Bitcoin and Ether Dump More Going Into Year-End, ETH Killers Showing Great Momentum

Just before the end of the year, the crypto market continues to take a beating. After the initial green start of the last week of 2021, prices have only been going down.

This rout further extended to late Wednesday and early Thursday when Bitcoin price dipped further just under $45,900 and Ether to about $3,585. As of writing, BTC/USD has been trading above $47k while Ether is also over $3,700.

While the leading cryptocurrency is down 31.6% from its $69,000 all-time high early last month, Ether is only down about 24%. This month, however, Bitcoin is down 17.5% compared to ether’s almost 20%, according to Skew.

But while Bitcoin managed to record losses less than Ether, the latter’s 2021 gains at 407% are still greater than Bitcoin’s only 60%.

“It’s not really that clear to the world at large, to the mainstream, that what’s really happening with Bitcoin, with Ethereum, with this whole bucket of technologies…is really a revolution in software development,” said Coinlist CEO Graham Jenkin in an interview. “Blockchain technology represents a totally new way to build, distribute and run software.”

The largest cryptocurrency has shown a positive correlation with the S&P 500 Index this year. But this week, S&P 500 rose to new highs while Bitcoin has only been recording losses.

With the subdued price action, the cryptocurrency’s volatility has also decreased. Even during the winter festive season and weekends, which have seen thin volume, the cryptocurrency has failed to have any wild swings.

“A lot of traders have made life-changing money in 2021 and have been waiting to take profits until after the turn of the year to delay tax payments until 2023,” said Sergio Silva, sales director at Fireblocks. “That’s another source of selling pressure that could cascade into additional weakness in January.”

But despite the ongoing weakness in the crypto market, exchange-traded fund investors (ETF) are still putting money into these products.

The ProShares Bitcoin Strategy ETF (BITO), the first Bitcoin futures ETF that started trading in October, has attracted more than $40 million in December for the third straight monthly inflows.

Investors have also poured in $6.5 million into another futures ETF, the Valkyrie Bitcoin Strategy ETF (BTF), since the end of last month, its third consecutive month of inflows as well.

2021 belongs to altcoins and not Bitcoin or Ether. The biggest gainers this year have been the NFT pay-to-earn (P2E) game Axie Infinity (AXS) whose gains have been more than 15,900%, and the NFT-based virtual world The Sandbox (SAND), whose returns have been 15,550%. AXS 1.17% Axie Infinity / USD AXSUSD $ 94.97
$1.111.17%
Volume 180.63 m Change $1.11 Open $94.97 Circulating 60.91 m Market Cap 5.78 b
10 h Bitcoin and Ether Dump More Going Into Year-End, ETH Killers Showing Great Momentum 1 d South Korean Exchange Suspends Withdrawals to External Wallets, Govt. Reaches Out to Apple and Google to Block P2E Apps 2 d Axie Infinity Daily Revenue Plunges Over 94% from Peak as Daily Active Addresses Drops by 72%
SAND 1.32% The Sandbox / USD SANDUSD $ 5.91
$0.081.32%
Volume 1.16 b Change $0.08 Open $5.91 Circulating 919.5 m Market Cap 5.43 b
9 h The Sandbox Game Is Migrating to Ethereum Sidechain Polygon and Launching A DAO in 2022 10 h Bitcoin and Ether Dump More Going Into Year-End, ETH Killers Showing Great Momentum 6 d Is This The Beginning of the Santa Rally? Markets Jump in Asia Session

Ethereum killers have been another good play of 2021, with Polygon (13,860%), Terra (12,960%), Fantom (12,260%), and Solana (9,320%) leading this rally.

