Category: btcusd



Bitcoin ‘heavy breakout’ fractal suggests BTC price can hit $250-$350K in 2021


The analogy appeared in anticipation that Bitcoin could post a 2017-like bull run, in which the price rose by more than 1,900%.

Bitcoin (BTC) has the potential to push its prices to between $250,000 and $350,000 by the end of 2021, a long-standing fractal suggests.

First spotted by pseudonymous analyst Bit Harington, the bullish setup drew its inspirations from Bitcoin's secular bull runs every time after halvings when the miner block reward gets cut in half. Analysts perceive the halving as a bullish event, which reduced the supply of newly mined BTC. 

Harington reminded that Bitcoin's prices surged by more than 600% after the first two halving events in 2012 and 2016 when measured from a so-called resistance/support (R/S) line, as shown in the chart below.

Bitcoin price performance after the first two halving events. Source: BuyBitcoinWorldWide, PlanB, and Bit Harington

The line represented a barrier during the period of price uptrend. Traders tested it for a breakout multiple times before successfully breaching it to log a new record high. When prices started correcting, they eventually bottomed out near the same line.

In 2020-2021, Bitcoin underwent a similar upside trajectory, bouncing from below $4,000 to rising to above $60,000. Again, Harington highlighted the $60,000-level as the same R/S line that kept trades from logging a clear bullish breakout.

The analyst hinted that Bitcoin would break above it to soar towards a new record price level.

Cointelegraph Markets analyst Michaël van de Poppe reacted to Harington's fractal theory, adding that it would lead the Bitcoin prices to the $250,000-$350,000 range.

He noted, however, that the massive run-up could also prompt a brutal correction that can push Bitcoin prices back toward $65,000, right near the Harington's S/R level of $60,000.

Do fundamentals agree?

Bitcoin skyrocketed after crashing below $4,000 in March 2020 primarily due to the global central banks' loose monetary policies to curb the economic aftermath of the Covid-19 pandemic. The cryptocurrency closed the year at around $30,000, as retail and institutional investors woke up to its safe-haven narrative against a falling U.S. dollar and rising inflation fears.

So far in 2021, the price of Bitcoin topped around $65,000 before correcting lower below $50,000. At its year-to-date (YTD) low, the pair traded for $29,301 on the Coinbase exchange. Its losses were led by a sudden ban on all crypto activities in China (including mining) and Elon Musk's alarming tweets over Bitcoin's booming carbon footprints.

Bitcoin price performance throughout the history. Source: TradingView.com

BTC balance on exchanges drops to fresh lows

The cryptocurrency held prices above $30,000 as its reserves across exchanges dropped significantly.

Blockchain data analytics service CryptoQuant reported that Bitcoin's balances across the crypto trading platforms slipped to around 2.37 million BTC last week, its lowest in more than a year.

Bitcoin reserves across all exchanges. Source: CryptoQuant

A decrease in Bitcoin reserves represents traders' intentions to hold the cryptocurrency instead of trading it for altcoins and fiat currencies.

Bitcoin hashrate has nearly recovered

Bitcoin's recovery from below $30,000 to almost $50,000 also coincided with its V-shaped hashrate recovery.

Related: BTC price falls back to $47K as weekly close neatly tracks Bitcoin futures gap

For the uninitiated, the Bitcoin network's computation power plunged to 84.79 million terahashes per second (TH/s) in early July from 180.66 million TH/s in late May. The drop surfaced as many miners responded to China's crypto crackdown by either shutting down their facilities or moving their operations abroad.

The seven-day average Bitcoin hashrate in recent history. Source: Blockchain.com

But the network recovered more than half of its lost hashrate, hitting 136.92 million TH/s on Sept. 18, indicating that China's direct ban did not have a prolonged effect on Bitcoin's mining sector. 

The views and opinions expressed here are solely those of the author and do not necessarily reflect the views of Cointelegraph.com. Every investment and trading move involves risk, you should conduct your own research when making a decision.












Bitcoin’s key momentum metric just flashed bearish with BTC price pinned under $50K


The relative strength index is making lower highs while correcting from its overbought area.

The run-up in the Bitcoin (BTC) price toward $50,000 last week risks exhaustion due to a mismatch between the cryptocurrency's price and momentum trends.

