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Bitcoin Dips Below $50,000 as Price Correction Continues, What’s Next?

Despite its price retracement, market analysts are still bullish on Bitcoin. What can we expect from the cryptocurrency in the upcoming days?

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Bitcoin has been undergoing a continued price correction after hitting a new milestone of over $58,000. At the time of writing, it has once again dipped below the $50,000K mark.

Despite that, investors have remained bullish on Bitcoin, with Fidelity’s Global Asset Allocation Director comparing the cryptocurrency to digital gold.

In a report, he submitted compelling arguments as to why Bitcoin was a better way to hedge against inflation than gold. He said:

“Seen as a form of digital gold, Bitcoin may act as a stable store of value and potentially offer protection against inflation- and even hyperinflation.”

With Bitcoin retracing below $50,000, what can we expect from the cryptocurrency in the upcoming days?

BTC Price Analysis

With the fall in interest rates on U.S. 10-Year Treasury bonds and the House passing President Biden’s $1.9 trillion stimulus bill, investors are no longer as panicked about rising interest rates and monetary tightening policies.

Bitcoin ushered in a new round of surges after hitting a previous low point of $43,021 on February 28. Currently, it is struggling to stay above the $50,000 mark.

Source:US Government Bonds 10 YR Yield Daily via TradingView

Citi analyst team said that Bitcoin is at a “turning point”, and it may become everyone’s preferred international trade currency or face a “speculative implosion.” In the report, Citigroup stated that Bitcoin “is at the tipping point of mainstream acceptance” after it recently gained popularity thanks to backing from companies such as Tesla and MasterCard. The bank said:

“Bitcoin’s future is thus still uncertain, but developments in the near term are likely to prove decisive as the currency balances at the tipping point of mainstream acceptance or a speculative implosion.”

Source: BTC/USD Daily via TradingView

Judging from the daily candlestick chart, on March 1, the Bitcoin price crossed the Exponential Moving Average Ribbon through the 30-day Moving Average, and the 25-day Moving Average finally stood above the 20-day Moving Average- breaking through the $48,000 mark and approaching the $50,000 point. BTC/USD broke through the $50,000 mark at the highest point today, reaching $50,250. At the time of writing, the price of BTC has dropped and is currently trading at $49,358.

Source: BTC/USD 4-hour via TradingView

From the 4-hour candlesticks chart, after several days of highly volatile trading, BTC has stabilized. Although BTC has started a good wave of recovery, it does not mean that the callback is over.

According to the Elliott wave principle, as shown in the figure, the downward interval was due to three obvious corrective actions. Bitcoin started a decent rise above the resistance level of $48,000. The current price trend is above the EMA ribbon and the 9-day Moving Average. In the future, Bitcoin may face a strong seller-off between $51,000 and $52,000.

Currently, investors still need to pay attention to the pressure level. First, the first pressure level will be the high point of the previous down period (point B), which is about $51,987, and the second pressure level is marked at $58300.

Once this pullback is completed, BTC can then target $70,000. Before rising, BTC needs to break through and stabilize above the resistance levels of $51,900 and $58,300.

Image source: Shutterstock

Source: https://blockchain.news/analysis/bitcoin-dips-below-50-000-price-correction-continues-whats-next

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Ethereum Gas Fees Surge to a Monthly High, Supply on Exchanges Continues to Decline

Ethereum’s total fees has hit a monthly high of 746.026 ETH.

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After hitting highs of $4,350 recently, Ethereum (ETH) retraced to $3,871 at the time of writing, according to CoinMarketCap.

The crypto market experienced shock waves after Tesla, the American electric car manufacturer, decided not to accept BTC payments, citing concerns of negative environmental impact.

The Ethereum network has enjoyed notable milestones ever since the second-largest cryptocurrency breached the previous record of $1,400 set in 2018.

For instance, the total fees paid hit a monthly high of 746.026 ETH, as acknowledged by on-chain metrics provider Glassnode. Moreover, ETH’s dominance reached a record high of 19.13%.

Ethereum’s supply on exchanges continue to be depleted

According to market analyst Joseph Young:

“The supply on exchanges continues to nosedive. Feels very different from the last bull cycle.”

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Glassnode had previously reported that ETH on exchanges dropped to 12% of circulating supply, as Ether in smart contracts rose to 22.8%.

CryptoQuant CEO Ki Young Ju attributes this trend to Ethereum’s usability and ecosystem, which has made ETH holdings decrease both in derivative and spot exchanges. As a result, the sell-side liquidity crunch has been intensified.

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Crypto addresses with at least 10,000 ETH hit ATH

Lex Moskvoski, the CIO at Moskvoski Capital, noted that crypto addresses with more than 10,000 ETH broke the record in the last 30 days. He explained:

“Number of Ethereum addresses with more than 10k ETH are repeatedly hitting ATH in the last 30 days. Looks like the beginning of massive accumulation. Smart contracts are excluded in this chart.”

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Furthermore, decentralized finance (DeFi) projects on the Ethereum network has expanded at an incredible rate, absorbing more than $100 billion in liquidity in less than a year. Ethereum smart contracts are one of the most sought after features in DeFi.

