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  • Bitcoin still trading like a risk asset, despite claims of decoupling amid banking crisis

    Bitcoin still trading like a risk asset, despite claims of decoupling amid banking crisis

    Key Takeaways

    • First Republic has become the latest bank to collapse in the US
    • Bitcoin has bounced this week, as it did in March when SVB fell and the banking crisis was triggered
    • Our Head of Research, Dan Ashmore, contends that Bitcoin remains a risk asset, despite claims from enthusiasts that a decoupling is occuring
    • Correlation with stock market is still high, he writes, pointing to altered expectations around interest rate policy as the reason Bitcoin has moved upward

    There has been chatter amid the market recently (again) that Bitcoin is decoupling from stocks. Something about Bitcoin offering an alternate store of value outside the realm of the fiat world, a proposition that has suddenly become a lot more valuable as the banking turmoil striking the US rages. 

    Let me start by saying that I don’t think my opinion is very valid here. I can’t predict the future. But I want to look at the numbers because I believe they prove that this theory, that Bitcoin has decoupled, is objectively false. 

    I wrote a deep dive on Bitcoin’s correlation with stocks in March, when this theory originally surfaced as Silicon Valley Bank collapsed, while Bitcoin raced upwards. The same logic applies now, so let me try summarise it by refreshing the same numbers. 

    And a quick note – this article is nothing about my beliefs around Bitcoin’s trajectory in the long-term. Whether Bitcoin decouples in future and establishes itself as a store of value akin to gold, uncorrelated to other risk assets, is a debate for another time and not one I will delve into here. I’m purely looking at the price action today and saying that, as of May 2023, Bitcoin is trading like an extreme-risk asset, completely removed from this uncorrelated vision. 

    Bitcoin’s correlation with the Nasdaq

    The natural place to look is tech stocks, being one of the riskier subsectors of the equity universe. The Nasdaq, being a tech-heavy index, is often seen as the benchmark for this sector. So let us chart Bitcoin’s correlation with the Nasdaq over the past couple of years. 

    Using a 60-Day Pearson measure, the chart shows that the correlation has bounced around a lot over the past couple of years. For the most part, however, it has shown a relatively strong relationship, frequently residing above 0.5. 

    There were a couple of dips. The first is clearly May/June 2021, when Bitcoin cratered from $63,000 to $31,000 for no apparent reason, before climbing back up into the high sixties later that year. 

    The second large dip in correlation is in November 2022. This was none other than the FTX collapse, the staggering implosion sending shockwaves through the crypto industry. At the same time, stocks actually advanced significantly as softer inflation data cropped up and optimism increased around the future path of interest rates. Cue the big dip in correlation. 

    Therefore, there have been two periods of notable, and very large, decorrelations. Both of these occurred as crypto melted down, independently of the stock market. If you look closely over the last year – I have shown the correlation over the last year below – you will see another big deviation in the summer of 2022 when crypto “bank” Celsius shut withdrawals. 

    And most importantly, the correlation has come back up swiftly every time. Including in March, when Bitcoin outperformed in the aftermath of the banking crisis. 

    But, did it really outperform in March? The correlation above remained relatively high, certainly nowhere near previous episodes of decorrelation – and a lot more brief. Sure, Bitcoin raced upward further than the Nasdaq post-SVB, but it also fell further prior to the guarantee that deposits backing the second largest stablecoin, USD Coin, were safe. In reality, Bitcoin did what it has been doing – sold off more aggressively and then bounced back stronger. Because, well, it is riskier.  

    Besides, the elephant in the room is the Federal Reserve. Markets have been moving off expectations of Fed policy all year long, and this was the true cause of the movement in March, as well as this week. 

    With SVB’s collapse, the market reacted to the announcement of a large liquidity injection by the Fed, as well as the expectation that rates could not be hiked as much in future as a result of the creaking banking system. These are both good things for risk assets and so Bitcoin rose. Again, not because of any potential downfall of the fiat system. 

    Not to mention, these banking problems were borne out of duration risk management, completely distinct to the banking issues of the GFC in 2008, which were a full-blown insolvency crisis built upon terrible underlying assets (subprime mortgages). Today, the banking crisis is still a crisis, but a regional one borne out of the most aggressive hiking cycle in recent memory, which has seen bank assets dropping in value and deposits pulled to take advantage of those higher rates elsewhere, leading to an unsustainable bank run as confidence evaporates. 

    We have seen similar developments again this time around, as First Republic Bank fell last week after revealing it saw over $1 billion of withdrawal requests last quarter. 

