$10,000 Bull Trap? Why Bitcoin Price Is Now Likely to Pull Back - Cointelegraph

$10,000 Bull Trap? Why Bitcoin Price Is Now Likely to Pull Back - Cointelegraph
J.P. Morgan—Bitcoin’s ‘Biggest Enemy’—Suddenly Appears To Be Going All In On Crypto - Forbes
Bitcoin’s $100K Probability – Speculation or Economic Theory Backed? - Finance Magnates
Bitcoin Price Drops to $8,840 — Key Metrics Signal BTC May Correct Further - Cointelegraph

Posted: 31 May 2020 02:24 AM PDT

Bitcoin (BTC) price was once again sideways last week with price action between bulls and bears proving to be equal. But scenarios look likely for Bitcoin as we approach the month of May comes to a close?

Let's take a look at what's happening with the largest cryptocurrency by market capitalization, BTC.

Daily crypto market performance. Source: Coin360.com

A bullish monthly candle close

BTC/USD 1-Month chart. Source: TensorCharts

Starting out on the monthly, we can see that Bitcoin grew in value by nearly 25% in the month of May. This is always a nice thing to see. However, since the March 12 dump, it's nothing for long term hodlers to get excited about just yet.

Nevertheless, as the one month candle is due to open above the .382 fib retracement level, a move up towards the .618 of $13,700 is something to be excited about. With that being said, let's not get ahead of ourselves, we first need to claim $11,800, and one cannot ignore that a move to the downside is always a possibility for the king of cryptos also.

As things stand, if June was to be bearish, a pullback to between $7,400 and $7,600 is where I'd be placing some buy orders, and that is what I'll explain today.

The monthly MACD is bullish

BTC/USD Monthly MACD. Source: TradingView

The monthly Moving Average Divergence Convergence (MACD) indicator is set to cross bullish. This indicates a return of upwards momentum for Bitcoin, and history tells us that this serves as a key buying signal to investors.

This is also reflected in the weekly MACD, which crossed bullish at the beginning of the month of May. So as things stand right this moment, Bitcoin looks strong on the higher time frames.

However, for more immediate price movement expectations, we need to drill down to the lower time frames to see what may be in store over the coming week.

Bearish divergence on the daily

BTC/USD daily MACD chart Source: TradingView

Bitcoin is not only flagging bullish on the weekly and monthly, but it is looking poised to cross bullish on the daily MACD. It almost seems like a trap, as conditions like this on this particular indicator are what dreams are made of.

However, with the price trending up and the indicator trending down we still have bearish divergence showing, and this is not a bullish sign in the least. This tells us that a pullback is due, and a glance over the lower time frames can show us where this might be.

Descending channel opening up

BTC/USD Daily chart. Source: TradingView

Taking a look at the daily time frame, we can see that Bitcoin broke down below the previous upward trend line last week, and the price has since continued to range through the previous support level, making it difficult to determine which direction the price wants to go.

This has caused a new downward channel to emerge on the charts, which puts $9,700 as resistance, and $8,700 as the midpoint level and $7,400 as support.

After such a big increase in price over the last eight weeks, a pullback is somewhat inevitable. However, I'd expect this to be short-lived due to the increased momentum across the higher frames.

Bearish scenario

BTC/USD Daily chart. Source: TradingView

Using the fib retracement levels on the daily chart, it gives us an idea of the levels to expect Bitcoin to hit should it pullback towards the midpoint of the descending channel.

This shows that support can be found at $8,613 with the key areas for a bounce being at $9,313 (the .382) and $9,046 (the .618)

Should the price retrace beyond $8,613, only then would $7,400 look like a realistic bottom.

Bullish scenario

From a bullish perspective, breaking $9,800 could put Bitcoin on a path to $11K and then on to $13,800.

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

J.P. Morgan—Bitcoin’s ‘Biggest Enemy’—Suddenly Appears To Be Going All In On Crypto - Forbes

Posted: 30 May 2020 04:53 PM PDT

J.P. Morgan, the largest U.S. bank by assets, has been waging a war of words with bitcoin and cryptocurrency for years.

The bitcoin price has swung wildly since J.P. Morgan chief executive Jamie Dimon called bitcoin a "fraud" in September 2017—rising to around $20,000 per bitcoin before crashing to under $4,000 (twice).

Now, J.P. Morgan's turbulent relationship with bitcoin appears to be rapidly softening, after the bank added its first crypto exchange customers and Dimon reportedly hosted secret meetings with the boss of major bitcoin and crypto exchange, Coinbase.

bitcoin, bitcoin price, crypto, JP Morgan, Jamie Dimon, image — J.P. Morgan chief executive Jamie Dimon has previously criticized bitcoin but the bank says it has ... [+] always "believed in the potential of blockchain technology."
AFP via Getty Images

Earlier this month, J.P. Morgan signed Coinbase and rival bitcoin and crypto exchange Gemini after a lengthy vetting period, it was first reported by the Wall Street Journal.