MATIC 3.24% Polygon / USD MATICUSD $ 2.56
$0.083.24%
Volume 1.93 b Change $0.08 Open $2.56 Circulating 7.16 b Market Cap 18.32 b
7 h StarkWare Proposes to Deploy Aave on its ZK-Rollup L2 StarkNet 9 h The Sandbox Game Is Migrating to Ethereum Sidechain Polygon and Launching A DAO in 2022 10 h Bitcoin and Ether Dump More Going Into Year-End, ETH Killers Showing Great Momentum
LUNA 1.41% Luna Coin / USD LUNAUSD $ 0.01
$0.001.41%
Volume 0 Change $0.00 Open $0.01 Circulating 1.71 m Market Cap 13.68 K
10 h Bitcoin and Ether Dump More Going Into Year-End, ETH Killers Showing Great Momentum 2 d UST Grows 55x to Become the 4th Largest Stablecoin, Terra DeFi Ecosystem Amasses $18B in Assets 6 d Is This The Beginning of the Santa Rally? Markets Jump in Asia Session
FTM -1.91% Fantom / USD FTMUSD $ 2.10
-$0.04-1.91%
Volume 607.67 m Change -$0.04 Open $2.10 Circulating 2.55 b Market Cap 5.34 b
10 h Bitcoin and Ether Dump More Going Into Year-End, ETH Killers Showing Great Momentum 3 d Bitcoin Is Back Above $51k and Ether $4,100 as The Cryptocurrency Market Goes Green 3 w ETHBTC Hits New 2021 High, Dogecoin and Ethereum Price Leading Google Trends in 2021
SOL 0.92% Solana / USD SOLUSD $ 172.53
$1.590.92%
Volume 1.51 b Change $1.59 Open $172.53 Circulating 309.48 m Market Cap 53.39 b
10 h Bitcoin and Ether Dump More Going Into Year-End, ETH Killers Showing Great Momentum 1 w Bitcoin and Ether Breaks Trend With Outflows While Altcoins Continue to See Inflows 1 w Crypto Outliers: Terra (LUNA) Amasses $16.9 Bln & Surpass BSC, Avalanche (AVAX) Aims for 1 Million Daily Transactions

“While Bitcoin showed strength in 2021, we’ve seen a constant stream of capital trickling down into altcoins,” Arcane Research wrote in a note. The firm’s analysts predict the strongest momentum in tokens related to GameFi and the metaverse, along with “ETH-killers” targeting Ethereum.

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Author: AnTy

Bitcoin’s Longest Slump Since May Severs its Pandemic-era Correlation With Tech Stocks

The beating continues in the cryptocurrency market as Bitcoin drops to as low as $55,700 on Thursday and Ether to $3,970. This has the total cryptocurrency market cap dropping to $2.56 trillion.

Some crypto assets like Loopring, Fantom, SHIB, NEAR, Zcash, LINK, and Kusama have fallen as much as 20% to 27% in the past week. Still, a few cryptos are enjoying gains, with The Sandbox, MANA, and Crypto.com up 50% to 75%.

For the fifth consecutive day, Bitcoin slipped, which is the longest slump since mid-May. The cryptocurrency has dropped below its average prices over the last 50 days. According to Matt Maley, chief market strategist for Miller Tabak + Co., $54,500 is the next important level with a drop below $50k to raise “serious warning flags.”

https://twitter.com/CL207/status/1461453590900486149

Now, ahead of the weekend, Bitcoin is back around $57k while Ether is above $4,100 that has the overall market cap now aiming for $2.6 trillion.

“The pullback, while sharp, has not impacted our positive intermediate-term gauges. Short-term oversold conditions are within reach for Bitcoin, Ether, and many altcoins,” said Katie Stockton, founder of research firm Fairlead Strategies. “So we would look for their collective pullback to mature later this week.”

With the latest weakness in the market, the correlation between Bitcoin and Nasdaq 100 futures is evaporating.

The 30-day correlation between the leading cryptocurrency and the Nasdaq futures has fallen to almost zero in recent days, which hit a 2021 peak at the end of September at 0.56, suggesting Bitcoin and tech stocks were moving in tandem often.

The correlation between Nasdaq and Bitcoin has been generally positive since February last year. But since September-end, Bitcoin is up 40%, surpassing Nasdaq 100’s 11% increase. Last week, Bitcoin hit a new all-time high at $69,000, emerging as an inflation hedge.

image1

However, according to Carsten Menke, head of next-generation research with Bank Julius Baer in Zurich, this evolution of the relationship between the cryptocurrency and Bitcoin doesn’t support the argument that it is a reliable, modern-day store of value for portfolios.