    Again, the market reacted to these things breaking by saying: “OK, the Fed cannot hike much more. This is good for risk assets”. Looking at Fed fund probabilities, there is the expectation of a 25 bps hike today (May 3rd) and then….nothing. The market is viewing this as the final hike. 

    So, it is important to keep track of lurking variables (interest rate policy) when assessing correlations and trying to garner why Bitcoin is moving. For the time being, the numbers are pretty clear, and the conclusion is unequivocal: Bitcoin is trading like a risk asset. Perhaps we don’t even need to look at correlation. Take a glance at the below chart plotting Bitcoin’s returns since the start of 2022 against the Nasdaq. Do you really want to argue that these assets are uncorrelated?

    The numbers speak for themselves. Again, this is not speculating about what will happen in future. Tomorrow, Bitcoin could go to $1 million and the Nasdaq could go to zero for all I care. Bitcoin may one day reach that uncorrelated store of value status. But for now, the numbers are clear: it is trading like a risk asset. 

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  • Bitcoin, Ether prices up as stocks tank on new bank fears

    Bitcoin, Ether prices up as stocks tank on new bank fears

    • Bitcoin (BTC) and Ethereum (ETH) prices rose nearly 2% respectively as stocks plunged.
    • The S&P 500 was down 1.5% as two bank stocks plummeted.
    • BTC and ETH gains saw altcoins in the top 10 cryptocurrencies by market cap up.

    Bitcoin (BTC) price moved above $28,500 again on Tuesday, rising more than 2% in early morning trades during the US trading session. The upside was yet another attempt by Bitcoin bulls to establish a fresj footing in the key price range.

    Elsewhere, the price of Ethereum (ETH) rose above $1,860 to hit a new 24-hour high as crypto spot markets climbed. The Ether token was 1.9% up at the time of writing, gains that were being mirrored across the top 10 cryptocurrencies by market cap list.

    BTC and ETH have traded to year-to-date highs above $31,000 and $2,100 respectively.

    Stocks tank on bank fears

    US stocks opened lower on Tuesday as stock prices of another two US banks plunged amid the latest turmoil in the banking sector. The S&P 500 was down 1.5% while Nasdaq was shedding 1.3%.

    After share prices of First Republic Bank fell in the lead up to its takeover by JPMorgan, Tuesday saw prices of Pacwest (PACW) and Western Alliance (WAL) stocks bleed massively.

    At about 12:30 pm ET, the PACW and WAL share prices were down 26% and 20% respectively.

    The two bank stocks had plummeted more than 30% earlier as investor concerns around the turbulence within the US banking system resurfaced following the losses that followed the collapse of Silicon Valley Bank.

    Also on investors’ minds this week is the Fed’s meeting that kicked off on Tuesday. While the market has the anticipated 25bps interest rate hike baked in for after the FMC meeting, what the central bank says in relation to what next is seen as key.

    Economist Mohamed A. El-Erian, commented on the market outlook, stating via a tweet:

    “The roller coaster continues with, this time around, a 20 bps drop in the yield on 2-year Treasuries.  With such a key market segment continuing to be in urgent need of stabilization, it remains to be seen if the Fed serves this function tomorrow or, instead, is again a source of volatility.”

    Barry Knapp of Ironsides Macroeconomics says the Fed’s approach to the inflation question is fraught and dubious. The central bank has to consider what the market is telling it. He shared his views in an interview with CNBC’s Squawk Box.

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  • Bitcoin supply is dwindling, yet volatility will be the biggest benefactor

    Bitcoin supply is dwindling, yet volatility will be the biggest benefactor

    Key Takeaways

    • Long-term holders are accumulating Bitcoin, with two-thirds of the supply stagnant for over a year
    • Our Head of Research, Dan Ashmore, writes that liquidity on the demand side is also drying up, with order books thin and stablecoins fleeing exchanges
    • This will kick up volatility in the short-term, leaving Bitcoin open to aggressive moves to both the upside and downside
    • Long-term the impact of a dwindling supply is a different discussion, but for now, risk is elevated in the already-risky crypto markets

    A lot is made of the demand for Bitcoin. Are institutions giving up on it following a disastrous 2022 that saw the entire crypto sector go up in flames? Is the market moving back in now that interest rate forecasts have softened following the relentless rate hikes over the past year?

    But rather than the demand, it is the supply of Bitcoin that is often the more intriguing to look at. Famously sporting a fixed cap of 21 million coins, Bitcoin’s supply schedule is coded into the underlying blockchain. This quality has given rise to a million different theories around the future place – and price – of Bitcoin in the world. 

