Bitcoin Price | Biz Builder Mike

PayPal’s crypto integration means Bitcoin could triple its user base

October 22, 2020 by bizbuildermike

Bitcoin (BTC) price has again punched through the $13,000 mark after yesterday’s PayPal’s announcement sparked a powerful rally which drove the price to a new 2020 high.

Currently sitting near $13,100, Bitcoin price has rallied nearly 10% since the announcement and BTC is now close to overtaking PayPal as the 21st biggest asset by market capitalization.

PayPal’s crypto announcement comes two weeks after Square, another payments giant, announced its own foray into Bitcoin by investing roughly 1% of its assets into Bitcoin.

According to Lanre Jonathan Ige, a researcher at Amun AG, the continuing trend of large sized investments will be material in bringing institutional interest to Bitcoin. Ige said:

“Corporations are often trend-following and we can expect a number of other corporations to follow the lead of Square and Microstrategy, as the returns of the assets continue to impress.”

However, the recent news from PayPal is more likely to bring the masses to Bitcoin, rather than Bitcoin to institutions. This is because PayPal may bring a more mainstream audience up to speed with the cryptocurrency as an investment vehicle for now and as a payment method in the future, which has been one of the main focus of the Bitcoin community when it comes to mass adoption.

PayPal should boost Bitcoin’s user base

According to data from glassnode, Bitcoin currently has over 187 million users or “hodlers”. While impressive, crypto analyst Willy Woo noted that this pales in comparison to PayPal’s 487 million users.

*Total Bitcoin HODLers. Source:* *Twitter*

By adding Bitcoin, PayPal is bringing the name to a mainstream audience. While it is only possible to buy, sell and hold Bitcoin through PayPal for the time being, the company announced that it would be adding cryptocurrency payment and transfers in 2021. Once this occurs, it could cement Bitcoin’s reputation as a payment and remittance mechanism.

Transacting through PayPal and other centralized platforms could even become one of the ways in which Bitcoin is able to scale to a mainstream user base. Centralized transactions (along with other methods like sidechains and lightning network) could be used to alleviate congestion in Bitcoin’s blockchain, allowing it to be used only for bigger transactions that require more safety, transparency or immutable proof of ownership.

Bitcoin is on the path to outperforming banks

While it seems that payment processing companies and cryptocurrencies are finding more synergy as time passes, the same can not be said for banks and this struggle is reflected in their stock price.

Jon Erlichman, tech correspondent at BNN Bloomberg, noted that assets like Bitcoin, Ether and stocks for payment companies like PayPal and Square were doing quite well this year but since the COVID-19 pandemic, financial stocks have underperformed.

*Bitcoin and Ether YTD performance. Source:* *Digital Assets Data*

To date, the prices of Bitcoin and Ether have appreciated by 80.5% and 217%. Meanwhile, PayPal rallied 99% and Square 186%. Banks like JPMorgan and Bank of America, on the other hand, have lost 28% and 32% respectively. Citigroup has seen its stock value drop by 46% and Wells Fargo has decreased by 58%.

As for Bitcoin, it continues to be one of the best performing assets in existence, beating gold and the S&P 500 by a wide margin in 2020.

*Macro Assets Current Year Returns. Source:* *Skew.com*

As a growing number of people interact with Bitcoin as an investment vehicle, it is possible that consumers will turn their backs to banks and invest in cryptocurrency.

According to experts, Bitcoin may even benefit from what some call the ‘Robinhood effect’, a phenomenon where retail investors with disposable income purchase an asset via fee-free, gamified investing platforms in order to avoid the rigamarole frequently associated with banks.

If this happens to BTC, the digital asset could see the same type of hyperbolic investing frenzy that occurred as Robinhood investors poured funds into Tesla earlier this year.

