Economist Henrik Zeberg believes current market conditions are ripe for a major Bitcoin (BTC) breakout. Zeberg tells his 173,900 followers on the social media platform X that market sentiment has gotten so low that it may indicate the bottom for Bitcoin and other digital assets is close. “BTC reached ATH (all-time high) on January 20th. […]
The post ‘Sentiment Is in the Gutter’: Economist Henrik Zeberg Says Conditions Ripe for Bitcoin To Potentially Go Higher appeared first on The Daily Hodl.
Memecoins reflect a higher beta to the entire crypto sector, but does their recent 25% price drop signal a deepening bear market for BTC, ETH and large caps?
The recent crypto crash hit memecoins hard, culminating with a 9% drop in total market capitalization from Aug. 14 to Aug. 21. During the same period, Pepecoin (PEPE), Shiba Inu (SHIB) and ApeCoin (APE) saw a 25% decline. The big question is whether this trend will affect the wider market, signaling a broader bear market, or simply reflects lagging performance of memecoins.
Memecoins like Dogecoin (DOGE) burst onto the scene, driven by viral memes and community enthusiasm. However, their appeal faded due to a mix of factors. These coins rely on media hype and online communities for attention, yet they lack value beyond their meme origins. Their speculative nature leads to rapid price changes and volatility.
Furthermore, the memecoin market has become saturated with copycats, drawing focus and resources to more traditional cryptocurrencies.
For traders, the mid-August crypto market crash was a stark reminder of memecoin volatility. Many of these coins emerged in the last six months, like PEPE and Milady Meme Coin (LADYS). This might push new entrants away and create a negative sentiment, potentially extending a bear market to the broader crypto landscape.
However, this underperformance is typical for memecoins, as seen in the past, like when APE, SHIB and PEPE lagged the total crypto market by 18% between June 5 and June 15.
These two instances don’t necessarily mean memecoins will always perform worse than the broader crypto market. They reflect a higher beta in the sector, where memecoins tend to exaggerate market movements. Despite this, it’s uncertain if excessive price drops are a backward-looking phenomenon or signal a market reversion.
Contrary to expectations, memecoins can also lag during bull markets. For instance, between March 13 and March 30, memecoins fell while the total crypto market cap gained 17.5%.
After looking at the two most recent instances of memecoin underperformance, it’s crucial to examine their aftermath. This entails determining whether the price drop hinted at a possible market bottom or if it merely signaled investors shifting their attention to other cryptocurrencies.
Following the mid-June and late-March period when memecoins underperformed, the overall cryptocurrency market capitalization either remained steady or experienced notable gains in the subsequent weeks. Numerous factors could have influenced investor sentiment during these periods. For instance, the sentiment might have been influenced by BlackRock's application for a Bitcoin exchange-traded fund (ETF) on June 15.
Similarly, on March 31, Bitcoin options worth $4.2 billion expired. This event was seen as a potential catalyst for Bitcoin (BTC) to strengthen its $28,000 support level. This was due to a notable imbalance between call (buy) options and put (sell) instruments, with call options surpassing put options by $1.2 billion. This likely favored Bitcoin bulls and could have led them to utilize profits from the expiry to bolster the BTC price.
However, since neither of the last two sharp corrections in memecoins was succeeded by broader cryptocurrency market declines, the possibility of Bitcoin finding support around $26,000 remains a possibility. Nevertheless, as evident from the ETF and options expiry incidents, market trends and memecoin price action are primarily steered by news and events.
This article is for general information purposes and is not intended to be and should not be taken as legal or investment advice. The views, thoughts, and opinions expressed here are the author’s alone and do not necessarily reflect or represent the views and opinions of Cointelegraph.
BTC futures open interest is on the rise, but Bitcoin trading volume suggests that traders have shifted their attention to other markets.
