Category: NEWS

It feels like nothing but the words of Jerome Powell matter in markets right now.

In looking at the data, it’s kind of true. I plotted the correlation of Bitcoin against the S&P 500 since the beginning of 2017, and the results show that the correlation has generally picked up over time. This really does shoot down talk of the “inflation hedge” narrative that proved so popular during the pandemic.  

But should correlations not come down over time? Well, not really. Think back to 2017, and the texture of the crypto landscape. It was still a niche asset; it was only beginning to get covered in the mainstream – and certainly nowhere near the level of digital ink that is spilled over it these days.

Today, we have public companies holding it. I took a visit to El Salvador this summer, where I paid for goods with it. These are remarkable developments compared to just a few years ago. Point being, Bitcoin is now in the mainstream.

And being a mainstream financial asset – and one that is substantially further out on the risk spectrum – it will indeed be influenced by the market.

2022

Indeed, this correlation has hit all-time highs this year, moving in lockstep with the stock market. What was the upward shift caused by? The interest rate environment has transformed entirely.

Following a decade of historically low interest rates, inflation has burst out at the seams as a result of incessant money printing and stimulus spending through the pandemic. In order to rein this in, central banks have been forced to hike, with the Federal Reserve in the US leading the charge.

Nothing sucks liquidity out of a market more than rising interest rates, and this is particularly true for high risk assets, such as tech stocks, which discount cash flows back to the present – discount rates which are now measurably higher.

And so – and this is something that is frequently overlooked – Bitcoin is now in a bear market while the wider market is too. Because for the first time in its existence, Bitcoin is experiencing a macro climate not awash with quantitative easing, basement-level interest rates and bullish sentiment. And it’s creaking at the knees – just like every other financial asset is.

Correlations rise in crises. Sellers are indiscriminate when a flight to quality occurs; liquidity is sought, defensive positions are taken and cash reserves rise. Bitcoin, for the first time in its history, is experiencing that the hard way.

In this context, it is no surprise that the correlation has risen.

Someone would have been mistaken to think that Bitcoin (BTC/USD) could approach the end of the year at just $20,000. However, as the clock ticks, the reality is increasingly getting confirmed. Notwithstanding that, many analysts expected that Bitcoin would click $100,000 by the end of the year. It wasn’t bad maths, though, considering a height of $68 in November last year. So, what went wrong?

Of course, it has been a tough year for all markets – cryptocurrencies and stocks alike. Issues ranging from economic tightening, recession risks, and the Ukrainian war have been cited. Stocks are trading at significantly depressed levels, while crypto has shown a direct correlation. If it makes sense that stock markets will come back, then it is an absolute genuine expectation of crypto recovery too. The question is, when?

Perhaps, it would be premature to think that recovery will happen soon as risks remain. However, popular analyst Will Clemente says markets are staring at significant bargains on Bitcoin at $20K. Clemente relies on multiple on-chain metrics to argue the case. 

According to the analyst, there is a huge institutional demand for Bitcoin at below $20,000 on Coinbase. The analyst says regulatory compliance has been attractive to institutional holdings on Coinbase. He notes clear bids on Bitcoin from the $18,500 price down to the $11,000 level. The same confluence, he says, is being observed in other venues. 

Technical indicators supporting BTC attractiveness?

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Disclaimer

Bitstamp

Bitstamp is a leading cryptocurrency exchange which offers trading in fiat currencies or popular cryptocurrencies.

Bitstamp is a fully regulated company which offers users an intuitive interface, a high degree of security for your digital assets, excellent customer support and multiple withdrawal methods.

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Source – TradingView

Bitcoin’s daily chart turns heads for technical readers. The price formed multiple bottoms at $19,000, signalling potential bear exhaustion. An RSI reading of 50.33 suggests that buyers and sellers are square at the moment. That was amid the high inflation numbers last week that forced a flash crash in BTC. The cryptocurrency price, however, is showing a limited upside. 

Is Bitcoin undervalued below $20K?

A large accumulation by institutional investors suggests they see value in BTC at the current price. Coupled with multiple bottoms at $19,000, the price could be undervalued. Potentially, Bitcoin could recover from the current level. Further declines could be minimal and long-term holders should find satisfaction in buying the $20K or $19K dip.