    But there is another interesting analytical angle to Bitcoin: before the anonymous Satoshi Nakamoto launched Bitcoin in 2009, the world never had an asset that provided so much visibility over the supply distribution. The nature of the blockchain is that, while the individual holders are anonymous, the distribution of all coins is available for the world to see at all times. So, let’s have a look. 

    Long-term holders are accumulating Bitcoin

    Central to many Bitcoin bulls’ long-term thesis is the idea that long-term holders will suck up supply, leading to an inexorable price rise. 

    Looking at current holdings, two-thirds of the supply has not moved in a year. That is certainly a large number, and we will get into what that means in the next paragraph. Pushing the timeline further out, over half the supply (53.6%) has been stagnant for over two years, 39.7% has not moved in 3+ years, and 28.6% has been idle for 5 years or longer. 

    What does this mean for price?

    These are large numbers by any stretch. It is impossible to compare them to other asset classes, given that none are trackable on a ledger like the blockchain. Perhaps only commodities such as precious metals can compete with the above numbers, yet that is only speculation. 

    But what does it mean? Is this a bullish sign? Well, yes and no. The immediate conclusion is that less supply means less demand is needed to push the price up, and the cap at 21 million Bitcoins certainly means if that demand keeps rising, the price has nowhere to go but up. 

    However, there are mitigating factors here. The first is the reality that some of the above “long-term holders” are in fact just lost coins, be it through people who have passed away, forgotten about their coins or lost access to their wallets. 

    Bitcoin creator Satoshi Nakamoto is one of those, the mysterious enigma holding approximately 1.1 million bitcoins, equivalent to a mammoth 5.2% of the supply. None of his/her/their coins have moved since they were mined back in the first eighteen months of Bitcoin’s existence. 

    Not to get too tangential, but below is the value of Nakamoto’s holdings over the last 13 years, assuming a stash of 1.1 million Bitcoin from mid-2010. That is a lot of capital that holders must surely hope never floods the market. 

    Volatility to rise with less liquidity 

    Regarding the impact of these large stashes of Bitcoin which are “removed” from circulation, the greatest impact – for now, at least – may be on the volatility rather than price. 

    In the following chart, I have plotted the amount of Bitcoin sitting on exchanges, currently at a 5-year low. 

    Not only is the amount of Bitcoin on exchanges dwindling, but stablecoins are doing the same. Over half of the balance of stablecoins have flooded out of exchanges since December. 

     

    This means liquidity on both the demand and supply side of Bitcoin is thin – and the same conclusion will be reached if an order book is downloaded from an exchange. Liquidity has dried up hugely, especially since FTX went under in November.

    This lack of liquidity only serves to jack up the already sky-high volatility in the Bitcoin market, exacerbating moves to both the upside and the downside. This is part of the reason why volatility recently spiked to its highest level since mid-2022, and also a factor in Bitcoin’s massive run-up this year. 

    By definition, it takes less to move a thin market, and with forecasts around the future path of monetary policy shifting to a more optimistic stance in recent months, Bitcoin has moved up with minimal resistance in its path. 

    While the supply-side dry-up is intriguing in the long-term, looking into that with regard to Bitcoin’s future performance is a different discussion entirely.  In the short-term, capital has fled crypto markets at an unprecedented pace, and we are now in a spot where the market is primed for violent moves in either direction. Like always in crypto, the short-term is difficult to predict, however, and the risk remains extreme – perhaps even more so currently than normal.

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  • Bitcoin price prediction for 2024: is $100,000 still on the cards?

    Bitcoin price prediction for 2024: is $100,000 still on the cards?

    • Standard Chartered analyst expects bitcoin to hit $100,000 in 2024.
    • Geoff Kendrick explained his bitcoin price prediction in a research note.
    • Bitcoin is currently down over 10% versus its high earlier this month.

    Bitcoin has lost more than 10% in recent days but that, as per a Standard Chartered analyst, may just be an opportunity to buy.

    Bitcoin could more than triple from here

    Geoff Kendrick remains convinced that the world’s largest cryptocurrency will more than triple to $100,000 in 2024.

    His bitcoin price prediction is based primarily on the recent bank failures. In a research note, the analyst said today:

    Current stress in traditional banking sector is highly conducive to BTC outperformance – and validates the original premise for Bitcoin as a decentralised, trustless, and scarce digital asset.

    The explosive rally in bitcoin following the collapse of Silicon Valley Bank on March 10th does seem to support his thesis. On top of that, the total supply of BTC is scheduled to halve next year that’s traditionally delivered a boost to its price.