Bitcoin (BTC) traders are currently not pleased with the recent price trends, especially due to the inability of its price to surpass the $30,500 mark over the last four weeks. This frustration is compounded by the fact that several requests for spot Bitcoin exchange-traded funds (ETFs) are either being delayed or pending review from regulators.
Interestingly, there has been a noticeable uptick in the open interest of Bitcoin's futures contracts, which likely indicates increased demand from institutional traders. On the other hand, activity in the derivatives markets has been lackluster. This contrast in market dynamics has led to a mixed sentiment among investors, making it challenging to gather enough momentum for trading at or above the $31,000 level.
The main factor cited by many analysts for the lack of buyers driving Bitcoin above the $30,000 mark is the reports surrounding the United States Department of Justice considering fraud charges against Binance. Additionally, the U.S. Securities and Exchange Commission (SEC) and the Commodity Futures Trading Commission (CFTC) currently have their own legal actions against the exchange and its founder, Changpeng “CZ” Zhao.
Taking a broader view of the situation, there is an added concern regarding the potential global economic recession triggered by the efforts of central banks to control inflation. The most recent U.S. core Consumer Price Inflation (CPI) figures, which exclude food and gas prices, saw a 4.7% rise compared to the previous year, following a 4.6% increase in June. This data supports the ongoing initiatives to tighten the economy, favoring investments in fixed income, short-term bonds and cash positions.
As a result, despite the consensus projecting the Federal Reserve to maintain the interest rate cap at 5.5% during the upcoming September meeting, investors lack the motivation to increase their positions in risk-on markets. This reluctance stems from the growing likelihood of a recession, evident through the 1.4% decline in Eurozone retail sales year-over-year in June and the U.S. ISM Manufacturing PMI registering at 46.4 in July, which indicates a state of contraction.
When examining the price as an indicator, it becomes apparent that Bitcoin investors are currently not displaying significant confidence in the likelihood of a near-term approval for a spot ETF. At the same time, there is a notable sense of pessimism surrounding the ongoing legal challenges faced by Binance and the potential repercussions of these challenges. Irrespective of the specific reason, the overall trend of Bitcoin's price over the past 50 days has been predominantly negative, with frequent visits near the $29,000 support level.
The Bitcoin futures market holds immense importance within the trading landscape. This market encompasses cryptocurrency-exclusive derivatives exchanges like Binance, Bybit, and OKX, as well as established traditional financial platforms such as the Chicago CME exchange. In essence, futures contracts are financial agreements between two parties, wherein actual BTC doesn't change hands. However, the appeal of leverage enables this market to surpass the trading volumes typically seen in regular buying and selling.
According to data from Coinglass, on August 8, trading activity within this market surged to approximately $14.5 billion, approaching levels reminiscent of those observed back in May 2022. It could be argued that these contracts are continuously balanced between buyers (longs) and sellers (shorts). However, the expansion of this market allows larger-scale investors to participate and attracts traders employing various strategies, including "cash and carry" approaches and miners seeking risk mitigation.
Nevertheless, the growing number of active contracts, as evident from open interest, does not necessarily equate to increased trading activity within the futures market. In reality, the volume associated with Bitcoin futures has experienced a downward trajectory over the past seven months.
Related: 5 things crypto must get right for mainstream adoption to happen
Recent data points out that trading volumes for BTC futures have dropped to their lowest levels since December 2022, averaging below $7 billion per day. This suggests that traders are either fully protected against risks and not inclined to make further moves at the current price levels, or they have shifted their focus to other markets with higher volatility or better odds of significant changes.
The situation boils down to this: until there's some clear confirmation about the ETF decision and more defined rules about exchanges like Binance and Coinbase due to their clashes with regulators, traders using Bitcoin derivatives don't seem to have much motivation to make more trades. These significant events, combined with the uncertainty in the broader economy, provide an explanation for the reduced trading activities, even though more people are keeping an eye on the situation and the price is stuck around $29,500.
