Bitcoin Rally To $8,000 Smells Like Late-2017: JP Morgan Analysis

Save for Friday’s sudden selloff, Bitcoin (BTC) has been on an absolute tear over the past few weeks. Since early-April, the asset has moved from $4,200 to a recent peak of $8,350 — effectively a gain of 100% — and is seemingly preparing itself for another leg higher.
While many believe that this move comes off the back of booming on-chain statistics and strong fundamental developments, one Wall Street firm argues that this isn’t the case.
Related Reading: Binance and Coinbase Traffic Spikes as Bitcoin Price Surges 81% YTD
Bitcoin Diverging From Intrinsic Value
In a recent research note from JP Morgan, obtained by Holger Zschaepitz, a German economist and author, it was explained that Bitcoin is trading above its “intrinsic value”. The note (seen below) suggests that the cryptocurrency’s “intrinsic value” is the estimated cost of production per unit or mining costs. In fact, JP Morgan’s estimates show that BTC is currently (as of May ~15th) trading above its breakeven mining cost by two times.

#Bitcoin prices diverge from intrinsic value, carrying echoes of late 2017, JPM says. pic.twitter.com/DImDoSMv8L
— Holger Zschaepitz (@Schuldensuehner) May 17, 2019

Zschaepitz adds that JP Morgan notes that this current rally “carries echoes of late-2017”, which was when BTC spectacularly rallied and decoupled from any fundamentals on the back of hype.
Related Reading: XRP Holds Strong After JP Morgan ‘Slaps’ Ripple With Bank-Centric Crypto
Indeed, Fundstrat’s Tom Lee claims that Bitcoin historically trades at around two times its intrinsic value, especially in bull markets.
It is important to note that JP Morgan has been historically bearish on Bitcoin. As NewsBTC reported previously, analysts from the American bank suggested that Bitcoin may only be a good hedge in a “dystopian scenario”, not a digital gold as some expect. They go on to state that BTC could plunge to $1,260 eventually. And, of course, JP Morgan’s impassioned chief executive, Jamie Dimon, has been enamored with calling BTC a “fraud” and a similar ilk of insults.
Yet Fundamentals Are Better
Is JP Morgan right in its assumption that Bitcoin is trading too far above its intrinsic value?
Well, maybe not. As Dan Held, the co-founder of Interchange, recently pointed out, the ecosystem’s fundamentals and infrastructure are much stronger now than in 2017 or 2018, sans mining costs.
Case in point, the industry has some of the biggest names in finance and technology delving in. Square, through its Cash App and chief executive Jack Dorsey; Fidelity Investments; E*Trade, Bakkt, and ErisX are among the developments in the space that make this rally entirely different than anything before it. Thus, some deem it logical that warnings of a large market correction can be deemed moot.
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Crypto Tidbits: ‘Spedn’ Bitcoin At Whole Foods, Cryptocurrency Cynic Flips Bullish, And Bakkt Looms

Another week, another round of Crypto Tidbits. Over the past week, Bitcoin (BTC) has traded in a crazy range, moving between $6,000 and $8,350 in a fashion that seems very reminiscent of 2017. This came as a slew of positive news graced the cryptocurrency and blockchain market.
Throughout the past seven days, a startup was revealed to be bringing crypto asset adoption mainstream, Facebook moved one step closer to launching its own blockchain-friendly network, and the financialization of the industry continues to occur.

Related Reading: Crypto Tidbits: Binance Bitcoin Hack, Buffett Hates Cryptocurrency, Ethereum Futures Inbound
Crypto Tidbits

Facebook Crypto On The Horizon, Company Opens Blockchain Firm In Switzerland: Quietly discovered by Reuters on Friday, technology giant Facebook has recently established a new company in Switzerland. The new firm is purportedly centered around blockchain and payments, likely pertaining to the company’s rumored “Libra” project. This has only been corroborated by the fact that the new company is registered as “Libra Networks”, and was registered weeks ago to “provide financial and technology services and develop related hardware and software”. Just last week, we reported that Libra was revealed to be a cryptocurrency payments ecosystem meant to curb fees, and that Facebook was staffing up (22 roles open on its career portal) for that division. And after that news broke, Facebook was revealed to have begun to roll back its ban against crypto- and blockchain-related advertisement content.
Bitstamp Selloff Results In Bitcoin Plunge To $6,100: On Friday, Bitcoin slipped from $7,800 to $6,100 on Bitstamp. Evidence is mounting that a single actor, or group of entities, catalyzed this move with mere clicks of their mouses. As recently noted by Adamant Capital’s Tuur Demeester, the rapid collapse was led by serious sell orders on Bitstamp. Some have suggested that this was in a bid to manipulate the value of the BitMEX’s perpetual swap for Bitcoin, specifically in an attempt to liquidate the millions of dollars of shorts racking up over recent days and weeks. As Three Arrows Capital’s Su Zhu suggests, someone tried to exploit BitMEX’s mark price by placing a large sell order on Bitstamp, which the former exchange draws data from to determine its index. Order book history seemingly corroborates this theory, as an entity placed a massive 2,000 BTC sell order at $6,500 on Bitstamp, seemingly in a bid to depress the price for a short period of time.
Coinbase May Soon Acquire Xapo’s Bitcoin Custodian: In an impeccable sign of the times, sources tell The Block that Coinbase may soon acquire Xapo, one of the first and most startups in the cryptocurrency space. The San Francisco-based cryptocurrency giant is “in advanced talks” to purchase Xapo, a Zurich-headquartered custodian that purportedly owns at least 5% of all BTC in circulation. Sources, who are “people familiar with the matter”, tell the outlet that Coinbase has an offer of $50 million and added contingent “earn-outs” on the table, but that Xapo has yet to shake on the proposed deal. They add that Coinbase and Fidelity’s resident crypto division, Digital Assets, have been duking it out over this deal, which is massive in and of itself. So far, as hinted at, Coinbase has the lead and was quicker on the draw, as the budding startup looks to bolster its embryonic custody business in a renewed drive to appeal to institutional players.
Coinbase Sees Massive Custody Interest: In a similar string of news, Brian Armstrong, the technologist-turned-chief executive of Coinbase, revealed that his firm’s custodian crossed $1 billion worth of assets under management (AUM) this week, which was sourced from 70 institutions. Armstrong adds that this sum continues to grow by $150 million, signaling immense interest from the non-retail audience. And in a Q&A session held on Wednesday night, the entrepreneur noted that Coinbase Pro’s volume is now 60% institutional.
Cryptocurrency Cynic Flips Bullish, Acknowledges BTC’s Value: During a recent Bloomberg podcast, which Forbes cited, Mark Mobius, the 80-something-year-old founder of Mobius Capital Partners, divulged some things that some would have never expected him to say. Mobius, who once dubbed Bitcoin a “real fraud” in a Jamie Dimon-esque fashion, stated that BTC is likely to be “alive and well”, uh, well into the future. The investor, deemed “legendary” and “veteran”, by his peers, then added that he knows there is a need, even a desire for global individuals to have a way to transact and transfer value “easily and confidentially”.
U.S. SEC Delays Bitwise Bitcoin ETF: According to a report from CoinDesk, the verdict on the Bitcoin (BTC) exchange-traded fund (ETF) application from California-based crypto upstart Bitwise Asset Management has been delayed once again. In a document published Tuesday morning, the U.S. Securities and Exchange Commission (SEC), who presides over such products, revealed that it won’t be issuing a final verdict (approve or deny) just yet. Interestingly, the regulatory entity has yet to comment on the proposal from VanEck and SolidX, which many investors believe has a higher chance of succeeding. The deadline for that proposal is coming up.
Samsung’s Budget Smartphone May Soon Integrate Blockchain: In a comment given to Business Korea, a local English outlet, a managing director of Samsung’s Wireless Business Division, Chae Won-Cheol, explained that his team will “lower barriers to new experiences by expanding the number of Galaxy models that support blockchain functions”. Won-Cheol adds that Samsung will “expand [its] service target countries” after launching blockchain-related features in Korea, the United States, and Canada, the seeming testbeds for this roster of products. This comes after the Galaxy S10 — Samsung’s latest flagship smartphone — was revealed to have a native digital asset offering in the form of a cryptocurrency wallet.
HTC Looks To Bring Blockchain Mainstream: Announced Saturday at New York’s Magical Crypto Conference, hosted by Litecoin’s Charlie Lee, Samson Mow of Blockstream, Whale Panda, and Riccardo Spagni, the HTC EXODUS 1s is expected to be a more “value-oriented” version of its predecessor. The Taiwan tech giant estimates it will cost around $200 to $300, about one-third the price of popular handhelds today. The EXODUS 1s, slated to be released by Q3 of 2019, will purportedly be the first consumer-facing smartphone to have full node capabilities, giving its users the opportunity to download the full Bitcoin blockchain to their phone, disvaluing third-party nodes that can be manipulated and improving privacy.
Bakkt Looks To Launch Bitcoin Futures By July: Revealed Monday, Bakkt, the Intercontinental Exchange’s independent crypto initiative, will be launching its physically-backed futures contract in July. According to a Medium update from its chief executive, Kelly Loeffler, the product will take two forms: 1) a daily settlement future; 2) monthly futures. This confirms rumors that the platform was looking to launch a vehicle for a same-day market. Bakkt expects the soft launch of this product by July, explaining that it intends to iron out any kinks in the coming weeks.