    Other reasons for his bitcoin price prediction

    Kendrick expects bitcoin to significantly outperform also because the U.S. Federal Reserve now seems likely to slam the breaks on lifting rates.

    Another positive catalyst he cited are the bitcoin miners. The recent surge in BTC, the analyst noted, has served to improve their profitability thereby making them less likely to sell many coins.

    Given these advantages, we think bitcoin’s share of total digital assets market cap could move into the 50% to 60% range in the next few months (from around 45% currently).

    His $100,000 bitcoin price prediction is in line with what a Gemini executive also forecast last month.

    The post Bitcoin price prediction for 2024: is $100,000 still on the cards? appeared first on CoinJournal.

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  • Bitcoin wallet dormant for 10 years suddenly wakes up

    Bitcoin wallet dormant for 10 years suddenly wakes up

    • A dormant wallet from 2012 has woken up and moved 279 BTC.
    • According to on-chain data, the Satoshi era wallet holds 1,128 Bitcoin worth $31.6 million.
    • The wallet last transacted when Bitcoin prices ranged in the $12 to $95 zone. 

    While Bitcoin price continues to flirt with $28,000 after this week’s slump from $30,000, a new development related to the leading cryptocurrency has been observed.

    Dormant wallet wakes up and moves 279 BTC

    According to on-chain details shared by crypto account Whale Alert, a BTC wallet that has been dormant for over 10 years just reawakened.  The Satoshi era wallet reportedly holds 1,128 bitcoin worth approximately $31.6 million.

    And the dormant wallet has made some quick moves, with 279 BTC of the assets being moved to three new addresses in the past 24 hours. On-chain smart money platform Lookonchain tweeted:

    “A whale with 1,128 $BTC ($31.6M) that has been dormant for 10 years transferred 279 $BTC ($7.8M) to 3 new addresses just now. The whale received 1,128 $BTC in October 2012 and May 2013, when prices were $12 and $195.”

    Bitcoin price reached highs of $69,000 in November 2021, meaning the wallet would have been even richer had it activated then. While the sudden activity and why it happened remains to be unearthed, crypto twitter is reacting to the news with speculation that it is possible someone just found their seed phrase.

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  • Bitcoin price falls below $29K, no surprise given volatility and liquidity metrics

    Bitcoin price falls below $29K, no surprise given volatility and liquidity metrics

    Key Takeaways

    • Bitcoin has softened fallen from $30,000 to close to $28,000
    • Our head of research looks into the data, arguing the move should not be a surprise
    • Bitcoin’s fixed supply and lack of dividends or earnings means price is entirely demand-driven
    • Thin liquidity in the Bitcoin market exaggerates every move, with 45% of stablecoins leaving exchanges in the last 4 months
    • Correlation with stocks remains high, with high UK inflation creating pause for thought
    • Market has also peeled back slightly on forecasts for interest rate cuts, and Bitcoin has followed

    I have lost count of the number of times I’ve been asked “Why is Bitcoin going up?”, or “what is driving this Bitcoin sell-off?”. 

    For many assets, it’s clear as day as to what is driving the price action over any given trading period. Earnings forecast missed by 10%? Hello, red candle. Warren Buffett announced a mass purchase of your stock? Buckle in; we’re heading north. 

    For Bitcoin, it’s a little tougher. There are no dividends or dividend forecasts; Bitcoin pays no yield. Nor are there earnings. Additionally, the supply doesn’t waver, instead it follows a pre-determined schedule set by Satoshi Nakamoto in October 2008, governing it block by block in ten-minute intervals. 

    With the supply set in stone and out of the picture, and the absence of any periodic yield/forecasts derived from dividends or earnings, this means that the Bitcoin price is all about demand. And that is very difficult to predict. Bitcoin gonna Bitcoin, is often about the best reasoning that can be given. 

    But there are factors we can assess. One is liquidity, which I touched on in a recent deep dive as Bitcoin surged beyond $30,000 for the first time in ten months. Order book liquidity is as thin as it has been in a year, while overall capital has fled the crypto space at large. Take a look at the balance of stablecoins on exchanges:

    That is 45% of the stablecoin balance taking the exit door in the last four months, the balance as low as it has been since October 2021. 

    With Bitcoin already uber-volatile (VIX metric blows that of any “normal” asset out of the water), this amps up its propensity for violent moves even further. In simple terms, thinner liquidity means it takes less action to move the price. 

    Why is the Bitcoin price currently falling?

