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Illiquid supply ‘going up relentlessly’ — 5 things to watch in Bitcoin this week

It may have dropped to six-month lows, but Bitcoin is still the subject of an increasing supply squeeze.
Bitcoin (BTC) is starting the final week of January in a place no one wanted but many warned about — a 50% drawdown from all-time.

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It may have dropped to six-month lows, but Bitcoin is still the subject of an increasing supply squeeze.

Bitcoin (BTC) is starting the final week of January in a place no one wanted but many warned about — a 50% drawdown from all-time highs.

A flight to $34,000 means that BTC/USD is now down by half in just two months, and perhaps naturally, concerns are that the losses could continue.

With $30,000 so far unchallenged, Bitcoin remains slightly above the trough of its dip from $58,000 to $29,000 last summer.

With macro markets facing a tough time of their own thanks to rapidly changing United States Federal Reserve policy, crypto holders will be eyeing their coins’ correlation to traditional assets going forward. Can Bitcoin break the trend?

So far, there are few signs that a significant rebound is on the cards, but below the headlines, not all is as it seems when it comes to Bitcoin’s strength.

Cointelegraph presents a look at five areas worth taking note of this week when assessing what could be next for BTC price action.

Bitcoin nears a “generational bottom”

Bitcoin bears took no notice of out-of-hours trading on Wall Street, with the weekend ushering in a new round of losses.

From $39,000 to current lows of $34,000, BTC showed no mercy as liquidations mounted and sentiment took a fresh beating.

Now, traders are naturally eyeing a test of $30,000 as a more definitive representation of how Bitcoin is likely to fare in the short to mid-term.

Other estimates for where some relief may occur previously lay at $33,000 and $31,500, these likewise yet to be reached.

Analyzing various aspects of the on-chain situation, Dylan LeClair, senior analyst at UTXO Management, highlighted Bitcoin’s current cost basis as a potential clue for what he calls a “generational bottom.”

Cost basis refers to the aggregate price at which Bitcoin from various cohorts of investors was last moved. The calculation, when combined with other data, can give an insight into where a Bitcoin bear phase is likely to bottom out.

Currently, the network cost basis is $24,000. The ratio of cost basis to price, known as the market value to realized value (MVRV) ratio, likewise has further room to fall before putting in a classic floor signal of its own.

Closer to home and a familiar target for BTC/USD is emerging in the form of a CME futures gap.

While a wick to just above $36,000 on Friday spoiled the opportunity for Bitcoin to reclaim levels closer to $40,000 as part of a “gap fill,” a lower gap from July remains at around $32,000.

“The actual price action will happen at the start of the new week, when futures open and CME starts to trade,” Cointelegraph contributor Michaël van de Poppe forecast.

CME Bitcoin futures 1-day candle chart. Source: TradingView

Futures “gaps” refer to the empty space on CME Group’s futures chart between the end of trading on Friday and the start on the following Monday. If spot price moves in the intervening period, it has a habit of returning to “fill in” the gap, this often occurs within days or even hours.

Spotlight on RSI

Over the weekend, Cointelegraph reported on Bitcoin’s daily relative strength index (RSI) metric nearing its lowest levels since the coronavirus crash of March 2020.

Well below even its classic “oversold” zone, RSI is now becoming one of the most convincing signals for analysts keen to put faith in a market rebound.

Not just daily, but weekly RSI is now de facto back where it dipped to almost two years ago. Thereafter, those who followed it profited big, as the next year saw practically unbridled BTC price gains.

RSI refers to how overbought or oversold an asset is at a given price point, and the current low readings thus lend weight to the idea that $35,000 does not accurately reflect Bitcoin’s value.

For popular Twitter trader and analyst TechDev, the numbers stack up, with RSI on the weekly chart within a hair of classic reversal zones from earlier in Bitcoin’s history.

“Monthly RSI approaching levels that have been historically some of the best buying opportunities in its entire history,” fellow analyst Matthew Hyland added alongside a chart of his own.