Startup To Allow Consumers To “SPEDN” Bitcoin At Whole Foods, Gamestop, More: Announced Monday in a Medium post, Flexa, a little-known startup looking to make “cryptocurrency spendable everywhere”, will be making Bitcoin, Bitcoin Cash, Ethereum, and Gemini’s in-house stablecoin available to spend in 30,476 retail outlets. Chains accepted the aforementioned digital assets include Crate & Barrel, GameStop, Lowe’s, Nordstrom, and arguably most importantly, the Amazon-owned Whole Foods. It has been reported that the aforementioned chains have agreed to participate in the Flexa ecosystem, implying partnerships. To accomplish this, Flexa has launched an app it calls “SPEDN” (a play on Bitcoin community not so inside joke “HODL”). This app, currently only available for Apple devices, allows users to deposit cryptocurrency into Gemini-run wallets, then use their phones in physical stores as a way to purchase goods as normal.

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Ethereum (ETH) Currently Overvalued, Correction May Be Inbound

Ethereum (ETH) up 37.9 percent, a retest of $200 likely
Barry Silbert of Digital Currency Group (DCG) is confident that prices will snap back to trend.

With supportive technical and fundamental factors, Barry Silbert is positive that asset prices will shake off sellers. Meanwhile, Ethereum (ETH) is stable and up 37.9 percent in the last week.
Ethereum Price Analysis
Fundamental
There is an element of resiliency in the ongoing correction. At the back of increasing awareness, an inclination towards data privacy and control, volatility and infrastructure development, today’s dip is markedly different from previous corrections.
Taking note is Barry Silbert, the founder, and CEO of Digital Currency Group (DCG), who told Bloomberg that fundamental and technical factors are supportive of price:
“Sentiment, the technicals look great. An 80 percent draw-down happened three or four times, and every time that’s happened [it hit] record highs. So as soon as you get the price going back up and animal instincts come back, [the market recovers].”
Adding that:
“But the difference between this increase in price and the bubble in 2017 is the infrastructure much different. You have custodians now. You have trading software, you have compliance software, and people are educated about the asset class, so this time is different.”
Candlestick Arrangements

What we have in the daily chart is a clear double bar bear reversal pattern. Even though prices are up 1.3 percent and 37.9 percent from last week and day, sellers have the upper hand. It is easy to see why.
First, note that May 16th and 17th bars did close above the upper BB (Bollinger Bands). From candlestick arrangement and BB rules, that is an over-extension that is usually followed by a correction — which is in progress.
Secondly, May 17th bear bar has high participation levels with sellers liquidating their positions triggering a fall. Bear momentum spilled over to today, and in confirmation, risk-off traders can begin unloading Ethereum (ETH) with targets at $190 in line with our last ETH/USD trade plan.
Apart from the two reasons, note that there is a lower low between May 11th and today’s close from BB analysis. If anything, that is bearish. On the other hand, any spike above May 16th highs will signal trend continuation, canceling out sellers.
Technical Indicators
Typical of ETH retracement and breakouts, it is likely that prices will drop back towards the 78.6 percent ($200) or April highs in a retest. Ideally, what would mark out sellers is a high volume—exceeding 537k — close below May 16th.
Chart courtesy of Trading View. Image Courtesy of Shutterstock
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Did Bitcoin [BTC] Bear and Accumulation Phase Shorten From 2015 by a Year?

Bitcoin has been divided into 4-year cycles, it is an intrinsic property of Bitcoin in which the miner rewards are reduced by half every four years to make Bitcoin deflationary. Currently, the inflation on Bitcoin is above 3.5%.
Since we’re still in the early phases on Bitcoin, only two halving events have been conducted until now, in 2012 and 2016. The current mining reward for validating a Bitcoin is 12.5 BTC. It will be reduced to 6.25 BTC after the halving event coming next year.
Analogy Between the Bear and Bull Cycles of 2014 and 2017
Furthermore, market sentiments have also followed the halving event very closely in the past. The price grew exponentially in 2013. The 2016 halving event was a significant driver of growth in the last bull and bear run of 2013-2015. Nevertheless, post that event there was a 57-week bear market followed by around 65 weeks of accumulation.
Also Read: Bitcoin [BTC] Price Cycles Replicated Until Now, $50000 Target Predicted by Peter Brandt
2014-2016 Bear, Accumulation and Bull Phase in Bitcoin [BTC] (TradingView)The 2017 bull market recorded over 5700% gains from $300 levels to $19500. The bull market ended at the beginning of 2018 in January after the trend reversal started to pull the price downwards. The bottom being identified in a graph suggests the end of a bearish trend. If $3150 if the bottom identified in this cycle, then the bear market was shortened slightly by a couple of weeks; it lasted for 52-weeks.
Nevertheless, as soon the bottom was suggested by the analyst, the accumulation seems to have ended sooner than before. Dovey Won, crypto-analyst and founder of Wheatpond, shared an analogy about the current correction from 2015 which takes us 5 months ahead of accumulation phase in 2015. Furthermore, the previous bull run in 2016 began during the month of May itself.

