Blockchain

Bitcoin price is still consolidating above $25,500. BTC might attempt an upside correction, but upsides might be limited above the $26,200 resistance.

Bitcoin is still trading in a range above the $25,500 support zone.
The price is trading below $26,000 and the 100 hourly Simple moving average.
There is a key bearish trend line forming with resistance near $25,950 on the hourly chart of the BTC/USD pair (data feed from Kraken).
The pair could attempt to recover but the bears might remain active near $26,200.

Bitcoin Price Stuck In Range

Bitcoin price made another attempt to clear the $26,000 resistance zone. However, BTC failed to gain strength for a move above the $26,000 and $26,200 levels.

As a result, there was a fresh bearish reaction and the price declined below the $25,650 level. The bulls managed to protect the $25,350 support and the price climbed back above $25,500. It is now trading below $26,000 and the 100 hourly Simple moving average.

Besides, there is a key bearish trend line forming with resistance near $25,950 on the hourly chart of the BTC/USD pair. Immediate resistance on the upside is near the $26,000 level and the trend line. It is close to the 23.6% Fib retracement level of the key drop from the $28,150 swing high to the $25,333 low.

The first major resistance is near the $26,200 level. A proper close above the $26,200 level might start an upside correction toward $26,750. It is close to the 50% Fib retracement level of the key drop from the $28,150 swing high to the $25,333 low.

Source: BTCUSD on TradingView.com

The next major resistance is near $27,000, above which the bulls attempt a steady increase. In the stated case, the price could test the $28,000 level.

Another Drop In BTC?

If Bitcoin fails to clear the $26,000 resistance, it could continue to move down. Immediate support on the downside is near the $25,500 level.

The next major support is near the $25,350 level. A downside break and close below the $25,350 level might increase selling pressure. In the stated case, the price could drop toward $24,500 or even $24,000.

Technical indicators:

Hourly MACD – The MACD is now gaining pace in the bearish zone.

Hourly RSI (Relative Strength Index) – The RSI for BTC/USD is now above the 50 level.

Major Support Levels – $25,500, followed by $25,350.

Major Resistance Levels – $25,950, $26,000, and $26,200.

The possibility of a Bitcoin spot Exchange Traded Fund (ETF) launching in the US, which has gained much attention over the past months, has again made headlines due to Bloomberg ETF analyst Eric Balchunas’s recent suggestions.

According to the analyst, should the US Securities and Exchange Commission (SEC) approve BlackRock’s Bitcoin spot ETF, a vast pool of $30 trillion capital overseen by US financial advisors could be directed toward Bitcoin investments.

Notably, Balchunas clarified that while the approval of a BTC spot ETF could serve as an accessible pathway for the $30 trillion managed by financial advisors to flow into BTC investments potentially, it is not particularly sure if the entirety of the $30 trillion would move into Bitcoin.

The analyst noted that only a fraction of that amount might consider investing. Balchunas noted: “But even if 0.5% of that allocates, it’s $150b.”

Hey I said that a spot ETF will be a bridge to the $30T advisors manage, a very small amt of which may invest, not all 30! But even if 0.5% of that allocates it’s $150b

— Eric Balchunas (@EricBalchunas) September 5, 2023

Aftermath Of A BlackRock’s Bitcoin Spot ETF

It is worth noting that when BlackRock, boasting over $9 trillion in assets under management, lodged its Bitcoin spot ETF application, it didn’t merely mark its entry. It also dramatically tilted the probability scales for an ETF approval.

Before BlackRock stepped into the frame, the Bloomberg expert claimed that the odds of a BTC spot ETF seeing the light of day in the US hovered around a mere 1%. However, after BlackRock’s involvement, Balchunas disclosed in a podcast that the probability surged to 50%.

Their application had consequences. Balchunas observed a subsequent surge in similar applications from renowned entities, namely ARK Investment, Valkyrie, and Fidelity. This underscored BlackRock’s influence and the escalating competition in the space.

Balchunas noted:

Their application triggered a wave of similar filings by other prominent firms such as ARK Investment, Valkyrie, and Fidelity, setting the stage for a highly competitive environment.

Spot ETF Vs. Futures ETF: The Real Potential

The US isn’t entirely unacquainted with BTC ETFs. Bitcoin futures ETFs have already made their mark, albeit in a limited manner.

As it stands, these futures-based ETFs amass roughly $1 billion in total assets under management. A figure that, though impressive, may appear minor in the face of a spot ETF’s potential.

Balchunas went as far as to term the BTC spot ETF the “holy grail.” A product that, if approved, could overshadow existing futures ETFs and charge up the crypto domain in ways so far unseen.

Meanwhile, amid the race to approve a Bitcoin spot ETF, BTC has been in a continuous downtrend over the past week. The asset has dipped below the $26,000 mark, down by 5.7%. Bitcoin currently trades for $25,501, at the time of writing, down by nearly 1%.

Featured image from iStock, Chart from TradingView

Like most altcoins, Ethereum (ETH) has seen its price succumb to the negative market sentiment in recent weeks. This unfavorable market condition has consistently caused the second-largest cryptocurrency to trade beneath the $1,700 level.

Could Ethereum Price Fall To $1,200?

In an X post dated Wednesday, September 6, crypto analyst Ali Martinez offered insight on the price of Ethereum. The analyst shared that the value of ETH faces a potential significant correction to $1,200 if it stays below $1,680.