    So, it is often difficult to ascertain why Bitcoin is moving, as this thin liquidity and capricious demand combine to make it very sensitive. 

    But sometimes, we can make educated guesses as to what moves Bitcoin on any given day. This is one of those moments. 

    Macro conditions have long been the key for Bitcoin. Again, a little chart to show this:

    Despite some temporary optimism that Bitcoin was decoupling as investors fled a collapsing (fiat) bakning system for the safe haven that is Bitcoin, the orange coin is very much moving in tandem with high-risk assets, such as tech stocks listed on the Nasdaq.

    I wrote a deep dive at the time of the banking crisis as to why Bitcoin’s dip in correlation with stocks was just a temporary blip. Looking at the data, it appears to have come back up.

    And looking at wider financial markets in the last few days, optimism over the economic climate has pulled back. UK inflation was released yesterday, holding firm in the double digits, fuelling the expectation that the Bank of England will hike further. 

    Over in the US, Atlanta Federal Reserve president said he expected another 25 bps hike, casting another bit of doubt for the market that hikes may not be done quite yet. 

    Not to mention a rally can’t go on forever. Bitcoin has been on a tear this year, up 74% year-to-date. It’s an asset which has always oscillated, so it’s not a surprise that it is finally showing a bit of weakness. And a fall from $30,000 to $28,000 is merely a drop in the ocean compared to what it is capable of. 

    A true Bitcoin red candle cannot be ruled out here, given the volatility and thin liquidity, just like it could suddenly surge further north. As financial markets adjust to new data all the time, like the all-important inflation readings and FOMC minutes, Bitcoin will continue to move like a levered bet on tech stocks. 

    As for what direction it will move in, that is anyone’s guess. I don’t have a crystal ball, and I won’t make any predictions just for the sake of it, because I simply don’t know. Not many people do right now, with the world in a precarious state economically. Inflation is still high, yet interest rates are apparently coming to the end of the tightening cycle. 

    Soft landing, hard landing, something in between? The future will tell. But whatever happens, the volatility of the world’s biggest cryptocurrency is very real, and abrupt price reversals and large swings won’t stop anytime soon. Bitcoin gonna Bitcoin. 

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  • Volatility lowest since January, but until it drops further, Bitcoin serves no purpose

    Volatility lowest since January, but until it drops further, Bitcoin serves no purpose

    • Bitcoin’s volatility is a massive problem, writes our head of research, Dan Ashmore
    • The volatility is the lowest since January, but that doesn’t provide much solace with regards to Bitcoin’s actual utility
    • For Bitcoin to deliver on its potential, it needs to become boring, with volatility closer to gold’s famously steady return profile

    It’s relatively calm in Bitcoin markets right now, but that won’t last long. And it’s a massive, problem. 

    First, let us look at the short-term volatility, because I noticed over the last few days that is has come down a little. Plotting the 1-month volatility on an annualised basis, we are at the lowest mark since January, when this little Bitcoin surge was kicked off. 

    OK, fine. 

    But don’t confuse that with a steady market. The crypto markets remain highly capricious and capable of swinging back and forth and eye-watering speed. Volatility is still close to 50%, which in the context of any regular market, is truly insane. 

    Perhaps plotting the daily returns of Bitcoin against that of Tesla shows this better. Tesla is just about the most extreme member of the S&P 500, its stock price more volatile than its CEO’s Twitter feed. Comparing your volatility to Tesla is like comparing your ability to run a football team to Todd Boehly (seriously, wtf). 

    And yet, Bitcoin’s daily price changes not only match Tesla, but commonly exceed it. 

    Indeed, if we plot Bitcoin’s volatility back over a longer time period, we see that these fallow periods do occur, but rarely last long. Bitcoin and volatility are like Frank Lampard and Chelsea, apparently – occasionally apart, but you know that before long, they will be back. And they are terrible for each other. 

    Make no mistake about it, volatility is one of Bitcoin’s greatest drawbacks. It is difficult to imagine the asset ever achieving anything remotely close to a store-of-value status while it oscillates back and forth like it does. 

    If the ultimate vision for Bitcoin is some sort of digital gold, it has a hell of a long way to go. Flipping the earlier comparison from Tesla to gold is more apt, and puts the chasm between the two assets up in lights:

    Obviously, this could all change in the future. I don’t have a crystal ball. Regarding Bitcoin’s ultimate vision, it simply has to, because as it currently stands, Bitcoin is not achieving anything. 