History doesn't repeat itself but it often …
… Rekt you the same way 😭😭 pic.twitter.com/t0XNOghFIg
— Dovey Wan 🗝 🦖 (@DoveyWan) May 17, 2019

Many analysts have confirmed that the bull market might have begun with Bitcoin breaking above two times the bottom value ($6300). It also broke above key resistance at $6400 like putting ‘knife in hot butter.’ Moreover, it also agrees with the market sentiments as the optimism toward Bitcoin is higher this time around.
Furthermore, the uncertainty over the regulatory ban and zero value FUD created during the past are a thing of the past now with Institutions like Fidelity, Bakkt, TA Ameritrade, eTrade and SquareCash stepping in to fill the demand for cryptocurrencies.
Do you think that the bull run has begun as well? Please share your views with us. 
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Source: CoinGape

Why The Bitcoin Flash Crash To $6,400 Isn’t Entirely Bearish: Positive Factors

Bitcoin (BTC) has just seen its craziest hour of price action since the weekend, during which the cryptocurrency market rallied by 20%, if not more. For those who missed the memo, or haven’t checked the charts or Crypto Twitter in a hot second, Bitcoin collapsed by over 15% in minutes on Bitstamp, falling from $7,800 to $6,200.
Interestingly, however, most of the downturn was contained to Bitstamp, a Europe-centric exchange, as there existed a $500 to $600 spread between its BTC/USD pair and the same pair on Coinbase. Since our report on the matter, BTC has recovered to $7,300 and has flatlined for the time being.

As the market has settled, some have sought to determine how this rapid drawdown will affect Bitcoin’s short-term prospects, especially in such an unpredictable environment. And per a number of analysts, Friday morning’s move should not only be expected but should be seen as a positive sign. Yes, you read that right.
Related Reading: Bitcoin Flavour of the Week Again: Crypto Back in Mainstream Media
Bitcoin Dump Might Be A Manipulative Move 
Evidence is mounting that a single actor, or group of entities, catalyzed this move with mere clicks of their mouses. As recently noted by Adamant Capital’s Tuur Demeester, the rapid collapse was led by serious sell orders on Bitstamp. Some have suggested that this was in a bid to manipulate the value of the BitMEX’s perpetual swap for Bitcoin, specifically in an attempt to liquidate the millions of dollars of shorts racking up over recent days and weeks.
As Three Arrows Capital’s Su Zhu suggests, someone tried to exploit BitMEX’s mark price by placing a large sell order on Bitstamp, which the former exchange draws data from to determine its index. Order book history seemingly corroborates this theory, as an entity placed a massive 2,000 BTC sell order at $6,500 on Bitstamp, seemingly in a bid to depress the price for a short period of time.

Bitmex wicked down to 6.4k.
2k BTC+ sell wall on bitstamp absorbed.
Looks like a mark price exploit by placing a large sell on stamp (1 of 2 oracles for mark on mex) to trigger liquidations on mex.
You would've been fine on lvg long on bitfinex which didn't go below 7k. pic.twitter.com/OO4wiiCJM4
— Su Zhu (@zhusu) May 17, 2019

It worked, but Bitcoin has since bounced back on the exchange by over 10%, hinting that there isn’t a large amount of bonafide selling pressure. As Adaptive Capital’s Murad Mahmudov postulates:
“Some person could have also had a massive derivative short position from ~8200, and then used spot physical sells on illiquid Bitstamp to push the price down on MEX, closing in profit at ~6700 and making very quick profits.”
What’s more, many analysts and commentators on Twitter anecdotally stated that they “bought the dip”, confirming that anywhere sub-$7,000 is an accumulation range for traders and investors alike.
It is important to add that such a move is expected, nay, mandated in such frothy market conditions. Analyst Crypto Quantamental notes that during 2017’s jaw-dropping bull market, “these sorts of drawdowns” were entirely commonplace and a near-weekly occurrence. Case in point, in early-December, BTC often saw -20%+ days, and then rebounded to new heights the next day.

For those that weren't around in the bull market in 2017, these sorts of drawdowns are normal and to be expected. Bitcoin is insanely volatile and will test your will. I'm not saying we are in a big "BULL", but if it is, expect this
See below for ~24hr drops in the last bull pic.twitter.com/AO4txhixNz
— Crypto Quantamental (@CryptoQF) May 17, 2019

Bitcoin Returns To Key Levels
Other reasons why some see this move as not entirely bearish is what occurred immediately after. Trader Anton Pagi notes that on Coinbase, Bitcoin’s four-hour chart during the sell-off was the largest seen in 2019. While this isn’t bullish in and of itself, when coupled with the fact that BTC rapidly bounced back above its 50 four-hour moving average and has yet to falter, bullish narratives can be spun.
Prominent researcher Alex Krüger expressed a similar sentiment, noting that he would long at $6,400, hinting that such a level was a local bottom. The fact that BTC bounced rapidly off that level could be seen as a very positive sign.

I would usually be looking to short this pullback higher. However, to me this is a *longs only* situation. If price gets there, the 6400 area is IMO ideal for longs. pic.twitter.com/nJqYFqVD8B
— Alex Krüger (@krugermacro) May 12, 2019

But what makes this extremely notable is that $6,400 is the region, which is where there was a CME Bitcoin futures gap, often found when markets are imbalanced in terms of buying and selling pressure. Commentator Cantering Clark recently explained that a gap forming at the start of a “major trend reversal”, which BTC might have seen earlier this week, is a sign of a “high-volume bullish shift.”
Sentiment Strong
What puts a cherry on top of the bullish Bitcoin cake is the fact that sentiment remained decidedly bullish before, during, and after the move. Throughout the sell-off, which took twenty minutes tops, everyone and their mother on Twitter were screaming for their followers to “buy the dip”, throwing in expletives and emojis to make a point.
And as Ari Paul of BlockTower adds, during the dip, not a single person in a room of 30 crypto-centric investors and “people” batted an eye. If that doesn’t say much about the sentiment of cryptocurrency investors at the moment, we’re not too sure what else will.

I'm not sure this dip is bullish, but one interesting datapoint: I was in a room with 30 crypto people and no one batted an eye. Strong underlying confidence. I actually thought my phone app might be broken for a second when the tone in the room didn't change.
— Ari Paul (@AriDavidPaul) May 17, 2019

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After Institutions Drive Bitcoin To $8,000, Will Retail Investors FOMO in?

It isn’t a secret that Bitcoin (BTC) has absolutely surged over the past six weeks. In that time period, the crypto asset rallied from a key resistance at $4,200 to $8,100, where it resides now. While such a move was covered incessantly by mainstream media outlets, little evidence indicated that consumers, who were likely still reeling in shock from Bitcoin’s $20,000 to $3,150 plunge, were taking notice.
Related Reading: Crypto Analyst: Bitcoin Price Now Above Ideal Buying Zone, Shortest Duration Yet
As Chris Burniske, a partner at Placeholder, suggested in an extensive Twitter thread earlier this year, the mainstream “has almost entirely forgotten about crypto again.” Gone are the days that “Bitcoin” was a popular word at the dinner table, as mainstream media outlets, the CNBC “Fast Money” segment, in particular, have slowed their coverage to a near-halt. Burniske touched on this, noting that via “conversations with people from home,” the crypto boom is still tangible in their minds, but the subsequent bust wasn’t observed.
This had led some to ask — who drove the recent rally? And more importantly, when will common Joes and Jills finally dive into cryptocurrency and blockchain once again, if at all?
Institutions Drove Bitcoin To $8,000
Well, according to prominent researcher Alex Krüger, institutions, insiders, and what we call “whales” were behind this recent move, which brought BTC higher by $1,500 in the past week alone.
In a recent thread posted on Twitter, the analyst remarked that “large players” participating in “systematic buying” was what drove the cryptocurrency market. He looked to “volume, price action, funding, and futures basis and term structure” to come to his conclusion: the move was “not retail driven.”

