Here’s Why Another Dump is ‘Extremely Bullish’ for Bitcoin

Besides being healthy for the Bitcoin price after an 85% uptrend in less than two months and mirroring the 2017 bull market when there had been an average of 30% pullbacks, another decline in BTC price means it is acting just like gold.

The crypto market has long been pointing how Bitcoin is the digital gold not only because it is now the hedge against inflation and in limited supply, but because the price of the digital asset also follows the same trajectory as the precious metal.

This has been pointed out by legendary investor Paul Tudor Jones in May when he announced that he had become a Bitcoiner and Tom Fitzpatrick, the Managing Director of Citibank, in his call for $300k per Bitcoin.

And this is why this is all bullish dumping.

“Any continued dump in BTC would be extremely bullish as it would reveal we are following the gold fractal from the 1970s, as per below by Paul Tudor Jones–the legendary macro investor who successfully used fractals to predict the 1980s stock market supercycle,” said Su Zu, chief executive officer of Three Arrows Capital.

This week, while the stock market made a new all-time high, Bitcoin lost big time, seeing a drop of 17% to nearly $16,300 level.

But Bitcoin wasn’t the only one; bullion has been falling for months now, going to $1,774 today — down 13.5% from its ATH in August. BTC, which climbed to $19,500 on Wednesday, is currently down 17% from its record high.

Even the greenback has gone down to 91.75, touching a three-month low and closing its lowest since April 2018.

“Over the longer term, this is probably the right trend for the dollar. We think the dollar has further room to the downside,” said Bipan Rai, North America head of foreign exchange strategy at CIBC Capital Markets.

Coming back to Bitcoin, it is trading above $17,150, as of writing, up over 1% with $2.59 billion in volume.

But of course, the pain is not over, and we can decline as much as to $13,500. The market, however, is uncovered and busy buying the dips.

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Author: AnTy

Crypto Lender, Genesis, New Loans Issuance Hits $2B In Q1 For Its Largest Quarter Ever

Renowned crypto lender Genesis Global Capital has revealed a healthy finish of the first quarter of this year.

In its latest quarterly lending report shared with Bitcoin Exchange Guide, the company revealed that it issued approximately $2 billion in new loans in the just concluded first quarter of this year. This was double the amount issued in Q4 2019 which was $1 billion.

According to the report, throughout Q1, the firm was able to enhance its active amount of active trading loans by about 19% rising to $649 million. However the firm suffered some considerable volatility. At the start of the year, the firm opened its loan book at $545 million which almost doubled to about $1 billion by February.

The firm was plunged into uncertainties in early March after the effects of Coronavirus started to spread to the world affecting the equities and the bond markets.

The crypto market experienced chaos in March as Bitcoin prices nosedived by more than 50% in 24 hours on March 12, commonly known as ‘black Thursday’. This was the worst Bitcoin plummeting in a single day for 7 years. Genesis was able to deal with the market shock by originating “a significant portion of the entire quarter’s loans during the month of March and never once paused lending activity.”

Following the events of ‘black Thursday’ the firm’s lending desk didn’t register any default from its more than 45 clients following the market sell-off. However, lending was temporarily halted to borrowers since it was hard to determine the right interest rate due to volatility.

According to Genesis CEO, Michael Moro the pausing of the lending activities was necessary to avoid the collapse of the firm. He explained:

“I just didn’t want that risk on the Genesis balance sheet. After we felt like markets had calmed down, we reopened the dialogue and restarted the origination machine.”

Moro explained that although volatility is a normal aspect in the crypto market, this was just so much in a single day.

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Author: Joseph Kibe

This Indicator Suggests Bitcoin at the Beginning of a Bull Market

  • Bitcoin Unrealized Profit is at a healthy level, that is similar to the beginnings of past bull markets
  • Despite Bitcoin losing 16% of its value last week, whales and long-term bitcoin holders are not selling their BTC

Bitcoin price might have lost 16% percent of its value last week and recovered some of the losses back, but the market hasn’t topped yet.

According to the unrealized profit of bitcoin, we just might be at the beginning of a bull market. Relative unrealized profit is the total profit in USD of all the coins in existence whose price at realization time was lower than the current price normalized by the market cap.