J.P. Morgan approved the two bitcoin exchanges' accounts last month and is already processing transactions—potentially signalling the end of the crypto industry's banking woes.

The bitcoin and cryptocurrency community has complained for years that banks including J.P. Morgan have denied them services and blocked accounts that dealt with crypto businesses.

Meanwhile, it has emerged Jamie Dimon has been hosting secret meetings with Coinbase chief executive Brian Armstrong since 2018, author Jeff Roberts revealed in his book, Kings of Crypto.

"Ironically, Brian Armstrong and Jamie Dimon of J.P. Morgan—who was the biggest enemy of bitcoin and has pissed on it for years—it turns out they were having secret meetings in 2018 at J.P. Morgan's headquarters," Roberts told Laura Shin's Unchained podcast while promoting the book, which charts Coinbase's rise to the top of the crypto industry.

However, J.P. Morgan's interest in cryptocurrencies might not extend all the way to bitcoin quite yet.

"We are supportive of cryptocurrencies as long as they are properly controlled and regulated," Umar Farooq, JP Morgan's head of digital treasury services and blockchain, said back in 2017.

J.P. Morgan launched its own answer to bitcoin last year, JPM Coin. Unlike bitcoin, JPM Coin is pegged to the dollar and aimed at speeding up and reducing the costs of global payments.

bitcoin, bitcoin price, JP Morgan, Coinbase, crypto, chart — The bitcoin price has swung from around highs of $14,000 per bitcoin to under $4,000 over the last ... [+] year--though bitcoin now be on course to be one of the best bets of 2020.
Coinbase

Meanwhile, some have accused Coinbase's Armstrong as being "skeptical" of bitcoin while working to promote other blockchain networks and cryptocurrencies such as ethereum.

"I'm sure he would deny it, but it's interesting to me that the CEO of the world's most prominent bitcoin-related company seems so skeptical of bitcoin," said Bloomberg editor and analyst Joe Weisenthal, commenting on a Twitter thread by Armstrong suggesting it might not be bitcoin that pushes the cryptocurrency ecosystem into the mainstream.

Despite J.P. Morgan's softening attitude toward bitcoin and crypto, the nascent technology is still fighting an uphill battle.

Earlier this year, Treasury secretary Steven Mnuchin warned "significant" new bitcoin and cryptocurrency regulations are on their way, Minneapolis Federal Reserve president Neel Kashkari branded cryptocurrencies "a giant garbage dumpster," and the Department of Justice called bitcoin mixing "a crime."

Just this week, Goldman Sachs listed five reasons that "cryptocurrencies including bitcoin are not an asset class" in a much-hyped but ultimately disappointing presentation titled "U.S. Economic Outlook and Implications of Current Policies for Inflation, Gold and Bitcoin."

Ernest Hemingway described going bankrupt as "gradually and then suddenly"—Wall Street's adoption of bitcoin and cryptocurrency could be happening the same way.

Bitcoin’s $100K Probability – Speculation or Economic Theory Backed? - Finance Magnates

Posted: 31 May 2020 01:05 AM PDT

Stemming from the confined venue of speculation and economic theory, there is much to address regarding the probability of whether Bitcoin will ever reach $100,000.

To bring light upon the query in motion, we'll analyze long-standing economic theories versus economist's doubts while taking under due consideration deeply-rooted market variables, projections, and global acceptance that are all bound to distill a change in the value of Bitcoin in one way or another.

The Most Diverse Audience to Date at FMLS 2020 – Where Finance Meets Innovation

With these truths in mind, let's begin.

What Crypto Enthusiasts Project

Cryptocurrency enthusiasts have long poised the likelihood of Bitcoin reaching $100,000.

Evidence of this can be noted from high-profile individuals such as Anthony Pompliano, Co-Founder and Partner of Morgan Creek Digital.

"…I still think Bitcoin will hit $100,000 by end of December 2021. Fixed supply. Increasing demand. Time will tell."

Charles Hoskinson, Ethereum Co-Founder, had tweeted in late 2019:

Bitcoin's price is going down? Remember everyone, after the FUD, news trading and manipulation clears out, we still have a global movement that's going to change the world. We will see 10k btc again and welcome 100k. Crypto is unstoppable. Crypto is the future pic.twitter.com/9vlgH4S7u2

— Charles Hoskinson (@IOHK_Charles) November 22, 2019

Then, of course, we have the more recent actionable insights rendered through " The Great Monetary Inflation" proclaimed by macro investor Paul Tudor Jones, who acquired Bitcoin as a hedge against inflation earlier this month.