What drove $BTC up this week?
A handful of large players, that started buying in waves. Systematic buying.
Clues to reach that conclusion can be found in volume, price action, funding, and futures basis and term structure. May expand on this later.
Not retail driven.
— Alex Krüger (@krugermacro) May 12, 2019

Data from the institutional-heavy Chicago Mercantile Exchange (CME) would confirm this. As reported by NewsBTC previously, the exchange’s Bitcoin futures vehicle saw 33,677 contracts traded on Monday, amounting to 168,385 paper BTC. This is absolutely staggering, especially considering that the last record, set in February, was a relatively mere 91,690 BTC.
In a similar fashion, the Digital Currency Group’s subsidiary Grayscale was revealed Monday to have seen its flagship product, its Bitcoin Trust, post $141 million in volume today on markets. This is a level not seen since early-2018, when the cryptocurrency market was filled to the brim with speculative interest and FOMO/hype. As Larry Cermak notes, much of this volume was likely sourced from institutional players, as only “qualified accredited investors can directly invest in GBTC with a minimum investment of $50,000.”
According to Krüger, this move was likely largely driven by those trying to “front run” a series of positive news events. These include but are not limited to Fidelity’s Bitcoin trade execution service, Bakkt’s crypto futures, TD Ameritrade and E*Trade getting into the cryptocurrency game, and retail chains across the U.S. indirectly accepting cryptocurrency payments.
Retail Begins To FOMO Into Crypto
So yes, last week’s move was likely caused by non-retail players. But, data suggests that this subset of the market is finally joining the fray after sidelining themselves for upwards of one year. Spotted Tuesday by CryptoRae, the terms “Coinbase” and “Blockchain”, likely in reference to the two popular Bitcoin wallets, have begun to trend on Apple’s App Store.
Although it isn’t clear what determines what is “trending” on the App Store, this is likely a sign that many casual investors are looking to store digital assets they already have or are looking to get.

Trending now: “Coinbase” and “Blockchain”. Not sure I’m ready for this. pic.twitter.com/mRGgcr8RWO
— rae (@cryptorae) May 14, 2019

Not only is FOMO materializing in downloads for key cryptocurrency applications but clicks to crypto-related sites too. According to Google Trends’ latest data, searches for “Bitcoin” in the U.S. have tripled over the past three weeks. Of course, volume for inquiries regarding the asset is still dramatically lower than during 2017’s peak, but the move is at least notable (seen below). A similar trend can be seen in data for other nations.

Now that retail investors are confirmed to be finally be showing interest in cryptocurrency again, the market could theoretically see a secondary rally, whereas normal investors late to the party continue to throw money at Bitcoin. But until TD Ameritrade and E*Trade launch their spot Bitcoin platforms, it is unlikely that massive retail flows are going to enter.
Related Reading: Altcoin Trader: Alt Bitcoin Bear Cycle Almost Over, 600% Gains During Bull Cycle Expected
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Crypto Markets See Record Day As Bitcoin Crosses $8,300: What Does This Imply?

Bears have seemingly thrown in the towel. In the past six weeks, Bitcoin (BTC) has rallied by nearly 100%, moving from $4,200 to $8,300, as of the time of writing this. And while some have been stating that this move seems entirely artificial, caused a result of “fake” and “manipulated” trading activity, data indicates that money truly is flooding into crypto assets.
Related Reading: Bitcoin Bulls Are Back: 40 Days of Uptrend Erases Nearly 8 Months of Bear Market
If this is true, it may corroborate the theories that the brutal bear market of 2018 is, believe it or not, finally over.
Bitcoin Volume Booms Across The Board
Call it a Consensus pump, a dead cat bounce, or a full-on recovery, but Bitcoin is back. Bitcoin is back not wounded, but stronger than ever. That’s what the statistics tell us anyway.
In a move somewhat uncharacteristic of the cryptocurrency market, BTC rallied well into last weekend, seeing most of its recent gains on Saturday and Sunday. While this was no issue for the crypto-native exchanges, whose trading engines are always online — 24/7, through thick and thin — platforms like the Chicago Mercantile Exchange (CME) couldn’t participate in the market influx. This led many to ask, what was going to happen when CME’s Bitcoin futures contract opened on Sunday night and Monday?
Some guessed that “fireworks” were going to grace the cryptocurrency market. And, when the market finally opened, that’s exactly what happened. As markets analyst Alex Krüger pointed out, the investment vehicle saw all-time highs on Monday, with the daily volume candle dwarfing any other candle seen before it. What makes this even notable is that it is effectively impossible to fake volumes on the CME, cementing the idea that interest is rapidly returning to the embryonic ecosystem.

CME Bitcoin volumes. Record highs as well. There is *zero* fake volume at the CME. pic.twitter.com/dDKW6PZ0N9
— Alex Krüger (@krugermacro) May 13, 2019

According to exact data compiled by the CME itself, 33,677 contracts were traded, amounting to 168,385 paper BTC. This is absolutely staggering, especially considering that the last record, set in February, was a relatively mere 91,690 BTC.
In a similar fashion, the Digital Currency Group’s subsidiary Grayscale was revealed Monday to have seen its flagship product, its Bitcoin Trust, post $141 million in volume today on markets. This is a level not seen since early-2018, when the cryptocurrency market was filled to the brim with speculative interest and FOMO/hype.
While $141 million isn’t exactly the largest figure, a reported 73% of the firm’s inflows are from institutional investors. As revealed in a report published Monday and in previous reports, the $42.7 million that was allocated to Grayscale’s products in Q1 of 2019 came from institutional players, half of which were hedge funds. If this trend continued, that likely means that much of today’s influx was a result of institutional players, many of which are likely looking to accumulate BTC for long-term positions.
Data compiled by Larry Cermak of crypto publication The Block would confirm this. He suggests that the over 10,000 BTC that Grayscale accumulated in April was likely caused by institutional players, as only “qualified accredited investors can directly invest in GBTC with a minimum investment of $50,000.”

1/ I normally never post bullish stuff unless I think it’s justified with data. Well, today might be the day. “Institutions are coming” has been the never-ending story for the last 4 years. Let’s look at some GBTC data. https://t.co/qBK6pPXXEA pic.twitter.com/rqUECQ5tS6
— Larry Cermak (@lawmaster) May 13, 2019

And on the retail side, volumes have all exploded. Krüger noted that according to CoinMarketCap, the past 72 hours have seen some of the largest levels of volume to date… ever. As of the time of writing this, the 24-hour volume figure on the website reads at a cool $95 billion. While this is most likely a manipulated figure (to some extent), it is still a bullish sign. Increased volume, in the eyes of many, is a sign of renewed interest of a market.
Related Reading: Analyst: Ongoing Bitcoin Rally Driven by a Handful of Strategic Buyers; Where Will They Send BTC Next?
Bullish News Abound
Well, what caused this influx of volume?
Krüger attributes the increase to no specific catalyst, citing the fact that markets don’t already move in response to news events or developments of similar stature. Instead, sometimes assets move simply as a result of more “aggressive buyers or sellers”.