The Chief Executive Officer of deVerge Group believes that long-term investors are crucial to the performance of the crypto market in the long run.

The CEO of deVerge Group, Nigel Green, discussed the importance of long-term investors in the cryptocurrency market in a recent interview.

With its headquarters in Dubai, the United Arabs Emirates, deVerge Group is a leading independent financial advisory, asset management and fintech organisation.

Green said long-term investors play an important role in the cryptocurrency market. He said;

“Markets are now predicting that policymakers at major central banks, including the U.S. Federal Reserve and Bank of England, are likely to remain resolute in pumping up interest rates in their battle to beat down unexpectedly stubborn inflation.

Five powerful officials of the world’s most influential central bank, the Fed, in comments made on Thursday, maintained a hawkish theme that inflation remains far too high and they won’t be put off raising rates. We expect a 75 basis-point hike when they gather 1-2 November.”

With more market volatility expected over the coming months, Green said long-term investors would have the opportunity to purchase cryptocurrencies at low rates. He added that;

“Given Bitcoin and Ether’s current correlation with stock markets, we anticipate further, perhaps heightened, volatility in the crypto market before the end of 2022. However, for serious investors, this will not necessarily be seen as a bad thing.”

Green added that major investors would treat the volatility the same way they treat such incidences in other financial markets. The deVerge CEO further explained that;

“The major investors, including institutional ones, will treat it in the same way as turbulence in any other market. 

Some of the world’s best investors consistently use market volatility as a major buying opportunity in traditional financial markets – and the cryptocurrency market is now no different.

When used effectively and efficiently, volatility can be an extremely powerful investment strategy.”

Green said that despite the current market volatility, Bitcoin had remained the best-performing asset in the world in recent years. He said;

“Bitcoin remains the best-performing asset class in the world and has consistently ranked amongst the best for both traditional and crypto investment sectors over the last few years.

Savvy, long-term crypto investors will be looking to benefit from panic-sellers by buying their digital currencies ‘on the cheap’ to enhance their investment portfolios. Serious investors will not be spooked by further volatility. This isn’t their first rodeo.”

Bitcoin is up by less than 1% in the last 24 hours and is currently trading just above the $19k support level. 

Sovryn will use the funds raised to build its global financial ecosystem for individual sovereignty. 

Sovryn, a Bitcoin-native, decentralised trading and lending platform, announced via a press release on Wednesday, October 12th, that it has raised $5.4 million in its latest funding round.

According to the press release shared with Coinjournal, the funding round was led by General Catalyst. The firm would use the proceeds from the funding round to expand its global financial operating system designed to provide individual self-sovereignty and financial autonomy to people around the world. 

Collider Ventures, Bering Waters, Bollinger Investment Group, and Balaji Srinivasan, were some of the other investors in the latest funding round. 

While commenting on this funding round, General Catalyst managing director Kyle Doherty said:

“We believe the team at Sovryn has the technical ability and community to build products that will actually fulfill the promise of DeFi by bringing it to the dominant network, Bitcoin. We are philosophically aligned with the goals of the Bitcoin and Sovryn networks to empower people, promote individual freedom, and achieve broader financial inclusion”.  

Sovryn explained that the funding round comes ahead of the public launch of its Zero protocol. Zero is a highly innovative lending product that will allow users to take out 0% interest loans using their bitcoin as collateral, with no repayment or maturity date against the loan. The loans are interest-free in perpetuity, and users decide when to pay them back, if ever. The waitlist for early access to Zero is now open, Sovryn added.

Sovryn’s core contributor, Edan Yago, added that;

“Sovryn is a user-owned cooperative developing open-source code to enhance the freedom of individuals around the world. There is no corporation, foundation or non-profit behind Sovryn – so it’s remarkable that established funds, like GC, are changing the way they invest in order to support the Sovryn mission”.

This cryptocurrency news comes as the bear market continues to affect the prices of most coins and tokens. Sovryn added that raising the funds during the current bear market demonstrates the confidence these investors have in Sovryn’s ability to grow the capabilities of Bitcoin beyond simply a store of value and to create tools for financial sovereignty.

