Kategorie: Bitcoin News

Bitcoin (BTC) price rose as much as 8% in 24 hours to top $24,287 on crypto exchange Coinbase, its highest price in over a month.

The upside came as a broader market rally saw most cryptocurrencies post significant gains to erase recent losses, with Ethereum (ETH) seeing the most gains at the top of the charts with over 50% in gains in a little over a week.

Analyst says rally likely to fade near current levels

BTC has shed some of the gains and currently trades around $23,500. But can it kick on and see a major breakout short term?

Katie Stockton, co-founder Fairlead Strategies founder, told CNBC’s ‘Squawk Box’ in an interview that while the world’s largest cryptocurrency had seen as strong rally over the past few days, this looked more like  sharp bear market rally than one likely to sustain into a major relief rally.

“If you do look at past bear market cycles, we’ve seen some massive relief rallies,” she noted, highlighting the +20% gains seen in some assets. However, she feels that despite the surge, indications are that this isn’t going to evolve into a “major relief rally.”

Stockton said the overall market’s outlook remains vulnerable to a downside, noting the market is “challenged” amid an oversold volatility reading and overbought mega cap (stocks) ahead of earnings reports.

According to the analyst, the current upside is more likely to fade near levels reached so far, with potential signals for a sustained upward move including a breakout above $25k and improvement in momentum gauges.

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FTX’s Sam Bankman-Fried is willing to lose money to ensure that the cryptocurrency industry operates as it should.

Bankman-Fried,  FTX co-founder and CEO, told attendees at the Bloomberg Crypto Summit in New York on Tuesday that he isn’t bothered by losing some money if his bailouts keep the crypto infrastructure humming.

The FTX boss said market leaders need to spend money to ensure that everything operates as it should. He said;

“It’s OK to do a deal that is moderately bad in bailing out a place. The bar is not: Is this a good return on investment? It’s more about maintaining the health of the wider industry.”

The cryptocurrency market has been in a bearish trend for the past few months, and this has affected numerous cryptocurrency companies. Bankman-Fried said he had allocated $1 billion.

Bankman-Fried has already spent hundreds of millions of dollars to bail out companies such as BlockFi and Voyager Digital. However, it hasn’t worked out as planned.

FTX has the option to acquire BlockFi for $240 million, while Voyager Digital filed for bankruptcy earlier this month. 

When asked about the bailout to Voyager Digital, Bankman-Fried laughed and shrugged off the the money spent on the company. 

According to Bankman-Fried, the struggles within the broader market is not yet over, as many companies as struggling with their finances. He stated that the conversations he has had with some crypto firms revealed that many of them are still not clear about their financial picture. 

However,  Bankman-Fried said he is interested in helping cryptocurrency companies figure out their finances. 

Bankman-Fried revealed that FTX has plans to purchase bitcoins. However, the company will only do so when the leading cryptocurrency hits a certain figure. He said;

“We did have real conversations at some point. There was a price. We did not hit that price.”

The broader cryptocurrency market has been performing well over the past few days, with Bitcoin currently trading above $23k per coin. 

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Celsius, a renowned crypto lender, has obtained crucial approval to go ahead with its plan of building a Bitcoin mining plant as it tries to find ways of returning it back to financial stability.

The value of Celsius assets decreased from $22.1 billion to $4.3 billion between March 30 and July 14, this year, with approx. $1 billion in third-party liquidations.

Celsius was brought down by the collapse of Terra LUNA and it has since been struggling to remain afloat something that forced it to file for Chapter 11 Bankruptcy in the US to as it tried to restructure. Prior to filing for Chapter 11, Celsius had tried a number of measures including ETH tokens from Bancor to settle its DAI loan with Aave so that it could free the WBTC it had provided as collateral. Celsius had borrowed 100 million DAI tokens on Aave forcing Marker DAI to disable DAI supply to Aave to avoid more exposure to Celsius.

The plan to build a Bitcoin mining facility is part of Celsius’ plans of stabilizing the company following its current financial crisis.

However, Celsius was recently sued for supposedly using customer deposits to rig the price of CEL tokens while failing to properly hedge risks. Therefore, the new venture of building a BTC mining plant will be widely watched seeing that Celsius is yet to resume withdrawals.

