Ethereum developer activity is seeing “parabolic” growth says analyst; will price follow?

According to data from Santiment, developer activity on the Ethereum blockchain network has seen parabolic growth as of late, rising to May 2019 levels.

In May, the Ethereum price was hovering at around $260, nearly 40 percent higher than its current price of $186.

ethereum developer activity
Ethereum developer activity has increased in the past several months (source: Santiment)

Is developer activity an indicator of the future price?

Previously, Ivey Business School professor JP Vergne found in a study that the best predictor of the short term price trend of a cryptocurrency is developer activity. He said:

“We found that the best predictor of a cryptocurrency’s exchange rate is the amount of developer activity around it.”

The developer activity on the Ethereum network is likely on the rise in anticipation of the launch of Ethereum 2.0, and reports indicate that major corporations are paying attention to the said launch, as it would allow the blockchain to process information more efficiently.

In an interview with Decrypt, EY’s global blockchain head Paul Brody said that the firm is processing more than 10,000 transactions on Ethereum for Microsoft, and larger capacity would allow firms to better utilize Ethereum to settle data.

An analyst, who operates with the alias Cactus, said:

“ETH development activity has been going parabolic the past three weeks, early 2020 we are going to be seeing some major announcements from the ethereum team… It will take other blockchains years to catch up in terms of development.”

State of the DApps, an analytics firm that evaluates the usage of decentralized applications, reported that the release of new DApps per month has increased to nearly 1,500.

Dapp
Number of DApps per month is rising (source: State of the DApps)

As the scalability of the Ethereum network improves, DApps and other blockchain networks operating on top of Ethereum will benefit from expanded capacity, creating a more practical environment for decentralized platforms to operate in.

Ethereum price is sluggish

With technical analysts generally gearing towards a deeper pullback for the cryptocurrency market following the drop of the bitcoin price below $9,000 earlier this week, the Ethereum price is expected to stall, possibly to the year’s end.

As reported by CryptoSlate, November has historically been a strong month for both Bitcoin and other major alternative cryptocurrencies, but as seen in 2018, significant sell-pressure could prevent rapid recovery.

Prominent trader Josh Rager said:

“Alts are directly correlated to Bitcoin. If price goes south, diversifying into alts will only make things worse If you want hedge, learn how to use futures or options to your advantage Diversification in crypto is not strategy – majority of portfolio should be BTC.”

In recent months, bitcoin has become more volatile than Ethereum and other alternative cryptocurrencies, which may indicate that a large price move could occur in the short term.

The post Ethereum developer activity is seeing “parabolic” growth says analyst; will price follow? appeared first on CryptoSlate.

Why one trader thinks Bitcoin may begin a mega bull run and reach $50k by July 2020

According to a cryptocurrency trader, the Bitcoin price may be set for an extended rally to $50,000 by mid-2020, based on its macro trend.

bitcoin price
Trader says bitcoin price is likely to surge to $50,000 by July 2020 (source: Rampage Twitter)

Throughout the past two weeks, despite the brief breakout of the Bitcoin price to $10,600, many technical analysts have generally geared towards a bearish short term outlook.

Still, with the block reward halving of Bitcoin set to occur in May 2020, most analysts remain bullish on the medium to long term trend of the dominant cryptocurrency.

Bottom likely to soon occur for bitcoin

Traders and technical analysts who have consistently favored a bearish short term trend for bitcoin, like Dave the Wave, have said that the bitcoin price is getting closer to its lower support level or a “buy zone.”

The trader said that if a pullback occurs in the cryptocurrency market after the decline of bitcoin from around $9,200 to $8,800 in the upcoming days, it is likely to be the last leg down for BTC.

As the short term trend of Bitcoin begins to demonstrate signs of a bottom, the macro trend of the asset is expected to become more optimistic, especially considering strong fundamentals including growing hash rate and strengthening infrastructure supporting the asset class.

Will block reward halving have the same effect as previous years?

In 2012 and 2016, when the block reward halving of Bitcoin occurred, a mechanism that drops the BTC reward of miners by half, the Bitcoin price went on to reach new highs a year and a half after.

The Bitcoin price increased by more than 10-fold after the 2016 halving, but it occurred over a long period of time, with BTC achieving its peak in December 2017.

Hence, the block reward halving may not have an immediate effect on the Bitcoin price as soon as it occurs in May, and it could see a 2016-esqe scenario in which it takes the asset a year or longer to see the real impact of halving.

However, as said by Blocktower Capital co-founder James Todaro, the majority of investors are not aware of the halving and that the theory that the halving is already priced in may be premature.

Grayscale Investments, a cryptocurrency investment firm with over $2 billion in assets under management, also reported that the firm was surprised to see that many investors are not anticipating the event.

The report read:

“In fact, based on anecdotal conversations with market participants, we were surprised to learn that many of them were not even aware of this event. Moreover, according to Unchained Capital, less than 32% of the bitcoins in circulation have remained in the same wallet addresses since July 2016.”

If the block reward halving is not priced into the market, as the market gets closer to May 2020, it may begin to see upside momentum affecting major cryptocurrencies.

The post Why one trader thinks Bitcoin may begin a mega bull run and reach $50k by July 2020 appeared first on CryptoSlate.

What Gold’s Price Plunge Tells Us About the Record-High Stock Market

Gold price dropped by 4% as U.S. stock market hit record highs. Major U.S. banks including JPMorgan and Citibank closed positions on gold for more risky alternatives. Nobel laureate says geopolitical risks are over-estimated, making the environment better for stock market over gold. The gold price has dropped by 4% in the past nine days […]

The post What Gold’s Price Plunge Tells Us About the Record-High Stock Market appeared first on CCN.com

Bloomberg: Ethereum, XRP et al. likely to remain below June 2019 Peak until BTC hits $20k

Researchers behind a monthly cryptocurrency report entitled “Bloomberg Crypto Outlook – November 2019 Edition” said that Ethereum, XRP, and other digital assets included in BGCI are unlikely to recover to June 2019 levels until Bitcoin achieves a record high, Three Arrows Capital CEO Su Zhu observed.

The Bloomberg report read:

“We think Bitcoin would need to revisit all-time highs for the BGCI to extend above its June apex… We expect the broader market, as measured by the Bloomberg Galaxy Crypto Index, to have little chance of further advancement absent a higher Bitcoin price.”

BGCI mentioned in the report, short for Bloomberg Galaxy Crypto Index, include Bitcoin, Ethereum, Monero, XRP, and Zcash, primarily measuring the performance of major alternative cryptocurrencies traded in USD.

Bitcoin expected to range for awhile

Currently, technical analysts generally remain cautiously optimistic towards the short term trend of bitcoin and the rest of the cryptocurrency market.

Throughout the past two weeks, since bitcoin’s abrupt increase to $10,600 on October 26, the Bitcoin price has been ranging in between $9,100 to $9,500, unable to break out or below key resistance or support levels.

ethereum, xrp
Total market cap of the cryptocurrency market dropped by $135 billion since June 2019, as Ethereum, XRP, and other assets dropped off (source: coinmarketcap.com)

Cryptocurrency trader Josh Rager said:

“Funding rate had a major increase overnight, meaning traders are going long & it certainly makes me cautious to be on the side w/ the majority I still lean bullish w/ being over $9200 but certainly do not count out a strong move to the downside even w/ the gap being ‘filled.’”

As Bitcoin ranges and sell pressure builds based on increasing sell limit orders across major exchanges, the dominant cryptocurrency is expected to continue to consolidate or break down below, creating a difficult environment for alternative cryptocurrencies like Ethereum and XRP.

Bloomberg researchers said:

“Our primary on-chain indicators—transactions and active addresses from Coinmetrics—point to an upwardly biased market stuck within a range.”

What’s behind the gloomy sentiment around alternative cryptocurrencies like Ethereum and XRP?

Ethereum and XRP have shown strong fundamentals as of late with the usage of the Ethereum network on the rise as a result of the increasing popularity of decentralized finance (DeFi) and the sentiment around XRP have improved with the anticipation of the Swell conference.

However, during times of uncertainty, investors tend to move away from alternative cryptocurrencies to more stable options like Tether and Bitcoin, which could make it more challenging for Ethereum, XRP, and other alternative cryptocurrencies to reach June levels.

In June 2019, when the Bitcoin price peaked at $14,000, Ethereum price was hovering at $310 and XRP was at around $0.43.

With alternative cryptocurrencies continuing to slump despite being down by 80 to 90 percent from their record highs, a further leg down by bitcoin to the low $8,000 could result in a deeper pullback for Ethereum and XRP.

The post Bloomberg: Ethereum, XRP et al. likely to remain below June 2019 Peak until BTC hits $20k appeared first on CryptoSlate.

As Bitcoin dominance doubles, analyst says altcoin charts are like “radioactive decay”

The majority of alternative cryptocurrencies, or altcoins, have fallen by more than 90 percent from their record highs, leading Bitcoin to reclaim its dominance over the crypto market.

Willy Woo, a partner at Adaptive Capital, said that price charts of altcoins are like “radioactive decay,” most demonstrating a steep decline in value over an extended period of time.

He said:

“The vast majority of alt-coins are Degens. Their price chart has a measurable half-life, like radioactive decay. Plotted on a log chart, it’s a straight line down.”

Bitcoin dominance is up from 33.47 to 67 percent

Since January 2018, the dominance index of bitcoin, which measures the share of bitcoin over the global crypto market, has doubled from 33.47 to 67 percent.

According to data from athcoinindex, Bitcoin is down by 53 percent from its all-time high while most altcoins, including major crypto assets such as Ethereum, XRP, and Bitcoin Cash have dropped by 80 to 95 percent against the U.S. dollar.

bitcoin dominance
Bitcoin dominance is up by 2x since January of 2018 as crypto market stagnates (source: coinmarketcap.com)

Altcoins outside of the top ten in the likes of Cardano (ADA), Stellar, TRON, and NEO have performed particularly poorly against the U.S. dollar, declining by well over 90 percent.