PayPal’s crypto integration means Bitcoin could triple its user base

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Pro traders added to shorts as Bitcoin price broke $12K — Data shows

October 21, 2020 by bizbuildermike

As Bitcoin (BTC) breaks the $12,000 resistance, derivatives markets are flirting with overly excessive bullish sentiment. The futures basis and the options 25% delta skew both reached the same levels seen now on October 12 when BTC briefly tested $11,700 but failed to maintain momentum.

What differentiates the current situation from nine days ago is the positions of top crypto traders. On Oct. 12, these traders increased their longs, but during the recent move to $12,000 these professional traders are opening up short positions.

Despite this flip in sentiment, traders should not automatically conclude that today’s pump will turn into a flop exclusively based on the longs-to-shorts indicator. For starters, there is no way to know for sure how the top traders are positioned off-exchange.

For this reason, derivatives pricing is a better way to assess how bullish or bearish professional traders might be. This indicator focuses on the actual market conditions, whereas both the fear and greed and options put-to-call ratio are backward-looking.

Futures markets tend to trade at a slight premium to regular spot exchanges. This event is not exclusive to crypto markets but rather a derivatives effect.

The futures contracts premium (or basis) should range between a 5% to 10% annualized rate for healthy markets. Figures above this range denote excessive optimism, as traders bet on much higher prices. In the opposite situation, a negative futures contract premium indicates bearish sentiment.

*BTC 3-month futures contracts annualized premium. Source: Skew*

The above chart shows how the basis indicator has been flirting with over-optimistic levels, similar to what happened on October 12.

Traders should not mistake optimism with leverage as a positive funding rate on perpetual contracts is also needed to confirm this thesis.

The perpetual futures funding rate settles every 8 hours on most exchanges, and a fee is paid from longs (buyers) to shorts whenever the funding rate is positive. This situation would be the defining characteristic of overleveraged buyers, but that hasn’t been the case so far.

*BTC perpetual contracts funding rate. Source: Digital Assets Data*

The data above shows how volatile the funding rate has been, although there has not been any sustained funding periods. The standard measure for this indicator is 8 hours. Therefore a 0.05% rate is equivalent to 1% per week. The opposite holds for a negative funding rate when shorts are the ones paying it.

As for the BTC options market, there has been a similar movement as the 25% delta skew indicator entered the overconfident bullish territory. A negative skew indicates calls (buy) options cost more than similar puts (sell) options, thus indicating bullish sentiment. On the other hand, a positive skew suggests bearishness.

*BTC 3-month 25% delta options skew. Source: Skew*

Take notice how close the skew indicator is to its lowest levels in 6 months, indicating traders’ optimism. This situation is the same as October 12, when BTC gained 10% in 4 days. Although nothing is barring the skew indicator from remaining at the current level for extended periods, it is unlikely in BTC history.

After reading derivatives market indicators, one might conclude that professional traders are leaning bullish by adding long positions above $12K. Except, exchange-provided data on top traders long-to-short net ratios shows this hasn’t been the case.

*Clients Long/Short Ratio. Source:* *Binance* & *OKEx*

There are often discrepancies between exchanges’ methodologies, so readers should monitor changes instead of absolute figures. According to the above data, it is safe to say that top clients were either neutral or adding long positions ahead of Oct. 12.

On the other hand, there has been a sizable move in both exchanges over the past two days as top traders were more active on the sell-side when BTC approached $12K.

Therefore, regardless of derivatives indicators’ bullishness, these traders are signaling a lack of short-term optimism.

These seemingly opposing signals could reflect the recent 15% hike in two weeks, causing some traders to realize gains. Even though derivatives markets continue to favor a bullish trend, top traders appear to see no reason to add to long positions at the current levels.

Although the top traders call seems to have failed for now, they appear to be in no rush to FOMO at the current levels. Until these begin building some substantial long positions above $12K, this support level cannot be deemed strong enough.

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

Pro traders added to shorts as Bitcoin price broke $12K — Data shows

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Price analysis 10/19: BTC, ETH, XRP, BCH, BNB, LINK, DOT, ADA, LTC, BSV

October 19, 2020 by bizbuildermike

Crypto market sentiment appears to be improving across the board and the global push to mainstream central bank digital currencies is also making headway.