Trying to explain every market move with narratives is a recurrent behavioural mistake. Sometimes markets do move in response to events. Other times simply due to more aggressive buyers or sellers. This time however the magnitude of the move makes it worthwhile analysing. $BTC
— Alex Krüger (@krugermacro) May 14, 2019

However, NewsBTC would be remiss not to mention the array of bullish news that has hit the industry over the past few days, because as the analyst above suggests, there is a chance that investors are trying to “front run” positive news events. Said events include, the impending launch of Bakkt’s physical Bitcoin futures, the inaugural trading session of Fidelity’s crypto trade execution service, mainstream adoption through Facebook’s and Samsung’s respective blockchains, and rumors that eBay is going to join the cryptocurrency fray by the end of the week.
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Bitcoin (BTC) Roars Past $8,000, Leaves Bloodied U.S. Stock Market In Its Wake

Bitcoin (BTC) has finally topped $8,000. In a move that can only be described as shocking, the cryptocurrency market returned on Monday, pushing dramatically higher on an array of fundamentalists and what one crypto Youtuber, Ivan On Tech, has called “global FOMO”.
Bitcoin Posts Another 10%+ Day
Bitcoin now sits at its highest level since mid-2018, posting a 14% gain as of the time of writing this. It isn’t clear when the buying pressure is going to stop, but this is quite a sight to behold.

As the leading cryptocurrency has boomed, pushing past key resistance levels like they are nothing more than soggy pieces of parchment, other crypto assets have done relatively poorly. Ethereum, for instance, is up a relatively measly 8.66% in the past 24 hours; XRP is up 5.76%, nearing the $0.33 level. The only notable cryptocurrencies that have beat the market leader are Binance Coin, posting a 17% gain as its deposits and withdrawals start to come online; Tron’s BitTorrent; and Bitcoin Cash.
As a result of this relative Bitcoin strength, BTC’s dominance has topped 60%, reaching levels not seen since the asset’s jaw-dropping rally to $20,000 in December 2017.
Related Reading: Hack? What Hack? Binance Coin (BNB) Leads Crypto Top Ten in Today’s Rally
With this move, BTC has surged past a number of key resistances, namely $7,400 and $8,000, and cements bullish narratives in the minds of traders across the board.
What makes this move even more promising is that according to Google Trends, the search terms for “Bitcoin” and “buy Bitcoin” have yet to surge higher, indicating that much of the rally is being caused by those already involved in the space, not common Joes and Jills.
What Are The Catalysts?
This begs the question, what exactly have been the catalysts for this move?
Well, as researcher Alex Kruger postulates, insiders and whales are trying to “front run” an array of news events, in a bid to accumulate BTC before their counterparts in the retail trading environment. Some news that said investors may be trying to front run include, the impending launch of Bakkt’s physical Bitcoin futures, the inaugural trading session of Fidelity’s crypto trade execution service, mainstream adoption through Facebook’s and Samsung’s respective blockchains, and rumors that eBay is going to join the cryptocurrency fray by the end of the week.
This is seemingly confirmed by the fact that Grayscale’s Bitcoin Trust (GBTC) saw $150 million in trading volume on Monday, which is a sign that institutional investors and accredited investors are throwing their hats into the ring rapidly.
Featured Image from Shutterstock. Charts Courtesy of TradingView.com
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Analysts Worried That Bitcoin Has Topped: BTC Flirts With $7,300

Whether this is the Consensus effect or not, Bitcoin (BTC) is now decidedly above $7,000. As of the time of writing this piece, BTC has finally tapped $7,400, a level that many see as short-term resistance. Let’s see what analysts are thinking right now.
Related Reading: Despite Crypto Comeback, Prominent Investor Doesn’t Expect Ethereum 2.0 Until 2021
Analysts Weigh In On Bitcoin Move
Prices are moving so fast that analysts’ thoughts on the market are constantly cheering. But according to recent comments (which may not be relevant in a few hours’ time), Bitcoin may be locally topping.
STEM major-turned-Crypto Twitter mainstay, The Crypto Dog remarks that he thinks the cryptocurrency market is going to top right about here. In an explanation tweet, Crypto Dog remarked that while the price action is undoubtedly bullish from a bird’s eye perspective, BTC’s chart is making it seem like a local peak is forming.
The analyst didn’t fully explain this, but he did depict that BTC is currently encountering a resistance box (seen in grey below). What’s more, the parabola that BTC has stuck to for the past few weeks is about to go vertical, meaning that a drawdown is possible.

I think we're about to finally top out.$BTC $BTCUSD #Bitcoin pic.twitter.com/AyRZhFhBdz
— The Crypto Dog (@TheCryptoDog) May 11, 2019

Others agreed with Crypto Dog’s analysis. Trader Cantering Clark explains that while the ongoing move seems “incredibly bullish”, BTC is still sitting under resistance, and is too far above its 20-week moving average. The 20-week moving average, according to Clark, has and is likely to continue to act as Bitcoin’s center Bollinger Band, meaning that it should return to that level’s vicinity in the near future.

1/n-I am 90% risk off at this point, with some spot that is always untouched for insurance purposes. While this does look incredible bullish to me I can not divorce my better faculties of reasoning in thinking that we revert to the mean at some point in the near future. $btc pic.twitter.com/A0pvJlVUHY
— Cantering Clark (@CanteringClark) May 11, 2019

He explains that as it stands, BTC is a “good three standard deviations from the norm,” with this move being fueled by retail shorts. This hints that Bitcoin may soon see a retracement, returning to more organic and sustainable levels as buying pressure slows in the coming weeks.
Room To Run?
Some have, however, argued that Bitcoin still has room to run. In a recent tweet, Mr. Anderson postulated that BTC’s parabola still extends higher. He explains that if the stars align, as it were, Bitcoin is likely to establish a short-term base in the high-$6,000s or low-$7,000s, before moving to and potentially beyond $8,000.

$BTC Are we Parabolic?
A Parabolic Blow-off top has been my primary view for some time now. Parabolic curves are tricky. So, be careful because she will have a deep retrace$BTC has already done a marvelous job, but, the higher the stretch, the better for Bulls#Bitcoin #BTC pic.twitter.com/FaxekEigVC
— Mr. Anderson (@TrueCrypto28) May 11, 2019

The fact of the matter is, this current rally is largely driven by those already in cryptocurrency, not those not involved in the crypto industry. As NewsBTC’s Joseph Young postulated on Twitter, “existing money in the crypto market [is] coming back due to overall growth in confidence/comfort.”
Google Statistics would confirm this. Popular researcher Alex Kruger explains that the “Bitcoin” search term’s volume is still at lows, with interest purportedly being 10% of what there was at BTC’s $20k peak in late-December 2017.
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Breaking: Binance Hot Wallets Lose 7,000 Bitcoin (BTC) In “Large Scale” Security Breach

Breaking news: Binance, a Malta-registered Bitcoin & crypto asset exchange that is one of the most well-respected in the market, has just revealed that it has been slammed by a “large scale security breach”. The platform reports a loss of 7,000 BTC, valued at $42 million at current values.

Binance Security Breach Updatehttps://t.co/KY2J3jWpmn pic.twitter.com/JZtMsbI9fS
— Binance (@binance) May 7, 2019

Binance Suffers Loss Of Thousands Of Bitcoin
Early Tuesday, Changpeng “CZ” Zhao, the chief executive of Binance, took to Twitter to reveal that has platform had to undergo “unscheduled server maintenance” that would “impact deposits and withdrawals”. Interestingly, CZ noted that the “funds are #safu”, evidently trying to reassure users that nothing was amiss.