The lack of a consistent and negative correlation between them suggests that Bitcoin is not yet a safe haven, he said, stressing that during times of financial-market stress, it tends to suffer like other riskier assets.

Defending Bitcoin, Esme Pau, an analyst with China Tonghai Securities, argued that bitcoin is a “sensible” way of buffering against inflation.

“I would urge investors to focus on the longer-term trend and do not think short-term changes in correlation should be considered representative,” she said.

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Author: AnTy

Bitcoin $50k Incoming? Bulls Take a Hit, Wipes Out Billions of Dollars from Crypto Market

The crypto market is taking a beating today, in a continuation of the losses seen on Monday.

Just last week, Bitcoin hit a new all-time high at $69,000. But while the market ticked up, on-chain metrics were actually flat last week.

According to CoinMetrics, Bitcoin transactions grew by only 2.9% week-over-week while Ethereum transactions actually dropped by 0.6%, and stablecoin activity also fell off after a recent surge. USDC active addresses declined substantially by 8.9% on the week, while Tether (USDT) active addresses fell by 2.1%.

Following the ATHs, Bitcoin today dropped more than 11% to as low as $58,650. Much like always, Ether dropped even harder. A 14% drop sent ETH to nearly $4,100.

Following the latest drop, the total crypto market cap has slid down to $2.72 billion, down from over $3 trillion last week.

However, the latest pullback only sent the price to the level seen in late October, so just three weeks back.

As Vijay Ayyar, head of Asia Pacific with crypto exchange Luno, said, it “would be unusual to keep moving up without corrections” and argued that it is “a healthy pullback” after a prolonged rally.

Bulls Need More Beating?

The pullback has wiped out $1.3 billion of the Bitcoin open interest from yesterday’s high of $25.96 bln and $4.2 billion from $28.85 billion ATH on Nov. 10. As for Ether OI, just over $1 billion has been nuked to $12.06 bln, down from $14.66 bln ATH on Nov. 10.

The funding rate, as a result, has normalized, and in some cases like OKEx and BitMEX have even gone negative, as per Bybt. The highest funding rate for Bitcoin futures contracts is currently on Bybit at 0.0678%, while for Ether perpetuals, it is at 0.01% on Bybit as again.

BTC annualized daily basis on Binance has now fallen to 5.68%, down from 12.92% last week and 15.32% from late October but still extremely high from -0.96% in late September.

This resetting comes after the liquidation of 219,010 traders for $885.62 million in the past 24 hours. Binance accounts for 37.46% of it, despite not putting out complete numbers.

But is it over yet? That’s hard to know though trader CryptoCobain who called for a “savage dip” after the ATH breakout “to crush late longers then real ATH breakout,” early last month now sees the ​​worst-case scenario to be Bitcoin dropping as much as to $48,000 or $52,000.

Basically, to a level where “it looks bad enough for bears to gloat,” he commented.

Speculators Need To Be “Shaken Out”

While Bitcoin has taken a drop, you wouldn’t want to be paper hands like economist Mohamed El-Erian who shared his crypto experience in an interview with CNBC, revealing that he bought some Bitcoin in the “crypto winter” of 2018 when the digital asset plunged to $3,000 only to capitulate well ahead of the face-melting rally.

“I felt compelled to buy it — I really did,” said the Allianz chief economic advisor. “I felt like I had framed it. I had this level, I had an entry point.”

But he ended up selling in late 2020 once Bitcoin went to 2017 all-time high of $20,000 due to “behavioral mistakes” as BTC went on to hit $65k in April and $69k last week, propelled by inflation fears.

While El-Erian didn’t comment on valuations, he categorized Bitcoin investors in three buckets: day-trading “speculators,” professional investors looking to diversify their portfolios, and “fundamentalists” who are in it for the long haul, with the last two types “really strong foundations for that market long-term.”

As for when to buy again, El-Erian said he would feel comfortable buying again once some of the speculators in the market are “shaken out,” which seems to be the case currently.

“These other two levels are pretty solid in terms of supporting bitcoin and other cryptocurrencies.”

“The key thing here is the underlying technology and the model. And those two things are going to be very influential in the period ahead.”

