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Bitcoin analysts explain what’s next in the aftermath of BTC plunging to $16.2K

Analysts and traders discuss both bull and bear cases for Bitcoin after BTC’s sudden price crash to $16,200…

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The price of Bitcoin (BTC) dropped sharply on Nov. 26 following a mass sell-off from whales. Data from on-chain data firms, namely Santiment, Intotheblock, and CryptoQuant, show heightened levels of whale exchange inflows.

Whales selling right under Bitcoin’s all-time high, particularly when the market sentiment was overly euphoric, led to a massive drop. Roughly $1.8 billion worth of futures contracts were wiped out, as Cointelegraph reported.

Some exchanges, like Binance as an example, recorded $400 million worth of liquidations within merely several hours.

According to Santiment, whales sold quickly after Bitcoin surpassed $19,300. Many of these high-net-worth individuals sold so aggressively that they are no longer in the whale category of holding over 1,000 BTC.

The overleveraged derivatives market started crashing as soon as the price of Bitcoin saw a relatively minor drop. Eventually, BTC dropped to as low as $16,200 on major exchanges. Analysts at Santiment said:

“$BTC whales with 1,000 or more coins held (currently $16.7M or more) sold off nearly immediately after the $19.3k price top two days ago. 11 of these whales actually sold off enough to no longer be in this 1,000+ coin category, just as prices peaked.”

Researchers at Intotheblock spotted a similar trend. The drop in the price of Bitcoin matched the moment when whales transferred 93,000 BTC into exchanges. When the price of BTC was at the yearly peak, 93,000 BTC were worth $1.8 billion.

Whales have been moving $BTC into exchanges.#Bitcoin has faced a steep correction since Wednesday’s highs of $19,600

This drop started as soon as whales began to deposit BTC to exchanges. More than 93 thousand Bitcoin’s were deposited into centralized exchanges. pic.twitter.com/ntq1yIlDeV

— intotheblock (@intotheblock) November 27, 2020

Subsequent to the rapid crash of the Bitcoin futures market, the outlook on Bitcoin from traders and analysts remains divided. Some believe that BTC is headed for a deeper pullback, possibly to the $13,800 support level. Others, however, say that buyers now have the incentive to bring BTC above $18,000 to tap the liquidity above.

Bearish cases for Bitcoin in the short term

The bearish case for Bitcoin in the near term mainly revolves around two things. First, during previous bull markets, BTC historically dropped 30% or more before seeing a continuation of the rally. If BTC sees a similar trend, that would mean a drop to at least $14,500.

Second, short-term investor activity is increasing as the price of BTC consolidates. In the past, a spike in the number of young addresses marked a bearish trend.

Cryptocurrency trader and technical analyst, Edward Morra, emphasized that previous bull markets saw multiple corrections that were even more severe, such as by 30% to 40%. Furthermore, the trader also said that the Fibonacci sequence 0.618 level is $13,500.

Based on the combination of these two data points, Morra explains that a drop to $13,500 would be a “fantastic” opportunity. He said:

“Assuming we’re in a bull-market, 0.618 Fibs are usually fantastic buy opportunities. Let’s take a look at the period of mid 2015 to late 2017. 6 out of 7 pullbacks we had landed at 0.618 Fib (last pullback only went to 0.5). All dips were 30-40%. Currently, 0.618 Fib level is around ~$13500. That would be a fantastic buying opportunity if it happens. We already had some mini-version of that earlier this year which corrected to 0.618 Fib too.”

Josh Olszewicz, a chartist and a cryptocurrency investor, meanwhile says that local Bitcoin tops usually occur when unspent transaction outputs (UTXOs) aged one to three months reach 10%.

The investor notes that it is currently at 8%, which has historically signaled a market top. He noted that “similar to BDD, more young on-chain coin movements are generally bearish.”

Bull cases in the near future

Nevertheless, the market sentiment around Bitcoin remains generally bullish. Many analysts that anticipate BTC to fall in the near term still expect the dominant cryptocurrency to hit an all-time high by the year’s end. Considering this, some traders are also optimistic about the short-term price trend of BTC.