Investing $3.7M for the new Bitcoin mining plant

Celsius intends to invest a whopping $3.7 million in constructing the new Bitcoin mining facility and an extra $1.5 million in importing mining equipment and paying for customs.

Celsius already has a mining plant in the US that presently operates over 43,000 mining rigs. By adding a new mining facility, Celsius intends to increase the number of mining rigs that it shall be operating to 112,000 by the second quarter of 2023.

The increased mining operations will in return increase the number of bitcoins that Celsius will have something the company believes will be a source of finances.

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Bitcoin (BTC) appears to have slightly recovered after one of its worst crashes in 2022. The coin had fallen below $30,000 for the first time since July last year. However, it rebounded sharply in a few days. Here are the main takeaways:

• BTC is currently hovering above $31,000 after a slight recovery over the last 24 hours

• However, there still remains a significant downside risk that could push BTC below $30,000

• Bullish RSI divergence however suggests a Bitcoin surge towards $34,000 could happen

Data Source: Tradingview 

Bitcoin (BTC) – How the price may playout

Bitcoin (BTC) fell below $30,000 for the first time in almost 10 months. Although the coin had seen sharper falls in 2022, it had never breached $30,000. The mega-cap however recovered almost instantly and is now hovering above $31,000. 

Despite this, a lot of downside risk still remains. In fact, there are fears that slow investor sentiment and an ongoing broader correction in the market could crash BTC to $20,000 before any future bull run. But momentum indicators show that there is an opportunity for short-term gains.

We expect BTC to test $34,000 based on the current RSI divergence. However, upward momentum remains severely limited. Unless something drastic happens to change sentiment, BTC will likely sell off after hitting $34,000 and may as well lose the $30,000 support once more.

Where will BTC bottom?

A lot of analysts were expecting some correction in Bitcoin this year. However, the price has fallen sharply than expected. If BTC is not able to stay above $30,000, we are going to see a huge drop in the price. 

In fact, downside risks below $30,000 are so serious to a point where BTC could go into free fall once it firmly settles below $30,000. Most analysts fear the coin could bottom at $20,000 before its next run.

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The crypto market has witnessed a massive price meltdown over the crypto winter, with the total market cap of all cryptocurrencies shrinking by a whopping $2 trillion.

Most assets have seen their prices slashed from bull market peaks – see Bitcoin struggle to stay above $20,000 after dropping from highs above $69,000, or Ethereum bulls battling to keep $1,000 after testing $4,800 in November.

The market recoiled loudly as cryptocurrency Terra (LUNA) and the algorithmic stablecoin TerraUSD (UST) collapsed, wiping billions of dollars’ worth of investors’ money off the face of the Earth.

Crypto meltdown’s main culprit

While investors saw UST’s march to zero and a market cycle wreak havoc on prices, the main culprit is the over-leveraging that characterized the bull market environment in 2020 and 2021.

Nik Bhatia, the founder of The Bitcoin Layer, told CNBC in an interview that the market going into a tailspin could also be traced to the macro environment that had aggressive interest rates from central banks and the end of easy money amid inflation.

But Bhatia, an adjunct professor of finance at University of Southern California (USC), says the shockwaves that hit investors and crypto companies amid the severe bear market is more down to leverage and perhaps the presence of some “bad actors” within crypto than these other factors.

The implosion linked to Terra and Three Arrows Capital aside, the analyst says there were “Ponzi-type” tendencies that characterized the activities of crypto lenders like Celsius.

“…they were attracting depositors with high yields just so they could pay down the yield they had promised their existing investors,” he noted.

He says Celsius’ collapse was due to the broader “misallocation of capital within DeFi,” with investors bent on securing high yields without knowing exactly where the huge interests came from.

The Bitcoin Layer founder added that the blind allocation of capital is what led to the tailspin. If investors did this without leverage, then the impact would be on their portfolios. 

However, going into it at staggeringly high leveraged positions only means the domino would be even more destructive.

You can watch Nik Bhatia’s interview with CNBC here.

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