A Disruptive Force

According to El Erian, the cryptocurrency is a “very disruptive force,” but he doesn’t see it ever becoming a “global currency” and replacing the U.S. dollar either.

While it can’t be “regulated out of existence,” the former PIMCO CEO thinks the crypto industry should start engaging with regulators sooner rather than later to avoid the regulatory headwinds faced by giants like Amazon, Google, and Facebook.

The crypto industry has a “responsibility not to repeat the mistake of Big Tech,” El-Erian said. “The big mistake of Big Tech was they didn’t realize they were becoming systemically important, so they didn’t engage in preemptive regulatory discussions.”

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Bitcoin Address Metrics Are Looking Terrible; Regulated vs Unregulated Spread Tightening

Bitcoin’s mere 13% YTD gain is still beating gold’s -4.70% performance; however, S&P 500 is now leading benign up 16.32% so far this year.

Though Bitcoin’s price dropped to $31,600, it simply remains within its range of $30k-$40k with no end in sight to this dull crab market.

Retail isn’t involved in the market anymore, with volatility and volume in the crypto market at their lowest levels. Daily active addresses halved, and new address growth is currently as low as it was immediately after the 2018 crash, said Charles Edwards of Capriole Investments.

Not to mention, the whales with over 1,000 BTC that dumped on the market at the top are still not buying. This, according to on-chain analyst Willy Woo,

“Could mean exchanges depleting inventory, or whale population is reducing, or just wallet consolidation. Nothing is definitive.”

However, Edwards noted that while Bitcoin addresses metrics look terrible, they can change quickly.

This lack of retail has the gap between the basis on the regulated futures market and the unregulated futures market now closing as well.

At one point, Bitcoin annualized daily basis on leading crypto and derivatives platform Binance was 41.4% in mid-April, around the time the crypto asset was near its all-time high of nearly $65,000.

When it comes to the 3-month annualized basis, throughout Q4, 2020, the CME futures traded at a slight premium to the unregulated market suggesting a high institutional appetite for the leading cryptocurrency, noted Arcane Research.

But as Bitcoin surpassed the previous ATH $20k, a significant gap occurred between the unregulated and regulated market.

This, however, wasn’t caused by a diminishing contango on CME but by the rapid growth in the contango in the unregulated markets where traders had a solid long bias.

This regulated vs. unregulated spread reached its peak on April 14th at 33% on the day BTC price reached its current global peak. But since then, several massive liquidation events occurred, and the appetite for upside exposure calmed, leading the spread to tighten towards a more sustainable level.

image1

The good thing is that with the price range getting tighter and tighter with Bollinger bands coiling around the price, volatility is expected to pick up. But it is to be seen just in which direction the price will move.

Not to mention, China FUD never seems to stop. This week, Anhui province in the country was the latest one to crack down on Bitcoin mining. The region, located close to Shanghai, plans to shut down all crypto mining projects within the next three years due to a power supply shortage.

Meanwhile, in this ongoing weakness, Bitcoin’s YTD gains have come down to 13%, and while it was beating S&P 500’s gains by several times, the traditional index is currently up 16.32% this year so far.

However, the digital gold is still beating the precious metal, which is down 4.70% YTD while recording positive returns of 2.50% this month, unlike Bitcoin’s 7.87% losses in July. This has the rolling 60-day correlation between Bitcoin and bullion tuning negative.

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Author: AnTy

Bitcoin Miners Generating BTC at Level Last Seen Post Halving; Unphased by the Drawdown

The crypto market may be experiencing the losses, but bitcoin miners remain unphased by the beating the digital asset took the past week.

Bitcoin miners are as bullish as ever and pushing the hash rate of the network to new highs.

Breaking yet another record, miners are conducting more than 130 hashes per second, keeping the network as secure as ever.

Source: Glassnode

Bitcoin’s difficulty adjustment meanwhile shifted lower this time at 17.3 trillion. With the negative adjustment, the bitcoin miner profitability took an upswing to $0.0898, as per Bitinfocharts.

Bitcoin miner’s profitability was around $0.161 for 1 THash/s in early May when the halving took a hammer to it, and profitability dropped 54%.