    The arguments commonly point to the developing world. Bitcoin can offer a greater place to store one’s financial wealth, they argue. Again, this may prove true in time, but even a collapsing currency like the Argentinian peso is not as volatile as Bitcoin. A gradual decline such as the peso (and I am using gradual a bit liberally there, admittedly) is at least easier to plan for than Bitcoin, which can quite literally be 20% lower in the space of a couple of minutes. 

    While Bitcoin is capable of these massive price moves, it isn’t in a place to help anyone. That argument is currently better served to stablecoins, pegged to fiat currencies like the US dollar, which can be equally accessible but don’t swing in price (at least, the prudently-designed ones don’t). Now, their flaws could fill a whole new article which I won’t get into here, but the point is this: Bitcoin is literally useless while its volatility is as high as it currently is. 

    My friends often poke fun at me for chatting about gold, or doing analytical pieces on its price drivers. Boomer, they call me. And that’s fair – gold is boring as f**k, and watching its price chart is like watching paint dry. But that is kind of the point, isn’t it? Gold is a store of value, and therefore it should not be printing gains and losses that get Robinhood investors all hyped up. Otherwise, it wouldn’t be doing its job. 

    Bitcoin is the same. It needs to take a leaf out of gold’s book and become boring. Until that happens, there is no point to this mythical asset beyond wild speculation. 

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  • Warren Buffett still sees bitcoin as a ‘gambling token’

    Warren Buffett still sees bitcoin as a ‘gambling token’

    Warren Buffett sees bitcoin as a ‘gambling token’
    • Bitcoin is up again following the U.S. inflation data on Wednesday.
    • Warren Buffett reiterates that BTC doesn’t have any intrinsic value.
    • BTC is currently up a whopping 80% since the start of the year.

    Bitcoin has climbed a whopping 80% since the start of the year but the “Oracle of Omaha” is still not convinced that it’s an investable asset.

    Buffett reiterates his view on Bitcoin

    Legendary investor Warren Buffett continues to see the bitcoin as “rat poison squared”. Spending money on it, he reiterated today, is more akin to gambling than investment.

    Bitcoin is a gambling token and it doesn’t have any intrinsic value, but that doesn’t stop people from wanting to play the roulette wheel.

    Buffett is one of the most notable critics of cryptocurrencies at large.

    Interestingly, though, his conglomerate Berkshire Hathaway increased its stake just a day earlier in Sumitomo Corp despite the Japanese trading company’s affiliations with Ripple.

    Bitcoin is up after the U.S. inflation data today

    Bitcoin is trading comfortably above the $30,000 level on Wednesday following the update from the U.S. Bureau of Labour Statistics which confirmed that inflation continued to ease in March.

    And Buffett agreed that there’s no telling when the upside will exhaust. On CNBC’s “Squawk Box”, he said:

    That’s predicting when speculation will end, when gambling instinct will go away, when more people would want to get out. If I were good at that, I’d make a lot of money in different things.

    Remember that the total supply of bitcoin is scheduled to have in April or May of next year – an event that’s historically unlocked more upside in BTC.

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  • Bitcoin Price Prediction Shoots For The Moon Bringing New Token ASI Along for the Ride

    Bitcoin Price Prediction Shoots For The Moon Bringing New Token ASI Along for the Ride

    • BTC rising 50% has produced a recovery in the crypto market
    • AltSignals (ASI) is a highly promising new token launch
    • ASI should outperform BTC percentage rise over the coming months and years

    After some significant movements in the crypto markets, the Bitcoin price prediction forecasts further upside. However, experts suggest that AltSignals’ new token, ASI, should outperform the Bitcoin price prediction in percentage terms before the end of the year.

    AltSignals is an industry-grade trading platform that is expanding its blockchain offering. Here’s why it could be the highest-performing project of its kind in 2023 and beyond.

    AltSignals is launching during a widespread market recovery

    The Bitcoin price prediction has flipped bullish after some promising price action at the beginning of 2023. BTC has risen over 50% from its recent lows and has been driving a recovery in the crypto market.

    After many altcoins fell over 90%, the BTC recovery has produced widespread gains across the crypto market. This comes at a time when AltSignals, a highly successful crypto trading community, is launching its crypto presale event.

    The ASI token has a high potential for future returns, especially as the crypto market recovers following a positive Bitcoin price prediction. A BTC recovery typically signals the beginning of bullish crypto market movements, and ASI is well-positioned to benefit over the coming months and years.

    What is Bitcoin?

    Bitcoin (BTC) is the first blockchain-based cryptocurrency. The Bitcoin blockchain uses a proof-of-work protocol to achieve consensus in a distributed computer network. This process is highly complex by design, and the economic costs of overriding the consensus mechanism make attacking the BTC network practically impossible.

