4 years in, MicroStrategy’s Bitcoin gamble beats Warren Buffett’s warning

August 11, 2024 Coin Telegraph

Bitcoin, Ethereum and altcoins hold intraday gains after Fed hikes interest rates by 0.75%

September 21, 2022 Coin Telegraph

Bitcoin

In addition to a 0.75% basis point hike, the Federal Reserve also set its 2022 target interest rate at 4.4%, leading Bitcoin analysts to forecast further downside for BTC.

Bitcoin (BTC) retreated and reversed its intraday gains after the Federal Reserve announced its third consecutive 75 basis point (bps) interest rate rise on Sept. 21.

Traders sold the news

BTC's price dropped circa 6.5% from its intraday high of $19,950, hitting $18,660 minutes after the Federal Open Market Committee's statement. Its decline mirrored a similar sudden correction in the U.S. stock market, with the benchmark S&P 500 dropping 0.5% minutes after the Fed update.

*BTC/USD daily price chart. Source: TradingView*

On the other hand, the 10-year U.S. Treasury note yield surged to 3.6% after the Fed's announcement versus 3.56% five minutes before it. Similarly, the yield on the 2-year Treasury note climbed from 3.98% to 4% in the same timeframe.

The U.S. dollar index (DXY), which measures the greenback's strength against a basket of top foreign currencies, surged to 111.57 for the first time in 20 years.

The Fed also published an updated "dot plot," which complied with its officials' individual interest rate projections by the end of 2025. These forecasts signaled additional rate hikes in the future, with the 2022 target sitting at 4.4% and 2023 targeting 4.6%.

The central bank officials also predicted that the policy rate would peak at 4.6% in 2023. Thereafter, it would decline to 3.9% in 2024, followed by another drop to 2.9% in 2025.

All the metrics point to more pain for Bitcoin

The dollar's rise and Bitcoin's fall after the Fed update reflected investors' growing appetite for cash and cash-based instruments compared to riskier assets. Meanwhile, the central bank's dot plot hinted that investor sentiment would remain unchanged until the end of 2023.

Bitcoin price could continue to suffer due to the Fed's hawkish stance and its attempts to bring inflation down from its current 8.3% level. After the central bank update, many analysts noted that BTC's price could break below its current technical support range of $18,000–$20,000, given that the Fed could raise rates by another 75 bps before the close of the year.

I really don't know how much longer this $BTC support can hold pic.twitter.com/YAdkkB9Zww
— CRG (@MacroCRG) September 20, 2022

Bitcoin's technical outlook appeared similarly bearish. Notably, the cryptocurrency has been forming a bearish reversal pattern dubbed the "head-and-shoulders ," whose profit target sits around $14,000, as illustrated below.

Conversely, a rebound from the head-and-shoulders support level of $18,800 could have Bitcoin eye $22,500 as its interim 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 extends slide below $43K as Binance’s BTC stash grows to May-crash levels

September 20, 2021 Coin Telegraph

Binance

Bitcoin has been leaving Coinbase’s wallets in 2021, while BTC exchange reserves on Binance tell a different story.

Despite Bitcoin (BTC) dropping below the $43,000 mark on Monday, the outflow of BTC from exchanges has continued in a multi-month trend, particularly on Coinbase Pro.

*BTC/USD 4-hour candle chart, Coinbase. Source: TradingView*

Over the past month, the amount of Bitcoin held in Coinbase Pro’s vaults dropped by 28,843.87 BTC. Similarly, other crypto exchanges, including Kraken, OKEx, Bitfinex and Huobi, also experienced a drop in their Bitcoin holdings, with the withdrawn amount totaling 30,236 BTC across the board.

*Bitcoin balance on Coinbase Pro. Source: Bybt*

On-chain analysts perceive falling Bitcoin reserves as a bullish signal.

That is primarily because most traders move their BTC assets to exchanges only when they prefer to trade them for other assets — be it fiat currencies or altcoins. As a result, the exchange balance serves as a metric to gauge traders’ sentiments for the underlying asset.

As a result, Coinbase Pro’s declining Bitcoin reserves hint at its traders’ intention to hold BTC instead of selling it. But, at the same time, its top rival, Binance, has been playing a spoilsport.

Binance BTC reserves buck the trend

However, data also shows that the Bitcoin balance in Binance wallets has risen to 29,717 BTC in the last 30 days, which is more than the amount Coinbase Pro withdrew from its vaults.

*Bitcoin balance on Binance. Source: Bybt*

As the world’s leading crypto exchange by volume, Binance enjoys a certain influence on the market due to its global outreach. The exchange’s rising Bitcoin balances suggest that its users could sell an increasing amount of BTC, the opposite of the trend seen on Coinbase.

The increase in Bitcoin reserves on Binance also reached levels that followed up with the market sell-offs during the second quarter of 2021. Notably, the Bitcoin balance on the exchange spiked from 199,700 BTC on April 20 to 347,590 BTC on June 26.

*Bitcoin balance on Binance between April 20 and June 26. Source: Bybt*

The same period saw BTC/USD drop from around $65,000 to below $30,000, including the notorious May 19 crash when Bitcoin plunged by more than 30%.

Bitcoin trading at $300 premium on Binance

The massive spike in Bitcoin reserves on Binance also coincided with premium BTC/USD bids on the exchange, with the BTC spot price being almost $400 higher on Binance than on Coinbase.

*Bitcoin prices on Binance vs. Coinbase. Source: TradingView*

The vast price difference created arbitrage trading opportunities, coinciding with Binance’s Bitcoin reserves adding 1,529 BTC in the previous 24 hours compared to Coinbase that processed withdrawals of 579 BTC.

As a reminder, exchanges still processed more than 30,000 BTC in withdrawals in the past 30 days, signaling that traders overall wanted to hold their crypto rather than sell it for other assets.

But given Binance’s trading volumes (~$24 billion) in the previous 24 hours were six times higher than Coinbase Pro’s (~$4.23 billion) at press time — as per data collected from CoinMarketCap — the probability of an interim Bitcoin price drop appeared high.

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