Bitcoin monthly RSI vs. BTC/USD annotated chart. Source: Matthew Hyland/Twitter

On both higher and lower timeframes, Bitcoin RSI is hinting that current price levels are unsustainable.

Miners hold firm… so far

Another phenomenon that could be subtly flagging $35,000 Bitcoin as a red herring is that of miner selling — or lack of it.

At 50% below all-time highs, BTC/USD is now within major estimates of global production costs for mining a single Bitcoin.

These range from around $34,000, as Cointelegraph reported, to $38,000, according to recent estimates, including that from crypto merchant bank Galaxy Digital.

Looking at data covering movements from mining pools and known miner wallets, however, it appears that despite presumably low or even negative profit margins, miners are in no mood to sell their BTC holdings.

A significant accumulation trend that began last year thus shows no sign of reversing — yet.

Nonetheless, not everyone is convinced that the status quo can weather the storm if spot price action continues to decline.

“The worst dumps #Bitcoin ever had were due to miners capitulation (Dec 2018, Mar 2020), when BTC fell below production costs, it is at risk for miner capitulation,” popular Twitter account Venturefounder reiterated over the weekend.

“BTC was at risk for miner capitulation at $30k in June and at risk now again at $34k.”

He included the latest incarnation of the Bitcoin production cost indicator from Charles Edwards, CEO of crypto investment firm Capriole.

Bitcoin production cost vs. BTC/USD chart. Source: Venturefounder/Twitter

Illiquid supply keeps growing

While concerns focus on whether or not certain cohorts of Bitcoin market participants will sell and at what price, it pays to zoom out, one analyst says.

Analyzing the overall BTC supply at the weekend, Lex Moskovski, chief investment officer of Moskovski Capital, drew attention to the ongoing trend of coins becoming ever more inaccessible.

Spot price moves aside, more and more of the supply is being siphoned off to cold storage, accompanying data from Glassnode shows.

In January, despite the downtrend, the conversion of Bitcoin to illiquid actually accelerated, underscoring the desire from investors to buy at price levels seen over recent weeks. Selling, it would seem, is the last thing on their minds.

“Panic if you feel like it but Bitcoin illiquid supply is going up relentlessly,” Moskovski forecast.

Bitcoin illiquid supply vs. BTC/USD annotated chart. Source: Lex Moskovski/Twitter

At the start of this month, Glassnode estimated that 76% of the supply was already illiquid. In December, approximately 100,000 BTC was becoming illiquid each month, additional findings claimed.

“The only thing that is noise is the summer dip,” Moskovski added about the supply upheaval that followed last May’s miner relocation event.

Sentiment index a hair from historic lows

With all the downside, it is likely unsurprising that Bitcoin market sentiment is not performing well.

Related: Top 5 cryptocurrencies to watch this week: BTC, LUNA, ATOM, ACH*, FTM

According to the latest data from the Crypto Fear & Greed Index, “extreme fear” just keeps getting worse in line with spot price performance.

Earlier in the month, Cointelegraph reported on the Index reaching lows seen only a handful of times in history, and with the weekend seeing a return to those levels, the doom being felt by the average market participant is becoming all the more clear.

Current levels of around 10/100 have in the past proven to be excellent buying points based on sentiment alone, with Bitcoin settling there in both March 2020 and the pit of its 2018 bear market. 

Crypto Fear & Greed Index (screenshot). Source: Alternative.me

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International

Beloved mall retailer files Chapter 7 bankruptcy, will liquidate

The struggling chain has given up the fight and will close hundreds of stores around the world.

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It has been a brutal period for several popular retailers. The fallout from the covid pandemic and a challenging economic environment have pushed numerous chains into bankruptcy with Tuesday Morning, Christmas Tree Shops, and Bed Bath & Beyond all moving from Chapter 11 to Chapter 7 bankruptcy liquidation.

In all three of those cases, the companies faced clear financial pressures that led to inventory problems and vendors demanding faster, or even upfront payment. That creates a sort of inevitability.

Related: Beloved retailer finds life after bankruptcy, new famous owner

When a retailer faces financial pressure it sets off a cycle where vendors become wary of selling them items. That leads to barren shelves and no ability for the chain to sell its way out of its financial problems. 

