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Bitcoin falls to $36K, traders say bulls need a ‘Hail Mary’ to avoid a bear market

BTC price dropped to new lows at $36,000, leading analysts to call for a “Hail Mary close above $39,600” to stave off a bearish shift in Bitcoin’s market structure.
Bitcoin (BTC) price continues to sell-off and the knock-on…

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BTC price dropped to new lows at $36,000, leading analysts to call for a “Hail Mary close above $39,600” to stave off a bearish shift in Bitcoin’s market structure.

Bitcoin (BTC) price continues to sell-off and the knock-on effect is an even sharper correction in altcoins and DeFi tokens. At the time of writing, BTC price has sank to its lowest level in 6 months and most analysts are not optimistic about an immediate turn around. 

Data from Cointelegraph Markets Pro and TradingView shows that a wave of selling that began late in the day on Jan. 20 continued into midday on Friday when BTC hit a low of $36,600.

BTC/USDT 1-day chart. Source: TradingView

Here’s a check-in with what analysts have to say about the current downturn and what may be in store for the coming weeks.

Traders expect consolidation between $38,000 and $43,000

The sudden price drop in BTC has many crypto traders predicting various dire outcomes along the lines of an extended bear market. Others like independent market analyst ‘Rekt Capital’, are not so quick to jump the gun and declare that all is lost.

As shown in the following chart posted by Rekt Capital, “the recent BTC rejection means that BTC is now residing at the lower region of its current $38,000-$43,100 range.”

BTC/USD 1-week chart. Source: Twitter.

According to Rekt Capital, “Bitcoin is just consolidating inside the $38,000-$43,100 range,” but needs to hold this support level to avoid dropping down into a lower consolidation range.

Rekt Capital said,

“Technically, the $38,000 support area is what separates BTC from entering the $28,000-$38,000 consolidation range. Bitcoin last consolidated in said range in Q1 and Q2 of 2021.”

Head and shoulders pattern confirmed

Analysis of the BTC price action from a purely technical point of view was touched on by David Lifchitz, managing partner and chief investment officer at ExoAlpha, who pointed out that the “giant head and shoulders pattern for BTC is now completed with the neckline broken with BTC at $38,300.”

BTC/USDT 1-day chart. Source: TradingView

From a theoretical standpoint, Lifchitz noted that this pattern predicts a possible drawdown as low as $20,000, but he stated that the “fall has generally been less than that” and suggested that “the $31,000 region could definitely be in sight.”

From a fundamental point of view, Lifchitz noted multiple factors that are creating headwinds for BTC, including tightening from the U.S. Federal Reserve, chatter from the EU regulators looking to ban proof-of-work mining, profit-taking from late 2021 and the continued uncertainty about the economic future as it relates to the Covid pandemic.

Lifchitz said,

“Therefore for Bitcoin, a move down to the low-mid $30,000 could be definitely in the cards soon before real dip-buyers show up.”

Traders look to scoop up BTC at $30,000

A look at how traders have responded to this drawdown as compared to the pullback in June of 2021 was provided by analyst and Cointelegraph contributor Michaël van de Poppe, who posted the following chart highlighting the major support zones for each period of weakness.

BTC/USD 1-day chart. Source: Twitter

van de Poppe said,

“Back in June → People are waiting for $23,000 to $25,000 to buy. Right now → People are waiting for $30,000 to buy. Similar fake breakout on the upside to nuke afterward into support.”

A similar point of view was offered by trader and pseudonymous Twitter user ‘Fomocap’, who posted the following chart outlining how BTC could perform in the days ahead.

BTC/USD 1-day chart. Source: Twitter

Fomocap said,

“Relief bounce to $44,000 - $42,000 retest, if rejection then $35,000 - $33,000. What do you think?”

Related: Crypto Twitter responds to Bitcoin dump: ‘Ok cool’

Bulls need a close above $39,600

A final bit of insight into was offered by crypto trader Scott Melker, who posted the following chart showing the price breakdown below a key level that must be recovered.

BTC/USD 1-day chart. Source: Twitter

Melker said,

“Bulls looking for a Hail Mary close above $39,600 on the daily. A close below (especially on weekly) is a break in market structure, lower low etc. Bears showing no mercy.”

The overall cryptocurrency market cap now stands at $1.801 trillion and Bitcoin’s dominance rate is 40.4%.

The views and opinions expressed here are solely those of the author and do not necessarily reflect the views of Cointelegraph.com. Every investment and trading move involves risk, you should conduct your own research when making a decision.