Similar to the equities market, during times of stagnancy and a lack of interest from the general public, investors in the crypto market tend to flock to bitcoin as a less risky option over altcoins.

Consequently, Tether, a stablecoin whose value is equivalent to that of the U.S. dollar, has become the fifth most valuable crypto asset in the global market, overtaking Litecoin.

While the Bitcoin price is up by 100 percent year-to-date, it is still substantially down from its record high with its volume declining noticeably since its yearly high in June.

As reported by CryptoSlate, November has tended to be the best performing month for bitcoin but for two consecutive years, BTC is at risk of recording a net negative in November.

Accumulation phase?

Ceteris Paribus, a cryptocurrency research team, said that in the 3rd quarter of 2019, Square users bought 133 BTC per day on average, 8.6 percent of daily issuance.

Based on the data from the team, around 1,800 BTC is mined every day by mining facilities globally, and the strong sales by Square indicate that investors are accumulating the dominant cryptocurrency.

As accumulation increases and the hash rate of Bitcoin continues to increase ahead of the block reward halving, the dominance of BTC is expected to rise even further, possibly into levels unseen since 2017, in the 70 percent area.

Whether altcoins will be able to utilize its recent momentum to sustain recovery throughout the year’s end remains uncertain.

Bitcoin is facing strong resistance at $9,400, with its $9,200 support level anticipated to be broken with rising sell pressure and sell limit orders on major fiat-to-crypto exchanges like Coinbase.

The post As Bitcoin dominance doubles, analyst says altcoin charts are like “radioactive decay” appeared first on CryptoSlate.

November has historically been Bitcoin’s best performing month; will this one be different?

According to James Todaro, managing partner at Blocktown Capital, November has been one of the best performing months for Bitcoin. However, traders remain divided on where the dominant cryptocurrency could go. Todaro said:

“November has been historically one of bitcoin’s greatest performing months dating back to 2012. November 2018 was the main (and memorable) exception. BTC is presently up only 1.5% for November 2019…What will the next 3 weeks bring?”

Bitcoin November
Source: James Todaro Twitter

Last November, the Bitcoin price fell from around $6,500 to $3,700 by more than 43 percent against the U.S. dollar, after ranging for nearly three months in between $6,000 and $7,000.

Why analysts are divided on how bitcoin would perform this November

Bitcoin is up by more than 100 percent year-to-date, increasing from sub-$4,000 to $9,300 from January.

Still, some technical analysts remain cautious about whether Bitcoin could overcome the “psychological level” at $10,000 in the short term, as sell pressure builds with stacked limit sell orders on major cryptocurrency trading platforms.

Josh Rager, a cryptocurrency trader, noted that before investors begin to lean towards a bullish scenario for bitcoin, it is important to take into consideration the abrupt 10 percent drop in the price of BTC on CME earlier this week.

In a quick gap close, the price of BTC dropped to $8,350 on the CME futures market, supplemented with large sell orders. He said:

“Interesting situation in the market with the CME Bitcoin futures price gap being ‘filled’ – though price didn’t close through it. These were large sell orders so before you get mega bull on this you need to ask yourself why did this happen.”

BTC has been ranging with high volatility throughout the past two weeks, unable to break above key resistance levels to climb above $10,000 nor break below $9,200, a solid support level.

Short term bear, medium to long term bull

As said by a trader who operates as “Dave the Wave,” most traders who lean bearish for the short term trend of bitcoin remain bullish for the medium to long term. He said:

“Daily still down though the longer term on the weekly is up. Interestingly, the weekly Gaussian is tracking the log curve and the cyclical/ mean curve on the chart. In sum – short term, down; medium-term, up.”

bitcoin price
Bitcoin on the daily is losing momentum says a trader (source; Dave the Wave Twitter)

One variable in the medium to long term trend of Bitcoin on the side of fundamentals is governments that were previously prohibiting most industries related to cryptocurrencies slowly opening up to BTC.

This week, the government of China removed Bitcoin mining as one of the industries the government wanted to remove last year.

However, rising hash rate, an imminent block reward halving, and rising growth potential of the mining sector are all positive factors that are unlikely to have any impact on BTC in the short term.

Hence, currently, many traders seem to be cautiously optimistic towards BTC, with orders on BitMEX and other margin trading platforms indicating that more investors are expecting the asset to go up.

The post November has historically been Bitcoin’s best performing month; will this one be different? appeared first on CryptoSlate.

Analyst: Hong Kong SEC to release criteria on crypto exchanges, why it’s big for the industry

According to Dovey Wan, founder at Primitive Ventures, the Hong Kong Securities and Exchange Commission (SEC) is set to release a crypto exchange application guideline.

Wan said:

“Hong Kong SEC will announce detail in about an hour regarding cryptocurrency exchange application criteria. Considering Huobi has already backdoor listed on HKex, this will definitely play them a huge favor to be the first legalized Chinese crypto exchange.”

The decision of the Hong Kong SEC to establish a direction for local crypto exchanges comes after the introduction of a national blockchain initiative by the Chinese government.

Why this is big for the global crypto market

Over the past two years, ever since the official imposition of a cryptocurrency trading ban by the government of China, most traders in the region are said to have moved into the Hong Kong cryptocurrency exchange market.

Many Chinese investors trade cryptocurrencies through over-the-counter (OTC) trading platforms based in Hong Kong, by selling and purchasing stablecoins like Tether (USDT) with a slight premium.

As said by Wan, the establishment of a clear guideline for crypto exchange applications could benefit exchanges that are used by Chinese investors like Huobi.

She said:

“Huobi is an effective Chinese exchange – run by Chinese team locally in mainland serves primarily Chinese customers. They spent huge effort to re-structure into a ‘foreign company’ after the 2017 China crypto ban. And the cost of the Hkex shell is not cheap too.”

It would also grant crypto exchanges a strong legal basis to operate within Hong Kong, which could potentially solve banking services-related issues cryptocurrency trading platforms have struggled to deal with.

Not just for Huobi

The guideline from the SEC is expected to positively affect most exchanges based in Hong Kong that primarily facilitate trades for investors based in mainland China.

It also means that as cryptocurrency exchanges in Hong Kong are allowed to maintain operations on a more stable footing with clarified regulatory frameworks, it will create a more practical environment for investors in China to invest in the asset class.

However, Chinese state-owned newspaper People’s Daily reported on a column released on November 4 that the government vehemently against speculation around crypto assets and that its positive stance towards blockchain development does not necessarily equate to crypto investment. The People’s Daily said:

“There is no doubt about the potential and the direction of blockchain development. Speculation has to be prevented and through a competitive environment, space for blockchain development has to be opened.”

The post Analyst: Hong Kong SEC to release criteria on crypto exchanges, why it’s big for the industry appeared first on CryptoSlate.

Why crypto execs say one investor did not manipulate Bitcoin to $20,000

Several prominent blockchain company executives have said that a recent study claiming a single investor likely manipulated Bitcoin to its record high of $20,000 in December 2017 is misleading and that it is based on a misunderstanding.

The study, done by John Griffin and Amin Shams from University of Texas and Ohio State University, noted that its findings indicate the move of Bitcoin to its all-time high in 2017 wasn’t caused by thousands of investors, but rather by one large “whale.” Griffin said:

“Our results suggest instead of thousands of investors moving the price of Bitcoin, it’s just one large one. Years from now, people will be surprised to learn investors handed over billions to people they didn’t know and who faced little oversight.”

However, many strategists and executives in the cryptocurrency industry have said that the data has been misinterpreted, acknowledging that a single custodian is equivalent to one person.

Difference between one custodian and one person

Ari Paul, the co-founder at BlockTower Capital, said that the logic in claiming that the spike of bitcoin in 2017 was fabricated because most of the trading activity came from one platform is like saying that traditional financial assets are manipulated because most of their volumes come from custodians.

“Their ‘research’ is based on an elementary misunderstanding of how financial assets work.  It’s like saying that GLD (gold ETF) is traded mostly by 1 person because it has a single custodian and a single entity handling creations and redemptions,” said Paul.

Speaking to CryptoSlate in an exclusive interview, Blockstream Chief Strategy Officer Samson Mow stated that the premise of the paper itself is “ridiculous” and that it is extremely unlikely for a single whale to manipulate the price of bitcoin. Mow said:

“The entire premise of Griffin and Shams’ original paper is ridiculous and the latest update from these ‘academics’ is equally laughable. If they really believe a single whale could manipulate the price of Bitcoin and hundreds of other assets, then they probably also believe Santa Claus delivers presents to every child in the world by flying reindeer sleigh.”

While the market capitalization of Bitcoin remains lower than traditional safe havens like gold, it has had relatively high liquidity and daily volume quite consistently throughout the past several years.

With BitMEX, the largest margin trading platform for Bitcoin, seeing over $1 billion in open interest and over $10 billion in daily volume on peak days, and other major exchanges including Kraken, Bitfinex, Bitstamp, Coinbase, Binance, and Gemini seeing high volumes, it is becoming increasingly difficult for a single individual to manipulate the dominant cryptocurrency.

Bitcoin infrastructure strengthening means it’s difficult to attempt manipulation

With the emergence of regulated and transparent investment vehicles, exchanges, and futures markets, the infrastructure supporting the Bitcoin market has strengthened since early 2018.

CME, Bakkt, and a new wave of regional cryptocurrency exchanges as well as margin trading platforms have started to take the focus of the market on a select few exchanges to thousands, creating a more difficult environment for individuals, even for whales, to try to manipulate prices.

The post Why crypto execs say one investor did not manipulate Bitcoin to $20,000 appeared first on CryptoSlate.

Research: Bitcoin and Ethereum correlation at nearly 90% for 2 years is not a bullish sign

Based on the data released by researchers at Skew, the correlation between Bitcoin (BTC) and Ethereum (ETH) has been at around 90 percent for two years.

Since the end of the 2017 bull market during which the bitcoin price achieved $20,000, most cryptocurrencies have fallen by 80 to 95 percent against the U.S. dollar.