A pseudonymous trader known as “Byzantine General” noted that the liquidity for Bitcoin is now in the $17,500 to $19,000 range. Liquidity emerges when traders in the futures market sway to one side of the market. Since the liquidity is higher up, it indicates that traders are likely shorting BTC and the liquidation prices of overleveraged shorts are located around $18,000.

Hyblock Bitcoin liquidation levels. Source: Hyblock

Stop hunts and cascading liquidations can work both ways. If mass long contract liquidations caused BTC to drop on Nov. 26, short liquidations could trigger BTC to rally. Given that BTC/USD has dropped substantially in a short period, a relief rally is certainly possible. With liquidity near $18,000, the probability of this happening remains high.

Former Credit Suisse banker Mira Christanto added that the medium to the long-term outlook of BTC remains strong. She pinpointed the Bitcoin Difficulty Ribbon indicator, which suggests the price of BTC has been suppressed for a long time. The indicator signifies an acceleration of mining difficulty, which as seen in 2013 and 2016, marked the start of bull cycles.

Bitcoin Difficulty Ribbon. Source: Willy WooThe biggest variable is stablecoin inflows

Whale exchange deposits have continuously remained high throughout November, which was the main source of selling pressure. But, the one variable that could offset the sell-off from whales is stablecoin inflows. In the latest note to its clients, data analytics firm CryptoQuant said that the number of stablecoins deposited into exchanges rose sharply in recent months.

For the rally of Bitcoin to continue in the near term, two main factors are critical. BTC needs to stay above the $16,200 support region, which it has defended so far with a strong reaction from the market.

It also would need to see higher stablecoin inflow in the next several days, which would indicate that sidelined capital is returning to the market. The note read:

“Over the last few months, the amount of stablecoins that have been deposited onto exchanges has risen sharply. This has resulted in sell pressure decreasing since the end of September, and staying low. Currently, the sell pressure is increasing slightly, and this could indicate a correction, but with the Exchange Whale Ratio remaining low, it seems that it won’t be large. Analysts utilizing CryptoQuants tools, looking at the long-term outlook, are anticipating bitcoin to reach and pass the previous high of $20,000.”

At least in the foreseeable future, it is critical for BTC to remain stable above $17,000 and consolidate. This would allow the derivatives market to see a potential resurgence in momentum and the open interest to build up. So far, there aren’t too many signs that a massive correction must occur and that the road toward a new all-time high in the medium term has been hindered.

Moreover, the culmination of negative news, including Coinbase CEO Brian Armstrong’s tweet thread about U.S. regulation and Chinese police seizing $4.2 billion in BTC and other cryptocurrencies from the PlusToken Ponzi scheme, hit the market in recent days to fuel bearish sentiment.

However, as the impact of this negative news wears off, the fear along with selling pressure on Bitcoin and other cryptocurrencies could decrease in the upcoming weeks

Source: https://cointelegraph.com/news/bitcoin-analysts-explain-what-s-next-in-the-aftermath-of-btc-plunging-to-16-2k

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Cointelegraph

Binance Coin reaches 37% of Ethereum’s market cap: 3 reasons why BNB is soaring

Binance Coin (BNB), the native cryptocurrency of Binance Smart Chain, has been rallying after seeing an uptick in transaction volume.

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Binance Coin, the native cryptocurrency of Binance Smart Chain, has been surging with a massive uptick in transaction volume.

Binance Coin reaches 37% of Ethereum’s market cap: 3 reasons why BNB is soaring

Binance Coin (BNB), the native cryptocurrency of Binance Smart Chain and top digital asset exchange Binance, is starting to close in on Ethereum (ETH) in market capitalization.

As of April 12, BNB is valued at $87 billion at the price of just under $600. The valuation of Ethereum is hovering at around $246 billion, which is 2.8 fold larger than that of Binance Coin.

— Joe Grech (@JoeBGrech) April 12, 2021

The technical momentum of BNB has been so strong that it briefly surpassed the volume of the BTC/USDT pair on Binance.

This trend is significant because USDT is the biggest stablecoin in the global market and the BTC/USDT pair is one of the most liquid trading pairs in crypto.

Why is Binance Coin surging so hard?

