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2015 Bitcoin Price Resistance Re-Emerges Amid Bitfinex Controversy

markets View Bitcoin’s failure to hold on to the gains above the 50-week moving average, currently at $5,477, could prove costly. A similar rejection in July 2015 was followed by a sharp sell-off. The daily chart is reporting a bearish divergence of the relative strength index, while short-term averages have shed bullish bias. So BTC…

2015 Bitcoin Price Resistance Re-Emerges Amid Bitfinex Controversy

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  • Bitcoin’s failure to hold on to the gains above the 50-week moving average, currently at $5,477, could prove costly. A similar rejection in July 2015 was followed by a sharp sell-off.
  • The daily chart is reporting a bearish divergence of the relative strength index, while short-term averages have shed bullish bias. So BTC could drop below $5,000 over the next few days.
  • The short-term outlook would turn bullish if the crucial 30-day moving average at $4,998 again provides strong support.

A long-term technical line, which served as strong price resistance four years ago, is capping the upside in bitcoin’s (BTC) price.

That line, the 50-week moving average (currently at $5,477) was breached earlier this week. The breakout, however, was short-lived with prices falling more than 5.5 percent to hit a low of $4,991 yesterday, possibly due to a controversy involving crypto exchange Bitfinex and the affiliated stablecoin issuer Tether.

As reported by CoinDesk, New York’s attorney general alleged that Bitfinex secretly used funds from Tether to make up for an $850 million loss of client and corporate funds. The news renewed concerns regarding the legitimacy of the stablecoin widely used to fund bitcoin purchases, sending both the crypto market leader and tether lower against the dollar.

That said, the short-term technical charts had warned of a price pullback prior to the attorney general’s announcement.

Bitcoin’s failure to hold above the 50-week MA could be a cause for concern for the bulls, as a similar rejection at the crucial average had ended up killing the nascent bull market in July 2015.

Daily chart: 50-week MA rejections

Back in 2015 (above right), bitcoin violated the bearish lower high of $297 (March high) in the first week of July, confirming a bearish-to-bullish trend change. Despite the bullish reversal, BTC failed to clear the descending (bearish) 50-week MA, then located at $312.

That failure proved costly, with BTC erasing the entire rally from $220 to $317 seen in five weeks to July 12. Further, the average resistance was finally breached in October after it had bottomed out (shed bearish).

Hence, the latest rejection at the 50-week MA (above left) could prove to be a major development – espcially as the average is reporting a bearish slope similar to the one seen in July 2015.

Daily chart

With bitcoin’s drop to $5,000, the bearish divergence of the relative strength index (RSI) looks more defined (proper lower high on RSI) than it did 24 hours ago. Further, the price has found acceptance above the 5- and 10-day MAs, which have shed bullish bias.

So, the ascending 50-day MA, currently at $4,572, may come into play over the next week or so.

The short-term bearish view, however, would be invalidated, and prices would likely rise back above $5,600, if the 30-day MA at $4,998 again serves as strong support. That average reversed pullbacks throughout March.

As of writing, BTC is trading at $5,170 on Bitstamp, representing a 3.13 percent drop on a 24-hour basis.

Disclosure: The author holds no cryptocurrency assets at the time of writing.

Bitcoin image via Shutterstock; charts by Trading View

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Bitcoin Beats Other Cryptos in ‘Smarter’ Bull Market, Says Billionaire Investor