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Sam Bankman-Fried could spend up to $1B in 2024 to thwart Trump comeback

The FTX founder said he’d spend “north of $100 million” with a “soft ceiling” of $1 billion and added “who knows what’s going to happen between…

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The FTX founder said he’d spend “north of $100 million” with a “soft ceiling” of $1 billion and added “who knows what’s going to happen between now and then.”

The billionaire founder and CEO of theFTX cryptocurrency exchange Sam Bankman-Fried has revealed he intends to spend anywhere between $100 million and $1 billion to help influence the 2024 United States presidential election campaigns.

In a podcast interview on May 24 Bankman-Fried was asked how much money he might donate during the next presidential election cycle, answering he’d give “north of $100 million” with a “soft ceiling” of $1 billion if he were to bankroll the person running against former president Donald Trump.

“I would hate to say hard ceiling because who knows what’s going to happen between now and then.”

According to the government watchdog OpenSecrets, which tracks data on campaign finance and lobbying, a $1 billion donation would break existing records multiple times over.

The largest individual political donors are currently the Republican business owners Sheldon and Miriam Adelson who spent $218 million in 2020.

Bankman-Fried continued by saying the amount he donates is “super contingent” and “really dependent on exactly who's running where and for why,” adding it’s likely he would spread the money across multiple organizations.

“I think that I'm going to be looking a lot less at political parties from that perspective and a lot more about sane governance and ads for the things that I care the most about.”

He said one of the most important issues to him is preventing the next pandemic which he thinks would cost “tens of billions of dollars.”

“The United States has both a big opportunity and big responsibility to the world to shepherd the West in a powerful but responsible manner,” and added that everything the country does has “massive ripple effects on what the future looks like.”

Bankman-Fried has donated millions to politicians in the past contributing $5.2 million in donations to now-President Joe Biden’s 2020 election campaign.

Related: Sam Bankman-Fried: The crypto whale who wants to give billions away

He also backs the political action committee (PAC) “Protect Our Future” set up in January 2022 which to April spent $9 million supporting Democratic candidates.

Earlier in May the PAC spent in the range of $8 to $10 million backing Carrick Flynn who failed to win the Democratic primary election for the newly created Oregon 6th District seat in the U.S. House of Representatives.

However, there may be a scenario where Bankman-Fried decides not to donate any money at all, although he thinks the possibility of that is “very low”:

“There's a world which ends up being close to zero if things just work out such that there isn't much I'm excited about.”

The FTX CEO didn’t state in the interviews which crypto related policies he would push for. Over at rival exchange Coinbase, efforts are ramping up in terms of lobbying for crypto favorable policies with last week’s announcement of a “crypto native” think tank, the Coinbase Institute.

It will publish research on crypto and Web3 to bolster the exchange's lobbying efforts. In 2021 the firm was the biggest spending blockchain company in terms of lobbying with over $1.3 million spent.

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Questions arise on Y Combinator’s role in startup correction

Some are pointing the finger not just at late-stage capital pools that poured too much liquidity into the startup market — some startup players are irked…

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A chill has descended onto the global startup market, albeit not evenly. Venture capital totals are sagging in most geographies, and falling share prices for tech companies large and small have soured sentiment on the future value of high-growth and often cash-hungry startups.

The end of the lengthy startup boom that first formed in the wake of the 2008 financial crisis and largely powered through until the final months of 2021 is shaking out, changing how the market views certain entities.


The Exchange explores startups, markets and money.

Read it every morning on TechCrunch+ or get The Exchange newsletter every Saturday.


Every business cycle has winners and losers, heroes and villains. Some earlier winners turned out to be losers. Tiger, the mega-crossover fund, has evolved from a market-dominating change agent in technology financing to a bag holder. SoftBank’s various Vision Fund efforts are suffering. And some crypto investments that looked to be massive wins have sputtered.

Torben Friehe, CEO of Wingback (YC W22), told TechCrunch earlier this year that many founders that he has spoken to have decided to hold off on fundraising in the current climate, adding that other founders from “across the ecosystem” are saying “that if you have to fundraise right now, you basically have to cut whatever you’d planned to raise back in January in half.”

The winners and losers scorebook isn’t that hard to draw up. But the heroes and villains ledger is a bit more difficult. But with the startup market so changed, so quickly, whiplash is setting in among the investing class. And some are pointing the finger not just at late-stage capital pools that poured too much liquidity into the startup market — some startup players are irked at accelerators, Y Combinator in particular. Let’s talk about it.

