Over the past week, Bitcoin has done surprisingly well, rallying from the $6,100 price seen last Sunday to a weekly high of $7,200, outperforming a majority of assets. Unfortunately, analysts are warning of a breakdown to pre-recovery levels.
Could Bitcoin Drop 20%?
There’s no doubt Bitcoin has done well over the past few weeks, rallying from the lows at $3,700 to the recent high of $7,200 as aforementioned.
According to Nik Patel — an analyst and the author of the crypto trading bible, “An Altcoin Trader’s Handbook” — however, a weekly close under $7,000 will likely lead to a retracement to $5,680, which would be a 20% drop from $7,000.
Patel’s chart indicates that $7,000 was the weekly high seen last week, making it important from a technical analysis perspective.
A close under $7,000 seems likely; just hours before the weekly candle is set to close, Bitcoin saw a rejection at $6,900, falling back to $6,700.
Long-Term Outlook Forming Bullish
Although there are these signs of downside in the short term, many are growing convinced that the long-term outlook for Bitcoin is anything but bearish.
Case in point, Anthony Pompliano of Morgan Creek Digital recently identified two fundamental trends that will act as “rocket fuel” for the rocket that is BTC’s price:
Central banks and printing money like there is no tomorrow: In a bid to prevent societal turmoil and an economic depression resulting from the coronavirus outbreak, central banks and governments have begun to enact emergency measures, handing out free money to consumers, cutting interest rates to promote spending, and injecting trillions of dollars worth of liquidity into the bond markets to keep the economy running.
Bitcoin’s halving is nearing: In just over a month from today, the number of BTC mined each day will get cut in half due to the so-called “halving.” This will make the cryptocurrency more scarce than gold and fiat, assuming a 2 percent annual inflation rate and a 2 percent annual growth of the physical stock of gold.
Ethereum has been struggling to garner any momentum as it faces heightened resistance around the mid-$140 region, with this bout of consolidation coming about in tandem with that seen by Bitcoin and most other altcoins.
In spite of this, ETH has been able to form a bullish textbook charting pattern that may give it some notable momentum once it breaks through the resistance it is facing around its current price levels.
This also comes as the crypto incurs some notable fundamental strength, with one on-chain metric suggesting that ETH is poised to see some serious near-term upside.
Ethereum Consolidates Below $145 as Bullish Technical Pattern Emerges
This is the price at which ETH has been trading at for the past few days, with its rally seen earlier this past week allowing it to climb to highs of $145 before being rejected.
Bulls then tested this level again on multiple occasions, with each time resulting in a similar rejection.
It is important to note that consolidation directly below resistance can be viewed as a bullish sign, as it often suggests that an upwards breakout is imminent.
Another key factor that could bolster Ethereum in the days ahead is the fact that it has formed what appears to be an ascending triangle with an upper boundary existing at just over $145.
Josh Olszewicz, a prominent cryptocurrency analyst, pointed out this emerging pattern in a recent tweet, while offering a chart with a target existing at roughly $200.
Image Courtesy of Josh Olszewicz
On-Chain Metrics Also Point to Imminent ETH Upside
Growing technical strength isn’t the only thing currently counting in Ethereum’s favor.
As NewsBTC reported yesterday, data from analytics platform Glassnode shows that exchanges are currently seeing their highest ETH balance since December of 2016.
Exchange balance has proven to be inversely correlated with Ethereum’s price action, which means that the crypto could be well positioned to make a massive upside movement.
“Since late 2019, ETH exchange balances have increased by more than 21% to over 18,187,000 – which represents ~16% of Ethereum’s circulating supply. The last time we saw levels this high was in December 2016.”
Image Courtesy of Glassnode
If this inverse correlation continues holding strong, the growth in the balance of Ethereum on exchanges does suggest that the crypto will soon see some massive near-term upside, which could be further bolstered by its technical strength.
Bitcoin.com’s Cashfusion Fund Exceeds Goal: $100K Raised for Bitcoin Cash Privacy
Bitcoin.com’s Cashfusion Fund officially surpassed the fundraiser goal by 103.3% or $51K worth of bitcoin cash spread out between 623 donations. The funds will go toward Cashfusion developer expenses and a security audit from Kudelski Security. Bitcoin.com also matched the funds donated so Cashfusion can provide bitcoin cash users with the best privacy methods available today.
Cashfusion Provides Greater Privacy Than Traditional Coinjoin Protocols
Cashfusion has been considered a powerful tool when it comes to obfuscating bitcoin cash transactions and ensuring privacy. The project made a lot of headway last year and into the new year as well as 3,139 Fusions have been processed since November 28, 2019. Furthermore, Cashfusion has also been complemented by well known privacy advocates like the creator of the Wasabi Wallet. On January 29, data analyst James Waugh sifted through a number of Cashfusion transaction inputs and outputs and realized that it’s “not possible to establish a concrete link” between them. The Cashfusion protocol is an extension of Cashshuffle, which adds a greater layer of privacy to BCH transactions. However, if a shuffling participant mixes their BCH and eventually consolidates the UTXOs, it’s possible the transaction can leave behind some clues for blockchain analysis.
Two months ago, Electron Cash developer Jonald Fyookball published a paper about the combinatoric math in Cashfusion. The paper has a quote from independent software developer Mark Lundeberg that explains how Cashfusion doesn’t use equal-amounts when fusing.
“In Cashfusion, we have opted to abandon the equal-amount concept altogether. While this is at first glance no different than the old naive schemes, mathematical analysis shows it in fact becomes highly private by simply increasing the numbers of inputs and outputs,” Lundeberg wrote. “For example, with hundreds of inputs and outputs, it is not just computationally impractical to iterate through all partitions, but even with infinite computing power, one would find a large number of valid partitions,” the developer added.