In mid-July, it bottomed at $0.0674, and since then, bitcoin mining’ profitability has been trying to sustain around $0.1, with no luck, so far.

Interestingly, amidst this jump in hashing power, miners are contributing to producing Bitcoin while the difficulty of generating BTC reduced; the block time has fallen to 8 minutes 2 seconds from the regular 10 minutes.

On September 3rd, the block time to mine bitcoin was just over 11 minutes only to continue to drop from there, which means miners are generating bitcoin at a fast pace. The last time block time was at this level, and lower, was in early June, following the halving on May 11.

Average block time (minutes)
Average block time (minutes)

Like bitcoin miners who don’t care about this momentary drop in the price, investors are unperturbed just as well.

Investors are taking this as an opportunity to buy the dips as bitcoin’s address activity continues to sustain nicely after shaking out the weak hands.

“We also are seeing a nice uptick in transaction volume, indicating the rising interest around this $10k price level,” noted Santiment.

Given that despite making several attempts in the past week to break the important psychological level of $10,000, bitcoin remains above, it also speaks well for the leading digital currency.

Bitcoin, however, did break down below $10k and today went down to $9,932, after surging to $12,000 level last week, because of the unwinding of “very crowded positions” in DeFi, which “resulted in a spillover effect.”

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Author: AnTy

Bitcoin Beats Gold and Longest Running Bull Market of S&P by a Wide Margin

  • Bitcoin up 90% YTD beating S&P 500’s 31% and gold’s 30% returns
  • While we are in the longest equity bull market, investors are flocking to gold
  • Bitcoin however is the best performing asset of the decade that has your $1 now worth $90,000

The world’s leading cryptocurrency is currently trading at $7,350 as per Coincodex, up about 90% on a year-to-date basis.

During the first six months, the BTC price went from $3,700 to $13,900, with Facebook launching its stablecoin Libra in June adding fuel to the fire.

However, in Q3 the sentiments changed and crypto sell-off started which could have been driven by Libra facing strong opposition from the regulators all over the world that has the market in fear that stringent regulations may come for the cryptocurrencies at large as well.

Miners selling their BTC further added to the selling pressure that has BTC down 48% from its 2019 high. Prices hit seven-month lows at about $6,400 earlier this week despite being bullish this weekend, up another 2.2% in the last 24 hours.

Despite this downturn, Bitcoin’s 2019 performance has been positive and beating any other market.

Equity has its Longest Bull market while Investors Flock to Gold

The stock market this year hit new highs but still while Nasdaq recorded a 38% surge, S&P 500 was up 31%. In the last 20 years, only 2013 with 32.4% returns had a higher total return than 2019.

Gold, the classic safe haven asset meanwhile was up only 15% trading at $1,474 per ounce, near its April 2013 level.

Source

Both gold and the stock market likely were driven by the US Federal Reserve’s monetary easing. The central bank made three 25-basis-point interest rate cuts in the second half and expanded its balance sheet by over $300 billion since Sept.

Central banks’ effort to jumpstart their sluggish economies by slashing interest rates to below zero has $17 trillion worth of sovereign debt generating a negative yield.

As interest rates fell, investors flocked to gold which was the top commodity of the 2010s.

Converting your $1 to $90,000

In 2019, the correlation between gold and Bitcoin also surged to 0.18 level in July, last seen in December 2016. Currently, the correlation is at the 0.1 level.

Source: Coin Metrics

Gold according to Bloomberg Intelligence analyst Mike McGlone is expected to shine in comparison to gold, if the dollar stops advancing. Also, a declining US equity market is a “primary force” that support metal.

“The gold-to-stocks ratio is potentially bottoming from a good support level despite a resilient greenback.”

Bitcoin’s 2019 performance makes it an attractive option than traditional markets as such making its way to investors’ investment portfolio.

The flagship cryptocurrency has been, in fact, the best asset of the decade. The digital asset rallied by 5,428% and 1,336% during its two bull markets, 2013 and 2017 respectively.

An early chart by Trololo posted to Reddit in 2014

According to a report by Bank of America Securities, if you invested $1 in bitcoin at the beginning of the decade, it would be worth more than $90,000.

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Author: AnTy