This indicator was at its highest at just above 0.85 in June 2011. In April 2013, it yet again reached 0.82 before dropping to 0.30 in Sep. 2015.

During the last bull run, in Dec. 2017, Bitcoin Unrealized Profit jumped to 0.77 only to drop to 0.32 in Feb. 2019. On Feb. 24, the bitcoin unrealized profit was at 0.463.

Bitcoin HODLers Holding their BTC Tight

According to yet another indicator, coin days destroyed, the whales and long-term bitcoin holders aren’t off-loading their bitcoin amidst the coronavirus scare. On-Chain data suggests both are sitting “firm and tight” on their bitcoin, said crypto investor and researcher Cryptokea.

The sell-off recorded last week was on par with prior bull markets and nothing extraordinary has been registered yet.

Source: @CryptoKea

The metric Coin Days Destroyed (CCD) measures the total HODL age of bitcoins moved on a given day which is calculated by multiplying those coins with the number of days they are held.

It becomes supply-adjusted CDD, when adjusted by the total supply of bitcoin. If long term bitcoin holders sell larger than usual portions of their holdings, this metric jumps “noticeably.”

But currently, the selling is “on par with prior bull market sell-offs,” especially in comparison to the periods around the reward halvings, which is coming in May.

Previously, he noted that bitcoin’s bull cycle, bottoms, and tops fluctuate around halving dates in an “almost equal ratio.” And though history never repeats itself, it does often rhyme.

“If this relationship were to hold true, we still have more than 570 days of bull market ahead of us, with a cycle top coming in around Sep 2021.”

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Author: AnTy

How will Bitcoin Halving Affect Miners’ Profitability

  • To maintain healthy profit margins for miners, a rising hashrate is needed while newer and more efficient mining devices to reduce mining costs
  • Before halving the gross cost to mine one BTC is $6,851 and after halving $15,062 and much lower for large scale commercial mining pools like Bitmain

Bitcoin reward halving is less than 100 days away, scheduled to occur in Mid 2020 that would see the new issuance supply of bitcoin declined by 50%. With this supply reduction, there would be changes in the breakeven cost to mine bitcoin before and after the halving.

Digital currency research company TradeBlock tries to find “bitcoin mining profitability following ‘The Halving’ and its indication for price in its latest blog.

Maintaining healthy Profit Margins & Reducing Mining Cost

In 2019, commercial mining operators were operating at “healthy profit margins,” as the price of BTC jumped throughout the year.

The network hashrate meanwhile, continued on its record run, making new highs each week as the number of resources committed to secure the network rises. But as the resources rise over time, efficiency and mining costs rise as well.

To maintain healthy profit margins for miners, a rising hashrate is needed to correspond with a rising bitcoin price while to reduce mining costs, newer and more efficient mining devices are continuously being developed.

Miners expecting the price of bitcoin to rise to higher levels?

The decentralized peer-to-peer network is secured by miners who receive 12.5 bitcoin for mining each block. Currently, 144 blocks are mined on average per day that results in 1,800 new BTC per day. After the halving, the mining reward will decline to 6.35 bitcoin per block, resulting in 900 new bitcoins mined per day.

Before the halving, the gross cost to mine one BTC at current levels with current device types are estimated by TradeBlock at $6,851. Meanwhile, the BTC price is trading at $9,800.

After the halving, assuming the hashrate will continue to rise over the next three months at the same rate it has been for the past three months and commercial operators transition to newer models for 30% of their rigs, the cost to mine one BTC would be $15,062.

If instead of rising to ~135,882,500 TH/s on halving day, the hashrate remains flat, the cost would fall to $12,525. However, for large scale commercial mining pools like those operated by Bitmain, the largest manufacturer of mining rigs, will have even lower breakeven cost.

The breakeven costs, TradeBlock says indicates miners continue to increase towards which suggests miners are “likely expecting the price of bitcoin to rise to higher levels,” above $12,000-$15,000 around the halving to continue to generate a profit. In contrast, it is also likely they will reduce resources following the halving that will result in a decline in hashrate as profitability falls.

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Author: AnTy