The price of Bitcoin (BTC) has been seeing a massive run in recent months as it surged by almost 100% from $10,000 to $19,800. However, the all-time high region at $20,000 has been showing significant resistance, causing the price to drop several times including today, as BTC has now fallen below $19,000 on Dec. 4.
The chances of a correction have been slowly increasing amid diminishing volume in recent days. Multiple arguments can be made for a deeper correction, which wouldn’t necessarily be bad for the market in general.
All-time high region still major resistanceBTC/USD 1-day chart. Source: TradingView
The all-time high region has not been broken yet, as the chart shows. This is not unexpected, however, as many retail investors will have the all-time high of 2017 as a marker for potential profit-taking. It’s the final hurdle before Bitcoin goes into price discovery, which would make the next targets difficult to determine.
Given that Bitcoin’s price reached the all-time high in a nearly vertical manner, a clear-cut breakout above the all-time high doesn’t seem likely to occur at this point.
However, as long as Bitcoin’s price remains in this region, several arguments can be made for a potential correction.
Specifically, the volume is dropping severely on the recent attempt to break $20,000 indicating a potential weakening of momentum. Second, the current all-time high tests open the door for a possible bearish divergence on the daily timeframe.
This bearish divergence isn’t confirmed yet, but it shows some potential signals of a slight trend reversal. In case of a correction, the key areas to watch for support are $16,000 and $14,000.
The 2014 high didn’t break in one go, eitherBTC/USD 1-day chart 2016. Source: TradingView
The current price action is comparable to the price action in the previous cycle. The 2014 peak acted as the final resistance, after which a significant correction of 30% took place.
This correction often leads back to the previous resistance, and as the chart shows, this resistance was at $800.
The previous high then flipped for support through that correction, which caused the price of Bitcoin to continue rallying to new all-time highs.
BTC/USD 3-day chart. Source: TradingView
As markets often act the same way in every cycle, a similar correction of 30% would put the price of Bitcoin at $14,000. Additionally, the previous high in June 2019 is also at $14,000, making it a likely target for a potential support/resistance flip.
Such a correction of 30% wouldn’t be unhealthy for the market and is quite common. It may also give latecomers a beautiful entry opportunity to boot.
Levels to watch on the lower timeframesBTC/USD 1-hour chart. Source: TradingView
The lower timeframes are indicating a potential reversal is in the making. The range is defined, with the support at the green zone around $18,500. This level has to hold for support to sustain the upward momentum.
If it fails to sustain support, the $16,000 area’s retest is very likely. However, if the market wants to maintain bullish momentum, the upper resistance at $19,500 needs to break to warrant further continuation. However, a classic bearish support/resistance flip is occurring here.
The $19,400 used to be resistance, after which a fake breakout occurred. Such a failed breakout often is confirmed through the previous resistance becoming resistance again, as the chart shows.
Therefore, for further upward momentum, the U.S. dollar has to continue showing weakness, and the price of Bitcoin must break through $19,500. If that doesn’t happen, retests of $18,500 and possibly $16,000 are on the table.
The views and opinions expressed here are solely those of the author and do not necessarily reflect the views of Cointelegraph. Every investment and trading move involves risk. You should conduct your own research when making a decision.
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.
Binance Coin, the native cryptocurrency of Binance Smart Chain, has been surging with a massive uptick in transaction volume.
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.”
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
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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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.
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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”.
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
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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.”
“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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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.
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