Have to perform some unscheduled server maintenance that will impact deposits and withdrawals for a couple hours. No need to FUD. Funds are #safu.
— CZ Binance (@cz_binance) May 7, 2019

But as NewsBTC and the rest of the cryptocurrency community has learned through a Binance blog post, funds, namely a large sum of BTC, aren’t entirely SAFU. In the post, it was explained that earlier today, “hackers”, which remain unnamed, were able to obtain a large number of user API keys, two-factor authentication codes,  and “potentially other” tidbits of information, giving them access to users’ accounts on the platform. It was explained:
“The hackers had the patience to wait, and execute well-orchestrated actions through multiple seemingly independent accounts at the most opportune time. The transaction is structured in a way that passed our existing security checks.”
Binance reports that the malicious group/entity used a serious of techniques to get their hands on this information, including phishing, viruses, potentially the extremely devious SIM swapping technique, and “other [vectors of] attack.”
Once hackers managed to get their hands on the aforementioned bits of information, they were able to withdraw 7,000 BTC from Binance’s hot wallet. The company asserts that 7,000 BTC is peanuts:
“The above transaction is the only affected transaction. It impacted our BTC hot wallet only (which contained about 2% of our total BTC holdings). All of our other wallets are secure and unharmed.”
The $42 million that was lost will be reimbursed by Binance’s SAFU fund, ensuring that “no user funds will be affected”.
For now, Binance will conduct a “thorough security review”, and will thus be suspending its deposits and withdrawals for the time being.
As a result of this news, the value of cryptocurrencies has slipped slightly. Since the news broke, BTC has fallen from $6,240 to $6,180 on Bitfinex — a loss of 1%. Altcoins have experienced a similar collapse. Considering that this hack was not a result of Binance’s negligence, investors may soon realize that the loss of $4.2 million worth of Bitcoin won’t be earth-shattering for the broader market.
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Stocks Plunge Could Spell Trouble For Bitcoin in Near-Term, Risking Recent Momentum

In a cruel twist of fate, it seems that tweets affect not only crypto assets, such as Bitcoin (BTC), but traditional markets too. On Sunday, U.S. president Donald Trump revealed that he intends to increase tariffs on Chinese-made goods from 10% to 25% by Friday. Global assets, like stocks and even BTC, flashed red minutes later.

For 10 months, China has been paying Tariffs to the USA of 25% on 50 Billion Dollars of High Tech, and 10% on 200 Billion Dollars of other goods. These payments are partially responsible for our great economic results. The 10% will go up to 25% on Friday. 325 Billions Dollars….
— Donald J. Trump (@realDonaldTrump) May 5, 2019

Bitcoin Drops With Trump’s Chinese Tariff Threat
While Trump’s out of left field maneuver had good economic intentions, stock markets didn’t react all too kindly. Futures for the S&P 500 are currently 1.75% down, implying a red open, and Asian markets, namely the Hang Seng (Hong Kong) and SSE Composite Index (China) got absolutely slammed. As of the time of writing, the SSE is down a jaw-dropping 5.3%, wiping out billions of dollars of wealth in a few hours’ time.
Related Reading: Bitcoin VC: China Tax Reform Could Help Crypto Assets “Bloom”
As hinted at earlier, Bitcoin followed right behind its brethren in traditional markets. As pointed out by crypto trader “Light”, when Asian markets opened on Monday, BTC fell right in lockstep, reacting to the tariff salvo negatively. There is a fleeting chance this is pure coincidence, but Bitcoin lost a very similar percentage to the Hang Sang in the same time frame, implying that BTC remains a “risk-on” asset, as Light explains. (Note: BTC has since started to recover)

Market participants continue to view Bitcoin as a risk-on asset.
Sunday evening's sell-off occurred simultaneously with the Hang Seng's precipitous 3.4% drop at the open following Trump's new tariff salvo. pic.twitter.com/Oa9RiVXuRg
— Light (@LightCrypto) May 6, 2019

This is not the only evidence pointing towards the idea that cryptocurrencies are risk-on, meaning an asset class investors prefer in markets trending higher.
Last week, Travis Kling of Ikigai Asset Management drew eerie similarities between the chart of the SSE and Binance Coin (BNB). As seen below, from mid-2018 to April 30th of this year, the index and the cryptocurrency (which is notably popular in Asia), followed each other. Or rather, BNB followed Chinese stocks to a tee. “Crypto is a risk asset, global capital flows matter,” Kling remarks.

Crypto is a risk asset. Global capital flows matter. pic.twitter.com/giZ186F4kc
— Travis Kling (@Travis_Kling) April 30, 2019

What’s more, a few weeks back, Fundstrat’s Tom Lee postulated that risk-on emerging markets, whose value is captured through the MSCI Emerging Markets Index, pulled down BTC over 2018. More specifically, this specific index fell by 27% over 2018, as BTC lost 70%.
With Trump unlikely to budge, the U.S. stock market and other global indices may continue lower, potentially unwinding Q1’s monumental rally, thus being a short-term detriment to BTC and other cryptocurrencies.
Bitcoin To (Eventually) Become Safe Haven As Digital Gold
So why is all the above information relevant?
Well, it shows that Bitcoin may be conforming to traditional markets’ risk-on assets after all.
For those unaware, cryptocurrencies have long been touted as an uncorrelated asset. In a CNBC interview in December, Anthony Pompliano of Morgan Creek noted that the correlation between BTC and the S&P 500 (SPX) is practically non-existent. Three Arrows Capital’s Su Zhu later confirmed this point, noting that through “high prices and low prices, high volatility and low volatility, the correlation between” the two aforementioned indices is still near-zero.
Monday’s confirmation of some correlation corroborates a theory proposed by John Normand, the head of JP Morgan’s cross-asset management arm, that gold remains a better safe haven or hedge against downturns than Bitcoin.
However, that’s not to say that the digital asset class won’t be able to break free eventually. As explained by Max Keiser, a prominent anti-establishment figure and Bitcoin OG, BTC will eventually become a “risk-off” asset, hinting at the characteristics that make it a form of sound money. The reason why he, along with many others, think so is that BTC is a non-sovereign, decentralized, censorship-resistant, and easily-transferrable asset that is strictly scarce and is not subject to the whims of central banks and the incumbent financial institutions.
Consumers may need a bit of a kick to understand this fact though. And this kick is expected to be the next financial crisis, which many pundits say is looming right over our collective head.
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Analyst: If Bitcoin Holds Above The $5,500 Region, A ‘Megamoonsoon’ May Soon Grace Crypto

While the upward price pressure has slowed, resulting in Bitcoin (BTC) posting a mere 0.15% gain in the past 24 hours, some are sure that the cryptocurrency’s chart structure remains bullish. Murad Mahmudov, a founding partner at up-and-coming crypto fund Adaptive Capital, recently broke down his reasoning as to why BTC holding above the $5,500 region could be “quite bullish.”
Related Reading: Analysts Believe Bitcoin May Continue Dipping Lower Before Surging to $6,500
The Bitcoin Megamoon Soon
In a 22-part Twitter thread posted Saturday, Mahmudov, who has risen to prominence to become one of the most well-respected voices in the cryptocurrency ecosystem, drew attention to 20 reasons why Bitcoin is currently bullish. Honestly, 20 may be too many to go through, but NewsBTC will break down the important tidbits.