Once that happens bankruptcy generally becomes the only option. Sometimes that means a Chapter 11 filing which gives the company a chance to negotiate with its creditors. In some cases, deals can be worked out where vendors extend longer terms or even forgive some debts, and banks offer an extension of loan terms.

In other cases, new funding can be secured which assuages vendor concerns or the company might be taken over by its vendors. Sometimes, as was the case with David's Bridal, a new owner steps in, adds new money, and makes deals with creditors in order to give the company a new lease on life.

It's rare that a retailer moves directly into Chapter 7 bankruptcy and decides to liquidate without trying to find a new source of funding.

Mall traffic has varied depending upon the type of mall.

Image source: Getty Images

The Body Shop has bad news for customers  

The Body Shop has been in a very public fight for survival. Fears began when the company closed half of its locations in the United Kingdom. That was followed by a bankruptcy-style filing in Canada and an abrupt closure of its U.S. stores on March 4.

"The Canadian subsidiary of the global beauty and cosmetics brand announced it has started restructuring proceedings by filing a Notice of Intention (NOI) to Make a Proposal pursuant to the Bankruptcy and Insolvency Act (Canada). In the same release, the company said that, as of March 1, 2024, The Body Shop US Limited has ceased operations," Chain Store Age reported.

A message on the company's U.S. website shared a simple message that does not appear to be the entire story.

"We're currently undergoing planned maintenance, but don't worry we're due to be back online soon."

That same message is still on the company's website, but a new filing makes it clear that the site is not down for maintenance, it's down for good.

The Body Shop files for Chapter 7 bankruptcy

While the future appeared bleak for The Body Shop, fans of the brand held out hope that a savior would step in. That's not going to be the case. 

The Body Shop filed for Chapter 7 bankruptcy in the United States.

"The US arm of the ethical cosmetics group has ceased trading at its 50 outlets. On Saturday (March 9), it filed for Chapter 7 insolvency, under which assets are sold off to clear debts, putting about 400 jobs at risk including those in a distribution center that still holds millions of dollars worth of stock," The Guardian reported.

After its closure in the United States, the survival of the brand remains very much in doubt. About half of the chain's stores in the United Kingdom remain open along with its Australian stores. 

The future of those stores remains very much in doubt and the chain has shared that it needs new funding in order for them to continue operating.

The Body Shop did not respond to a request for comment from TheStreet.   

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Government

Are Voters Recoiling Against Disorder?

Are Voters Recoiling Against Disorder?

Authored by Michael Barone via The Epoch Times (emphasis ours),

The headlines coming out of the Super…

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Are Voters Recoiling Against Disorder?

Authored by Michael Barone via The Epoch Times (emphasis ours),

The headlines coming out of the Super Tuesday primaries have got it right. Barring cataclysmic changes, Donald Trump and Joe Biden will be the Republican and Democratic nominees for president in 2024.

(Left) President Joe Biden delivers remarks on canceling student debt at Culver City Julian Dixon Library in Culver City, Calif., on Feb. 21, 2024. (Right) Republican presidential candidate and former U.S. President Donald Trump stands on stage during a campaign event at Big League Dreams Las Vegas in Las Vegas, Nev., on Jan. 27, 2024. (Mario Tama/Getty Images; David Becker/Getty Images)

With Nikki Haley’s withdrawal, there will be no more significantly contested primaries or caucuses—the earliest both parties’ races have been over since something like the current primary-dominated system was put in place in 1972.

The primary results have spotlighted some of both nominees’ weaknesses.

Donald Trump lost high-income, high-educated constituencies, including the entire metro area—aka the Swamp. Many but by no means all Haley votes there were cast by Biden Democrats. Mr. Trump can’t afford to lose too many of the others in target states like Pennsylvania and Michigan.

Majorities and large minorities of voters in overwhelmingly Latino counties in Texas’s Rio Grande Valley and some in Houston voted against Joe Biden, and even more against Senate nominee Rep. Colin Allred (D-Texas).