This article is for general information purposes and is not intended to be and should not be taken as legal or investment advice. The views, thoughts, and opinions expressed here are the author’s alone and do not necessarily reflect or represent the views and opinions of Cointelegraph.
Bitcoin’s strong start to 2023 is persisting despite numerous headwinds, and is currently outperforming the S&P 500 Index by nearly 60 percentage points.
Following Bitcoin’s (BTC) stellar start to 2023, SkyBridge Capital founder Anthony Scaramucci believes “we’re through the bear market” and expressed confidence in his firm's crypto investments.
However, "the Mooch" qualified the statement by adding, “That is a guess. We don't know.”
In an April 6 interview with Yahoo Finance, Scaramucci noted that Bitcoin has consistently outperformed every other asset class over longer periods of time, saying:
“But any time that you've held Bitcoin in a four-year rolling interval, so you pick the day, hold it for four years, you've outperformed every other asset class.”
Scaramacci also expressed his bullish outlook for the leading crypto by market cap ahead of the next halving cycle, which is set to take place in early March 2024 according to NiceHash.
Bitcoin has historically operated on a four-year cycle, with the start of an upwards trend occurring soon after each halving cycle.
The theory behind the price cycle is that block rewards being halved makes the BTC in existence more scarce, and therefore more valuable.
Bitcoin has recorded gains of nearly 70% in 2023 according to Cointelegraph Pro, increasing from $16,521 to $28,060 compared to the S&P 500 index rising by just over 7% during the same time period.
Bitcoin’s enviable start to 2023 also comes amid what can only be described as poor market and regulatory conditions that may yet weigh down the price.
Crypto institutions based in the United States are struggling to find banking partners and liquidity following the collapse of crypto-friendly banks such as Silvergate, Silicon Valley, and Signature Bank and there are fears that the U.S. is putting into place a policy to prevent banks from interacting with crypto.
Related: Bitcoin ‘faces headwinds’ as US money supply drops most since 1950s
Additionally, the two largest crypto exchanges in the world according to CoinMarketCap — Binance and Coinbase — have both been subject to recent scrutiny from regulators.
Coinbase received a Wells Notice on March 22 notifying of possible enforcement action from the Securities and Exchange Commission, while Binance has been sued by the Commodity Futures Trading Commission after allegedly violating trading and derivatives rules
Yet, despite these events, crypto sentiment remains positive.
The Crypto Fear & Greed Index, an indicator used to measure crypto sentiment, is currently sitting in greed territory and is pushing for highs that haven’t been seen since November 2021 — Bitcoin's all time high.
Asia Express: Zhu Su’s exchange did $13.64 in volume akshually, Huobi in crisis
Sentiment toward the crypto market is the most positive its been since around the time Bitcoin hit its all-time high almost 16 months ago.
The Crypto Fear and Greed Index has hit its highest index score this year, reaching levels not seen since Bitcoin (BTC) posted its all-time high in November 2021.
A March 20 update of the Index showed a score of 66, placing it firmly within the "Greed" territory.
The Crypto Fear and Greed Index aims to numerically present the current "emotions and sentiments" towards Bitcoin and the cryptocurrency market, with the highest score being 100.
The last time the index recorded a score above 66 was on Nov. 16, 2021, just days after Bitcoin's all-time high of over $69,000 was recorded on Nov. 10, 2021, according to Coingecko.
Over the past seven days, Bitcoin has recorded gains of around 27.8% as per Coingecko data, and hit $28,000 for the first time since June 2022.
This is a developing story, and further information will be added as it becomes available.
A January survey from Paxos found that 89% of respondents still trusted “intermediaries” to hold their crypto, despite the collapses and bankruptcies last year.
American crypto users haven’t lost their trust in “intermediaries” to hold their crypto, with a January survey from Paxos suggesting a majority of United States crypto hodlers still trust banks, exchanges and mobile payment apps to custody their assets.
