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One of the many beauties of Bitcoin is that the blockchain backing it is simultaneously pseudonymous and transparent, meaning that you can look into, say, the number of BTC in existence but not know who (or what) owns coins. The pseudo-transparency exhibited by Bitcoin has created an industry and art around “chain analysis,” which gives researchers a way to delve into the cryptocurrency economy in ways others can’t.

Case in point, top blockchain analytics site BitInfo Charts recently observed that 11.58 million Bitcoin — more than 50% of all of the cryptocurrency in circulation, which is valued at over $70 billion as of the time of writing this — has not moved in over a year. This also means that less than 6.8 million BTC has changed hands in the last 12 months.

This could imply that there remains strongly positive sentiment in the cryptocurrency market, despite the 50% downturn seen in the price of Bitcoin over the past five months. The thing is, if you didn’t have chain analytics, you wouldn’t have been able to come to this conclusion.

Related Reading: Bitcoin Price’s November Close Triggers Medium-Term Sell Signals

What Does This Stat Imply? 

Yes, CoinMetrics estimates that over 4 million BTC — just under half of the “dormant” coins — have been lost to the ether, with owners of said keys losing access to their keys, passing away, opting not to access the coins for other reasons, etc.

Though, the fact that there’s a large portion of BTC, and thus investors in the industry that have yet to move their coins, despite the near-100% performance this year implies largely positive sentiment.

Related Reading: Strong NYSE Composite, Dow Jones May Give Bitcoin a Boost Into 2020

Why Are HODLers Bullish on Bitcoin? 

But why are they bullish? Why are the holders of the dormant Bitcoin fine with sitting through parabolic run-ups and brutal drawdowns? We don’t have a comprehensive list for the reasonings of so-called “HODLers,” but here are a few reasons why as explained by Thomas Lee of Fundstrat Global Advisors in a recent CNBC “Market Alert” segment.

Firstly, the popular researcher noted that the strength in traditional equities is likely to provide BTC with some positive momentum heading int 2020. More specifically, he believes that the positive performance seen in American stocks should set the stage for risk-tolerant investors to start siphoning capital back into Bitcoin and other markets deemed “risky” by classical investors.

Secondly, the block reward reduction is taking place within the next six months. Lee thinks that this will have a positive effect on the long-term outlook for Bitcoin’s price.

And lastly, the Fundstrat executive noted that while China has taken a harsh approach in regulating Bitcoin in its latest blockchain campaign, he believes the country remains pro digital assets.

Related Reading: Crypto Tidbits: Bakkt’s Bitcoin Futures Surge, UpBit Hacked for $50 Million in Ethereum, US Arrests Blockchain Researcher
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Nick Chong , 2019-12-02 14:00:22

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NewsBlock © 2019 - 2020 All rights reserved.

NewsBlock © 2019 - 2020. All rights reserved.

While Bitcoin’s price seemingly moves without rhyme or reason — collapsing by dozens of percent and embarking on face-melting rallies on a whim — the cryptocurrency market is filled to the brim with fractals.

Related Reading: Analyst: Bitcoin Price Likely to Fall to Low-$8,000s as Chart Remains Weak

A brief aside: A fractal, in the context of technical analysis and financial markets anyway, is when an asset’s price action is seen during a different time. This form of analysis isn’t that popular, but it has proven to be somewhat valuable in analyzing Bitcoin.

One recent fractal popularized by a well-known cryptocurrency trader is implying that BTC is going to return to the low-$7,000s in the coming days.

Bitcoin Fractal Implies Retracement to Low-$7,000s

A well-known crypto trader going by “Tyler Durden” on Twitter recently posted the chart below, which shows that a Bitcoin price fractal may be playing out. The fractal has four phases: horizontal consolidation marked by one fakeout, a surge above the consolidation phase, a distribution, then a strong drop to fresh lows.

If the fractal plays out in full, BTC could reach the low-$7,000s again, potentially as low as $7,100. This would represent a 20-odd percent collapse from the current price point of $8,800.

It isn’t only a fractal that is hinting Bitcoin has the potential to visit its lows. As we reported on Saturday, Bloomberg believes that if the GTI Vera Convergence Divergence Indicator flips red, a downtrend could push the cryptocurrency back to $7,300.

Related Reading: Stephen Colbert Pokes Fun at Bitcoin in Monologue: Mainstream Gone Wrong?

Can Bulls Step In?

But again, many believe it is irrational to have such bearish interpretations of the cryptocurrency’s chart at the moment. As reported by NewsBTC earlier, Popular crypto trader Mayne recently noted that the “people waiting for $6,000” are irrational. He quipped that Bitcoin retracing and consolidating after its fourth-biggest bull move in history ($7,300 to $10,500, a 42% gain) is perfectly par for the course, but noted that it’s totally possible we can go lower from $8,800.

The medium-term technicals support this.

Trader and CoinTelegraph contributor FilbFilb found that by the end of November or start of December, the 50-week and 100-week moving averages will see a “golden cross,” which he claims is far more significant” for the Bitcoin market that other technical crosses.

Also, a Bitcoin price model created using Facebook Prophet machine learning found that the leading cryptocurrency is likely to end the year at just over $12,000. What’s notable about this model is that it called the price drop to $8,000 months in advance, and forecasted a ~$7,500 price bottom for BTC.

To put a cherry on the cryptocurrency cake, Crypto Thies observed that when Bitcoin bottomed at $7,300, it bounced decisively off the 0.618 Fibonacci Retracement of the move from $3,000 to $14,000, which correlates with the two-week volume-weighted moving average. He added that summer 2019’s consolidation was marked by Bitcoin flipping major resistances into support levels, implying that a bullish reversal and subsequent continuation is likely possible in the coming weeks.

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Nick Chong , 2019-11-10 12:00:38

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