Returns from Hispanic precincts in New Hampshire and Massachusetts show the same thing. Mr. Biden can’t afford to lose too many Latino votes in target states like Arizona and Georgia.

When Mr. Trump rode down that escalator in 2015, commentators assumed he’d repel Latinos. Instead, Latino voters nationally, and especially the closest eyewitnesses of Biden’s open-border policy, have been trending heavily Republican.

High-income liberal Democrats may sport lawn signs proclaiming, “In this house, we believe ... no human is illegal.” The logical consequence of that belief is an open border. But modest-income folks in border counties know that flows of illegal immigrants result in disorder, disease, and crime.

There is plenty of impatience with increased disorder in election returns below the presidential level. Consider Los Angeles County, America’s largest county, with nearly 10 million people, more people than 40 of the 50 states. It voted 71 percent for Mr. Biden in 2020.

Current returns show county District Attorney George Gascon winning only 21 percent of the vote in the nonpartisan primary. He’ll apparently face Republican Nathan Hochman, a critic of his liberal policies, in November.

Gascon, elected after the May 2020 death of counterfeit-passing suspect George Floyd in Minneapolis, is one of many county prosecutors supported by billionaire George Soros. His policies include not charging juveniles as adults, not seeking higher penalties for gang membership or use of firearms, and bringing fewer misdemeanor cases.

The predictable result has been increased car thefts, burglaries, and personal robberies. Some 120 assistant district attorneys have left the office, and there’s a backlog of 10,000 unprosecuted cases.

More than a dozen other Soros-backed and similarly liberal prosecutors have faced strong opposition or have left office.

St. Louis prosecutor Kim Gardner resigned last May amid lawsuits seeking her removal, Milwaukee’s John Chisholm retired in January, and Baltimore’s Marilyn Mosby was defeated in July 2022 and convicted of perjury in September 2023. Last November, Loudoun County, Virginia, voters (62 percent Biden) ousted liberal Buta Biberaj, who declined to prosecute a transgender student for assault, and in June 2022 voters in San Francisco (85 percent Biden) recalled famed radical Chesa Boudin.

Similarly, this Tuesday, voters in San Francisco passed ballot measures strengthening police powers and requiring treatment of drug-addicted welfare recipients.

In retrospect, it appears the Floyd video, appearing after three months of COVID-19 confinement, sparked a frenzied, even crazed reaction, especially among the highly educated and articulate. One fatal incident was seen as proof that America’s “systemic racism” was worse than ever and that police forces should be defunded and perhaps abolished.

2020 was “the year America went crazy,” I wrote in January 2021, a year in which police funding was actually cut by Democrats in New York, Los Angeles, San Francisco, Seattle, and Denver. A year in which young New York Times (NYT) staffers claimed they were endangered by the publication of Sen. Tom Cotton’s (R-Ark.) opinion article advocating calling in military forces if necessary to stop rioting, as had been done in Detroit in 1967 and Los Angeles in 1992. A craven NYT publisher even fired the editorial page editor for running the article.

Evidence of visible and tangible discontent with increasing violence and its consequences—barren and locked shelves in Manhattan chain drugstores, skyrocketing carjackings in Washington, D.C.—is as unmistakable in polls and election results as it is in daily life in large metropolitan areas. Maybe 2024 will turn out to be the year even liberal America stopped acting crazy.

Chaos and disorder work against incumbents, as they did in 1968 when Democrats saw their party’s popular vote fall from 61 percent to 43 percent.

Views expressed in this article are opinions of the author and do not necessarily reflect the views of The Epoch Times or ZeroHedge.

Tyler Durden Sat, 03/09/2024 - 23:20

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Government

Veterans Affairs Kept COVID-19 Vaccine Mandate In Place Without Evidence

Veterans Affairs Kept COVID-19 Vaccine Mandate In Place Without Evidence

Authored by Zachary Stieber via The Epoch Times (emphasis ours),

The…

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Veterans Affairs Kept COVID-19 Vaccine Mandate In Place Without Evidence

Authored by Zachary Stieber via The Epoch Times (emphasis ours),

The U.S. Department of Veterans Affairs (VA) reviewed no data when deciding in 2023 to keep its COVID-19 vaccine mandate in place.