An annual online survey published on March 7 by the stablecoin issuer conducted on Jan. 5 and Jan. 6 sought to understand how the crypto winter and “large industry fallouts” in 2022 — including the bankruptcies of FTX and Alameda Research — impacted consumer behavior and confidence in the crypto ecosystem. Paxos noted:
“2022 was a rollercoaster year for the crypto industry.”
“Ranging from some of the highest Bitcoin prices ever to some of the lowest, largescale industry fallouts from companies like Terra, FTX, Alameda Research, and more — it was a volatile and potentially confidence-testing year for the ecosystem,” Paxos added.
After a turbulent end to 2022, crypto consumers have remained confident for 2023. We conducted a consumer survey and found many reasons why crypto is still viewed as a primary staple for financial livelihoods. Read our full survey here: https://t.co/AwFrGMuX0r pic.twitter.com/TZcmct0O5L
— Paxos (@PaxosGlobal) March 7, 2023
However, the survey found that of those that heard and followed the FTX saga, more than half (57%) of respondents either planned to buy more crypto or simply do nothing as a result of the news.
It also found that 89% of respondents still trusted “intermediaries” such as “banks, crypto exchanges and/or mobile payment apps” to hold their crypto, stating:
“In fact, despite the high-profile collapses and underlying poor risk management practices seen in several crypto companies, crypto owners still trust intermediaries to hold crypto on their behalf.”
The survey also found more desire from consumers to be able to buy Bitcoin (BTC), Ether (ETH) and other digital assets from household or traditional banks, with 75% of respondents indicating they were “likely or very likely” to purchase crypto from their “primary bank” if it were offered, a 12 percentage point increase from the year before.
“Additionally, 45% of respondents reported they would be encouraged to invest more in crypto if there was more mainstream adoption by banks and other financial institutions,” Paxos added.
It said a "significant untapped opportunity" existed for banks if they expanded offerings to digital assets. "Not only would these services satisfy increasing demand, but they would also result in higher engagement,” Paxos claimed.
Related: Paxos is engaged in ‘constructive discussions’ with SEC: Report
Respondents qualified for the survey if they lived in the United States, were over 18 years of age, had a total household income greater than $50,000 and purchased cryptocurrency sometime within the last three years. The survey recruited 5,000 participants.
“Despite the volatile 2022 crypto landscape, consumers didn’t lose faith in their crypto investments. This number was unchanged from the previous year’s report, underlining the long-term confidence of those participating in crypto markets,” wrote Paxos.
The timing of the survey, however, means that the gleaned results did not take into account more recent crypto headwinds, such as the bankruptcy of crypto lender Genesis, the crackdown on Binance USD (BUSD) involving Paxos and the financial uncertainty of crypto bank Silvergate Capital.
A rise in negative sentiment on Bitcoin (BTC) and the crypto markets at large is increasing the odds that the 2023 bull run will continue, according to a leading analytics firm. Santiment says a wide swath of traders now firmly believe prices will dip this month – and when too many people believe the market […]
The post Analytics Firm Forecasts Imminent Bitcoin and Altcoin Rally As Self-Custodied BTC Explodes to Over $400,000,000,000 appeared first on The Daily Hodl.
The Bitcoin Fear and Greed Index reached an index score of 52 over the weekend, marking the first time its hit neutral territory in three quarters.
The highly-referenced Bitcoin Fear and Greed Index moved into neutral territory over the weekend following several months of fear.
On Jan. 15, the index reached a neutral level of 52, its highest since April 5. The move follows a 24% gain for the BTC over the past seven days.
The market sentiment tracker hit a multi-year low of 9 in June 2022. Since then it has been hovering between 20 and 30 in the “Extreme Fear” category. Furthermore, it registered its longest-ever streak of extreme fear in mid-2022, as reported by Cointelegraph.
The fear and greed index uses “motions and sentiments from different sources” including current volatility, market momentum and volume, social media and Google Trends data, among others.