The high level of correlation between Bitcoin and Ethereum indicates that most major cryptocurrencies have been following the price trend of the dominant cryptocurrency.

Why is it a sign of a bearish trend for bitcoin, Ethereum, and crypto in general?

In amidst a bull market or an extended rally, cryptocurrencies tend to see independent movements to either the upside or the downside.

Early on in 2017, for instance, the correlation between Bitcoin and Ethereum was hovering in the range between -50 percent and 50 percent, as both cryptocurrencies moved purely based on the demand from their respective markets.

However, as cryptocurrencies moved into the bear market territory, the entire market started to fall in tandem, forcing most cryptocurrencies to move up and down in a correlated manner.

When the bitcoin price saw a spike to $14,000 in June, the Ethereum price also saw its yearly high at $366.

Depending on the interpretation of various data, it is arguable whether the cryptocurrency market is currently in a bear market or a bull market.

Engagement wise, considering data from social media platforms and search engines surrounding crypto-related keywords, the interest surrounding the market has noticeably dropped over the past two years.

In terms of price, Bitcoin is up by more than two-fold since January 2019 and Ethereum has also recovered relatively well, which some may consider being a bull market.

As long as the correlation amongst major cryptocurrencies remains substantially high, it is difficult to conclusively state that cryptocurrencies are in a bull market.

Fundamentals are still strengthening

Despite the sluggish trend of cryptocurrencies, the fundamentals for both bitcoin and Ethereum seem to be strengthening.

bitcoin ethereum hash rate
Hash rate of the Bitcoin network is still near record highs, Ethereum hash rate recovering (source: Blockchain.com)

The hash rate of bitcoin is still near record highs with six months to go for the block reward halving in mid-2020 and the user activity of Ethereum is on the rise due to various factors including rising decentralized finance (DeFi) activity and the usage of stablecoin Tether.

As reported by CryptoSlate, the volume of newly emerging strictly-regulated platforms targeting accredited investors such as Bakkt has also begun to see a large increase, indicating rising demand for cryptocurrencies from a broader base of investors.

Technical analysts generally favor a deeper pullback in the short term but over the medium to long term, optimism continues to surround the cryptocurrency market.

The post Research: Bitcoin and Ethereum correlation at nearly 90% for 2 years is not a bullish sign appeared first on CryptoSlate.

Despite big partnerships, XRP is the only top 10 crypto to drop year-to-date

XRP, the native cryptocurrency of XRP Ledger and RippleNet developed by Ripple, is the only top 10 crypto asset to record a drop against the U.S. dollar year-to-date.

In the same period, the price of Bitcoin has increased by more than two-fold from below $4,000 to $9,100 and other crypto assets such as Ethereum, Litecoin, and Binance Coin have increased by 50 percent to 200 percent.

Why XRP price is lagging behind amidst strong partnerships

As previously reported by CryptoSlate, Ripple has secured high profile partnerships throughout the year, including its deal with payment processors to utilize XRP in processing international remittance payments.

The MoneyGram deal, for instance, led to a substantial spike in the volume of XRP in Mexico, as the remittance service provider started to expand its usage of XRP.

According to Asheesh Birla, senior vice president of product at Ripple, MoneyGram CEO Alex Holmes said:

“Our partnership with Ripple will be a competitive differentiator in the months and years ahead.”

Yet, the price of XRP has dropped from $0.34 to $0.29, by nearly 15 percent in the past 11 months, despite the optimism surrounding its partnerships.

Currently, analysts generally believe the sluggish price trend of XRP to have been caused by the sales of the crypto asset by Ripple.

In its quarter 3 report, Ripple said that it sold $66.24 million worth of XRP, with the vast majority being sold to institutions. Ripple said:

“Ripple sold $66.24 million XRP in Q3 2019, a 73.7% decrease in sales in XRP QoQ, as measured in USD. Overall market capitalization of digital assets decreased in Q3, with the overall market cap losing 30.4%. XRP price declined 35.4% QoQ.”

However, the firm noted that it intends “to maintain a similar approach to Ripple’s XRP sales as compared with Q3,” hinting at additional sales of the asset approaching the year’s end.

Can it recover?

In the past month, technical analysts like Peter Brandt have said that XRP looks to have finally bottomed after what has been a relatively poor year for the crypto asset in terms of price. Brandt said:

“The diamond pattern has always been a top pattern among traditional markets. I suppose pattern might work for a bottom in crypto markets. If you want to know what a very clean diamond looks like, see XRP.”

Eric Thies also noted that there is a large bullish divergence on the weekly for the asset against the U.S. dollar, not dismissing the possibility of a trend reversal in the short term. Thies added:

“Then again there’s a decently large bull div on the 1 week for XRPUSD so who knows how long this actually stays true for.”

With a major Japanese financial institution in SBI Group and a widely utilized remittance service provider in MoneyGram both doubling down on their focus on XRP, the asset seemingly has factors for a potential rally.

However, its year-to-date performance still has been poor when compared to other top cryptocurrencies.

The post Despite big partnerships, XRP is the only top 10 crypto to drop year-to-date appeared first on CryptoSlate.

Why Bitcoin Has Outperformed Gold Every Single Year Since 2011

Bitcoin, also known as “digital gold,” has outperformed gold every year since 2011. Given the large discrepancy in the market capitalization between bitcoin and gold, bitcoin has more potential to grow over the short to medium term than gold. So far into 2019, contrary to popular belief, bitcoin has failed to demonstrate the characteristics of […]

The post Why Bitcoin Has Outperformed Gold Every Single Year Since 2011 appeared first on CCN.com

Bakkt crosses $1m in open interest, what does it show about Bitcoin?

According to researchers at Skew Markets, total open interest at Bakkt’s Bitcoin futures market — operated by NYSE parent company ICE — crossed $1 million.

The Skew Markets researchers said:

“Bakkt slowly taking off – total open interest just crossed $1mln with volumes also ramping up a quite a bit this week. Don’t bet against Jeff Sprecher.”

While Bakkt’s total open interest is still only a fraction of widely used margin trading platforms like BitMEX, which is showing $800 million in total open interest as of Nov. 3, analysts remain optimistic on the trajectory of the platform.

Why Bakkt is important for Bitcoin

Cryptocurrency investors are closely observing the performance of Bakkt as a key platform to facilitate the demand for bitcoin from accredited and institutional investors.

With the involvement of large-scale retailers like Starbucks, Bakkt has the potential to tap into the global consumer market with a Bitcoin integration, which Starbucks is currently working on.

Bakkt is also the provider of the first physically-backed Bitcoin futures in the U.S., indicating that contract holders on the platform are delivered with physical bitcoin.

Jake Chervinsky, general counsel at Compound Finance, said:

“Why is @Bakkt important for adoption of bitcoin? A: It offers a way for large, risk-averse institutions to buy and custody bitcoin through an end-to-end regulated system approved by the CFTC and NYDFS, and backed by the sterling reputation of ICE. Compliance lawyers rejoice.”

The volume and total open interest of Bakkt in comparison to major cryptocurrency exchanges that have existed for well over five years are substantially small. But, because of its physically-backed contracts, Bakkt has the potential to affect the price trend of Bitcoin in the long term.

As such, as the utilization of Bakkt rises, it could bring more balance into the global bitcoin market that is still arguably dominated by individual investors across exchanges like BitMEX, Coinbase, and Binance.

Trading volume is rising and it is likely to continue to increase

Since late September, the daily trading volume on the Bakkt Bitcoin futures market has increased from $1.2 million to $6.2 million, briefly achieving $10.3 million on Oct. 28 after the Bitcoin price abruptly surged from $7,600 to over $10,000.

Strategists like Su Zhu, the CEO at Three Arrows Capital, said following the launch of Bakkt that the platform is unlikely to see large volume immediately after its opening as it would need futures brokers to prepare. Zhu previously said:

“Bakkt will be likely first a trickle and then a flood. The reality is that most regulated futures contracts get low adoption on day1 simply b/c not all futures brokers are ready to clear it, many ppl want to wait and see, the tickers are not even populated on risk systems, etc.”

The volume of Bakkt already showing signs of a noticeable increase less than three months after its launch suggests that bitcoin as a store of value is appealing to accredited and institutional investors.

The post Bakkt crosses $1m in open interest, what does it show about Bitcoin? appeared first on CryptoSlate.

$128 Billion in Cash: Is Warren Buffett Unconvinced of Stock Market Rally?

Berkshire Hathaway is holding $128.2 billion in cash, according to its quarterly report. With no big deal in four years, Warren Buffett seems to be unfazed by the stock market rally. Buffett, who has evolved the $528 billion conglomerate into the world’s biggest financial company by revenue, is known to be patient in spotting large […]

The post $128 Billion in Cash: Is Warren Buffett Unconvinced of Stock Market Rally? appeared first on CCN.com

What Gold’s Massive Rally Tells Us About the Stock Market

Gold and stocks are rallying in lockstep with each other. Appetite for gold is driven by safe-haven demand despite surging stock prices. Analysts believe the gold bulls still have the upper hand in 2019. This week, the S&P 500 achieved a new all-time high following a positive jobs report. Yet, the gold price has approached […]

The post What Gold’s Massive Rally Tells Us About the Stock Market appeared first on CCN.com

Crypto exchange legalization in China is not true says Binance CEO

Binance CEO Changpeng Zhao has clarified that rumors circulating about the “legalization” of crypto exchanges is simply misleading.

crypto exchanges
Crypto exchanges in China not “legalized” says Binance CEO (source: Changpeng Zhao Twitter)

Not a crypto exchange license but a generic business registration

On Oct. 30, an analyst claimed that a photograph of a cryptocurrency trading license issued by the Chinese government has leaked, indicating that crypto exchanges are allowed to operate within China.

However, Zhao and other investors based in China including Primitive Crypto founder Dovey Wan said that it is a basic generic business license containing the phrase “trading services” and that it does not represent a crypto trading license for local companies.