Doherty further said;

“Our intention is to help grow the Sovryn ecosystem, actively participate in Bitocracy, and become useful members of the Sovryn community. We think we have much to offer and are excited to get started. There is an incredible opportunity to pursue investments that enable and build upon Bitcoin and Satoshi’s original vision. Bitcoin is the longest-running cryptocurrency with the largest market cap, and with the appetite for DeFi on other blockchains, Sovryn is fulfilling that appetite on Bitcoin to provide people with financial control over their lives.”  

Sovryn is a Bitcoin-native DeFi platform that is owned and governed by the community. The DeFi platform is built on the Bitcoin blockchain and uses BTC as its primary trading currency, and delivers decentralised and autonomous finance at scale. 

The new spot bitcoin ETP will list and trade on Nasdaq Dubai, 21Shares said in a press release.

21Shares, a leading provider of cryptocurrency exchange traded products (ETPs), has expanded its product range to the Middle East, the company said in a press release on Wednesday.

The ETP issuer’s entry into the fast-growing Middle East market comes with the launch of 21Shares Bitcoin ETP, the region’s first physically-backed Bitcoin ETP.

21Shares continues expansion

21Shares’s new spot BTC exchange traded product will trade on Nasdaq Dubai under the ticker ABTC and will have the same characteristics as the 21Shares Bitcoin ETP Europe, according to the announcement.

“Our expansion into the UAE is a major milestone in 21Shares’ international growth plans. Coming from the Middle East myself, the region is exceptionally important to me and, as a company, we are committed to providing regional investors with safe and secure access to cryptocurrency-backed products,” Hany Rashwan, CEO and co-founder of 21Shares said in a statement.

21Shares’ move into the Middle East comes a few weeks after parent company 21.co launched and raised $25 million at a $2 billion valuation to become the largest crypto unicorn in Switzerland.

“Cryptocurrencies are fast becoming the asset of the future for investors and wealth managers around the world, as global crypto adoption and investment levels continue to accelerate at pace – and the Middle East is a major accelerator of this growth,” said Sherif El-Haddad, the Head of Middle East for 21Shares.

As CoinJournal reported, EL-Haddad joined 21Shares in August as the crypto ETP issuer expanded its reach across Europe and the Middle East.

Over the past year, and despite the crypto winter, 21Shares has expanded its innovative products suite, with launches including the world’s first USD Yield ETP, crypto exchange traded funds (ETFs) in Australia and pioneered the  and the Bitcoin and Gold ETP on the SIX Swiss Exchange.

In June, 21Shares unveiled its Crypto Winter Suite, which as CoinJournal also reported, offered a product set tailored to help investors navigate the bear market.

Bitcoin could drop below the $19k support level over the coming hours as the leading cryptocurrency has been underperforming so far today.

Bitcoin, the world’s leading cryptocurrency by market cap, has been underperforming over the last 24 hours. BTC has lost less than 1% of its value over the past few hours.

The poor performance comes despite the broader cryptocurrency market recording gains in the past 24 hours. The total cryptocurrency market cap is above $920 billion, as the market has added more than 4% to its value so far today.

Ether, the second-largest cryptocurrency by market cap, is also down by more than 1% and is now trading below $1,300 per coin.

With Bitcoin currently experiencing losses, the leading cryptocurrency could slip below the $19k level for the first time this month.

Key levels to watch

The BTC/USD 4-hour chart is bearish, as Bitcoin has been underperforming over the last few days. BTC has lost more than 4% of its value in the last seven days and could record further losses over the next few hours and days. 

BTC/USD Chart By TradingView

The MACD line has been below the neutral zone since Friday, October 7th, indicating that the bears are currently in control of the Bitcoin market.

The 14-day RSI of 31 shows that BTC could soon enter the oversold region if the bearish trend continues.

At press time, Bitcoin is trading at $19,111. If the bearish trend is sustained, BTC could drop below the first major support level at $18,945 before the end of the day.

In the event of an extended bearish run, Bitcoin could trade around $18,700 for the first time in a month.

However, the broader market is bullish, and that could affect Bitcoin’s performance in the near term. If that happens, Bitcoin could make a move toward the $20k resistance level over the next few hours or days. 

Where to buy now

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Disclaimer

Bitstamp

Bitstamp is a leading cryptocurrency exchange which offers trading in fiat currencies or popular cryptocurrencies.

Bitstamp is a fully regulated company which offers users an intuitive interface, a high degree of security for your digital assets, excellent customer support and multiple withdrawal methods.

