The surge in Bitcoin's value over the last week is credited to a couple factors, the main driver seems to be the growing mistrust of traditional banks. As reports of bank failures and bailouts continue to make headlines, investors are turning to alternative forms of investment to safeguard their wealth. Bitcoin's decentralized nature has made it an attractive option for those looking to spread risk across different investment types.
The Federal Reserve's announcement of an emergency loan program to backstop depositors as three regional U.S. banks collapsed only added to Bitcoin's momentum.
That momentum hit bump today as the Federal Reserve's decision to raise its key interest rate by a quarter of a percentage point, as well as its indication that it is unlikely to cut its key interest rate this year, led to a pullback.
Despite the setback, in the big picture Bitcoin remains largely unaffected having surged from $22,000 to $28,000 over the past week, and today's losses have it settling around $27,000 (at the time of publishing) - the overwhelming majority of its recent gains remain intact.
The reasons that sparked the last bull run remain present, and may even intensify - unless there's some unexpected bad news, things could turn bullish again at any moment.
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Author: Mark Pippen
London News Desk
Breaking Crypto News
This week was brutal for those betting the crypto market would continue to drop lower, as they were instead met with a surprise bull run leading to the most liquidations of short positions in over a year.
In the case of Bitcoin (BTC) which rose from $17,500 at this time last week, to over $21,000+ at the time of publishing, truly punished those who bet against it.
Short trader losses for BTC reached levels not seen since Aug 2021.
Total Lost by those Shorting the Crypto Market this Week Totals OVER $500 Million...
Ethereum has been the most shorted coin with 49% of liquidations coming from ETH shorts, Bitcoin was the second most popular coin responsible for 29% of the liquidations, with the remaining liquidations spread among altcoins that also went along for the ride up.
One thing is clear from looking at these stats - a lot of people were caught off guard!
The Question on Everyone's Mind - Where Do We Go From Here?
There's a split among analysts who predict that prices will continue to rise, and others who believe prices are soon heading back down... so, that doesn't help much.
Both sides have valid reasoning behind their predictions, it's up to you to decide which feels right.
Those who believe that bitcoin will continue to rise point to the fact that the cryptocurrency has bounced off lows of approximately $16,000 on five different occasions over the last three months. This is seen as proof that "we've found the bottom" - many investors were standing by, waiting to see what the bottom would be - now that they have an answer, expect more to take positions as prices remain low.
Others believe that these gains are only temporary. They point to the general economic uncertainty that can be found in most industries, in most countries - and top concern, inflation, far from resolved.
Make Smart Moves:
There's 2 strategies dominating in communities of experienced traders.
Those who agree$16,000 is indeed 'bottom' will likely agree with the strategy shared by one trader "Anything within $10k of that is an automatic buy - so if the price is $26,000 or less I'm accumulating."
If you're not convinced that we've seen the worst of it, you'll probably agree with what another trader shared, saying "I still believe a drop to $10-12k is possible before the next real, sustained bull run. So I'm going to keep my DCA strategy running" - DCA stands for Dollar Cost Averaging, this method involves investing a set amount each week no matter what the price is. If it goes down from here, you still have funds to buy the dip. If the price continues to go up, you at least bought some near the recent low.
Share your thoughts:
Do you believe recent gains will hold? Tweet us at @TheCryptoPress
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Author: Mark Pippen
London News Desk
Breaking Crypto News
Bitcoin being taken off exchanges is a clear sign that the owner is storing it instead of keeping it on an exchange where they can easily sell it.
This confirms that bitcoin accumulation continued as the price fell.
How Many Are Truly HODLing? Here's the numbers...
Long-term holders (LTH) are those who have owned their BTC for more than 155 days, they purchased it before mid-April, while short-term holders ( STH ) bought after the historical high on April 14.
In total, short term holders have amassed 16.8% of bitcoin's supply in the last five months, or about 3.16 million bitcoins.
While long term holders now own 79.5% of bitcoin's supply.
Signs Of What's To Come...
In the graph below, you can see two things: long term holders are at a historical high, and the accumulation of Bitcoin off-exchanges creates a supply shortage that typically triggers a price increase.
"Accumulation highs precede a price high" the report states.
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Author: Mark Pippen
London News Desk / Breaking Crypto News
When looking at the amount of Bitcoin or Ethereum that has been held for more than 6 months by the same person/entity, we immediately can conclude one clear fact - crypto investors believe the market is nowhere near the top.
When investors believe the top is approaching, we will see more short-term trading activity as well coins moving back on to exchanges, so they'll be ready to trade.
Instead, we're seeing the complete opposite - investors holding coins longer, and investors unconcerned with being able to sell their Bitcoin or Ethereum quickly.
Investors main concern: security storing their crypto....
Which is why huge quantities have been taken off exchanges and placed into offline cold storage.
The study of how long coins were being held by the same investor was conducted by Glassnode, who says their long-term holding charts indicate "a strong HODL conviction" in the current market.
The Hyper-Bullish Effect...
We're talking about the most basic fundamentals behind supply and demand - and what we're seeing is a supply being accumulated and removed from the open market, while demand continues to grow.
This is a combination of factors that sends prices (of anything) upwards fast, as new buyers entering the market are left in bidding wars over a dwindling supply.
Until recently, crypto investors have overwhelmingly had one thing in common - thinking they may have to sell it all in a moments notice. That's why this strong trend in the opposite direction is a true indicator of a new, different market, made up of investors confident in their investments.
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