Binance Coin has been rising due to the three key reasons: an overall uptick in the popularity of Binance Smart Chain, strong technical momentum, and the gap between BSC and Ethereum projects.

Binance Smart Chain transaction volume. Source: BSCScan.io

In recent weeks, the transaction volume on Binance Smart Chain has tripled the volume of the Ethereum blockchain.

Particularly in Southeast Asia, the usage of Binance Smart Chain has been rising, according to Coin98, the biggest venture capital firm in Vietnam that is building a DeFi ecosystem targeted at Asia.

Considering that the price of BNB was much lower than Ethereum until late March, this discrepancy between BNB and ETH likely made BNB a compelling trade.

There is also a big gap in valuations between the Ethereum DeFi ecosystem and Binance Smart Chain, which has been fueling a large portion of the demand for BSC projects.

This has caused the value of BNB to rapidly rise over the past two weeks while ETH has been relatively stable at just over $2,000.

A journalist who covers crypto in China known as “Wu Blockchain” explained:

“BNB broke through an astonishing $600, but Ethereum’s Fees fell to its lowest point in a month. Although the transaction volume of BSC is 3x that of Ethereum, the two are not in a competitive relationship. The top 10 addresses of BNB hold more than 88%, and Eth is 20%. The future of Ethereum depends on the upgrade of EIP-1559 and 2.0. The only two things Binance needs to worry about are the government suppression and hackers.”

Traders foresee BNB to undergo a more explosive rally in the foreseeable future if it breaks out against Bitcoin.

Kaleo, a pseudonymous cryptocurrency trader, said:

“$BNB breaking above this level on the $BTC pair could lead to the type of explosive momentum needed to actually close in on $1,000.”BSC/BTC 1-day price chart (Binance). Source: TradingView.com, KaleoWill the capital rotate back into Ethereum?

However, Kelvin Koh, the managing partner at Spartan Group, one of the largest DeFi-focused funds in Asia, said that for now, he expects the capital to rotate back into Ethereum as BSC projects near the valuation of ETH equivalents.

He emphasized that there is a huge valuation gap between BSC and ETH projects. This gap could be making BSC projects compelling to the market. He said:

“BSC is having its own DeFi summer….so much alpha to be discovered in BSC ($XVS, $CAKE). If you are wondering why Ethereum DeFi coins are lacklustre, its because of the huge valuation gap that still exists between the BSC coins and ETH equivalents. Until this gap closes, money isn’t rotating back to ETH DeFi coins.”

Source: https://cointelegraph.com/news/binance-coin-reaches-37-of-ethereum-s-market-cap-3-reasons-why-bnb-is-soaring

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Cointelegraph

Our Man in Shanghai: Scandal as $45M of stolen government funds lost using 100X leverage

A blockchain security company’s future is in doubt after its CMO allegedly lost $45M betting on Bitcoin; Chinese netizens turn the other cheek to Peter Thiel’s warnings, and more

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The Chief Marketing Officer a blockchain security company has been charged with embezzlement; Peter Thiel calls Bitcoin a ‘weapon’ of China (but no one cares), and CZ’s net worth rises to $1.9 billion.

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Our Man in Shanghai: Scandal as $45M of stolen government funds lost using 100X leverage

Blockchain security company Beosin has been the focus of a major scandal after its Chief Marketing Officer Gao Ziyang was taken into custody and charged with embezzlement of state-owned assets. He is alleged to have been using government funds to unsuccessfully short BTC, resulting in a massive liquidation of over 300 million renminbi, or $45 million dollars.

Beosin, also known as Lianan Tech, had a working relationship with Chinese authorities and was helping them investigate fraudulent fundraising schemes. After the seizure of funds back in 2020, Beosin was tasked with storing and selling the assets, to be later returned to the state treasury. Instead of selling the assets, CMO Gao Ziyang allegedly opened a short position in late August, hoping to increase the size of the positions for personal gain. At the time, BTC was trading around $12,000.

Authorities say that records obtained from OKEx show the position began using 10x leverage, before increasing to 100x, and eventually ended up in liquidation. They began to ask about the whereabouts of the funds, before finally realizing that the assets were no longer in the wallet. Online, people have marveled at the age of Gao Ziyang, who was described as in his twenties. The future of Beosin, which was once regarded as a credible blockchain security company in China, is now in serious doubt.