0/20. My list of 20 reasons why I think that if 5450-5550 area holds — its very bullish & megamoonsoon is still on the table:
I repeat, IF, 5450-5550 area holds, THEN, it's quite bullish.
Saturday Megathread: pic.twitter.com/KBbMj8OdU9
— Murad Mahmudov (@MustStopMurad) May 4, 2019

Firstly, Bitcoin is currently trading in the midst of an ascending channel, marked by consistent higher lowers and higher highs. With BTC continuing to hold this pattern with an impeccability, a move higher to potentially break out of the upper bound of the channel seems likely.
Next, the Stochastic Relative Strength Index (RSI) and the traditional RSI are both showing bullish signs, both accentuating that the crypto market isn’t overextended and thus has room to run.
Thirdly, BTC is currently trading above key moving averages, like the 50-week simple moving average and 89-week exponential moving average, which “caught multiple local bottom and top areas in both previous and current cycles.”
And lastly, as hinted at in previous reports, there has been an unprecedented rally in the amount of BTC upon in short contracts, resulting in postulation, from Mahmudov and others, that a massive short squeeze may soon be inbound.
From Crypto Bear To Bull 
All this marks a confirmation that Mahmudov has flipped from bear to bull. As NewsBTC reported on a number of times during late-2018 and early-2019, the Adaptive Capital partner was overtly bearish on a number of occasions. Often, he noted that Bitcoin still had a chance to fall to $1,700, citing historical factors to try to convince investors that November’s sell-off may have just been the “Little Capitulation” before the “Final Capitulation,” coupled with the idea that BTC’s long-term cycles dictate that a rally this soon may be illogical.
In one analysis, he noted that the waning number of mentions of “Bitcoin” on Twitter was an “absolute disaster for the price in the medium-term.” He opined that this accentuates how there are “far fewer people who care about decentralized, sovereign, uninflatable currency” than it may seem from the surface, and how little effect 2017’s parabolic run-up had on this community’s size.
Now, however, he revealed in a recent Tone Vays Youtube episode that he is 75% sure that the cryptocurrency market has found a long-term floor. And this time, it doesn’t seem like he will be wishy-washy at all, as all signs seem to be leaning in favor of the bulls. His peers would agree.
Related Reading: Prominent Analysts Divided Over Bitcoin Bottom: Let’s Look At The Two Sides
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Bitcoin Keeps Its Pedal To The Metal, Eliciting Bullish Response From Prominent Analysts

For some reason or another, Bitcoin (BTC) has continued to rally into Saturday. As of the time of writing this, the crypto asset is trading at $5,725 on most major exchanges, while altcoins have begun to play catch-up.
While some fears that this rally is unsustainable, especially with the debacle that both Bitfinex and Tether are both going through, analysts have kept a bullish tone across the board.
Bitcoin Could See A Further Move Higher
According to David Puell, the head of research at Adaptive Capital, Bitcoin’s chart is currently showing an array of bullish signals, both in terms of technical indicators and pure price action.
In a simple chart posted on Friday night, the investor remarked that Bitcoin is currently trading in a broadening ascending wedge, a pattern defined by legendary chartist Bulkowski as a catalyst for bullish continuation. Bitcoin Bravado’s Jack, who noticed this pattern alongside Puell, remarked in his own tweet that such wedges are often never seen in bear markets, and are instead, a reversal pattern that commences a bull run.

$BTC: I am scared to bid this insanity, but…
Le long… le long… pic.twitter.com/EqgQmSBwYY
— David Puell (@kenoshaking) May 4, 2019

But according to Puell, this isn’t the only bullish sign. He looks next to volume, which has been on the decline since April 1st’s boom past $5,000 but has begun to recover with Friday’s uptick. Remarking on Friday’s volume candle, he writes “Ce n’est pas mal!”, which for those not versed in French, means “this is not bad.” Indeed, a notable amount of trading activity signals that stronger movements can be seen.
Related Reading: Prominent Analysts Divided Over Bitcoin Bottom: Let’s Look At The Two Sides
Next, the Adaptive Capital partner, who works alongside prominent crypto analyst Murad Mahmudov noted that the lack of resistance and sell orders in the $5,700 to $5,850 range may soon allow Bitcoin to move to that level.
And last but not least, Puell points to the fact that the Relative Strength Index (RSI), Chaikin Money Flow (CMF), and On-Balance Volume (OBV) readings, which all measure if an asset is either technically overbought or oversold are currently breaking to the upside. Puell didn’t give an explicit short-term prediction, but it is clear that he doesn’t intend to short BTC at the moment.
And he isn’t the first to think so. In a tweet posted Thursday, Peter Brandt, a legendary commodities trader with decades in the biz, revealed that Factor’s benchmark moving average for Bitcoin’s weekly chart has begun to trend higher. The last time such an event was seen was when BTC “began its move from $340 to $20,000.”
It is important to note that last time Factor’s moving average reversed from a downtrend, BTC was susceptible to one more pullback before embarking on the aforementioned parabolic run.

The last time Factor's benchmark weekly MA was in the current profile of turning from down to up was in Nov 2015 just as $BTC began its move from $340 to $19,800. pic.twitter.com/uFJSkV9NwM
— Peter Brandt (@PeterLBrandt) May 2, 2019

But will historical action be indicative of future performance? At this point, crypto diehards can only hope.
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Analysts Flip Bullish En-Masse As Bitcoin Price (BTC) Blips Past $5,700

Over the past 48 hours for some reason or another, Bitcoin (BTC) bulls have begun to return en-masse. As of the time of writing this, BTC is currently trading at $5,590, finding itself up by around 6% in the past 24 hours.
Crypto assets as a whole have yet to post similar gains, leading some to postulate that Bitcoin’s recent rally has much to do with the Tether and Bitfinex news, but some are sure that BTC will continue higher in the near-term.
Related Reading: Bitcoin Price Rise After Tether Scandal Shows End of Crypto Winter: Fundstrat
Analysts Expect Bullish Follow Through 
While some cynics see Bitcoin as overextended in the short-term, the evidence is mounting that a move higher may just be in crypto’s cards.
Murad Mahmudov, Adaptive Capital’s chief investment officer that is 75% sure the bottom is in, noted in a recent chart that the liquidity gap between $5,600 and $6,400 could attract BTC rapidly towards that level. He points out that a similar occurrence came to life when BTC rallied past $5,000 on April 2nd, as a lack of liquidity (meaning little short-term resistance) in the mid-$4,000s aided bulls greatly.
For this to move to come to fruition, however, Bitcoin will need to break past the $5,600 resistance and set up shop above that key local level.

pic.twitter.com/AH3GX7R3Pp
— Murad Mahmudov (@MustStopMurad) May 3, 2019

According to key technical readings, such a sustained breakout may soon come to fruition.
In a tweet posted Thursday, Peter Brandt, a legendary commodities trader with decades in the biz, revealed that Factor’s benchmark moving average for Bitcoin’s weekly chart has begun to trend higher. The last time such an event was seen was when BTC “began its move from $340 to $20,000.”
It is important to note that last time Factor’s moving average reversed from a downtrend, BTC was susceptible to one more pullback before embarking on the aforementioned parabolic run.

