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Bitcoin price is still stuck under $60,000 but unable to push any lower than $55,000. The tightening across the crypto market has been long and arduous but when $60,000 is finally broken, the crypto asset should reach what one analyst calls “escape velocity.”
Here’s what the term means and what that could look like post-breakout of the key resistance level.
Bitcoin Could Reach Escape Velocity After Breaking Above $60,000
Bitcoin price action has come to a critical impasse, either ready to explode to hundreds of thousands of dollars per coin, or about to take a dive from current highs.
Resistance above $60,000 has been the first zone proving too strong for bulls to get through with ease, causing momentum to fizzle out. Momentum indicators have turned red for the first time in months, but bears have failed to take prices much lower.
Related Reading | Stablecoin Supply Rising, Diminishing Bitcoin Reserves Ready To Fuel Next Leg Up
The standoff has volume dropping, and volatility dipping to the lowest levels in months for the characteristically explosive crypto asset.
But when things finally do break above $60,000, one crypto analyst expects things to reach “escape velocity.”
This is what escape velocity could look like in Bitcoin | Source: BTCUSD on TradingView.com
What The Physics Term Playing Out In Crypto Would Look Like
According to Wikipedia, escape velocity is a physics term describing “the minimum speed needed for a free, non-propelled object to escape from the gravitational influence of a massive body.” In simpler terms, its the strength and speed needed for an object to escape a planet’s gravitational pull and exit its atmosphere.
The analogy makes sense. “Escape velocity rises with the body’s mass and falls with the escaping object’s distance from its center. The escape velocity thus depends on how far the object has already traveled,” a description reads.
Essentially, $60,000 is the object’s center, and resistance should weaken once it is passed, requiring less overall momentum to continue to head off toward the moon.
Related Reading | Crypto CEO “Convinced” Of Bitcoin Cycle Top, Warns Of Sell Side Intensity
The reason being is, Bitcoin has attracted substantial media attention above $50,000 where the coin has now spent weeks above. Those waiting for a breakout of $60,000 will buy with extreme force knowing that any correction was warded off.
At the same time, those waiting for prices lower will realize it isn’t coming, and FOMO back into Bitcoin, causing prices to soar with even greater ease.
Between the flurry of new buyers getting in for the first time, sellers buying back in after they’ve realized their mistake, and more, it should cause the final parabolic stage of the Bitcoin bull run, and the “escape velocity” the analyst is talking about.
Featured image from Deposit Photos, Charts from TradingView.com
Jesse Powell, the Kraken CEO, said crypto companies pose a real threat to traditional finance. While some legacy businesses are making moves into the crypto space, Powell said those who stay sidelined would be replaced.
“we’ve seen the tremendous traction that Cash App has had. PayPal, fortunately for them, they’ve been on the ball. I think you’re going to see more of that, and people who aren’t keeping up with that, I think their days are numbered.”
Are The Valuation of Crypto Firms Justified?
Following a delayed Nasdaq listing, which was initially scheduled in March, it looks like the Coinbase IPO will now take place on April 14.
Reports vary widely on the firm’s valuation. But some sources claim the company’s pre-IPO price could be worth up to $100bn. This would make Coinbase more valuable than many notable banking institutions, including Santander at $59bn and Barclays at $44bn.
Kraken has plans of its own to go public in 2022. Powell stressed that this would only happen at the right price. It’s reported that he sees the firm’s valuation around the $20bn mark.
When asked his opinion on these figures, Powell implied they are justified. He expanded by saying Kraken was built from the ground up because nothing like it existed ten years ago.
“We’ve built the whole stack from custody to settlement to matching to clearing to payments. So, we’ve had to build the whole stack because nothing was there ten years ago when we got started with this.”
He added that crypto companies are the future and have a shot at replacing the entire system. More so, taking over from legacy firms that have not “done the work” as far as crypto is concerned.
“Most of these guys haven’t done the work these last ten years to make sure they are current with the crypto technology. So I think there’s a very real risk that over the next ten years, for those legacy businesses to be simply replaced.”
Banks Are Offering Crypto Services
Grayscale reported more than half of 2020’s total inflows came in the final quarter of the year. This period is widely regarded as the penny drop moment for corporate crypto acceptance.
“Grayscale experienced increased investor demand, with approximately $3.3 billion of inflows. Investment into the Grayscale family of products surpassed $5.7 billion during 2020, more than four times the $1.2 billion cumulative inflow into the products from 2013-2019.”
Evidence of this trend continues into 2021 as more and more companies announce the integration of crypto services, banks included.