Despite acquisitions and proclamations attesting to Bitcoin's impending worth, one should also assess whether these claims are rather a publicity stunt to increase Bitcoin participation or rather a deep-rooted belief originating from a coupling between past experiences and a desperate desire of riches to prolong extravagant lifestyles.

Regardless, these speculations should be taken with a grain of salt and weighed accordingly.

Addressing Economic Theory & Models

While crypto enthusiasts rely upon speculation in the crypto news, investors and Bitcoin participants tend to primarily formulate their assumptions upon tangible evidence that is derived from projection models and macroeconomic theories.

Projection models such as the Bitcoin S2F Model and M2 capitalization theory project astronomical valuations for Bitcoin but as time has shown us one of these models has already been debunked.

M2 Capitalization Theory

Over the past few years, and more prominent now as a method used to combat the financial ramifications of the Coronavirus pandemic, quantitative easing has been performed by countries' central banks.

Take for instance the U.S. Federal Reserve, which has been printing U.S. dollars at an exponential rate since 1970.

Perhaps the most noticeable effects of the exponential printing of U.S. dollars would be inflation, where the price of goods and services has been rising in unison to meet the money supply.

Generally, a healthy economy would be characterized through depreciation in prices due to entities finding more efficient and affordable alternatives for similar goods and services but that is not the case.

To highlight the core point of this theory, should the Federal Reserve continue to print U.S. dollars at an exponential scale then, as a result, the U.S. dollar price of Bitcoin will also continue to rise at an exponential rate until it has reached a value of $100,000 per Bitcoin.

Bitcoin Stock-to-Flow Cross Asset Model

Also known as the Bitcoin S2F model, the Bitcoin Stock-to-Flow Cross Asset Model ratio created by @100trillionUSD seeks to measure the effect of scarcity on BTC price through measuring current Bitcoin circulation and production rate.

As @100trillionUSD suggested in 2019 through Modeling Bitcoin Value with Scarcity, "The predicted market value for bitcoin after May 2020 halving is $1trn, which translates in a bitcoin price of $55,000. That is quite spectacular. I guess time will tell and we will probably know one or two years after the halving, in 2020 or 2021. A great out of sample test of this hypothesis and model."

While it doesn't take a mathematician to deduce how significantly short this economic model failed, up to 8 additional flaws have been reported regarding the Bitcoin scarcity valuation model.

As a result, we can no more put stock in economic theory than we can through unwarranted speculations.

Economists Debate

The most level-headed forerunners for predicting future Bitcoin prices may be contributed to economists who have yet to be proven incorrect regarding their cynical-based projections.

Such examples include the projection laid upon us by Kenneth Rogoff, an economist and Harvard University professor, who went on to express the following during a CNBC interview:

Black Swan Consideration

While speculation and debunked theories are two sides of the same coin, black swan events are an entirely different entity that has been known to characterize an era of hardship and uncertainty.

Unforeseen black swan events, such as the recent Coronavirus Stock Market Crash, have gone to illustrate that no economy is impervious to flaws while also dismantling the long-standing ideology that Bitcoin is a 'safe haven' asset.

Given the ramifications that can materialize from the wake of black swan events, no Bitcoin valuation can be complete without the possible occurrence of these devastating events.

To expand, modern times must be taken into account.

Such as, those of us reading this have already survived one black swan event but given how countries are starting to open their borders and governing states are once again re-opening their economies, the likelihood of another black swan event occurring as the byproduct of a second outbreak of Coronavirus only increases with each easing of confinement limitations folded back.

Therefore, it would be optimistic to the point of foolishness not to weigh these truths in your mind when speculating the possibility of BTC reaching $100,000.

Bitcoin Adoption Feasibility

One variable piece of the puzzle that can significantly influence Bitcoin's likelihood of $100,000 per coin would be the mainstream adoption of Bitcoin.

Should a significant surge in Bitcoin participation become present, then the generalized economic theory of supply and demand can be implemented as an increase in participation will likely be contributed to an increase in demand.

Through an increase in demand comes an appreciation of value, which given how Bitcoin supply is limited, should further strengthen the ideology that an increase in Bitcoin demand will increase the price of Bitcoin.

Bitcoin Market Capitalization

Let's ditch the economic theories and speculations to conduct some simple arithmetic.

The maximum sum of Bitcoins that will exist is 21 million.