Wan said:

“Not such thing as ‘cryptocurrency exchange legalization’ by a simple EDGAR equivalent registration and generic business license.”

She added:

“Looking up Chinese EDGAR Database equivalence (screenshot attached) there are many “digital asset trading and service companies have ‘registered’ and ‘licensed.’ It’s lacking a BASIC understanding of corporate law in China.”

China’s blockchain initiative cannot be ignored but it is overhyped

The blockchain initiative of China is expected to solely focus on permissioned ledgers or blockchain networks that are centralized to a large extent, which are structurally different from existing public crypto assets.

Considering that most major over-the-counter (OTC) trading platforms based in Hong Kong that are known to facilitate trades for investors based in China have offices in Beijing, the local government may not strictly crackdown on OTC desks in neighboring questions.

Other than that, the blockchain initiative will primarily benefit blockchain-related businesses, developers, and government-supported organizations in China, and as such, the narrative that the initiative would greatly benefit crypto in the short to medium term is likely to be overplayed.

Wan noted:

“China’s ‘National Blockchain Initiative,’ no matter what it ends up to be, digital RMB or what, is NOT a hoax. Will be a widely used and highly practical new form of financial infra. There will be an interesting partition of public vs ‘Blockchain with Chinese characteristic.”

Still, industry executives argue that the pro-blockchain stance shown by the government of China will place significant pressure on the U.S. and other major regions to adopt similar policies, which could have a largely positive impact on the sector.

DeerCreek managing partner Mike Wasyl told Fortune:

“China is making these very large macro plays. They want to maintain control and be seen as leaders and so adopting blockchain and being public about it, as we saw recently, is going to stir a lot of interest.”

Major crypto markets in Asia in the likes of Japan and South Korea have also started to adopt clearer regulatory frameworks to govern cryptocurrency exchanges, paving a pathway for long term growth for startups.

The post Crypto exchange legalization in China is not true says Binance CEO appeared first on CryptoSlate.

Bitcoin Shows Extreme Volatility After $10,600 Spike — Where to Next?

As the Bitcoin price shows volatility unseen since June, traders anticipate a large move to occur after monthly close on Nov. 1.

The Bitcoin price has been showing a high level of volatility following its abrupt increase to $10,600 on Oct. 26, when Bitcoin (BTC) climbed by 43% against the United States dollar on a single day.

According to Skew Markets, Bitcoin has been more volatile than other major cryptocurrencies like Ethereum in the past week, which does not tend to happen due to the discrepancy in liquidity between BTC and alternative cryptocurrencies. The volatility of Bitcoin’s marked increase following a six-month low indicates that investors remain divided on the potential short-term trend of Bitcoin.

Given the stability of Bitcoin subsequent to achieving $10,600 in late October, some technical analysts favor a bullish scenario in which the Bitcoin price avoids a re-entry into the mid-$8,000 support level and looks to break out above $10,000. However, other traders still anticipate a deeper pullback, considering the entire run up to $10,600 to be a stop hunt, trapping long contracts across margin trading platforms and futures markets.

The bull scenario: clean recovery over $10,000 for Bitcoin

On Nov. 1, the highly anticipated monthly candle of Bitcoin is set to open at previous monthly candle openings, as the Bitcoin price has tended to record a large spike in value. After the opening of the monthly candle of August, the Bitcoin price went on to increase by more than $1,000, going from $10,000 to just over $12,200 over the following seven days. A similar trend also took place in September.

Bitcoin price from Aug. 01—08, 2019

Bitcoin price from Aug. 01—08, 2019. Source: Coin360.com

Based on historical data that shows a significant spike in volatility before and after the closure of a monthly candle, traders are anticipating that the Bitcoin price might test the $10,000 resistance level once again in the short term, TurtouseTraiding said on twitter:

“BTC Tomorrow is the day where the relative time period to the 2018 bottom ends. We already had a massive rise in price but bulls aren't out of the woods yet. Tomorrow is also the monthly close. Expecting a big move on BTC.” 

Josh Rager, cryptocurrency trader and technical analyst, similarly said that if the Bitcoin price is able to reclaim the mid-$9,000 region, it will likely lead the dominant cryptocurrency back above the $10,000 mark, an area considered as an important psychological level by investors, “Daily support below, while overhead is the weekly and monthly open (resistance) with a break and close above these areas on higher time frames will likely be a signal to move up in the $10ks.”

Scott Melker, a trader at Texas West Capital, described the current price action of Bitcoin as a largely bullish trend, based on its rebound from sub-$9,000, “This looks massively bullish to me. Price has broken out of the descending channel and is consolidating with the former resistance as support. Still long from $8.985.”

One potential positive factor for Bitcoin that could contribute to a short-term trend reversal to the upside is the increase in the daily volume of BTC on BitMEX, the most widely utilized cryptocurrency margin trading platform. BitMEX liquidations for Bitcoin and other major cryptocurrencies in the past year reached $21 billion:

Throughout October, when the Bitcoin price portrayed signs of stagnation with a low level of volatility, the asset’s trading volume on BitMEX was hovering at around $1 billion to $1.5 billion, near to the levels seen in March 2019. The daily trading volume of Bitcoin then dropped below $1 billion on Oct. 12, down substantially since June when Bitcoin price hit a yearly high at $13,920.

Bitcoin’s trading volume on BitMEX is an important indicator for trading sentiment, as the exchange tends to see a mass cascade of long or short liquidations that trigger a big price movement to either the upside or downside.

The bear scenario: a bigger pullback based on fractal

A technical analyst and trader known to the cryptocurrency community as “Dave the Wave” has long emphasized the bear trend of Bitcoin since mid-2019, ever since the asset started to fall off from its spike to $13,920.

If the Bitcoin price is following a fractal, the analyst said that a drop to the $6,000–$7,000 range is likely in the short to medium term, adding that BTC has fallen back into the downside trend after its rise to $10,600. The analyst also noted that it is difficult for a two-day spike to dismantle months of BTC’s price action, suggesting that the abrupt surge to over $10,000 on Oct. 26 has not changed the course of the asset, adding:

“Was always unlikely for a multi-month trend to be broken on the basis of a two day spike. Has retraced near 50% already.”

Rager also explained that for the bullish structure of Bitcoin to hold, it will need to defend the $9,000 support level with strength and avoid a drop below $8,800. A bearish trend for Bitcoin could materialize if the asset falls in spite of the monthly candle close, which has historically been a period controlled by bulls.

Some other factors

Social media and search engine engagement for cryptocurrency-related keywords as a direct result of Chinese President Xi Jinping endorsing blockchain technology has increased, especially on Chinese platforms like Baidu.

Binance, one of the largest cryptocurrency exchanges, has begun to support the Russian ruble on the platform, as the company is now targeting the Russian market. This is happening on the backdrop of Russia and China — with ambiguous regulatory frameworks surrounding cryptocurrencies — beginning to see progress in developing regulations that may later play as macro factors for the price trend of Bitcoin and other cryptocurrencies.

However, cryptocurrency trading still remains prohibited in China, and the People’s Bank of China — the nation’s central bank — has no intention to publicly allow digital asset trading in the near future. Despite this, Bitcoin in China has good local liquidity, according to Primitive Crypto founder Dovey Wanshe:

“For fiat buyers, all the Chinese exchanges operate big OTC, Huobi OTC volume is around a few hundred millions of $ every day on a conservative side Local liquidity of Bitcoin in China is EXTREMELY good.”

With Bitcoin showing a high level of volatility — which it normally does not demonstrate — and potentially large markets for the asset opening up to blockchain technology, macro factors could add to the upside movement of BTC if it breaks out upon its monthly open.

Why average Bitcoin Cash (BCH) transaction size increased after the Bitmain “civil war”

The average Bitcoin Cash (BCH) transaction size has increased from $7,420 to $24,050 in the aftermath of the controversy surrounding Bitmain.

Bitmain has long been a backer of Bitcoin Cash since the emergence of Bitcoin ABC in 2017. As of August 2018, Bitmain is said to have held over one million in BCH, as said by a co-owner of bitcoin.org and bitcointalk.org.

What Bitcoin Cash transaction size increase could mean

This week, Jihan Wu, a co-founder and former CEO of Bitmain, the world’s largest cryptocurrency mining manufacturer, reportedly ousted Micree Zhan, another co-founder of the company.

According to local media and investors like Dovey Wan, founding partner at Primitive Ventures, Micree was forced out of the company in an “ugly” way. She said:

“Chinese news reported: according to who’s close to the matter, Micree was outcasted in an ugly way, he may consider dump BCH he owns .. which is 1.6M BCH total. This will be extremely irrational if true, it’s nuts.”

The increase in the average size of BCH transactions indicates that a growing number of investors are speculating on the possible effect the change-up in the leadership of Bitmain could have on the price of Bitcoin Cash.

bitcoin cash (BCH) volume
Data from IntotheBlock shows the average size of Bitcoin Cash (BCH) transactions increased (source: intotheblock.com)

Some believe that the abrupt alteration in the structure of the firm could endanger the company’s plans to initiate an initial public offering (IPO). Wan added:

“According to public record, Jihan Wu took over Micree Zhan as the legal representative of Bitmain in China. Under China law, this means he serves as the legal embodiment of the company, which is a crucial role. Bitmain obviously can’t sit still while Canaan filed IPO.”

Others, like the aforementioned co-founder of bitcoin.org and bitcointalk.org, said that the “reappointment” of Jihan Wu as the representative of Bitmain could be a solid first step towards the company regaining market share that it has lost.

With the public’s opinion divided on whether the implication of the Bitmain leadership change is a positive or a negative factor for the firm’s long-term growth trend, the rise in the average Bitcoin Cash transaction size demonstrates that whichever way, most investors expect it to have an impact on BCH.

BCH up more than 30% in 7 days

The price of BCH increased from around $220 to nearly $300 in the past seven days by more than 30 percent against the U.S. dollar.