    Since it was first launched in 2009, BTC has become the largest cryptocurrency by market capitalization and has been adopted by governments and financial institutions worldwide. The rate of progress for the Bitcoin price prediction is a testament to its innate scarcity – there will only ever be 21 million BTC, which means that constantly rising demand is destined to push the price upwards.

    Bitcoin price prediction: Can BTC reach over $30,000 in 2023?

    The Bitcoin price prediction for 2023 targets $30,000 as a key level. If BTC can break through resistance at $29,000, then it is likely to reach $30,000 and above before the end of the year.

    What is AltSignals?

    AltSignals is one of the largest crypto market trading communities in Web3. The platform has consistently provided profitable trading signals to its users since 2017 and has an impressive track record for success. For example, the Binance Futures Report for Feb 2023 has shown a win rate of 90%.

    The project is now expanding its offering and will introduce several useful features to its community of crypto market traders. The ASI token, which is being released at $0.012 during the presale, is integral to this development.

    How will the ecosystem utilize ASI?

    The ASI token will give holders exclusive access to premium trading signals in the crypto market using ActualizeAI. ActualizeAI is a groundbreaking AI-powered development tool that combines several leading technologies with crypto market data. After analyzing a wide variety of different indicators, ActualizeAI will generate profitable trading signals on a consistent basis.

    ASI can be used to access the AI Members Club. This premium offering will grant early participation in AltSignals’ new trading tools. With massive profits already being made through AltSignals’ AI tools, this feature can give traders a real edge in the crypto markets.

    By holding the ASI token and joining the AI Members Club, users can gain access to exclusive investment opportunities and much more. Members can even help the AltSignals development team improve their tools by participating in early tests and sharing feedback with the team.

    Could ASI reach $1 in 2023?

    The ASI token represents a strong existing project that is now branching out further. AltSignals has a large existing user base and extensive token utility, making it a prime investment opportunity over the coming years.

    The AltSignals crypto presale will raise the price of ASI from $0.012 to $0.02274 before the token goes live on exchanges. At this point, the price of ASI could go parabolic, especially if the AI development coincides with rising prices across the crypto market.

    Experts are forecasting a $1 price level for the ASI token before the end of 2023 – a 45x price rise from the end of the presale. As a reputable community-driven project that will in the future utilize advanced AI tools, AltSignals certainly has massive potential.

    AltSignals vs. Bitcoin price prediction: Why buy ASI?

    While Bitcoin is expected to kickstart a recovery for the crypto markets, it is unlikely to outperform AltSignals in 2023 and beyond if a bull market begins. Early investors in the ASI crypto presale can expect significant returns over the coming years, as the project combines several ground-breaking technologies to deliver a comprehensive user trading experience.

    AltSignals has the potential to become an industry-leading AI trading project on the blockchain. However, a limited number of ASI tokens are being released during the presale event, and it is first come, first served. The ASI token could be the best buy of 2023 as investors prepare for the next bull run in the crypto market.

    You can participate in the AltSignals presale here.

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  • Bitcoin price, volatility and profits are all the highest since June 2022

    Bitcoin price, volatility and profits are all the highest since June 2022

    Key Takeaways

    • Bitcoin has broken $30,000 for the first time since June 2022
    • Volatility is also at its highest point since June
    • Liquidity is the lowest it has been all year, meaning less is needed to move Bitcoin up (and down)
    • 45% of stablecoins have fled exchanges in last four months, with market depth has not recovered from Alameda bankruptcy in November
    • Interest rate forecasts have flipped, providing positive impetus as market bets tight monetary policy is coming to an end
    • Low liquidity and positive interest rate expectations have kicked Bitcoin up past $30K
    • Week ahead brings data on inflation, Fed minutes and earnings, and Bitcoin could move violently again depending on how it shakes out

    Throw a mask on and stay beyond a 2-metre radius, because it feels like 2021 again. 

    At least, looking at the cryptocurrency market, that is. Bitcoin has turned back the years to rally to its highest price since last summer, despite the economy feeling like it’s falling down all around us. $30,000 has officially been breached. 

    Not only is the price at its highest point in ten months, but the volatility and profits have also ramped up to the highest points since before the house of cards all came down, while the supply on the market is dwindling.

    But why? And will all this continue or will Bitcoin fall back down to Earth? Let’s dig into the data to see if there is an answer. 

    Price

    First, what makes the headlines pop: the price.  