Together, data from these sources is used to create a straightforward number to summarize the emotional state regarding Bitcoin and crypto markets.
It consists of five categories ranging from extreme fear to extreme greed, the latter not been seen since October 2021.
As at the time of writing, the index has dipped back down to 45, which puts it back into the “Fear” category, suggesting that confidence has yet to make a full return.
Bitcoin Fear and Greed Index is 45. Neutral
— Bitcoin Fear and Greed Index (@BitcoinFear) January 16, 2023
Current price: $20,879 pic.twitter.com/lnj3pd73XL
Meanwhile, Bitcoin has seen its second-longest streak of gains in history with a 12-day run this month. The asset has gained 28% since the beginning of this year, wiping out all losses in the crash that followed the FTX collapse in early November.
The massive momentum has created a large movement in technical indicators such as the RSI (relative strength index) which has hit its highest level for four years on the daily timeframe.
High RSI figures can suggest that an asset is overbought and a correction is due.
Highest RSI levels on Daily $BTC chart for 4 years.
— Cold Blooded Shillver (@ColdBloodShill) January 15, 2023
Each of the prior 3 touches of the 90 level responded as follows:
Touch 1: BTC continued +18% higher before correcting -12%
Touch 2: BTC continued +16% higher before correcting -21%
Touch 3: No BTC gain and -31% correction pic.twitter.com/swQSLqATIi
Related: Bitcoin fails to convince that bottom is in with $12K ‘still likely’
Several analysts have labeled the recent move as a bull trap but a solid weekly close has led some to believe the momentum will continue.
$BTC Weekly
— The Wolf Of All Streets (@scottmelker) January 15, 2023
You could not dream up a more bullish weekly candle. pic.twitter.com/fv66u76ujV
Professional trader and chart guru Peter Brandt summed it up on Jan. 16, tweeting:
“Any idiot can make wild guesses about markets, so here is my dunce-hat prediction. In reality, nobody has a clue what any given market will do. $BTC.”
Bitcoin was trading up 2.2% on the day at $21,1652 at the time of writing, according to CoinGecko.
The fall of FTX undoubtedly hurt investor sentiment toward crypto, but it won't change its popularity as a means for cross-border transactions.
The crumbling of the FTX crypto empire may have damaged Brazilian retail and institutional sentiment toward crypto. However, its impact won't affect everyday citizens — who will still use crypto for cross-border transactions.
Reflecting on the recent fall of FTX, Thiago César, the CEO of fiat on-ramp provider Transfero Group said that the exchange’s fall, like in many countries around the world, has hurt confidence around centralized crypto exchanges and crypto in general.
Transfero Group is tied in closely with the Brazilian crypto ecosystem and FTX as it was the fiat on-and-off-ramp provider for the exchange and is also the issuer of Brazilian Stablecoin BRZ, which was listed on the now-defunct exchange.
César told Cointelegraph that the collapse of the exchange had removed a “big liquidity source” from the market, as FTX was ranked within the top three in terms of trading volume.
He also noted that uncertainty surrounding centralized crypto exchanges caused a “big outflow of funds” from exchanges in Brazil, with many looking into self-custody — estimating at least 20% of trading volume has been lost on exchanges so far.
“A lot of people are trying to even liquidate whatever positions they have in crypto and we just hold money in the bank account.”
César noted the FTX saga will make crypto investment a “harder sell” for new investors and traders.
“For the crypto investor/trader of course. It’s a harder sell now. If you go to a person who is not crypto savvy and you try to convince him to invest, especially in Brazil — the population has always been very skeptical of crypto. Now it's harder," he said.
However, he notes that for people that use crypto as a means for cross-border payments or the “internationalization of money,” there will unlikely be any impact from the FTX collapse.
“A lot of the crypto volume in Brazil derives from players that are willing to exchange their local currency into an internationally liquid asset denominated in dollars. So in that sense, the market will not die down because crypto is just rails for that.”