So far, based on the price trend of the asset, it seems that investors are leaning towards the Bitmain fiasco potentially having a positive effect on Bitcoin Cash, as a larger holder of the digital asset.

As of now, it remains unclear whether Bitmain would be able to proceed with its plans to IPO in the U.S. market, while its rival Canaan has already filed for an IPO on the Nasdaq.

The post Why average Bitcoin Cash (BCH) transaction size increased after the Bitmain “civil war” appeared first on CryptoSlate.

Billionaire investor says Starbucks testing crypto integration is a “big deal”

Michael Novogratz, the billionaire CEO of Galaxy Digital, said the testing of crypto by Starbucks for its consumer app is a big deal for the asset class.

“Follow this space. This is a big deal. Crypto acceptance is coming. Bakkt to launch consumer app in first half of 2020; will test product with Starbucks,” said Novogratz

Why potential crypto integration by Starbucks is crucial

Throughout the past three years, the crypto sector has seen significant improvements in many areas such as trading infrastructure and institutional services.

However, some key aspects of the market in the likes of regulatory clarity, consumer adoption, and banking support for cryptocurrency-related startups remain relatively weak.

Up until mid-2018, large retailers, especially in major crypto exchange markets including Japan and South Korea, were planning to integrate cryptocurrencies like bitcoin.

Most of the high profile deals have not been finalized and only a small number of large-scale retailers such as Bic Camera are directly accepting crypto payments.

As Starbucks continues to move towards integrating a system to accept payments in crypto incentivized by its role in Bakkt — a Bitcoin futures market operated by NYSE parent company ICE — as a founding partner, it could single-handedly increase the adoption of crypto by consumers in the U.S. market.

Bakkt’s focus is on the consumer side

This week, Mike Blandina, the Chief Product Officer at Bakkt, reemphasized its focus on the development of its consumer app and its partner Starbucks.

Blandina said:

“Over the last year, we’ve assembled a strong team of payments engineers and are nearing completion of our core payments and compliance platform. We’re now focused on the development of the consumer app and merchant portal, as well as testing with our first launch partner, Starbucks, which we expect in the first half of next year.”

The integration of a system that accepts crypto payments by Starbucks could be a catalyst that encourages other retailers to integrate crypto after years of non-action, possibly due to regulatory uncertainty, volatility, and the lack of viable services available in the sector.

crypto volume
The Bakkt Bitcoin futures market saw a record high volume on October 25 as the crypto market surged (source: Bakkt Volume Bot)

Good timing for the integration amidst China interest

The development of the Bakkt-Starbucks partnership comes amidst the call by Chinese President Xi Jinping to speed up blockchain development and integration.

While the motivation behind the Chinese government to abruptly begin to focus on blockchain development remains unclear, it has brought significant attention to the crypto market as portrayed by various pieces of data such as the rising search volume for crypto-related keywords.

Three Arrows Capital CEO Su Zhu said:

“Some fear China would dislike Bitcoin for its destabilizing effects on the yuan in the event of capital flight. I think this is still a concern, and why China is reluctant to allow mass-market fiat exchanges to proliferate. With that said, they appear confident that they have many levers to pull and as a result are willing to take that risk.”

The introduction of a crypto payment option or a cryptocurrency solution by Starbucks on its consumer app as the momentum of the sector as a whole strengthens could establish a positive business sentiment throughout 2020.

The post Billionaire investor says Starbucks testing crypto integration is a “big deal” appeared first on CryptoSlate.

As Bitcoin spikes $2,500 in 1 day, analyst says bear trend is technically over

According to global markets analyst Alex Krüger, the bear trend of Bitcoin is technically over after its abrupt and massive rally.

Krüger said:

“Technically, BTC bear trend is over. Fundamentally, market changed in the last two months for the worse beyond just price. Miners implosion likely incoming. Impressive BAKKT volume spike (low base effect), now 2% of CME’s. Today’s +15% in my opinion clearly related to China’s news.”

The short term upside movement of bitcoin was crucial in preventing a further downside movement below key support levels at $6,800 and $6,300, which were being considered as possible targets following weeks of stagnancy.

Bakkt sees record-high volume but it’s not a big Bitcoin mover

Subsequent to the $2,500 movement of Bitcoin from around $7,500 to $10,000, the volume of Bakkt, a regulated bitcoin futures market operated by the parent company of the New York Stock Exchange, achieved a new record high at 1,179.

Each contract on Bakkt is equivalent to 1 BTC and as such, 1,179 indicates a daily volume of 1,179 BTC or $11.79 million.

While Bakkt is growing and it is expected to eventually evolve into a platform that accurately reflects demand from accredited and institutional investors, for now, it only accounts for a small fraction of exchanges.

In comparison, BitMEX saw more than $150 million worth of shorts liquidated as reported by CryptoSlate, 50 times larger than the entire daily volume of Bakkt.

What happens next for BTC?

With analysts like Krüger suggesting that technicals indicate a strong trend reversal for bitcoin, traders are looking at historically important resistance levels in the $8,000 to $9,000 range to confirm a breakout.

Josh Rager, a cryptocurrency trader, said that if it closes above previous resistance at $8,374, it may lead to an extended rally. He said:

“Bullish candle that woke the market, was hedge short myself 1x got stopped out and still up in BTC. Late shorts got punished and literally knocked out all stops A great start but still want to see price break/close above previous resistance $8,374+.”

bitcoin price
Trader says both patterns currently forming on bitcoin chart are bullish (source: Scott Melker)

Another investor said that the current state of the cryptocurrency market can be described as a bull market and that bulls will likely continue to take control. He noted.

“If today’s BTC price action did not serve as enough of a reminder, let me say it again…this is a BULL market and bulls will take control when they please.”

Altcoins flying high

Off of the strong upside movement of Bitcoin, Ethereum climbed from $161 to $191, by more than 17 percent within two hours.

The price of XRP also spiked from $0.27 to more than $0.3, by well over 10 percent within the same time frame.

The price of Litecoin surged from $49 to $60, a gain of over 20 percent.

Analysts generally anticipate that the overnight rally of Bitcoin is likely to ignite the start to an extended rally and a potential trend reversal to the upside throughout the short to medium term.

The spike in the price of bitcoin comes at a crucial time after dropping to the lowest level since June.

The post As Bitcoin spikes $2,500 in 1 day, analyst says bear trend is technically over appeared first on CryptoSlate.

What triggered Bitcoin’s price to suddenly surge 10% within minutes? Traders react

The Bitcoin price surged from $7,600 to $8,400 within a span of minutes on Oct. 25, almost immediately after Chinese President Xi Jinping said that China would focus on blockchain development.

Is China a factor?

Some investors anticipate that the rare release of a positive stance of the government of China on blockchain development could have contributed to the increase in the price of bitcoin.

cnLedger, a trusted cryptocurrency news source in China, said:

“President Xi Jinping emphasized that the integrated application of blockchain technology plays an important role in new technological innovation and industrial transformation.”

It added that President Xi emphasized the nation should accelerate the development of blockchain technology in his first address of blockchain. The source reported President Xi saying:

“We must take blockchain as an important breakthrough for independent innovation of core technologies, clarify the main directions, increase investment, focus on a number of key technologies, and accelerate the development of blockchain and industrial innovation.”

While the term “blockchain” used by China likely refers to a permissioned ledger that is structurally and fundamentally different from decentralized cryptocurrencies like Bitcoin, the statement of President Xi is expected to bring significant attention to the space.

Massive bitcoin shorts liquidation on BitMEX

Currently, China is considered to be the main catalyst for the abrupt turn around of Bitcoin as prior to that, the technical structure of the short term trend of bitcoin was heavily leaning towards a bearish trend.

A minor upside movement eventually turned into a $1,000-rally, leading to a cascade of short liquidations on BitMEX.

bitcoin liquidated
$150 million+ bitcoin short contracts liquidated on BitMEX (source: Datamish)

According to Datamish, more than $150 million worth of short contracts on BitMEX has been liquidated, further pushing the price of bitcoin up within a short time frame.

Traders optimistic

The sentiment around the Bitcoin price has noticeably recovered following its 10 percent upside movement, with some traders stating that it could mean a full trend reversal for the asset.

Raoul Pal, CEO at Global Macro Investor, said:

“A fitting end to Gold vs Bitcoin. They both feel like they are trying to break higher after consolidations. Bitcoin is very interesting here… had to take some pain from the failure of the initial preferred wedge pattern but let’s see how this set up works.”

Scott Melker, a trader at Texas West Capital, said that the crucial death cross, which emerged on the bitcoin chart earlier this week that indicates a strong bearish movement, may have been avoided, alleviating pressure on the asset. He said.

“Price is above the 21 EMA, which has acted as strong resistance. Further, people have been trading the impending death cross of the 50 and 200 EMAS (lagging indicator IMO). The 50 EMA is presently pointing back up after today’s candle. Death cross may be avoided.”

The post What triggered Bitcoin’s price to suddenly surge 10% within minutes? Traders react appeared first on CryptoSlate.

Privacy-Focused Cryptos Hunted Down by Forensics and Exchanges

Major crypto markets are forced to delist privacy coins as per FATF requirements, is it counterproductive or a step in the right direction?

As Japan and South Korea — two of the largest cryptocurrency exchange markets in Asia — are increasingly pressuring exchanges to delist privacy-focused crypto assets, and concerns are rising that it could lead to more markets, at least in Asia, to follow the trend of the two major countries.

Meanwhile, Blockchain analytics firms like CypherTrace appear to be developing technologies to better understand the structure of privacy-focused coins and to trace transactions initiated by cryptocurrencies. Speaking to Cointelegraph, a spokesperson for CypherTrace said that the company expects to see some progress by 2020 on privacy coins, stating, “We look forward to some results on privacy coins in 2020.”

But as things stand, analytics firms are still not close to finding a solution for tracing transactions processed by some privacy coins like Monero, which may make it more difficult for privacy coins to remain listed on strictly regulated exchanges that support fiat pairs.