Earlier this week, Goldman Sachs said they would offer “the full spectrum” of crypto investment services to select clients. Mary Rich, the bank’s Global Head of Digital Assets, said this was due to a contingent number of customers asking for inflationary hedge assets.
It’s also likely, as Powell alluded to, the banks are scrambling to stay relevant.
Bitcoin faced a strong drop into Friday. The cryptocurrency, after peaking at $40,000, fell as low as $34,000 in a flash drop on Friday morning.
The drop was odd because the cryptocurrency was strongly underperforming altcoins. Normally, during Bitcoin corrections, altcoins fall against the U.S. dollar and against BTC, though this was not the case.
Bitcoin has since bounced back toward $36,500 since the daily lows.
An analyst is expecting some form of consolidation in the days ahead, which may result in strength in the altcoin market.
Related Reading: Wall Street Veteran Kickstarts Own Bitcoin Fund With $25m Investment
Bitcoin Could Enter Consolidation, Analyst Predicts
One crypto-asset analyst recently suggested that Bitcoin has a good likelihood of consolidating in the short term, which could end up resulting in an altcoin rally.
He shared the chart below on Friday, showing Bitcoin’s potential outlook ahead of the weekend. The chart shows that BTC is currently rubbing up against a key support level and against a number of key moving averages. This formation led him to suggest that the cryptocurrency will end up consolidating throughout the weekend.
As the trader explained:
“Here’s the possible outcome short term (12-24h) for #Bitcoin. 1) Consolidates while $ETH / $BTC is strong, 2) $ETH / $USDT takes the lead, 3) Slay altcoins over the weekend, 4) Pay yourself by Sunday 6pm, 5) Let Monday unfold.”
When Bitcoin consolidates in a bullish manner, it is argued that that is a prime time for altcoins to break out.
Chart of BTC's price action over the past few weeks with an analysis by crypto trader and chartiist Pierre (@Pierre_Crypt0 on Twitter). Source: BTCUSD from TradingView.com
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What the analyst predicted appears to be playing out in real time.
As of this article’s writing, leading altcoins are starting to break higher in a serious fashion, largely leaving Bitcoin in the dust. The BTC dominance metric has dropped from 67.5% to 66.5% over the past day, which is notable in a market worth over $1 trillion.
Altcoins such as Curve DAO Token (CRV), Aave (AAVE), Chainlink (LINK), and many more are surging higher as Bitcoin enters some form of consolidation.
This trend is likely to continue as long as BTC respects key support levels in the near term.
Related Reading: 3 Bitcoin On-Chain Trends Show a Macro Bull Market Is Brewing
Featured Image from Unsplash Chart from TradingView.com Price Tags: BTCUSD, XBTUSD, BTCUSDT, ETHUSD, ETHBTC, ETHUSDT Why This Analyst Expects Bitcoin Price Consolidation After the Recent 15% Drop
Image Credit: Refer to Source
Author: Refer to Source Nick Chong
- Bitcoin has been caught in the throes of immense volatility as of late, with buyers losing their edge over its price action
- The cryptocurrency is now, once again, drifting down towards the lower-$30,000 region, which is around where it has been trading throughout the past few weeks
- Where the entire market trends next will undoubtedly depend on Bitcoin’s reaction to its $30,000 support, as a break below here could prove to be dire for the entire market
- One economist believes that BTC will soon see a prolonged bout of rangebound trading around its current price levels
- He believes that this will come about before the crypto making a push towards $50,000
Bitcoin and the entire crypto market are seeing yet another influx of selling pressure, with yesterday afternoon’s rebound not being enough to fully invalidate the weakness that has been incurred as of late.
The cryptocurrency is now struggling to hold above $33,000, with it finding some slight support here as it navigates down towards $30,000.
This has created major headwinds for the aggregated market and may continue slowing its ascent in the days and weeks to come.
One economist is now forecasting some range-bound trading for BTC around its current price levels. He expects this to come about before the crypto can rally to $50,000.
Bitcoin Breaks Down as Bulls Fail to Gain Ground
At the time of writing, Bitcoin is trading down just under 6% at its current price of $33,500. This is around where it has been trading throughout the past day.
The selling pressure seen in the mid-to-upper $30,000 region has proven to be quite intense and may continue hampering its growth for days to come.
This may also place continued pressure on the aggregated market, as altcoins are all facing intense weakness at the present moment.
Economist: BTC Likely to Range Before Seeing Breakout Rally to $50,000
One popular crypto-focused economist explained in a recent tweet that he expects Bitcoin to see range-bound trading between $30,000 and $40,000 until volumes decline further.
He expects that this will be followed by a breakout rally to $50,000.