In China’s Shenzhen province about 2 million people had applied for the digital yuan giveaway and the lucky 50,000 among them received “red envelopes” of digital yuan totalling $1.5 million.

By the end of Oct. 18 about 47,573 of the recipients had spent roughly $1.3 million of the bounty, amounting to 88% of the total giveaway. This suggests that the pilot program was a success and shows that China is far ahead of other developed economies in developing their central bank digital currency..

To speed up the process of launching its CBDC, the Bank of Canada recently listed a job opening for an economist with thorough knowledge of financial technology and digital currencies.

However, U.S. Federal Reserve Chair Jerome Powell seems unfazed by the progress other countries are making with CBDCs. According to Powell, “it’s more important for the United States to get it right than it is to be first.”

*Daily cryptocurrency market performance. Source:* *Coin360*

In other news, a survey by Statista shows that only 7% of Americans have used or owned Bitcoin (BTC).

This figure is far less than Nigeria where the penetration rate is 32%, but also higher than Germany and Japan. This shows that the asset class has a long way to go before it can truly become a ‘mainstream’ currency.

Currently, the bearish sentiment that dominated the markets for the past month appears to be alleviating as Bitcoin price moves closer the the $12K level.

Let’s study the charts of the top-10 cryptocurrencies to spot the ones that may perform well in the short-term.

BTC/USD

Bitcoin (BTC) has risen to the resistance line of the ascending channel where it could face selling pressure from the bears. However, the upsloping 20-day exponential moving average ($11,201) and the relative strength index above 67 suggests that bulls are in command.

If the bulls can exploit this advantage and push the price above the channel, the up-move could pick up momentum and quickly rally to $12,048.05. A breakout of this level may challenge the yearly highs at $12,460.

However, the bears are unlikely to give up without a fight. They will try to stall the rally at the resistance line. If the price turns down from the current levels but stays above $11,500, then the BTC/USD pair could slowly grind higher inside the channel.

The first sign of weakness will be a break below $11,178, and the trend will turn in favor of the bears if they can sink the price below the support line of the channel.

ETH/USD

The bears could not sustain Ether (ETH) below the moving averages on Oct. 16 and 17. This attracted buying and the bulls will now try to push the price above the overhead resistance at $395.

The 20-day EMA ($368) has started to turn up slowly, and the RSI has risen above 57, which suggests that bulls are attempting a comeback.

If the bulls can push and close (UTC time) the price above $395, it will complete an ascending triangle pattern. This bullish setup has a target objective of $478, just below the 52-week highs at $488.134.

This positive view will be invalidated if the pair turns down from the current levels or from $395 and plunges below the uptrend line. Such a move could keep the pair range-bound between $308.392 and $395 for a few more days.

XRP/USD

Although XRP broke below the moving averages on Oct. 15, the bears could not capitalize on this advantage and sink the price to the bottom of the range at $0.2295. This suggests a lack of sellers at lower levels.

The bulls have currently propelled the price back above the moving averages. If they can sustain the higher levels, there will be another attempt to clear the $0.26 hurdle.

A breakout and close (UTC time) above $0.26 is likely to start a new uptrend that may reach $0.2905 and then $0.303746.

However, the flat moving averages and the RSI just above the midpoint suggest a balance between supply and demand. If the XRP/USD pair turns down from the current levels or $0.26, the range-bound action could continue for a few more days.

BCH/USD

The bulls have held the critical support at $242 for the past two days, and Bitcoin Cash (BCH) is now attempting to resume its up-move.

The upsloping 20-day EMA ($241) and the RSI above 58 indicates that the bulls are in control. The first target on the upside is $266.46, and if that is scaled, the up-move can reach $280.

However, if the bulls fail to push the price above $266.46, the BCH/USD pair could remain range-bound for a few days. A break and close (UTC time) below the moving averages will indicate weakness and could pull the price down to $200.