The crypto exchange market in Asia and privacy coins

Japan and South Korea have essentially imposed a blanket ban on privacy-focused cryptocurrencies like Monero (XMR), Zcash (ZEC) and Dash (DASH), which, officers at the Japanese Financial Services Agency like to describe as the “three anonymous siblings.”

Throughout the past year, the G-7, an organization consisting of the seven largest economies, and the Financial Action Task Force (FATF), which operates under the G-7, have shown efforts to unify basic regulatory frameworks surrounding cryptocurrencies.

With the push of Japan, both the G-7 and the FATF and have pressured major markets to take action against privacy coins, leading large exchanges like UPbit and OKEx to delist Monero, Dash, Zcash and several other cryptocurrencies. On Sept. 10, OKEx Korea said in an official statement translated by Cointelegraph:

“According to the statement corresponding to FATF R.16, […] We have decided to take measures to end trading support for stocks classified as privacy-oriented cryptocurrencies, aka dark coins.”

As reported by Cointelegraph, UPbit, the largest cryptocurrency exchange in South Korea by volume, also delisted privacy coins due to money laundering concerns. UPbit said in a statement, “The decision to end trading support for the crypto-asset was also made to block the possibility of money laundering and inflow from external networks.”

Related: FATF AML Regulation: Can the Crypto Industry Adapt to the Travel Rule?

Cryptocurrency exchanges in Japan and South Korea planned to support the stance of their respective governments to prohibit the trading of privacy coins prior to the meetings held by the FATF. However, the FATF released a document following its second plenary meeting entitled, “Outcomes FATF Plenary, 20–22 February 2019,” explicitly stating that entities described as virtual asset service providers will have to comply to the revisioned requirements of the FATF Standards.

Others to follow G-7 and FATF guidelines?

The revised requirements for virtual asset service providers could make it mandatory for all regulated exchanges located in G-7 countries to discard support for privacy coins, creating a more difficult environment to trade the digital assets.

Regulated exchanges in the United States like Coinbase and Gemini have not supported privacy coins since their inception, with the exception of Zcash in the case of Gemini. It remains unclear whether Zcash can be considered a privacy coin, as it provides users the option of processing transactions that are not private.

To process private transactions of Zcash, shielded transactions have to be initiated, and on most exchanges and wallets, shielded Zcash transactions are not processed. Due to the ability of Zcash to comply with local regulations, Gemini has supported Zcash since May 2018, and management at the Electric Coin Company has said on several occasions that ECC is working with OKEx and other South Korean exchanges to list Zcash.

Is there a solution?

For privacy coins that purely focus on being private, like Monero for instance, it may not be possible for blockchain analytics firms to establish an efficient method of tracing transactions. As a CypherTrace spokesperson told Cointelegraph:

“Monero in particular has a very privacy focused technology including ring signatures and mixing.  Most coins have a much more transparent blockchain and are not actively trying to prevent analysis.”

Hence, for Monero and a select few other privacy coins, at least in the foreseeable future, regulated cryptocurrency exchanges that either don’t support privacy coins or have already delisted privacy coins are highly unlikely to list them again.

The Federal Ministry of Finance of Germany, which is a member of the G-7, released a report at the end of October entitled, “First National Risk Analysis 2018/2019,” stating that the growing usage of Monero on the darknet makes it more dangerous than Bitcoin. The report says:

“Due to the increasing popularity of Monero on the Darknet, it can be foreseen that this crypto asset, especially, will gain more practical relevance in the future in the area of securing and exploitation.”

It did not single out Monero, adding that other privacy coins like Zcash can also be used to launder money. The growing pressure from G-7 countries for exchanges to deal with privacy coins will further push the FATF to apply guidelines and standards to prevent money laundering, making it harder for exchanges to support privacy coins.

Zcash has the best chance, but does it count?

Given its selective privacy option that allows users or service providers like exchanges to choose whether to implement private transactions or not, combined with the support from a top U.S. cryptocurrency exchange in Gemini, Zcash seemingly has the best chance of being listed by exchanges operating in G-7 countries.

Gemini is able to process Zcash transactions with the approval from the New York Department of Financial Services likely because it only supports withdrawals for non-shielded transactions.

Like how Gemini supports Zcash, the FATF may likely require exchanges to be able to monitor and trace transactions as needed before privacy coins can be listed on major exchanges. Without such solutions, maintaining compliance with the FATF’s requirements could prove too challenging, particularly since they became stricter following the organization’s second plenary meeting in February 2019.

Would the delisting of Monero hurt chances of tracing?

Earlier this year, in February 2019, Kimberly Grauer at the crypto analytics form Chainalysis said that Monero is a top priority for the firm, and tweeted, “We can easily track the funds in and out of a DNM [darknet market]. If you ever want to convert your crypto into fiat, you’ll have to go through an exchange, which will force you to KYC, so there’s still hope.”

However, if Monero is delisted from exchanges and trades begin to be processed in a peer-to-peer manner, it will become almost impossible for blockchain analytics firms to find the identity behind the Monero transactions. Therefore, delisting of Monero from exchanges could hurt the chances of analytics firms tracing funds involved in criminal activities.

Investor: DeFi reflects rising Ethereum demand, total ETH locked up hits ATH

According to a research team that focuses on DeFi (decentralized finance), the usage of Ethereum (ETH) on decentralized financial networks is on the rise. The DefiPulse team said:

“Total ETH locked in DeFi (currently 2.311M) is approaching its all-time high of 2.332M, levels last seen in mid-April 2019. At the moment, ~2.13% of all ETH is locked in DeFi.”

DeFi in Ethereum refers to the usage of ETH to process financial services that often require third-party service providers, such as lending.

Through the usage of smart contracts, DeFi allows users to borrow and lend money in a peer-to-peer manner with ETH as collateral, maintaining a decentralized financial ecosystem.

DeFi reflects Ethereum growth, but more data is needed

Investors like Ryan Sean Adams, founder at Mythos Capital, said that public blockchain data shows a significant amount of Ethereum issuance is being consumed by DeFi, which suggests that the demand for DeFi is increasing at a rapid rate.

Since Ethereum is used as collateral in most DeFi-related services, the growth of the DeFi market directly reflects the total usage of ETH, leading to an overall increase in user activity.

Adams said:

“Is more ETH getting locked in money protocols than being issued? Current ETH issuance: 4.6% annual. Since Jan 2018, ETH supply grew 12.15% ETH. locked in DeFi currently consumes half that amount. DeFi demand is sucking up new ETH issuance.”

Adams followed up that:

“Is DAI used in money protocols? Yes. Increasingly so. Over 22m DAI now locked in money protocols. That’s 26% of all DAI supply Pretty much none of this existed 18 months ago This is good for ETH since DAI demand is ETH demand.”

However, as many investors like to put ETH as collateral often to acquire more ETH as market prices drop, the consumption of ETH by DeFi-related services tends to increase amidst a market downturn, along with other factors.

The ETH price dropped by 16 percent so far into the month, from over $190 to $162.

Hence, to more accurately evaluate the trend of the growth of the Ethereum ecosystem, it is crucial to consider other types of data including transaction volume, address growth, and network utilization.

Most charts point towards rising growth trend

Based on data from Etherscan, the number of unique Ethereum addresses has increased from 54 million to 78 million since January 2019 and daily transaction volume has almost doubled in the same time frame.

ethereum transactions
Daily Ethereum transaction volume nearly doubles since early 2019 (source: Etherscan)

The daily transaction volume of ETH increases when DeFi-related services and decentralized applications (DApps) record rising user activity, as ETH is used as gas to process information.

Currently, reports indicate that developers are working through some obstacles that may emerge prior to and subsequent to the launch of Ethereum 2.0, a highly anticipated update that would increase the efficiency of the blockchain in processing information, benefiting areas like DeFi.

The post Investor: DeFi reflects rising Ethereum demand, total ETH locked up hits ATH appeared first on CryptoSlate.

Congressman says XRP, ETH, and BTC are actual cryptocurrencies, not Libra

At Facebook CEO Mark Zuckerberg’s Senate testimony, Republican congressman Ted Budd of North Carolina said that Bitcoin, Ethereum, and XRP are actual cryptocurrencies, while Libra isn’t.

By “actual” cryptocurrencies, Congressman Budd likely meant that unlike the three assets, Libra is not open-sourced and permissionless.

xrp price
XRP price has recovered fairly strongly since early October until this week’s correction (source: TradingView)

He said:

“It’s crucial that members of this committee be able to differentiate between Libra, which is really not a cryptocurrency and actual cryptocurrencies like Bitcoin, Ethereum, and XRP, before we discuss draft legislation. Many of the proposals would stifle financial innovation and if we’re to remain as a world leader in financial technology, it’s vital that this committee not embrace reactionary laws against cryptocurrencies.”

XRP, ETH, and BTC: What makes them real cryptocurrencies?

Although there have been some questions surrounding the extent to which XRP is open-source and decentralized, the paper of Rippled, the server software that powers the XRP Ledger, says that Rippled itself is open-source under the permissive ISC open-source license. The paper reads:

“The server software that powers the XRP Ledger is called rippled and is available in this repository under the permissive ISC open-source license. The rippled server is written primarily in C++ and runs on a variety of platforms.”

For Bitcoin and Ethereum, in June 2019, U.S. Securities and Exchange Commission (SEC) chairman Jay Clayton noted that Bitcoin is not a security and in June 2018, SEC Director of Corporate Finance Bill Hinman said that Ethereum is also not a security, indicating that they are decentralized.

A court case is still pending to conclusively determine whether XRP is a security or not in the U.S., and the case is unlikely to be resolved in the short term.

The statement of Congressman Budd that describes XRP as an actual cryptocurrency alongside Bitcoin and Ethereum amidst uncertainty regarding the nature of XRP is widely considered a positive factor by investors in XRP. Ripple CEO Brad Garlinghouse said:

“Earlier today Rep Ted Budd emphasized the importance of distinguishing between Libra and actual digital assets like XRP, BTC and ETH. He provided an excellent reminder: the crypto industry should not be painted with one broad brush.”