So it appears the Bitcoin's price and relative strength index (RSI) have been moving in the opposite direction since late July. In doing so, even a strong push higher in the BTC/USD bids has coincided with lower peaks in momentum, suggesting that the pair's upside momentum is weakening out.

Bearish divergence

A normal RSI momentum tends to tail the price action. That said, it rises when the price rises and falls when the price drops. But in some cases, the RSI deviates from pursuing the price trends, leading to a so-called RSI divergence.

Technical analysts consider RSI divergence as a powerful signal to spot price reversals. For instance, a bullish divergence, wherein the price falls and RSI rises, prompts traders to buy the asset in anticipation of a rebound. Similarly, a bearish divergence—featuring rising prices and falling RSI—prompts traders to take profits at the top while expecting a pullback.

The Bitcoin daily chart below shows the cryptocurrency in bearish divergence.

BTC/USD 1D chart featuring bearish divergence. Source: TradingView.com

The downside signal appears as Bitcoin struggles to break bullish above $50,000. As of Sunday, the benchmark cryptocurrency was trading at $48,387, or 4.19% lower from its three-month high of $50,505, achieved on Aug. 3, following a similar 72.36% upside boom.

On the other hand, Bitcoin's daily RSI initially rallied in sync with prices but topped out on July 30, which was way ahead of price, hitting $50,505. Since July 30, the Bitcoin price formed a sequence of higher highs while RSI printed lower highs, suggesting a weakening upside momentum.

A similar bearish divergence between January and April 2021 was instrumental in predicting a Bitcoin price drop, as shown in the chart below.

Bitcoin price-RSI divergence from January-April 2021 period. Source: TradingView.com

Bullish indicators

The bearish divergence signal comes as Bitcoin holds strongly above $30,000, amidst anticipation that it would become a hedge of choice among accredited investors against inflationary pressures.

The perception has led many analysts, including investment researcher Lyn Alden and Fundstrat CEO Tom Lee, to predict a $100,000 valuation for the cryptocurrency in 2021.

On Friday, Bitcoin price shot upward by $1,500 in an hour after Federal Reserve Chairman Jerome Powell presented a pro-inflation, dovish policy outlook at this year's Jackson Hole symposium.

As a result, the biggest bullish indicator for Bitcoin remains the Fed's aggressive $120 billion a month asset purchase program, coupled with its near-zero interest rate policy.

Related: Bitcoin price stages a comeback as 3 indicators reflect BTC’s strength

The strong fundamental has prompted technical analysts to envision a long-term uptrend in the Bitcoin market. Namely, independent market analyst Teddy Cleps presented a bullish outlook for the cryptocurrency, based on key wave support that acts as an accumulation area for traders.

Bitcoin 4H chart featuring wave support. Source: Teddy Cleps, TradingView.com

Similarly, Ryan Clark, another market analyst, noted that Bitcoin has been merely consolidating below $50,000 just like when it was trading below $24,000 before the December 2020's bullish breakout.

On the other hand, TraderXO noted that Bitcoin could still fall towards the $39,000-40,000 area but remained convinced that the cryptocurrency would log an attractive rebound from the lower range.

The analyst marked Bitcoin's all-time high near $65,000 as its long-term upside target.

The views and opinions expressed here are solely those of the author and do not necessarily reflect the views of Cointelegraph.com. Every investment and trading move involves risk, you should conduct your own research when making a decision.





Bitcoin slides with S&P 500 as Fed signals tapering $120B monthly bond purchases


The benchmark cryptocurrency retreated alongside risk-on markets as investors shifted their exposure to the U.S. dollar.

Bitcoin (BTC) prices briefly fell below $44,000 on Thursday as the United States Dollar strengthened after the U.S. Federal Reserve policy minutes revealed its intentions to limit its bond-purchasing program this year.

Bitcoin risks $45,000 becoming new resistance 

The spot BTC/USD rate dropped 1.71% to a new week-to-date low of $43,955. The pair’s plunge appeared as a part of a technical correction that started after it had reached a three-month high of $48,176 on Saturday, following a 64.42% price rally.