BNB/USD

The support at $29.5646 is acting as a new floor for Binance Coin (BNB). Both moving averages continue to rise, and the RSI has been sustaining in the positive zone for the past few days, which suggests that bulls are in command.

The bulls will now again try to push the price above the $32– $33.3888 resistance zone. If they can pull it off, the pair is likely to pick up momentum and challenge the all-time highs at $39.5941.

This bullish view will be negated if the BNB/USD pair turns down from the current levels or from the overhead resistance and sustains below the 20-day EMA ($29.17). Such a move could drag the price down to the 50-day simple moving average ($26.83).

LINK/USD

Chainlink (LINK) has held above the 20-day EMA ($10.52) for the past three days but the bulls have not been able to push the price back above the $11.1990–$11.8028 resistance. This suggests that demand is drying up at higher levels.

However, the gradually upsloping 20-day EMA and the RSI in the positive territory suggests a minor advantage to the bulls. The momentum could pick up after the bulls push the price above the overhead resistance zone. The first target is $13.28 and then $18.

This bullish view will be invalidated if the LINK/USD pair turns down from the current levels or the overhead resistance and breaks below $10.15. Such a move could pull the price down to the $8.7975 support.

DOT/USD

The failure of the bears to sink Polkadot (DOT) to $3.5321 suggests that lower levels are attracting buying by the bulls. If the buyers can push the price above the downtrend line, the bearish descending triangle setup will be invalidated.

Above the downtrend line, the DOT/USD pair could move up to $4.6112 and if this level is crossed, the rally may extend to $5.5899.

However, the bears are unlikely to give up without a fight. The sellers will try to reverse the direction from the current levels and again at $4.6112. If the pair turns down from either resistance, it could again drop to $3.5321.

A breakdown and close (UTC time) below $3.5321 will signal that bears are back in command.

ADA/USD

Cardano (ADA) has bounced off the 20-day EMA ($0.103), which shows that the sentiment is positive and the bulls are accumulating at lower levels. The buyers will once again try to push the price above the resistance line of the rising wedge pattern.

If the bulls can manage a close (UTC time) above the resistance line, a rally to $0.128062 and then to $0.1445 is possible. The upsloping 20-day EMA and the RSI above 61 suggest that the path of least resistance is to the upside.

Contrary to this assumption, if the ADA/USD pair turns down from the resistance line, the bears will once again try to sink the price below the 20-day EMA and the support line of the wedge. If they can do that, the advantage will tilt in favor of the bears.

LTC/USD

Litecoin (LTC) has bounced off the uptrend line and the bulls will now try to push the price above the moving averages. If the buyers can sustain the price above the moving averages, a move to the overhead resistance zone of $51–$52.36 is possible.

However, the bulls are unlikely to have it easy as the bears will try to defend the moving averages. If the LTC/USD pair turns down and breaks below the uptrend line, a drop to $42 will be on the cards.

Currently, the flat 20-day EMA ($47.99) and the RSI at the midpoint suggests a balance between supply and demand. Hence, the price action could remain volatile for the next few days as both the bulls and the bears try to dominate proceedings.

A breakout and close (UTC time) above the resistance zone will complete an inverse head and shoulders pattern that may signal the start of a new uptrend.

BSV/USD

Bitcoin SV (BSV) is attempting to stage a recovery but the rebound off the Oct. 16 intraday lows lacks strength. This suggests that the bulls are in no hurry to buy as they are not confident that the bottom is in place.

The downsloping moving averages and the RSI in the negative zone suggest that the advantage is with the bears. If the bulls do not push the price above the moving averages within the next few days, the bears will make one more attempt to sink the price to $146.20.

Conversely, if the bulls can push the price above the moving averages, the BSV/USD pair could move up to $180.63. A breakout and close (UTC time) above this resistance could start a journey to $189 and then to $227.

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

Market data is provided by HitBTC exchange.

Price analysis 10/19: BTC, ETH, XRP, BCH, BNB, LINK, DOT, ADA, LTC, BSV

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