Tough road ahead for Libra and Zuckerberg

Following the 11-hour testimony, it was clear that many members of Congress do not have the confidence in Facebook to lead the development and distribution of Libra, which led Zuckerberg to state that Facebook may leave the Libra association if the U.S. government does not approve of the project. He said:

“We’ve faced a lot of issues over the past few years, and I’m sure people wish it was anyone but Facebook putting this idea forward.”

Whether the growing scrutiny on Libra and Facebook would grow the confidence of investors towards the long term trend of cryptocurrencies like Bitcoin, Ethereum, and XRP remains to be seen.

The post Congressman says XRP, ETH, and BTC are actual cryptocurrencies, not Libra appeared first on CryptoSlate.

Ethereum plummets 6% after Bitcoin falls overnight: what’s causing the drop?

The Ethereum price (ETH) has dropped by nearly six percent within a 12-hour span following Bitcoin’s overnight three percent slip from $8,200 to $7,960.

Across major cryptocurrency exchanges like BitMEX, Binance, and Coinbase, the price of Ethereum slipped from $173 to $163, recording a large drop following the daily close.

ethereum volume
The volume of Ethereum is down compared to mid-2019 (source: TradingView, BitMEX)

The sharp pullback of Ethereum is likely to have been triggered by a minor drop of Bitcoin, which was seemingly demonstrating signs of a trend reversal to the upside as it surged past $8,300.

Volumes are still low, making a fast reversal for Ethereum unlikely

The daily trading volume of both Bitcoin and Ethereum are hovering around yearly lows on BitMEX, which is known to have a major effect on the price trend of the cryptocurrency market due to its futures contracts.

Usually, when Bitcoin shows a sideways movement during an extended period, the Ethereum price tends to show a spike in volatility.

Throughout October, the price of Bitcoin has remained relatively stable in a tight range between $7,800 to $8,300, creating an ideal environment for Ethereum and other major cryptocurrencies in general to see higher volatility.

Yet, the Ethereum price struggled to show signs of a breakout to the upside and its low volume intensified the downward movement, ultimately leaving the asset vulnerable to a short term pullback.

As Bitcoin price nears 50% drop
Related: As Bitcoin price nears 50% drop, analyst foresees deeper correction for Ethereum

Previously, as CryptoSlate reported, technical analysts including Dave the Wave said that the Ethereum price is likely to correct all the way down to below $150 if the bitcoin price makes its way to the low $7,000 region.

Based on the trend of the cryptocurrency market in general, which lost $50 billion in market capitalization since September, both assets are forecasted to see a build-up of sell-pressure.

Josh Rager, a cryptocurrency trader, and analyst said:

“As you can see with not only Bollinger bands but also historical volatility (HV) that a major move is brewing With a slow sideways market, we’ll see descending HV that indicates a strong reaction in price action ahead and rise in volatility.”

Until Oct. 22, many traders anticipated the volatility of bitcoin to result in an upside movement. However, as Bitcoin showed rejection at a low resistance level, traders have begun to expect a deeper pullback.

Case of medium-term optimism for ETH

According to a price action trader, Ethereum is lacking signs of being overpriced or overbought and is in a neutral zone. The trader said:

“Ethereum currently shows no major signs of being overpriced, overbought or overvalued. The market is currently relatively conservative. I think ETH 2.0 is a few months away, I think we see scalability fixed & futures going live in the same month. Never a coincidence.”

As Ethereum 2.0 comes closer, investors anticipate that it would alleviate some of the pressure on the price of the asset.

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Why liquidity of XRP in Mexico is surging after MoneyGram partnership

According to an analyst based in Japan, the liquidity of XRP in Mexico, specifically on Bitso, has increased significantly following the partnership between MoneyGram and Ripple.

xrp liquidity
XRP liquidity on the rise in Mexico (source; Tenitoshi Twitter)

Prior to the deal, the Tenitoshi Liquidity Index for XRP in Mexico was hovering in the negative, indicating that the volume of the cryptocurrency struggled to recover. The analyst said:

“In principle, market volume cannot be negative. But the calculation of the index sometimes outputs negative values undesirably. It tends to happen if a market is no liquid or very volatile. But those absolute values are negligibly small. So you can think of it as near-zero.”

Volume rising due to remittance usage

In June 2019, Ripple established a strategic partnership with MoneyGram, a major remittance service provider, to utilize XRP in processing international payments.

As a part of the deal, Ripple pledged to invest up to $50 million in the remittance company, anticipating that the partnership would increase the usage of the asset and the XRP Ledger as a settlement layer.

At the time, CEO Brad Garlinghouse stated that Ripple is not leveraging its investment to encourage MoneyGram to accelerate the adoption of the digtal asset.

Garlinghouse also noted, in an interview with Yahoo Finance, that the effect of the MoneyGram deal on the entire crypto market would be bigger than Libra, a cryptocurrency project led by a consortium based in Switzerland that was kickstarted by Facebook.

Based on the volume of the XRP-to-Mexican peso on major exchanges in Mexico like Bitso, it appears that the strategy of Ripple to work with remittance service providers to process payments using the cryptocurrency is working.

Ripple sees MoneyGram as a big catalyst for XRP

In August, Garlinghouse emphasized that MoneyGram will start using XRP to process Mexican peso and Phillippine peso pairings, and the increase in volume will likely be reflected starting the first quarter of 2020. He noted:

“It’ll start to ramp in Q4 but really we’ll start to see more consequential volumes in Q1.”

So far into the year, heading into 2020, the usage of XRP in Mexico, fueled by the MoneyGram-Ripple partnership, is noticeably on the rise and if the trend can be sustained until the year’s end, the volume is expected to rise further entering into the first quarter of next year.

Eric Dadoun, an early stage investor, expressed optimism towards the increase in the usage of XRP, adding that half of the supply of the cryptocurrency being in escrow by Swell 2019, is an important milestone. He said:

“Less than half the total supply of XRP will be left in escrow just in time for Swell By Ripple. Whether you call it a coincidence, conveniently timed or baseless speculation, one thing is for sure… it’s a milestone. Onwards.”

Down by 91% since record high but show signs of improvement

Although the price of XRP has dropped by more than 91 percent from its all-time high, in the past month, the asset has increased from around $0.23 to $0.29, by more than 26 percent against the U.S. dollar.

Technical analysts and traders like Peter Brandt said earlier this month that there are signs that XRP is close to reaching key support levels against BTC, entertaining the possibility of a recovery period.

The post Why liquidity of XRP in Mexico is surging after MoneyGram partnership appeared first on CryptoSlate.

Investor: Ethereum fundamentals are strong despite 88% drop from ATH

The Ethereum (ETH) price has dropped by 88 percent from its record high at $1,448, showing a sluggish price trend year-to-date. Yet, according to investor Spencer Noon, the fundamentals of the asset remain strong as the total value of Ether locked in DeFi apps continues to increase.

Ethereum value locked in DefFi

Spencer Noon, an investor at DTC Capital, compared the price trend of Ethereum since early 2019 to the total amount of U.S. dollar locked into DeFi (decentralized finance), and suggested that the price does not accurately depict the growth of the blockchain network.

Why has the altcoin market been struggling for so long alongside Ethereum?

In terms of price, 2019 has not been a particularly positive year for Ethereum considering its performance throughout previous years.

At the start of 2019, the price of ETH was hovering at around $135 and since then, it increased to $174, by less than 30 percent against the U.S. dollar.

In comparison, the price of bitcoin rose from $3,800 to $8,200, by more than two-fold in the same period.

Some analysts speculate that despite signs of decent growth of the Ethereum blockchain network in terms of gas usage, users, and developer activity, the extended correction of the cryptocurrency market exhausted investors, forcing a sell-off of more risky assets.

Eric Conner, the co-founder of EthHub, said:

“For the first time ever, Ethereum’s block gas limit has passed 9,000,000. The network now has 12.5% more capacity than last week and is still on the rise.”

Cryptocurrencies as an asset class in itself are considered as risky by the broader market of investors but within the cryptocurrency market, Bitcoin tend to demonstrate a lower rate of volatility compared to alternative cryptocurrencies or altcoins.

The prospect of the bear market of cryptocurrencies lasting longer than the expectations of analysts led investors to hedge their positions with cash on exchanges and stablecoins like Tether, creating a difficult environment for even major cryptocurrencies like Ethereum to rebound.

How technicals look for ETH

Ethereum and alternative cryptocurrencies, in general, tend to demonstrate higher volatility when bitcoin is in a sideways movement.

As such, when the daily volume of bitcoin was hovering at yearly low levels in early 2019, the daily volume of Ethereum reached its yearly peak at $1.64 billion on BitMEX alone.

However, since then, the daily volume of Ethereum has struggled to recover and as of late October, its daily volume is at around $93 million on BitMEX.

Ethereum price
Ethereum saw a strong reaction in September as it headed to lower supports (source: Hsaka Twitter)

Against both Bitcoin and USD, the price of Ethereum tends to see a strong response when key support levels are supported on the downside, as seen in early September.

While the technicals and the volume of ETH and for the rest of the cryptocurrency market have geared toward a bearish trend in recent weeks, as the market moves closer to a short term bottom, traders are not dismissing the possibility of an abrupt reaction.

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Binance Exec: Bitcoin futures volume rose significantly in 2019, as it raises leverage to 125x

Speaking to CryptoSlate in an exclusive interview, Binance Futures Director Aaron Gong said that the Bitcoin futures volume in 2019 increased significantly, expressing confidence in the long term trend of the market.

Earlier this week, on Oct. 18, Binance Futures increased the maximum leverage of BTC/USDT (Tether) to 125x, offering a leverage that is higher than all existing platforms in the cryptocurrency market in the likes of BitMEX and Deribit.