Should the value of Bitcoin reach $100,000 per coin then the total potential market capitalization of Bitcoin, once all mined, would be equivalent to $21 million x $100,000 = $2,100,000,000,000 or $2.1 trillion.

According to CNBC in late 2019, the value of the global equities market surpassed $85 trillion, or $85,000,000,000,000.

It should be noted that the global value of the equities for 2019 started under $70 trillion, meaning it saw an increase of no less than $15 trillion throughout the year 2019.

To put that into perspective, should Bitcoin reach a value of $100,000 per coin (even if all were mined) that would mean that the market capitalization of Bitcoin would be more than 40x's less than what the value of the global equities market was at the end of 2019.

($85,000,000,000,000 global equities value / $2,100,000,000,000 = 40.4761904762)

Putting the Pieces Together

Putting stock in speculations asserted by cryptocurrency advocates will get you no further than faulty economic theories that can in no way, shape, or form take under due consideration all the innumerable variables that nest their way into the ever-changing Bitcoin valuation equation.

Through M2 capitalization theory and the renowned principles of supply and demand, we are rendered rather convincing insights into the possibility that Bitcoin could reach $100,000 which is further strengthened when you compare the capped off Bitcoin market capitalization of $2.1 trillion to that of the $85 trillion for global equities in 2019.

While, at first, it may have seemed like a highly unrealistic projection of Bitcoin reaching $100,000, but when you stop to put it in perspective with the total value of global equities then it may appear, to some, as only a matter of time.

Regardless, and to conclude, it is impossible to accurately predict the value of Bitcoin in 10, 20, or even 40 years from now but if history has taught us one thing it would be that anything is possible.

Bitcoin Price Drops to $8,840 — Key Metrics Signal BTC May Correct Further - Cointelegraph

Posted: 24 May 2020 12:23 PM PDT

Within the last hour Bitcoin (BTC) price dropped to $8,840. The drop came with less than 8 hours left before the weekly close.

A confluence of miners selling more BTC than they mine, Bitcoin recording 6 consecutive lower highs, and the retest of the $8,800 support leaves BTC vulnerable to a severe pullback.

Six consecutive lower highs since June 2019

As shown on the daily chart, since June 19 Bitcoin has recorded six consecutive lower highs. The price rejected at $14,000, $13,300, $12,300, $10,600, $10,500, and $10,000, making every local top lower than the previous peak.

In technical analysis, lower highs indicate that buyers are failing to establish a new bull cycle. Every time a lower peak is reached, it shows the selling pressure in the market is simply too strong to break out of it.

Bitcoin records six consecutive lower highs since June 2019. Source: Tradingview

A clear rejection of the $9,800 to $9,900 range and the projected third test of the $8,800 support level suggest Bitcoin is not ready to initiate a rally above $10,000 just yet.

Triple test of $8,800

The price of Bitcoin rebounded at $8,840, testing the $8,800 support area for the second time within four days. Typically, the digital asset tends to break down below a heavy level of support in the third or fourth touch. This means, BTC is likely to see a clean breach of $8,800 upon the weekly close.

Almost immediately after dropping close to $8,800, the price of Bitcoin rebounded to around $8,900, showing BTC is set for a short-term price spike following the weekly open on May 25.

But, data from TradingLite shared by cryptocurrency trader Hsaka shows a significant amount of sell orders on OKEx in the $9,300 to $9,400 range.

OKEx shows large sell orders at $9,300. Source: Hsaka

Based on the firm response of buyers at the $8,800 support level and selling pressure at $9,300, BTC is likely to remain in between the $8,800 to $9,300 range before seeing the next pullback.

If the price of Bitcoin rebounds in the short-term to the low-$9,000 region and revisits $8,800, the probability of BTC seeing a much larger correction to the $6,000 to $7,000 range increases.

Bitcoin miners are applying selling pressure

Bitcoin miners are continuing to sell more BTC than they mine. Such a trend is understandable given that the breakeven cost of mining BTC is above $12,000 following the May 11 halving.

The price of Bitcoin is nowhere close to $12,000 and this means miners will have to sell a portion of their existing supply to cover operational costs.

As cryptocurrency investor Willy Woo explained, there are two unmatched sellers in the Bitcoin market: miners and exchanges. Woo said:

There's only two unmatched sell pressures on the market. (1) Miners who dilute the supply and sell onto the market, this is the hidden tax via monetary inflation. And (2) the exchanges who tax the traders and sell onto the market.

Bitcoin Miners Rolling Inventory Above 103%. Source: ByteTree

As shown by the chart above, the Miner's Rolling Inventory (MRI) is above 103%, which means miners are spending more BTC than usual. This means the selling pressure coming from miners will continue to remain a threat to the recovery of BTC in the short-term.

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