Peter Thiel’s Bitcoin claims ignored

On Wednesday, PayPal co-founder and venture capitalist, Peter Thiel warned that the Chinese government may be using Bitcoin as a “financial weapon” to undermine the stability of the U.S. Dollar. The reaction was quite muted, as only 30 comments responded to the story on Sina Finance, a social media account with over 23 million followers. One of the top comments simply pointed out that “Bitcoin wasn’t invented by China” while another comment simply stated “Impossible”.

Binance billionaire

On Thursday, Binance founder Zhao Changpeng, better known as CZ, appeared as #1664 on Forbes’s annual billionaire list. His net worth is now listed at $1.9 billion, an increase of $700 million from the last list in 2020.

Nanjing Ribensi bought by US company

US Company Future FinTech announced earlier this week that they had agreed to a deal to acquire China-based mining company Nanjing Ribensi Electronic Technology Co. Nanjing Ribensi operates a mining farm that can handle up to 30,000 Bitcoin mining machines. The deal was worth approximately $9.1 million dollars and stipulates that the mining company must generate no less than approximately $2.3 million dollars in 2021.

Blockchain standards accelerated

China’s National Development and Reform Commission called for the accelerated implementation of blockchain standards in a new plan released on April 1. The plan was jointly issued by 28 government departments and also included technologies such as cloud computing, IoT, and big data.

This weekly roundup of news from Mainland China, Taiwan, and Hong Kong attempts to curate the industry’s most important news, including influential projects, changes in the regulatory landscape, and enterprise blockchain integrations.

Source: https://cointelegraph.com/news/our-man-in-shanghai-scandal-as-45m-of-stolen-government-funds-lost-using-100x-leverage

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Cointelegraph

CoinMarketCap removes South Korea crypto exchanges from Bitcoin price tracker

The crypto analytics provider also removed South Korean exchanges from the price calculations of cryptocurrencies in 2018 “due to the extreme divergence in prices.”

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“If the prices on South Korean exchanges stabilize, then we will add the data back in, but that hasn’t happened yet,” said a CoinMarketCap spokesperson.

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CoinMarketCap removes South Korea crypto exchanges from Bitcoin price tracker

Crypto price trackin website CoinMarketCap has removed many South Korean exchanges from its calculations for the price of Bitcoin as the coin dipped under $58,000 again.

As of today, CoinMarketCap’s Bitcoin price tracker shows no data from major South Korean crypto exchanges including Upbit, Bithumb, Coinone, and Korbit. The website uses data from many exchanges to estimate the average price for cryptocurrencies. At the time of publication, the price of Bitcoin (BTC) is $57,721, having fallen more than 2% this morning.

Speaking to Cointelegraph, CoinMarketCap content manager Molly Jane Zuckerman said the removal was due to the premium observed on crypto exchanges based in South Korea. The crypto analytics provider estimates the BTC price to be roughly 6% higher than that on other exchanges.

“If the prices on South Korean exchanges stabilize, then we will add the data back in, but that hasn’t happened yet,” said Zuckerman.

The last time the price tracking website took similar action was in 2018, when CoinMarketCap announced it had “excluded some South Korean exchanges in price calculations due to the extreme divergence in prices from the rest of the world and limited arbitrage opportunity.”

During roughly the same time three years ago, the price of XRP was falling significantly after reaching an all-time high of $2.96 on Jan. 2. However, the token is looking bullish today, having briefly surpassed $1.00 for the first time since 2018 after it rose more than 20% in the last 24 hours. The price has since fallen to $0.9694 at the time of publication.

CoinMarketCap said only its Bitcoin price index was affected today, given the large volume of the crypto asset on South Korean exchanges. Last month, the volume of transactions in the South Korean digital currency market — driven in part by the price of BTC reaching an all-time — briefly exceeded the daily average transaction amount of the country’s stock market.

Source: https://cointelegraph.com/news/coinmarketcap-removes-south-korea-crypto-exchanges-from-bitcoin-price-tracker

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