“My BTC short-term view after long deliberation and some flip flopping is rangebound in 30K-40K until the curve and vols come off a further. Then, 50K. I wouldn’t be surprised if 30K is briefly breached but the risk is to the upside. Those calling for 20K missing the big picture.”
This could mean that the recent price action is healthy and marks the end of a short-term parabolic advance rather than the end of its uptrend.
Featured image from Unsplash. Price data from TradingView.
Image Credit: Refer to Source
Author: Refer to Source Cole Petersen
It’s no secret that Bitcoin’s recent parabolic rally has done little in the way of providing tailwinds for altcoins, with many seeing devastating losses against BTC as their growth stagnates.
This isn’t unprecedented, as past bull runs have followed a similar path, with BTC leading the way and rallying independent of the rest of the market, followed by a capital rotation event that sends altcoins flying as BTC drifts lower or consolidates.
There’s a strong possibility that this will happen again in the future, but it only remains a question of how long Bitcoin will rally and how high it will go before altcoins can gain some momentum.
One venture capitalist believes that the market is nearing the point at which a rotation from BTC and towards altcoins will occur.
He notes that sentiment surrounding Bitcoin can be characterized as no less than “general greed & fomo,” noting that this could be emblematic of a local high.
He also notes that altcoins have been undergoing sheer capitulation as their investors chase after the Bitcoin rally, which typically occurs just before these tokens boom.
Bitcoin Rally Puts Altcoin Holders on Edge
Bitcoin has been relentlessly climbing throughout the past few days and weeks, with its ascent even catching its most loyal supporters off-guard.
A combination of mounting retail demand and institutional demand is the likely suspect behind this rally, which has caused its price to run from multi-month lows of under $10,000 to highs of nearly $30,000 that were set last night.
This rally has not been too friendly to altcoins, as most have declined significantly on their BTC trading pairs over the past few months.
This has created a generally negative sentiment around altcoins and has also sparked some capitulation.
VC Claims Altcoins are About to Boom
Matt Kaye, crypto-focused venture capitalist at Blockhead Capital, explained in a recent tweet that he is slowly converting his Bitcoin to altcoins, noting that he expects an imminent flood of capital away from BTC and towards its smaller peers.
“I’ve starting selling BTC for alts over the past 7 days and will continue to. The extreme nature of this period is why. I’m betting on: – Extreme mrkt positioning – General greed & fomo – ALTs being under owned as holders capitulate for BTC – Cyclical nature of the market.”
If this transition from Bitcoin to altcoins does occur, it will confirm a trend seen during countless other crypto bulls markets, where altcoins strength is inversely correlated with BTC’s.
Featured image from Unsplash. Price data from TradingView.
Image Credit: Refer to Source
Author: Refer to Source Cole Petersen
CEO of major cryptocurrency exchange Binance, Changpeng Zhao, or CZ, expects the exchange to make profits between $800 million and $1 billion this year. According to Zhao, Binance’s expected profits for this year are up from about $570 million – or almost double – of what it recorded last year. CZ revealed the figures to Bloomberg Businessweek after they named the Binance CEO in their 2020 Bloomberg 50 list.
Binance launched in July 2017 as a crypto-to-crypto exchange and quickly pivoted to the world’s largest digital asset exchange by trading volume. During the recent rally, trading volume on Binance saw a significant surge. According to data from CoinMarketCap Binance had $25 billion in trading volume on 19 November alone. In terms of the overall exchange volume in BTC, Binance also performed relatively well during the rest of the year, seen in the image below:
Image Source: CryptoCompare
Glassnode reported that Bitcoin futures open interest on Binance hit an all-time high of $1.17 billion on 24 November.
#Bitcoin futures open interest on #Binance hits an all-time high (~$1.17B)
Chart: https://t.co/qktAwF39NV pic.twitter.com/1ohynfUiyf
— glassnode (@glassnode) November 24, 2020
With regard to aggregated open interest, Binance’s BTC Futures trading platform crossed the $1 billion mark in November. The exchange has been offering futures trading from September 2019 onwards.
Image Source: Skew
While the leading crypto exchange seems to be attracting more trading activity and seems to be growing in popularity, it is doing so without US users. Recently, Binance reportedly asked some of its users in the US to transfer their holdings out of the exchange, within 14 days, and that if they did not comply, their account would be locked. Reports even stated the exchange had notified these users in the US via an email.
It is important to note that Binance has no regulatory standing in the US. Last month, it was also reported that Binance was sending out emails to users who had US-associated IP addresses. However, the latest crackdown on US users came right after Forbes had recently reported that there were documents that proved Binance was trying to evade US regulators.
Image Credit: Refer to Source
Author: Refer to Source Alisha Roy
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