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Binance futures sees record high volume (Aaron Gong Twitter)

The official announcement read:

“Binance Futures has increased its maximum leverage to 125x for BTC/USDT contracts and enabled a leverage adjustment function on its web and testnet trading interfaces. Users can now select any leverage between 1x and 125x.”

Is Binance Futures concerned about a decline in bitcoin volume in the past 4 months?

Since the June 2019 peak during which the bitcoin price achieved $13,920, the volume of bitcoin on most major trading platforms has fallen by around 60% to 95% from the highest to the lowest point.

On average, based on weekly volume, the volume of bitcoin fell by around 72% in the past four months as the Bitcoin price dropped below several key support levels, below $8,000.

However, Gong noted that despite the sluggish growth of the cryptocurrency market heading into the last quarter of 2019, the total monthly cryptocurrency futures market volume rose from $50 billion to $280 billion in July, in merely a span of several months.

Gong said:

“The total futures market volume has actually increased significantly in the second half of 2019. Earlier this year, the total monthly futures volume was around $50 billion USD, then jumped to $280 billion in July. We have seen increased activities from traders transferring in and out from spot to futures during volatile periods.”

Throughout the past five years, the cryptocurrency market has seen a pattern of a rally followed by a steep correction, a build phase, and a recovery period.

While the volume of the global bitcoin futures market has noticeably dropped since July concurrent with the large pullback of the bitcoin price, year-to-date, the volume of the bitcoin futures market has increased by around two-fold, similar to the spike in the price of bitcoin from $4,000 to just below $8,000.

Futures trading is an important new market for exchanges of all sizes

Earlier this week, Binance officially announced the completion of its 9th quarterly BNB burn of $36.7 million worth of BNB, indicating a quarterly profit of over $183 million.

Most of the volume of Binance and other major cryptocurrency exchanges in the third quarter of 2019 has come from July and August when the price spike of bitcoin to the $12,000 to $13,000 range led alternative cryptocurrencies like Ethereum and XRP to demonstrate a strong short term performance.

During a market downturn, however, the alternative cryptocurrency and spot markets tend to stagnate, and futures trading could provide a consistent stream of volume and revenue for both minor and major exchanges.

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As Bitcoin price nears 50% drop, analyst foresees deeper correction for Ethereum

Since achieving $13,920 at the yearly peak, the Bitcoin price is nearing a 50 percent drop and according to a technical analyst, it could mean a larger correction for Ethereum.

Within three months, the bitcoin price has declined by 43 percent against the U.S. dollar and a dip below the $7,000 level would indicate a 50 percent+ slip for BTC since the 2019 high.

If the Bitcoin price drops further, according to a technical analyst known as “Dave the Wave,” it will likely cause a deeper pullback for Ethereum.

Where is the potential bottom for both bitcoin and Ethereum?

In an event in which the declining volume in the global bitcoin market continues to fuel sell-pressure and causes a sub-$7,000 drop, the analyst said that $144 remains as a potential medium-term bottom for Ethereum.

As previously reported by CryptoSlate, the daily volume of bitcoin on BitMEX, the most widely utilized margin trading platform by cryptocurrency traders, dropped by 95 percent from the yearly peak to the lowest point of the year.

The daily volume of BTC across most major cryptocurrency exchanges has dropped to levels seen in the first quarter of 2019, suggesting stagnancy in the cryptocurrency market.

For bitcoin, in the short term, Dave the Wave noted that a drop to the low $6,000 region should not be alarming based on its performance throughout the past several months.

The analyst, referring to the $6,000 region said:

“Blue lines equate to the cyclical mean. Notice how much more price deviated from the mean in this cycle. Price being much more volatile both below and above the line, so shorter-term MAs are less significant. A further correction back to the line should not be alarming.”

Bigger picture

Still, as reported by BNN Bloomberg’s Jon Erlichman, the bitcoin price has outperformed all major stock indices in year-to-date performance.

bitcoin price
The bitcoin price is still up by nearly two-fold year-to-date, outperforming stock indices (source: Jon Erlichman Twitter)

The Bitcoin price opened at just above $4,000 at the start of 2019 and since then, it has increased by nearly two-fold.

Ethereum has also seen increasing usage from enterprises like Microsoft and Ernst & Young. According to Decrypt, E&Y is processing over 10,000 transactions per day on the Ethereum network for Microsoft.

EY’s global blockchain leader Paul Brody said:

“We’re doing more than 10,000 transactions per day for Microsoft. We have seven major video games suppliers live and we’re expanding the footprint of that service.”

Strong fundamentals of both bitcoin and Ethereum as well as key catalysts in 2020 such as the block reward halving of BTC still have many investors optimistic about the medium to long-term trend of both Bitcoin and Ethereum.

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Legendary billionaire investor warns big economic slowdown; how will Bitcoin react?

Ray Dalio, Co-Chairman and Co-Chief Investment Officer at Bridgewater Associates with a net worth of over $18 billion, warns stimuli from central banks won’t reverse global economic slowdown, which may affect bitcoin in the medium term.

While bitcoin has been described as a safe haven asset by some, researchers like Thomas Lee at Fundstrat believe BTC has demonstrated qualities of a risk-on asset in recent months and it tends to move in tandem with the equities market. Lee on CNBC’s Fast Money said:

“I think the next big catalyst is a decisive breakout in the equity markets. I think once equities break an all-time high, bitcoin becomes a risk-on asset.”

If Bitcoin continues to follow the trend of the equities market and if the slowdown of the global economy begins to take a toll on the stock market, some speculate on the possibility of it placing more sell-pressure on BTC.

Why Bitcoin could be a risk-on asset

Bitcoin is an alternative store of value and with the emergence of regulated trading venues in the likes of CME’s futures exchange, Bakkt, and other custodial solutions, it has garnered the interest of institutional and accredited investors.

However, purely based on its market capitalization and volatility, Bitcoin is still considered to be a high-risk asset by most investors and when fears of recession rise, accredited investors could dispose of high-risk assets first.

According to Dalio, the global economy has become a “great sag” and has entered a period in which loose monetary policies and interest rate cuts will not alleviate enough pressure on the markets.

“This cycle is fading, we are now in the world in what I would call a ‘great sag,’ he said, noting that like 1930s, disputes between key economies are increasing geopolitical risks in the global market.

Dalio added:

“Also like the 1930s, we have a rising power challenging an existing world power in the form of China-U.S. challenges.”

Currently, both skeptics and optimistic investors generally agree that the accommodative stance of the Federal Reserve and the likelihood of additional interest rate cuts are maintaining the momentum of the U.S. equities market despite the lack of a finalized trade deal between the U.S. and China.

If interest rate cuts begin to have less impact on fueling the growth of the economy, it could lead investors to take on a more aggressive approach in safeguarding their assets through traditional safe havens like bonds and gold, potentially causing a bitcoin sell-off.

Not enough data yet

For now, there is no sufficient data to conclusively determine that bitcoin is a risk-on asset and that investors would initiate a sell-off as recession fears intensify.

Bitcoin price - 1 year
The bitcoin price fell by around 50% in late 2018 as fears of recession mounted (source: CryptoSlate / CryptoCompare)

Bitcoin showed signs of a risk-on asset in late 2018 when the lack of progress in the U.S.-China trade talks led to a near 50% fall in the price of bitcoin.

The sell-off in late 2018 could have been a coincidence and as such, it remains to be seen whether bitcoin would act as a safe haven asset or a risk-on asset in the upcoming months, as the outlook of the global economy declines.

The post Legendary billionaire investor warns big economic slowdown; how will Bitcoin react? appeared first on CryptoSlate.

Bitcoin fails to recover as weekly volume on BitMEX drops 72% in 3 months, traders bearish

The bitcoin price has failed to push above a relatively low resistance level at $8,374, making a bigger pullback into the mid-$7,000 region more likely.

According to Arca’s chief investment officer Jeff Dorman, the current state of the cryptocurrency market, given the low volume of bitcoin, incentivizes traders to short bitcoin until bottom levels are hit.

Traders in the cryptocurrency market often utilize BitMEX to place long or short BTC contracts and the low volume of the exchange could make it easier for bears to maintain control.

Since the July peak earlier this year during which the bitcoin price spiked to as high as $13,920, the weekly volume of BTC on BitMEX has dropped from $55 billion to around $15 billion, by more than 72 percent.

The volume of BitMEX, in particular, is important for traders as it is the largest margin trading platform in the global cryptocurrency market, and it is speculated to have the biggest impact on the short term price trend of bitcoin.

Traders are not discarding potential drop of bitcoin to $6k

Some traders who are considered to trade with large size on cryptocurrency margin trading platforms are not dismissing the possibility of bitcoin dropping to the low $6,000 region in the short term.

Since early 2019, bitcoin traders who have been gearing towards a bearish medium-term trend have consistently emphasized $6,300 to $6,500 as an area of significant historical activity that could serve as a bottom for BTC heading into 2020.

A technical analyst who operates with the alias “Dave the Wave” noted that short term momentum indicators have become increasingly irrelevant due to high volatility.

bitcoin price
Momentum indicators are not relevant during the current bitcoin price trend says analyst (source: Dave the Wave Twitter)

As such, with the declining volume of BTC on BitMEX and other spot exchanges causing a build-up of sell-pressure, technical analysts foresee a further 30 percent to 40 percent pullback from current levels.

Altcoin market isn’t doing any better

Major cryptocurrencies in the likes of Ethereum and XRP have been underperforming against both bitcoin and the U.S. dollar since the beginning of the year.

From their record highs, the price of Ethereum and XRP have fallen by 88 percent and 92 percent respectively, while BTC has dropped by less than 60 percent in around the same period.

The lagging growth of the altcoin market, following predictions of an altcoin season in July, has led the valuation of the cryptocurrency market to slip by 42 percent within less than four months from $385 billion to $220 billion.

For bitcoin and the cryptocurrency market to recover to key resistance levels, it would need to be supplemented with a noticeable spike in daily and weekly volume.

For now, there are little signs of a potential trading volume upsurge in the cryptocurrency market.

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