In October, a report from Chainalysis found that remittance payments and battling inflation were two of the most significant drivers of crypto adoption in Latin America.
Related: Brazilian SEC seeks to change its role in cryptocurrency regulation
César said the FTX collapse will likely be used by local exchanges "as a lobbying tool" to push for regulations aimed at bringing international exchanges in line.
César added that these crypto exchanges had been pushing for regulation in Brazil that would “segregate” local and international exchanges by taking away international exchange’s access to their global liquidity books.
“They were proposing that regulation would enforce for example, that liquidity on the books in Brazilian reais be segregated from international books.”
César explained that such regulation would hurt international exchanges as their main advantage comes from liquid, international global books.
In a Nov. 18 report from Reuters, Roberto Dagnoni, the executive chairman and CEO of Mercado Bitcoin said crypto laws in Brazil have been “kind of dormant” during the election period but now needed priority.
“The rules that currently exist have not been applicable to some players, so they can do whatever you want,” he said.
Apollo Capital CIO Henrik Andersson said there will come a point when not investing in crypto will be a “career risk.”
Henrik Andersson, CIO of crypto asset fund manager Apollo Capital believes institutions may soon “flip” on their conservative stance towards crypto.
Speaking to Cointelegraph, the Melbourne-based crypto fund manager said that while institutional interest in crypto has been slow in picking up, particularly in Australia, there are a lot of players that are waiting for the right moment to strike.
Andersson admitted that major institutional investors in Australia, particularly retirement funds (or superannuation funds) have yet to warm up to the digital asset space.
“It’s still early days. So yes, speaking to a lot of family offices in Australia and smaller boutique institutions. The big industry super funds are not there yet.”
“From their point of view its still a lot of education going on. So it will still take some time, I believe,” he added.
Apollo Capital is a fund manager focused on providing family office and institutional investors access to crypto investment opportunities. One of its latest launched funds is the Apollo Capital Frontier Fund, which is focused on nonfungible token (NFT) infrastructure, decentralized finance (DeFi) and multi-chain infrastructure.
Asked what needs to happen for institutional sentiment to change, Andersson believes this will “flip” when big players start making more substantial moves in the space.
“No one wants to be the first into something like this. Because if you’re the first one and things go wrong, then there’s a career risk. That will flip at some point to the opposite,” explained Andersson.
“At some point, when prices go up, then people don’t want to miss out. And if others are making investments, then it will become a career risk not to be invested.”
In Australia, several large banking institutions such as ANZ, NAB and Commonwealth Bank (CBA) have already been making forays into the digital asset space.
“We’ve seen several of the major banks here in Australia, taking an interest in digital assets. So that’s really, really good to see,” he said.
CBA was notably the first major bank in the country to announce crypto services through its mobile banking app last year, but later put its plans on hold noting it was still waiting on regulatory clarity from the new government.
Others have pushed forward with stablecoin and tokenized asset trading.
Related: Fidelity will ‘shift’ retail customers into crypto soon — Galaxy CEO
Internationally, large banking conglomerates such as Singapore’s DBS Bank are continuing to grow its digital assets business despite the bear market, while major investment banks such as Goldman Sachs, Morgan Stanley, CitiGroup and JPMorgan have also been beefing up its coverage of the crypto space.
“You have all the major investment banks in the world writing research reports on the crypto space. Everyone from Goldman Sachs to Morgan Stanley, Citigroup, JP Morgan and others. So there’s definitely still a lot of interest in the space from those kind of institutional players.”
“So while it seems like its going very slowly now, you know, once the sentiment changes, we see the first players making investments that can change very, very quickly.”
Earlier this week, Irfan Ahmad, the Asia Pacific digital lead for the bank’s crypto unit State Street Digital told Sydney Morning Herald that despite the current crypto winter, institutional investors have maintained their interest in blockchain and digital assets.
