF to market.” 
  • Furthermore, the filing reads that such a product would “present 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.” However, the document didn’t reveal the name of the custodian.
  • The regulator has yet to approve a Bitcoin ETF in the US as it has rejected dozens of applications so far. VanEck alone has a couple of attempts in the past, but each ended with a withdrawal from the company. 
  • While the US has failed to approve a product tracking the performance of the primary cryptocurrency, the nation’s northern neighbor did so earlier this year. 
  • Canada’s Ontario Securities Commission (OSC) approved a filing by Purpose Investments in February, and the product accumulated more than $400 million in its first few weeks of existence.  
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Source: https://cryptopotato.com/cboe-files-with-the-us-sec-again-to-list-vanecks-bitcoin-etf/

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No, Goldman Sachs isn’t a bearish indicator for Bitcoin

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Peter Brandt, a popular veteran trader and CEO of proprietary trading firm Factor LLC, recently gave his thoughts on Goldman Sachs potentially restarting its cryptocurrency desk.

On Dec. 21, 2017, a similar Bloomberg piece stated that Goldman Sachs would set up a cryptocurrency trading desk, although the bank was “still trying to work out security issues.”

Although Brandt’s chart seems significant, one needs to understand that such speculation had been ongoing for a couple of months. Wall Street Journal already covered Goldman Sachs’ intention to do this on Oct. 2, 2017.

Even if we disregard the exact date, Goldman Sachs apparently ditched those plans to launch its Bitcoin (BTC) trading desk. But, more importantly, there aren’t many similarities between the 2017 bull run and the current market in terms of their structure.

Bitcoin market cap, volume late-2017, USD billion. Source: TradingView

Take notice of how BTC volume soared from a $2 billion average daily volume in November 2017 to $14.6 billion by year-end, a seven-fold increase. The incoming retail demand was so impressive that it caused Binance, Bitfinex, and Bittrex exchanges to reject new users temporarily.

Binance accounts were even sold by users directly to other users at the time when no new sign-ups were being accepted. In other words, there is currently no retail frenzy in Bitcoin similar to what happened in late 2017. In fact, the current bull cycle appears to be driven by institutions that are seemingly scooping up BTC on every dip

Bitcoin market cap, volume, USD billion. Source: TradingView

Meanwhile, the $66 billion daily average traded volume seen on Feb. 22, 2021, as Bitcoin’s market capitalization peaked at $1.09 trillion, has been relatively flat for the previous six weeks.

Therefore, an experienced technical analyst such as Brandt should have added the caveat that volume is the most relevant market participation indicator (which he frequently emphasizes in his other analysis). 

To settle this difference for good, one needs to understand the basics of futures markets. Derivatives exchanges charge either perpetual futures longs (buyers) or shorts (sellers) a fee every eight hours to keep a balanced risk exposure. This indicator, known as the funding rate, will turn positive when longs are the ones demanding more leverage.

Bitmex BTC perpetual futures weekly funding rate, late-2017. Source: TradingView

As the above chart indicates, buyers were willing to pay up to 40% per week to leverage their long positions. This is entirely unsustainable and a sign of extreme optimism. Any market downturn would have caused cascading liquidations, with the BTC price accelerating to the downside.

BitMEX BTC perpetual futures weekly funding rate. Source: TradingView

Such exorbitant rates no longer exist, albeit the current 4% weekly funding rate has been the highest since June 2019. Nevertheless, scales of magnitude lower than late-2017 outrageous retail-driven long leverage frenzy.

Lastly, one should factor in that December 2017 marked the launch of CME and CBOE futures contracts. As Cointelegraph astutely put back then: This unprecedented event could have a significant impact on the Bitcoin economy.” In retrospect, this seems to have been the peak euphoria signal the bears were waiting for. Thus, Goldman Sachs balking was likely the effect, not the cause. 

But while Brandt has become well-known in the cryptocurrency space for anticipating the 80%+ correction after the 2017 Bitcoin price top, his track record has been less impressive in recent times. 

So to sum up, there is zero evidence to support Peter Brandt’s theory besides a single event that happened once in the 11 years of Bitcoin trading. Not to mention that the 2017 Goldman Sachs cryptocurrency trading desk rumors had been going for a while.

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.

Source: https://cointelegraph.com/news/no-goldman-sachs-isn-t-a-bearish-indicator-for-bitcoin

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