Buy BTC with Bitstamp today

• Bitcoin has fallen back to $19,000 after strong job numbers.

• Economist Alex Krüger says Bitcoin is flashing a key volatility index that precedes major moves.

• Bitcoin trades at a support, and price action will depend on price data.

Bitcoin BTC/USD has flashed a key indicator that, historically, can predict explosive market moves. The views are according to renowned economist Alex Krüger. He has 146,200 followers on Twitter, making him one of the most followed economists. It is for this reason that his recent sentiments around Bitcoin draw attention.

Krüger has been monitoring the Bitcoin volatility index or BVOL. The index uses a weighted average price to measure Bitcoin’s volatility on a 30-day annualised basis. The economist says that a huge Bitcoin move happens each time BVOL closes below 25. With the key indicator flashing, Krüger expects a huge Bitcoin move.

The comments come when Bitcoin has slid back to below $19,500. The decline follows a job report last, which showed robust payrolls. The job report calls for faster Fed action, which slowed markets. The next in sight will be the inflation data on Thursday. Krüger says the consumer price index will spark the next wave of BTC’s volatility in either direction.

Bitcoin trades below the midpoint amid weak sentiment

eToro

eToro offers a wide range of cryptos, such as Bitcoin, XRP and others, alongside crypto/fiat and crypto/crypto pairs. eToro users can connect with, learn from, and copy or get copied by other users.

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Disclaimer

Bitstamp

Bitstamp is a leading cryptocurrency exchange which offers trading in fiat currencies or popular cryptocurrencies.

Bitstamp is a fully regulated company which offers users an intuitive interface, a high degree of security for your digital assets, excellent customer support and multiple withdrawal methods.

Buy BTC with Bitstamp today

Source – TradingView

On the technical side, Bitcoin trades at its psychological support of around $19,000. The bulls have defended the level for quite a while. However, an RSI reading below the midpoint shows there are more sellers.

Concluding thoughts

While the street sentiment is that Bitcoin is in a compelling buy zone, sentiment remains weak. Investors are also cautious ahead of the inflation data on Thursday. Bitcoin could oscillate around the support zone ahead of the CPI data. However, $19,000 remains an attractive zone, and a potential reversal is a possibility.

Bitcoin has performed well over the last few days but has failed to surge past the resistance level above $21k.

Bitcoin, the world’s leading cryptocurrency, has been performing well over the last few days. The coin has added more than 4% to its value in the last 24 hours and is now trading above $20k for the first time this month.

The positive performance coincides with that of the broader cryptocurrency market. The crypto market has been in a bullish trend since the start of the week, with the total crypto market cap now closing in on the $975 billion mark.

Bitcoin has been trading above the $20k level for the last 48 hours and has failed to mount a rally towards the $21,368 resistance level. 

BTC is down by less than 1% in the last 24 hours and could dip below the $20k support level in the coming hours if the bulls don’t take control of the market.

Key levels to watch 

The BTC/USD 4-hour chart remains bullish despite Bitcoin underperforming over the last few hours. However, the technical indicators show that Bitcoin could become bearish if the current momentum is maintained.

BTC/USD Chart By TradingView

The MACD line remains above the neutral zone, indicating bullish momentum for Bitcoin. The 14-day RSI of 62 also shows that Bitcoin could enter the overbought region if a sustainable rally can be achieved.

At press time, BTC is trading at $20,205 per coin. If the bulls don’t take control of the market, Bitcoin could slip below the first major support level at $19,581 before the end of the day.

However, the second major support level at $19,026 should cap further downward movement in the near term. 

The bulls could regain control of the market and push BTC towards the $20,819 resistance level. In the event of an extended rally, BTC could surge past the $21,368 resistance level in the short term. 

Where to buy now

eToro

eToro offers a wide range of cryptos, such as Bitcoin, XRP and others, alongside crypto/fiat and crypto/crypto pairs. eToro users can connect with, learn from, and copy or get copied by other users.

Buy BTC with eToro today

Disclaimer

Bitstamp

Bitstamp is a leading cryptocurrency exchange which offers trading in fiat currencies or popular cryptocurrencies.

Bitstamp is a fully regulated company which offers users an intuitive interface, a high degree of security for your digital assets, excellent customer support and multiple withdrawal methods.

Buy BTC with Bitstamp today