Time will tell whether ETH will hit the psychological price of $5,000 this year, given that Ether has enjoyed a remarkable bull run in just the first quarter of 2021. Many are inclined to think that Ether will eventually reach $5,000 in value. Dallas Mavericks owner Mark Cuban seems to think that Ethereum will dwarf Bitcoin in the future, given the reliance of other blockchain projects on its network.

Image source: Shutterstock

Source: https://blockchain.news/news/ethereum-gas-fees-surge-monthly-highsupply-exchanges-continues-decline

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Bitcoin Struggles to Maintain Its Dominance

Bitcoin’s dominance has fallen to 44%, which is the lowest level BTC has gotten since 2018.

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Bitcoin’s consolidation continues. Ever since the top cryptocurrency hit highs above $64,500, it has not been able to breach the $60K price level. Last month, Bitcoin even plummeted to lows of $48.5K.

This downtrend was triggered by speculations that the American administration would increase capital gain taxes, which would affect crypto investments. Bitcoin is trading at $55,179 at the time of writing, according to CoinMarketCap.

The lack of an upward momentum has been partly triggered by Bitcoin’s dominance falling to 44%, which is the lowest level BTC has gotten since 2018, as alluded to by market analyst Holger Zschaepitz. He explained:

“Crypto market value hits $2.5tn as Ether hits record high >$4k. Bitcoin’s price is currently ~$59k w/its dominance reaching 44%, lowest since 2018, while Ethereum’s dominance is at a record 18%.”

Despite Bitcoin’s dominance falling, Square Inc. recently announced a BTC revenue of $3.51 billion during the first quarter of 2021, which is an increase of more than 11 times over the same period last year.

Institutions bought the recent Bitcoin dip

According to Glassnode co-founders Yann & Jan, panic selling by retail investors caused Bitcoin to plummet. They said:

“While retail investors panic sold, institutions bought this recent Bitcoin dip.”

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They had previously said that new market entrants caused the recent BTC panic selling, which saw the cryptocurrency’s price nosedive to the $48K level.

Bitcoin whales are, therefore, in an accumulation mood, as noted by Santiment. The on-chain metrics provider explained:

“Of the 16,104 Bitcoin addresses holding between 100 to 10,000 BTC currently, they own 9.1M BTC ($531.3B in USD). After declining holdings from April 10 to May 4, this group is showing signs of accumulating again with 20k added BTC the past 2 days.”

On the other hand, Bitcoin’s selling pressure from miners has fallen, as stated by a crypto trader tweeting under the pseudonym “Crypto Baby.”

“BTC selling pressure from miners is dead. They sent a large amount of BTC to exchanges in Feb this year, but they are moving a relatively small amount of Bitcoins these days. The sellers today seem not long-term investors and miners, but short-term profit takers.”

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Although Bitcoin is eyeing the $60K price level and has been struggling to retest it, 2021 has still proven to be a record-breaking year for BTC.

Image source: Shutterstock

“Crypto market value hits $2.5tn as Ether hits record high >$4k. Bitcoin’s price is currently ~$59k w/its dominance reaching 44%, lowest since 2018, while Ethereum’s dominance is at a record 18%.”

Source: https://blockchain.news/news/bitcoin-struggles-maintain-its-dominance

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Kazakhstan Launches Public Consultation for Its Proposed CBDC

Kazakhstan is advancing its digital tenge project with a use case design and stakeholder consultation.

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The National Bank of the Republic of Kazakhstan (NBRK) is set to launch a public consultation for its proposed digital tenge currency, the nation’s official Central Bank Digital Currency (CBDC).

As detailed by the NBRK, the development of the digital tenge will take a two-tier structure in which the apex bank will provide the infrastructure backing the CBDC rollout while the financial market participants will provide payment services.

The development of the digital tenge according to the NBRK will seek to serve as a complement to the fiat currency, and not as a replacement.

“National digital currency is a promising form of funds that are the obligation of the National Bank of the Republic of Kazakhstan and presented in digital form. The digital tenge will be a legal tender, a measure of value, and a store of value,” the bank said in its public announcement.

To make for a successful digital tenge, the NBRK has highlighted the need to consult relevant stakeholders by working together with financial market participants, the expert community, and international partners. The pilot test will be kickstarted with the study of the risks and benefits associated with the issuance of a digital tenge in the nation.

“To make a decision on the issue of the Digital Tenge, it is necessary to conduct a comprehensive study of the benefits and risks with the definition of the tasks solved by the digital currency, the method of its emission and distribution, the technology used, the impact on monetary policy, financial stability and the payment ecosystem,” the NBRK noted.

Kazakhstan has been a very bullish nation when it comes to digital currency innovations, adequately nurturing plans to attract as much as $738 million in crypto-based investments over the course of three years. The country also has a dedicated crypto mining engagement, for which it plans to invest $700 million.

The digital tenge project is a development that models similar efforts by other advanced economies including the United States, Britain, and China, to name a few. Kazakhstan has no set deadline on CBDC issuance.

Image source: Shutterstock

Source: https://blockchain.news/news/kazakhstan-launches-public-consultation-its-proposed-cbdc

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