    Bitcoin breached $30,000 Monday evening for the first time since June 2022. To refresh the memory, that was the week of the Celsius crash, the crypto lender announcing on June 12th 2022 that it was suspending withdrawals, having been caught up in the LUNA contagion. 

    Billions of customer assets were locked, and the Bitcoin price spiralled downwards, dropping below $30,000, and then $20,000, in the days afterwards. Monday was the first time it has taken back the $30,000 mark. 

    The key to this resurgence? Interest rate forecasts, primarily (but not just interest rates…as we will get into in the next section). 

    The forecast of the future path of interest rates has completely flipped in the last month or so, providing impetus for this leg up in Bitcoin as the market bets that we are finally ready to pivot off the aggressive hiking of rates that has been ongoing since last April. 

    Last year’s transition to a new paradigm of tight monetary policy signalled an abrupt end to the decade-long bull market across financial markets, pulling risk assets down in price across the board. 

    Crypto didn’t help its case with several scandals along the way – LUNA, Celsius and FTX to name a few – but the macro conditions have certainly not been kind either, with the Nasdaq shedding a third of its value last year, its worst return since 2008. 

    But following the banking collapse, the market is betting that the Fed simply cannot continue with the interest rate forecasts going forward. The below chart shows interest rate expectations for the July meeting – the right side shows the forecast from six weeks ago, which has completely flipped compared to the forecast today (purple bars on the left). 

    Volatility 

    But it’s not just the price that is rising. Volatility is also at its highest point since it picked up following the collapse of Celsius last June. The below chart shows this, and then we will see why this is not a coincidence that it is coinciding with a relentless price rise. 

    The elevated volatility is a direct consequence of the liquidity being so low. I crafted together a deep dive on this two weeks ago, but liquidity in cryptocurrency markets is as low as it has been all year. 

    45% of the stablecoin balance on exchanges has fled in the last four months, with the resultant balance the lowest since October 2021. 

    This is matched by market depth dropping down too, yet to recover from the evaporation of Alameda into thin air last November. 

    And this gets to the crux of the issue: the thin liquidity exacerbates moves both to the downside and upside. This is a fancy way of saying it elevates volatility, which is exactly what we seeing recently for Bitcoin. 

    And this exacerbation of any price move, coupled with the positive spin coming out of the interest rate forecasts, means Bitcoin is getting a hell of a push up the charts – with liquidity so shallow that there is minimal resistance. 

    In short, liquidity is down, and volatility is up. And with the most important thing in markets right now, i.e. the interest rate forecast, flipping positive, we get a violent upward price move. 

    “The low liquidity has left the market vulnerable to massive moves”, says Max Coupland, director of CoinJournal. “Luckily for crypto investors, the flip in interest rate expectations has meant prices have accelerated upwards, but looking at the week ahead, this may change if the economic data comes in below forecasts. Bitcoin is always volatile, but it feels particularly primed for big moves at the moment”.  

    Profit

    Finally, profit. It doesn’t take a genius to work out that with the Bitcoin price at its highest point in nine months, the profit position for investors is also looking a little rosier than it has in the past. 

    When assessing the price at which Bitcoins last moved at compared to the current price, it can be deduced that 76.2% of the Bitcoin supply is in profit. That marks the highest point in a year, back before the transition to a tight monetary policy and the LUNA scandal of last May.  

    What happens next?

    But will this all persist? Or is it just a bear market rally?

    Well, the uber-low liquidity is likely not going to shift in the short-term, at least. This means that volatility will remain elevated and moves to both the downside and upside will be elevated. 

    But with volatility high, which direction will it go? I won’t pretend I know the answer to that, but the week ahead has some key data coming out that will drive the price one way or another – and perhaps very significantly so. 

    First is the CPI data out Wednesday. Inflation has come down every month since June 2022 yet this is the first inflation reading to come out following the optimism that interest rate hikes are soon coming to an end. A hot reading could spook the market into thinking that the Fed may think about hiking further, however, especially after the banking troubles of the last month have subsided. 

    Also on Wednesday is the FOMC minutes, which will give a direct insight into the plans of the Fed. This, and the inflation reading, are absolutely vital economic indicators, and have been what has moved markets all year long. That won’t change. 

    Throw in Thursday’s producer price index (PPI) and earnings season kicking off on Friday, and the price moves ahead could be extreme. Bitcoin is very volatile right now and the economy is at a watershed moment, with plenty of data coming out in the week ahead. 

    Buckle your seat belts and get your popcorn ready.

    If you use our data, then we would appreciate a link back to https://coinjournal.net. Crediting our work with a link helps us to keep providing you with data analysis research.

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