Bitcoin Beats Other Cryptos in ‘Smarter’ Bull Market, Says Billionaire Investor

Bitcoin Beats Other Cryptos in ‘Smarter’ Bull Market, Says Billionaire InvestorBitcoin’s dominance will only be more pronounced in this bull market and that’ll show in its value, according to Mike Novogratz. | Source: ShutterstockBy CCN: Mike Novogratz, the billionaire CEO of Galaxy Capital and a former hedge fund manager at Fortress Investment Group, believes alternative cryptocurrencies, or altcoins, will be outperformed by bitcoin in the bull market.Not this time. Market getting smarter. $btc will outperform.— Michael Novogratz (@novogratz) May 19, 2019The statement of Novogratz comes after the bitcoin price risen by more than 115 percent year-to-date against the U.S. dollar, leading the crypto market to add $124 billion to its valuation.Will bitcoin continue to outperform altcoins?Historically, altcoins have relied on the price trend of bitcoin and have rarely demonstrated independent price movements in extended time frames.Altcoins typically surge in value when the bitcoin price shows stability at a tight price range, leaving investors to take high-risk and high-return options over the dominant cryptocurrency.The optimism towards bitcoin, despite the emergence of sophisticated altcoins, is well founded due to the involvement of major financial institutions in the likes of Fidelity and TD Ameritrade building infrastructure on top of bitcoin.Fidelity and ICE, the parent company of the New York Stock Exchange, are initially launching custodial services for bitcoin, targeting institutional investors.According to TD Ameritrade’s executive vice president Steven Quirk, tens of thousands of clients at the brokerage already trade crypto assets in some capacity.But, traders suggest that if the sentiment around the crypto market remains overwhelmingly positive, investors will eventually explore alternative opportunities for high-return trades, which then may fuel a rally for altcoins.One cryptocurrency trader said that bitcoin is likely to climb further throughout 2019, triggering a healthy market for altcoins:The rest of this year will be characterized by rapid BTC advances, healthy corrections and periods of sideways price action, when altcoins will fly. Put that nonsense rhetoric about waiting for capitulation and still not making our bear market lows away. Wrong cycle.Full on degen altcoin season still on track for June. Next few weeks, as BTC finds a range, we’ll continue to see the popular altcoins bounce back 1st. In June, all altcoins across the board will bounce back hard. More disbelief on its way.The concern of some investors like Novogratz on the prospect of a booming market for altcoins is that many retail investors were hurt in the 2017 bull market taking high-risk trades, trading against stable assets like bitcoin.As the market matures and as investors in the market become smarter, Novogratz indicated that the appetite for altcoins could decline.The crypto market has added more than $100 billion to its valuation year-to-date (source: coinmarketcap.com)Similarly, Jeff Sprecher, the chairman of the New York Stock Exchange, said in November 2018:Somehow bitcoin has lived in a swamp and survived. There are thousands of other tokens that you could argue are better but yet bitcoin continues to survive, thrive and attract attention.At the time, Sprecher emphasized that Bakkt, a futures market operator created by NYSE’s parent company ICE, will focus on building a regulated infrastructure for bitcoin first ahead of other assets.Sentiment is generally positiveOn May 17, as CCN reported, the bitcoin price plummeted by 18 percent within hours following an unexpected 5,000 BTC sell order on Bitstamp that led prices of bitcoin and ethereum to crash on BitMEX.The market absorbed the abrupt decline in the bitcoin price fairly well, indicating that the confidence in the near-term price trend of crypto assets remains strong.While investors have cautioned that bitcoin has shown oversold conditions in recent weeks as it surpassed key resistance levels, the momentum of the asset could prevent it facing a large correction some expect would occur in the near-term. About The AuthorJoseph YoungHong Kong-Based Finance and Cryptocurrency Analyst. Contributing regularly to CCN and Hacked. Providing unique insights into the crypto and fintech space since 2012.This article was edited by Samburaj Das.
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Bitcoin’s price has pumped beyond its ‘intrinsic value,’ JPMorgan says

Bitcoin’s price has pumped beyond its ‘intrinsic value,’ JPMorgan says

Banking behemoth JP Morgan Chase & Co. has taken another shot at Bitcoin, BTC claiming the cryptocurrency‘s latest rally has pushed its price beyond its “intrinsic value.”
“Over the past few days, the actual price has moved sharply over marginal cost,” JPMorgan analysts wrote in a note obtained by Bloomberg. “This divergence between actual and intrinsic values carries some echoes of the spike higher in late 2017, and at the time this divergence was resolved mostly by a reduction in actual prices.”

To come to this conclusion, the JP Morgan team treated Bitcoin as a commodity, calculating its “cost of production” based on a number of factors, including estimated computational power, electricity expense, and hardware energy efficiency.
“Defining an intrinsic or fair value for any cryptocurrency is clearly challenging,” the analysts continued. “Indeed, views range from some researchers arguing that it has no fundamental value, to others estimating fair values well in excess of current prices.”

Bitcoin‘s price briefly dropped from almost $8,000 to $7,050 on May 17, after $250 million of long positions got liquidated on BitMEX. Since then, BTC has surged back to $7,893 at the time of writing.
By now, JP Morgan has made a habit out of thrashing Bitcoin and cryptocurrencies. Back in 2017, CEO Jamie Dimon called the currency a “fraud” – a statement he later softened, suggesting he simply doesn’t care about Bitcoin. Since then, JP Morgan launched its own blockchain-based “digital currency,” which was neither a cryptocurrency, nor a stablecoin.

Published May 20, 2019 — 11:54 UTC

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