The return of fear

The latest missives from venture players are once again downturn letters. We last saw a round of these notes when COVID-19 first hit the world outside of China, leading to economic calamity and lockdowns. Investors warned startups to buckle up for bad times. But, as we now know, the bad times never came for most of them.

Instead, ironically, the pandemic became an accelerant of sorts, pushing more business toward tech companies that helped other concerns operate remotely; an accelerating digital transformation was another tailwind bolstering the tech sector, giving startups a shot in the arm.

The most recent round of warnings from venture capitalists appears more frequent than we saw in 2020, leading our own Natasha Mascarenhas to note over the weekend that “everyone is drafting their own startup Black Swan memo.” Among the various firms that sent advice to their portfolios was Y Combinator.

Y Combinator, or YC for short, is the world’s best-known accelerator. Its expanding cohort sizes, twice-yearly cadence and “standard deal” made it a trendsetting startup program; one that has sufficient heft to influence the overall direction of the early-stage market for funding upstart technology companies. And, after starting life offering “about $20,000 for 6% of a company,” YC raised its terms in 2020 to “$125,000 for 7% equity on a post-money SAFE,” along with reduced pro-rata rights “to 4% of subsequent rounds.”

That changed again in early 2022, when YC added a $375,000 note to its deal, offered on an uncapped basis but with most-favored-nation status. In essence, YC conserved its ability to collect 7% of startup equity early, with extra capital provided to its portfolio companies to put to work.

Over the last few years, YC has raised the valuation bar for its startups, from around $333,333 (6% of a company for $20,000) to $1.79 million (7% of a company for $125,000). Even more, the additional capital it now offers on an uncapped basis likely worked to cement early-stage startup expectations that their accelerator valuation was market valid.

Abhinaya Konduru, an investor at Midwest-focused venture fund M25, told TechCrunch that her firm has “been skeptical of a couple of national accelerators’ valuation practices from an investing standpoint even before the last couple of years,” adding that changes to early-stage valuations from select accelerators — she did not call any program out by name — “made it even harder to consider those companies for an investment to the point where [M25] stopped looking at them.”

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Bitcoin, Gold and Bonds could dominate 2022 – Bloomberg Intelligence

Inflation is arguably out of control globally, with rates hitting as high as 9% in the United Kingdom while the M1 money supply grows.
The post Bitcoin,…

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Inflation is arguably out of control globally, with rates hitting as high as 9% in the U.K. while the M1 money supply grows. The stock markets have taken a massive hit, with over $7 trillion wiped off the Nasdaq in the last four months.

A senior analyst at Bloomberg Intelligence, Mike McGlone, said:

“If stocks are going limp, Bitcoin, Gold, and Bonds could rule.”

McGlone shared the chart below to support his claim.

Source: Twitter

This spread chart shows the U.S. Treasury 10-year bond yield in orange and the price of Bitcoin against the NASDAQ 100 over the past four years. At the bottom of the Bitcoin bear market, around 2018, the chart shows a double bottom ratio of 0.5 before rising to 2.0 in early 2021.

The ability of Bitcoin to hold the 2.0 ratio since January 2021 indicates that it is performing well amid its first potential recession. The last extended global recession occurred due to the 2008 financial crisis, which was a year before the birth of Bitcoin.

Since its inception, Bitcoin has flourished in a thriving global economy. The COVID-19 hurdle of early 2020 was surpassed due to trillions of dollars flooding into circulation, much of which made its way into cryptocurrency. As the world deals with the impact of the rapid increase in money supply, Bitcoin appears to be holding firm compared to other risk-on investments.

McGlone states that “Greater Risk in About a Year May Be #Deflation.” However, his overall sentiment continues to focus on the ability of Bitcoin and Gold to outperform the market in the near future. 

“Following an extended period of outperformance, an underperformance period may be overdue for the #stockmarket, which may shine on #gold and #Bitcoin. The BOLD1 Index (gold, bitcoin combo) has kept pace with the Nasdaq 100 Stock Index in a bull market and with lower volatility.”

The supporting chart shows the declining volatility of BOLD1 against the NASDAQ 100 index since 2019.

BOLD1 chart
Source: Twitter

 

The post Bitcoin, Gold and Bonds could dominate 2022 – Bloomberg Intelligence appeared first on CryptoSlate.

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