Bitcoin daily price chart. Source: TradingView

Bitcoin’s latest price decline also surfaced in line with a similar market bias on Wall Street. For instance, the benchmark S&P 500 index lost 47.81 points, or 1.1%, dropping to 4,400.27 during Wednesday’s final hours of trading.

Similarly, the Dow Jones and the Nasdaq Composite also plunged 1.1% and 0.9%, respectively. In addition, CNBC’s pre-market data revealed that futures tied to Wall Street indexes dropped on Thursday, hinting that the markets will likely continue their declines after the New York opening bell later on Thursday. 

On the other hand, the U.S. dollar index (DXY) benefited from declining risky markets. The index, which measures the greenback’s strength against a basket of top foreign currencies, surged 0.39% to a six-month high of 93.50 before correcting lower by modest margins.

U.S. dollar index daily chart highlighting an inverse head and shoulder setup. Source: TradingView

Tapering alert

The U.S. Federal Reserve’s July 27–28 meeting, released Wednesday, showed an emerging consensus to unwind its $120-billion monthly purchases of Treasury and mortgage-backed securities.

Most central bank officials agreed that the U.S. economic recovery is on the right path, which is an appropriate reason to reduce the pace of asset purchases. But they did not reveal when they should begin the tapering, with only three remaining Federal Open Market Committee meetings left to attend this year.

Officials also agreed that scaling back asset purchases would position them to raise interest rates should the economic recovery persist as anticipated. But they said that they want to see stronger evidence that the labor market has recovered from the aftermaths of the COVID-19 pandemic, the minutes revealed.

On inflation, the minutes showed Fed officials anticipating a temporary burst. They highlighted that their preferred gauge of inflation, after excluding volatile food and energy categories, was at 3.5% in June — a 30-year high — but anticipated declines by calling the upswing in consumer prices transitory.

Bullish exhaustion ahead?

In detail, excessive bond-buying ended up sending U.S. debt yields to a low of 0.66% in 2020. Even the bounce back recorded at the beginning of 2021 kept the yields near their record lows. The trend was the same across the globe, wherein the amount of debt offering negative yields recently stood at $16.5 trillion, a six-month peak.

Long-term government bond yields are declining across developed economies. Source: FRED

The lower rate of returns has sparked a series of rotations in the equity market, with indexes logging record highs. The S&P 500 rallied 19.01% year-to-date to hit a lifetime peak of 4,480.26 points, while the Dow Jones jumped 16.30% year-to-date to reach an all-time high of 35,369.87 points.

Bitcoin, which emerged as a safe-haven alternative to the U.S. dollar and gold in 2020, also rose alongside the Wall Street index. In 2021, it has penned a record high near $65,000, with analysts crediting the Fed’s loose monetary policies as one of the leading catalysts behind its price rally.

But the biggest question remains of whether or not tapering will rotate capital out of the markets, which boomed during the period of quantitative easing, especially now Bitcoin that is sitting atop over 1,000% in profits following the Fed’s loose policy introduction in March 2020.

Jon Ovadia, founder of South Africa-based crypto exchange Ovex, noted that a declining cash flow from the Fed’s coffers would likely halt the growth of Bitcoin and similar risky assets in the near term.

Related: Cause and effect: Will the Bitcoin price drop if the stock market crashes?

“The factors that support the growth of Bitcoin, in particular, goes beyond just the Fed’s interference in keeping the economy healthy,” he explained, adding:

“However, on the macroeconomic front, Bitcoin investors will have to factor in the prospective impact and hang on to other fundamentals that abound in the crypto market to keep prices at record levels.”

Bitcoin will have refreshed record highs by Q1/2022

James Wo, founder and CEO of Digital Finance Group, called the latest price declines in Bitcoin and the equity market “reactionary” in nature. But he stressed that risk-on assets would continue their upward momentum in the long term due to inflationary pressures.

Related: Bitcoin set to replace gold, says Bloomberg strategist on Bretton Woods’ 50th anniversary

“Nominal inflation will take time to get back to levels seen before the pandemic,” he said.

“I continue to believe that we are still on track to reach all-time highs by Q4 2021–Q1 2022.”

The views and opinions expressed here are solely those of the author and do not necessarily reflect the views of Cointelegraph.com. Every investment and trading move involves risk, you should conduct your own research when making a decision.









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