The last time Factor's benchmark weekly MA was in the current profile of turning from down to up was in Nov 2015 just as $BTC began its move from $340 to $19,800. pic.twitter.com/uFJSkV9NwM
— Peter Brandt (@PeterLBrandt) May 2, 2019

Moving averages aside, on-balance volume (OBV), a technical trading signal that weighs both volume flow and price action to determine market momentum, has continually trended higher since January. As analyst Income Sharks points out, the fact that Bitcoin’s OBV has not broken a clear uptrend, and that it continues to establish higher lows has him convinced that the recent foray past $5,600 is not the end of bulls’ ongoing reign.

OBV is the main reason I've been bullish on $BTC since the end of January. Not once has the trend been broken, and we continue to make higher lows. pic.twitter.com/hGeGAxGZsH
— Income Sharks (@IncomeSharks) May 3, 2019

And even if this technical analysis is moot, there is always the chance of a short squeeze. Since the NYAG released its report about Tether, the number of Bitcoin short contracts open on Bitfinex has rallied from 25,000 to 29,894 — an increase of 20% in under a week’s time. Alistair Milne, the chief investment officer of the Atlanta Digital Currency Fund, claims that with Bitfinex users liquidating their Bitcoin and withdrawing funds en-masse, coupled with the margin funding rates on the platform skyrocketing to 0.09% a day, there is a “high risk of a very significant short squeeze, especially if BTC withdrawals continue.”
Bitcoin Isn’t Home Free Just Yet
While the crypto bulls, or wolves rather, are howling for the moon, BTC isn’t exactly ready to skyrocket just yet. That’s what some analysts expect anyway. Dave The Wave explains that his model, which shows that a parabolic curve has depressed BTC throughout all of 2018, shows that Bitcoin is currently encountering resistance, and has yet to break through.
In another chart, he noted that Bitcoin’s Moving Average Convergence Divergence (MACD) reading is currently “rolling over the zero line.” The last time BTC saw such similar action in this specific reading was when the cryptocurrency market saw one final capitulation event before heading decidedly upward.

MACD rolling over on the zero line. pic.twitter.com/XyFrsZoM99
— dave the wave (@davthewave) April 29, 2019

But technicals and charts aside, fundamentals are surely leaning in Bitcoin’s favor. As Tom Lee of Fundstrat recently remarked on a CNBC “Fast Money” segment, the transactional value of on-chain BTC transfers has turned positive on a year-over-year basis, while the average daily transactions processed have almost reached all-time highs. What’s more, big names, both in terms of institutions and corporations, continue to siphon time, capital, and talent into this space without much of a concern.
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Bitcoin Price Rise After Tether Scandal Shows End of Crypto Winter: Fundstrat

On Tuesday, the crypto asset market began to move higher, shocking many investors across the board. As of the time of writing this, Bitcoin (BTC) is trading at $5,380, posting a 2.81% gain in the past 24 hours. Most altcoins, like Ethereum, are up even further, with Litecoin flouting a hefty 7.26% 24-hour rally. Even Tether is looking green, with USDT posting a 0.5% gain.
This strong move may seem normal and mundane out of context, but according to Fundstrat’s Tom Lee, Tuesday’s rally confirms that the cryptocurrency winter might be finally biting the dust.
Tether Confirms Hearsay
When investors buy stablecoins, digital assets pegged to and backed by an asset outside of this ecosystem, they expect that the coin is fully collateralized. As reported by NewsBTC earlier today, however, this might not be the case with USDT, which sports a cool $2.8 billion market capitalization.

Tether Inc: Tether is backed 1:1 to USD
Also Tether Inc: Tether is actually only backed 74% https://t.co/uzlsJd6L1V
— Tim Swanson (@ofnumbers) April 30, 2019

Per a statement from iFinex, the holding company of both Tether Limited and Bitfinex, the USDT in circulation is backed by cash and “short-term securities” (shares in iFinex secured as collateral for a line of credit with Bitfinex) valued at “approximately” 74% of the $2.8 billion market capitalization. It isn’t clear how the $2.1 billion in assets that Tether currently owns was divided between cash and “cash equivalents.”
Related Reading: Bitcoin Price Reaction to Tether Fiasco May Signal Strong Fundamental Strength
The reason why iFinex had to issue a clarification statement on the matter, for those unaware, is because of accusations made by the New York Attorney General’s office that Bitfinex and Tether, which share management and are financially intertwined, may be participating in acts that “defraud” investors. More specifically, the office is believed to be taking issue with the fact that Bitfinex is operating in New York state, coupled with its conjecture that each USDT is fiducially required to be 100% backed by fiat holdings or assets of equivalent value. Zoe Phillip of Morgan Lewis, who is Tether’s defense lawyer, explains:
“According to the Attorney General, the line of credit needed to be frozen because it improperly impairs the reserves Tether would use for redemptions. The Attorney General appears to believe that Tether must hold $1 in cash fiat currency for every dollar of tether. These allegations are wrong on multiple levels.”
Bitcoin Rallies, Despite Tether Update
While it has been acknowledged that USDT isn’t and doesn’t need to be fully backed, some have been taken aback by this recent, rather blunt statement. In a scathing thread, Larry Cermak of The Block explained that Tether “only” being 74% backed goes “against the exact values that Bitcoin was meant to uphold.” Tim Swanson expressed a similar sentiment, noting that those backing the stablecoin and its issuer in light of the recent news are being hypocritical. And as NewsBTC’s Joseph Young pointed out, a stablecoin is meant to have parity and be backed by a dollar. “73% is 0.73: 1.”
Fears aside, Bitcoin still rallied as aforementioned, posting a healthy gain of nearly 3%. And according to Tom Lee, the head of research at Fundstrat, this might just be another sign that “crypto winter is ending.”
The permabull notes that if this same story broke in mid- to late-2018, the cryptocurrency market would have likely capitulated immediately, as investors may have rushed to flee the fact that some of the biggest names in this ecosystem are unbacked. He adds that if BTC continues to hold, failing to react to the constant inundation of Tether-related news for two more weeks, he “would be inclined to argue that this is [another] reason [why] crypto winter is over.” Others, like Placeholder’s Chris Burniske, expressed a similar sentiment,

If this tether #USD $USDT story broke in mid- to late-2018, the crypto market would probably seen panic liquidations across the board
Another sign crypto winter is ending? The fact that relative calm in crypto market despite tether news? @bitfinex @Bitfinexed
I think so…
— Thomas Lee (@fundstrat) April 30, 2019

The Other Side Of The Story
While Lee and other respected analysts are convinced that Bitcoin’s non-action in the face of the Tether news is undoubtedly bullish, some have drawn attention to nuances.
Yoni Assia, the chief executive of the crypto-friendly eToro, recently took to Twitter to claim that if the market takes the “Tether isn’t fully backed” news as “bad,” investors will dump their USDT en-masse.
Although there is no guarantee that said dumped USDT will find its way into BTC, many highly-liquid USDT markets are paired with Bitcoin, meaning that large sales of the stablecoin could actually boost BTC. While this would be seen as good from the surface, a rapid rally at the expense of Tether’s demise may be detrimental to crypto’s long-term prospects, and thus null Lee’s analysis that “crypto winter is ending.”
Related Reading: Tether Scandal Could Cause Big Bitcoin Short Squeeze, Boosting BTC: Analyst
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