Bitcoin 'supercycle' sets up Q4 BTC price top as illiquid supply hits all-time high

Bitcoin (BTC) is gearing up for a comeback which should lead it to repeat classic bull run years 2013 and 2017, analysts are arguing.As $42,400 local highs appeared on July 31, narratives around the market are flipping back to a bullish Bitcoin “supercycle.”Bulls come out for 2021 closeBitcoin has been busy repairing the impact of the China miner rout since mid May, but last week’s price advances were stronger than most anticipatedRelated: Bitcoin open interest mimics Q4 2020 as new report ‘cautiously optimistic’ on BTC rallyRather than suffer a serious dip, BTC price action has held onto its gains, which at the time of writing total 23% in a week.What seemed all but impossible just seven days ago is now flavor of the month among an increasing portion of the analytical community.“History doesn’t repeat itself but it often rhymes” #bitcoinA repeat would be a Q4 blow off top. New ATH’s into 2022 seem more likely. Super cycle/last cycle will depend on what happens in 2023 IMO. https://t.co/07Ryn3pcTf— ChartsBTC (@ChartsBtc) July 31, 2021″Following a troubling three months of news and price action, bitcoin went on to print five green monthly candles in a row and went up ~10x in the second half of 2013,” Jeff Ross, founder and CEO of Vailshire Capital, said in Twitter comments Saturday. “I still contend that 2021 will behave in similar fashion.”BTC/USD 1-month annotated candle chart. Source: Jeff Ross/ TwitterWith its latest uptick, meanwhile, BTC/USD broke through its 21-week exponential moving average, something which analyst Rekt Capital described as a “time-tested bull market indicator.”The supply shock is backWhile Ross added that such a prediction was “just a guess,” he has an increasing number of on-chain indicators to support him.Hash rate is back above 100 exahashes per second (EH/s) after bottoming at 83 EH/s, while difficulty saw its first positive readjustment since the May price crash on Saturday.Investor behavior further mimics the change in sentiment. Strong hodlers with little to no history of selling their BTC are now back in control at levels never seen before andabsent since Bitcoin’s current all-time high of $64,500 in April.”This is very bullish,” Lex Moskovski, chief investment officer of Moskovski Capital, summarized alongside an accompanying chart from Glassnode. It showed hodler conviction in terms of an increasing amount of the BTC supply becoming illiquid — taken off the market.Bitcoin illiquid supply annotated chart. Source: Lex Moskovski/ Twitter”Bitcoin ‘supply shock’ is now at levels that previously priced Bitcoin at $53K,” fellow analyst William Clemente commented on the same data. “Consolidation after 10 straight green days is very reasonable but still remain bullish over the coming weeks.”

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Bitcoin records rare 10-day winning streak as BTC price taps $42K ceiling

Bitcoin (BTC) shot to new highs of $42,400 on July 31 in a surprise attack on range resistance which sellers failed to squash.BTC/USD 1-hour candle chart (Bitstamp). Source: TradingViewBitcoin seals 10 green candles in first since 2012Data from Cointelegraph Markets Pro and TradingView showed BTC/USD gaining for a tenth straight day across exchanges, reaching $42,420 on Bitstamp.A subsequent cooling-off preserved most of the gains, with Bitcoin circling $41,900 at the time of writing, still up over 8% over the past 24 hours.In trading circles, talk focused on a rare performance for the Bitcoin daily chart — ten green candles in a row, after all, last occurred in 2012.Bitcoin has closed 10 straight green daily candles! pic.twitter.com/6FEG4CgqLl— Will Clemente (@WClementeIII) July 31, 2021Even eight days of consecutive gains are a rarity, while nine have been seen only twice. Depending on the exchange, the data can be slightly different — Coinbase saw 12 green candles one after another in May 2017, one Twitter user noted.Regardless, conspicuous was on one hand Bitcoin’s strength, and on the other the lack of bearish selling pressure.A glance at short activity on major exchange Bitfinex underscored the current mood, with hardly any trader willing to take on the risk of shorting the Bitcoin spot price at current levels.BTC/USD shorts 1-day candle chart (Bitfinex). Source: TradingView”BTC just tapped 42k as resistance for the first time since the epic drop in May,” popular trader Scott Melker summarized on the day. “Time to pay attention.”Cracks appear in Bitcoin’s ceilingAs Cointelegraph reported, $42,000 represents the final resistance hurdle in Bitcoin’s multi-month trading range. Since coming down from all-time highs and falling through the level, which also represents the previous all-time from February, it has acted as a de facto unchallenged price ceiling.Related: Price analysis 7/30: BTC, ETH, BNB, ADA, XRP, DOGE, DOT, UNI, BCH, LTCAbove, orderbook data shows, little lies in Bitcoin’s way — $45,000 or even $47,000 could easily be next, a hypothesis also supported by whale investing behavior.BTC/USD buy and sell positions (Binance) as of July 31. Source: Material Indicators/ TwitterAccording to the popular and historically accurate stock-to-flow Bitcoin price forecasting models, spot price should still be much higher — $94,839 on Saturday.Nonetheless, its creator, PlanB, has said that a monthly close of at least $47,000 for BTC/USD in August would be enough for progress to remain on track.

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$25B investment firm adds 'riskier' Grayscale GBTC and ETHE for clients

Bitcoin (BTC) and Ether (ETH) exposure has come to one of the world’s biggest automated investment firms.In a blog post on July 29, Wealthfront, which has $25 billion in assets, confirmed that it had added two Grayscale funds to its suite of investment options.GBTC buzz returnsThe recent rise in cryptocurrency prices has kept institutional products such as Grayscale’s various funds in the spotlight.Wealthfront, an example of a so-called “robo advisor” in the investments space, will now allow its clients exposure to the Grayscale Bitcoin Trust (GBTC) and Grayscale Ethereum Trust (ETHE).”Buying cryptocurrency can feel intimidating — it takes time and effort to research all of the options, set up a wallet, and monitor an additional account. That’s why we’ve made it easy to get exposure to Bitcoin and Ethereum right in your Wealthfront portfolio, no wallets required,” the blog post explains.”Instead of buying coins yourself, you can invest in GBTC and ETHE.”Clients will be able to have up to 10% of their portfolio in Grayscale products, a limit the firm attributes to the “riskier and more volatile” nature of crypto products.The move nonetheless reduces the ease-of-access dilemma faced by those interested in Grayscale’s funds, which are not always directly available, and place strict rules on shareowners.Alongside Grayscale, meanwhile, Wealthfront increased its offering of exchange-traded funds (ETFs) from ARK Invest, itself a major GBTC stakeholder.ARK Invest’s GBTC holdings (purple). Source: Cathiesark.comWhat unlocking?The announcement comes as institutional interest in Bitcoin in particular shows no signs of decreasing at prices around $40,000.Related: Bitcoin open interest mimics Q4 2020 as new report ‘cautiously optimistic’ on BTC rallyAs Cointelegraph reported, exchange balances have fallen sharply this week, as over-the-counter (OTC) desks also see significant activity.For its part, Grayscale has rid itself of a negative narrative surrounding unlocking of GBTC shares after the events had no perceptible impact on BTC price action.Remember when all the traditional analysts said the Grayscale unlock would unleash billions in selling this last week? Yeah, no.— Willy Woo (@woonomic) July 29, 2021Its CEO, Michael Sonnenshein, this week reiterated a pledge to turn all Grayscale crypto funds into ETFs at the earliest opportunity, subject to regulatory changes in the United States.

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