Monat: April 2023

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Ethereum price prediction as longs liquidations jump

  • Ethereum price dropped violently on Wednesday as cryptocurrencies pulled back.

  • Bullish liquidations jumped to the highest point since March 9.

Ethereum (ETH) price nosedived suddenly as more investors liquidated their positions. The coin pulled back to a low of $1,976, the lowest level since Monday this week. It has dropped by more than 8% from the highest point this week.

ETH bullish liquidations rise

Ethereum joined other cryptocurrencies in a major sell-off on Monday. Bitcoin moved below $30,000 for the second time this week. In the same period, popular coins like Arbitrum, Space ID, Kaspa, and Verasity also pulled back. 

It is not clear why Ethereum and other cryptocurrencies crashed on Wednesday. A likely reason is that the number of bullish liquidations jumped to the highest level in months. According to CoinGlass, the amount of bullish liquidations jumped to over $41.1 million. In contrast, shorts liquidations were over $1.2 million

These numbers were significantly higher than on Wednesday when bulls liquidations were just $9.6 million. Shorts liquidations were $16 million.

In most periods, cryptocurrencies jump when short-sellers start liquidating their coins and vice versa. For example, Ethereum price soared on April 14 when shorts liquidations jumped to more than $62.8 million.

Ethereum’s decline also coincided with outflows from several centralized exchanges. Binance has had over $18 million of outflows in the past 24 hours. Similarly, Bitfinex, Huobi, and Bybit lost over $20 million each.

Meanwhile, Ethereum price also reacted to the latest questioning of Gary Gensler on Tuesday. In congressional testimony, he repeatedly refused to answer whether he believes that Ethereum is now a financial security.

In a previous interview, Gensler said that he believes that Ethereum and other proof-of-stake coins are securities. His main concern is the opaqueness of staking, which he believes should be regulated to protect customers. On Monday, the SEC identified five coins, including Algorand, that it believes are securities.

Ethereum price prediction

The daily chart shows that the ETH price has been bullish in the past few months. It jumped to a high of $2,120, the highest point in months. A closer look shows that it formed a dark cloud cover pattern, which explains why it has dropped sharply. It also dropped below the first resistance of the Woodie pivot point.

Ethereum remains above the 50-day and 25-day moving averages. Therefore, there is a likelihood that the coin will have a bullish breakout in the coming weeks a buyers target the second resistance at $2,200.

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The post Ethereum price prediction as longs liquidations jump appeared first on CoinJournal.

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Opinion: 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. 

The post Opinion: Volatility lowest since January, but until it drops further, Bitcoin serves no purpose appeared first on CoinJournal.