Doses of a COVID-19 vaccine in Washington in a file image. (Jacquelyn Martin/Pool/AFP via Getty Images)

VA Secretary Denis McDonough said on May 1, 2023, that the end of many other federal mandates “will not impact current policies at the Department of Veterans Affairs.”

He said the mandate was remaining for VA health care personnel “to ensure the safety of veterans and our colleagues.”

Mr. McDonough did not cite any studies or other data. A VA spokesperson declined to provide any data that was reviewed when deciding not to rescind the mandate. The Epoch Times submitted a Freedom of Information Act for “all documents outlining which data was relied upon when establishing the mandate when deciding to keep the mandate in place.”

The agency searched for such data and did not find any.

The VA does not even attempt to justify its policies with science, because it can’t,” Leslie Manookian, president and founder of the Health Freedom Defense Fund, told The Epoch Times.

“The VA just trusts that the process and cost of challenging its unfounded policies is so onerous, most people are dissuaded from even trying,” she added.

The VA’s mandate remains in place to this day.

The VA’s website claims that vaccines “help protect you from getting severe illness” and “offer good protection against most COVID-19 variants,” pointing in part to observational data from the U.S. Centers for Disease Control and Prevention (CDC) that estimate the vaccines provide poor protection against symptomatic infection and transient shielding against hospitalization.

There have also been increasing concerns among outside scientists about confirmed side effects like heart inflammation—the VA hid a safety signal it detected for the inflammation—and possible side effects such as tinnitus, which shift the benefit-risk calculus.

President Joe Biden imposed a slate of COVID-19 vaccine mandates in 2021. The VA was the first federal agency to implement a mandate.

President Biden rescinded the mandates in May 2023, citing a drop in COVID-19 cases and hospitalizations. His administration maintains the choice to require vaccines was the right one and saved lives.

“Our administration’s vaccination requirements helped ensure the safety of workers in critical workforces including those in the healthcare and education sectors, protecting themselves and the populations they serve, and strengthening their ability to provide services without disruptions to operations,” the White House said.

Some experts said requiring vaccination meant many younger people were forced to get a vaccine despite the risks potentially outweighing the benefits, leaving fewer doses for older adults.

By mandating the vaccines to younger people and those with natural immunity from having had COVID, older people in the U.S. and other countries did not have access to them, and many people might have died because of that,” Martin Kulldorff, a professor of medicine on leave from Harvard Medical School, told The Epoch Times previously.

The VA was one of just a handful of agencies to keep its mandate in place following the removal of many federal mandates.

“At this time, the vaccine requirement will remain in effect for VA health care personnel, including VA psychologists, pharmacists, social workers, nursing assistants, physical therapists, respiratory therapists, peer specialists, medical support assistants, engineers, housekeepers, and other clinical, administrative, and infrastructure support employees,” Mr. McDonough wrote to VA employees at the time.

This also includes VA volunteers and contractors. Effectively, this means that any Veterans Health Administration (VHA) employee, volunteer, or contractor who works in VHA facilities, visits VHA facilities, or provides direct care to those we serve will still be subject to the vaccine requirement at this time,” he said. “We continue to monitor and discuss this requirement, and we will provide more information about the vaccination requirements for VA health care employees soon. As always, we will process requests for vaccination exceptions in accordance with applicable laws, regulations, and policies.”

The version of the shots cleared in the fall of 2022, and available through the fall of 2023, did not have any clinical trial data supporting them.

A new version was approved in the fall of 2023 because there were indications that the shots not only offered temporary protection but also that the level of protection was lower than what was observed during earlier stages of the pandemic.

Ms. Manookian, whose group has challenged several of the federal mandates, said that the mandate “illustrates the dangers of the administrative state and how these federal agencies have become a law unto themselves.”

Tyler Durden Sat, 03/09/2024 - 22:10

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