Bitcoin.com’s Cashfusion Fundraiser – Bitcoin Cash Community Raises $51K
Since Cashfusion provides greater privacy to BCH participants, Bitcoin.com decided to raise funds for the tool’s creators for a security audit and developer expenses. Just like the Cashshuffle software, Cashfusion will get an audit from Kudelski Security in order to make sure the code is solid and doesn’t have vulnerabilities. At the end of February, privacy advocates from Bitcoin.com decided to launch the fundraiser for the Cashfusion team so they can further the project’s goals. As we stated in the initial announcement, Bitcoin.com knows the community is waiting for Cashfusion and our company wants to make the project’s official launch come to realization sooner. By March 6, the BCH community raised over 100 BCH in the midst of the looming economic effects of the covid-19 crisis.
Despite the coronavirus and its effects on the world’s financial system, the greater BCH community managed to surpass the Cashfusion Fundraiser’s goal. As of Sunday, April 5, the fundraiser has 103.3% raised from 623 transactions which add up to $51K. Bitcoin cash proponents sent 21.9 billion satoshis since the start of the fundraiser. Bitcoin.com wholeheartedly believes in the right to privacy and our team has always pushed for tools that further economic freedom. With privacy-enhancing protocols like Cashshuffle and Cashfusion, as well as the recently added Schnorr Signatures, BCH has set itself apart from the rest of the cryptocurrencies in existence.
“I think it’s great the Bitcoin Cash community appreciates privacy and economic freedom,” said Bitcoin.com executive chairman Roger Ver after the fund reached its goal. Ver added:
Raising funds for Cashfusion shows the BCH community cares about privacy a great deal and the security audit should forward that goal. Privacy is of utmost importance these days and it’s more apparent than ever during this current crisis.
The covid-19 crisis has highlighted the need for liberty and how everyone should have the right to do what they want with their own money. As banks around the world have been stopping people from withdrawing their own hard-earned cash, it’s pretty apparent fractional reserve banking has glaring issues. While governments and central bankers try to install a greater form of surveillance capitalism and monitor all of our financial transactions, tools like Cashfusion will be there to make sure privacy is protected. The Cashfusion Fundraiser reaching its goal is proof that the BCH community cares deeply about promoting privacy.
What do you think about the Cashfusion Fundraiser surpassing its goal? Let us know in the comments below.
Image Credits: Shutterstock, Pixabay, Wiki Commons, Cashfusion Stats by Acidsploit
Purchase Bitcoin without visiting a cryptocurrency exchange. Buy BTC and BCH here.
Disclaimer: This article is for informational purposes only. It is not an offer or solicitation of an offer to buy or sell, or a recommendation, endorsement, or sponsorship of any products, services, or companies. Bitcoin.com does not provide investment, tax, legal, or accounting advice. Neither the company nor the author is responsible, directly or indirectly, for any damage or loss caused or alleged to be caused by or in connection with the use of or reliance on any content, goods or services mentioned in this article.
A high-profile bitcoin whale predicts more pain ahead for the global economy as the ramifications of the coronavirus shutdown take their toll.
Joe007, a prolific bitcoin whale investor who earned an alleged $20 million in profits through February and March’s market volatility, says he expects traditional markets to spiral in the coming months.
According to a series of posts made April 3, the whale trader called the coming recession the “economic shock of our generation,” that will unfold in waves over time.
Joe007 predicts a “flight” to fiat liquidity to play out in the short-term, as investors flee the volatility of traditional and alternative markets. He expects this movement to have consequences for the price of bitcoin and the crypto-assets.
A previous tweet by the whale investor on Mar. 27 criticized the approach of most central banks to correct the current crisis by printing trillions in fiat. According to Joe007, the current economic crisis forcing people to stay at home will not be corrected by injecting new money into the market.
Bitcoin’s sideways trading that was first sparked by its rejection at $7,300 has extended through today, with the cryptocurrency firmly caught within the upper-$6,000 region as its bulls and bears both reach a firm impasse.
In the near-term, analysts are noting that the cryptocurrency could be on the “edge of glory” if it is able to surmount one key technical level, but firm resistance may make bull’s attempt to boost it futile.
Sellers may also be bolstered by a recent EMA bear cross on the cryptocurrency’s weekly chart, a formation that could force the crypto significantly lower and stifle any bullish undercurrents that have been established.
Bitcoin Caught Within Firm Bout of Consolidation as it Pushes Against Key Technical Level
At the time of writing, Bitcoin is trading down just under 1% at its current price of $6,730, which is around the price at which it has been trading at for the past several days.
The tight trading range it is currently caught within appears to exist between $6,700 and $6,900, with BTC finding some support at the lower boundary and heavy resistance at the upper boundary.
If bulls continue struggling to surmount the resistance around $7,000, another rejection here could do some significant technical damage to its short and mid-term market structure, as this would mark the third time being rejected here over the past seven days.
One popular analyst, however, is noting that Bitcoin could be “on the edge of glory” as the crypto’s daily RSI attempts to flip into a bullish range, something that could occur at any moment.
“BTC – Daily RSI really wants to flip to a bullish range above (50) …right on the edge of glory or not,” he noted.
Image Courtesy of Big Chonis
This Recently Formed EMA Bear Cross Could Thwart Bullish RSI Crossover
The main bearish factor currently counting against Bitcoin – besides its mounting resistance around $7,000 – is a recently formed weekly EMA bear cross.