Using data from the blockchain analytics platform IntoTheBlock, Martinez’s projection revolves around the purchasing areas where most investors acquire ETH. According to the analytics platform, the price zones beneath the range of $1,633 to $1,681 are “weak purchasing areas,” which hint at weak support. 

IntoTheBlock data shows few investors bought ETH beneath this level – down to the $1,385 price range. This ultimately implies that the support is thin around those levels – as indicated by the small size of the green circles in the image above.

With weaker support at the lower price ranges, the Ethereum price might be unable to stay afloat should bearish pressure increase. This explains why crypto analyst Ali Martinez believes the ETH price beneath $1,680 is a source of concern for traders. 

Meanwhile, the significant percentage of holders currently at a loss exacerbates this risk. Some ETH investors may choose to sell their assets to cut their losses, which could trigger downward pressure on the cryptocurrency’s price.

This Smart Whale Purchased 19,500 ETH – What Do They Know?

On a positive note, an Ethereum whale has been purchasing ETH in the past two days, according to the on-chain analytics platform Lookonchain.

On Tuesday, the 5th of September, the analytics platform revealed that the whale deposited $36 million USDC on Binance and withdrew 9,819 ETH (worth $15.9 million at the time). 

Subsequently, the whale withdrew 9,689 ETH (worth $15.8 million) from Binance on Wednesday, bringing their total purchase to 19,506 ETH (equivalent to $32 million).

Typically, when large amounts of cryptocurrencies are moved out of centralized exchanges, it indicates that whales are accumulating – and sometimes anticipating a price rally. 

Moreover, looking at this particular whale’s past transactions shows that they have the habit of buying Ether at low prices and selling at high prices to make a profit. 

Hence, this latest transaction suggests that the whale is expecting a bounce. However, it is worth noting that the price of Ethereum has not changed in the past day.

According to CoinGecko data, the Ether token currently trades at $1,624.35, with a 0.8% price decline in the last 24 hours.

PERP, the native token of Perpetual Protocol, is one of the top-performing assets, looking at price action in the past 48 hours. As of September 6, the token is changing hands at $0.78, adding roughly 90% from August 2023 highs. 

Amid this stellar performance, reports reveal that the Perpetual Protocol Foundation has transferred 903,000 PERP worth approximately $691,000 to Binance, the world’s largest cryptocurrency exchange by trading volumes and client count.

PERP Ripping Higher After Dumping In Q2 2023

According to Lookonchain, a blockchain analytic platform, the wallet associated with the foundation has been regularly moving tokens to Binance in the past few months, starting from March. At that time, PERP was trading at a relatively higher price, at around $1, looking at trackers like CoinMarketCap. Since then, however, the token has been on a downtrend. 

To illustrate, after peaking at about $1.22 in early March, PERP tanked by over 65% to $0.38 in June. A marginal increase from July before prices contracted to around $0.40 in August, bouncing to spot rates in the past few trading sessions.

Looking at the PERP/USDT candlestick arrangement in the daily chart, buyers have the upper hand after a clear double bottom was printed following gains in early September. Whether the uptrend will continue and PERP has effectively bottomed after a rough few months is yet to be seen. What’s clear is that buyers appear to be in control, and PERP is trading at April 2023 levels, peeling back losses of the past four months.

Perpetual Protocol TVL Remains Depressed, Will The Foundation Sell?

Perpetual Protocol is a popular decentralized finance (DeFi) protocol allowing users to trade crypto perpetual futures with leverage trustlessly. Perpetuals are complex derivatives products with no expiry dates.

Perpetual Protocol also supports concentrated liquidity, a feature first introduced in Uniswap v3. Moreover, it allows leverage of up to 10X.

Through this exchange, DeFi users have an alternative to Binance or Coinbase, both centralized options. By September 6, the exchange’s total value locked (TVL) was steady at around $12 million, down from $18 million in late July 2023. Of note, PERP is rallying without any sharp increment in TVL, as DefiLlama data shows. 

Typically, outflow from a non-custodial wallet to a centralized exchange is interpreted as bearish in crypto circles. So far, trackers reveal that the Perpetual Protocol Foundation has 7 million PERP in Binance worth over $4.62 million. It is also not clear whether they plan to sell.

On-chain data shows the Bitcoin Market Value to Realized Value (MVRV) ratio is nearing a retest that could be crucial for the asset.

Bitcoin MVRV Ratio Is Nearing In On The 1.2 Level

As an analyst in a CryptoQuant Quicktake post explained, the 1.2 level of the MVRV ratio has historically been a support line for the cryptocurrency. The “MVRV ratio” is an indicator that measures the ratio between the Bitcoin market cap and the realized cap.

The “realized cap” here refers to a capitalization model for BTC that assumes the real value of each coin in circulation isn’t the current spot price but rather the price at which the coin was last bought/transacted on the blockchain.

As the realized cap considers the cost basis or acquisition price of each investor in the market, the model essentially represents the total capital that the holders have put into the asset.

Thus, comparing the market cap against the realized cap in the MVRV ratio can provide hints about whether the investors are holding more or less value than they put in.

When the ratio’s value is greater than 1, it means that the market as a whole is sitting on some profits right now. Generally, the higher the MVRV goes above this mark, the more probable corrections become for the asset as investors look to harvest their gains.

On the contrary, the indicator below this mark can signal that BTC may be underpriced right now, as the average holder in the sector carries coins at a loss.

Now, here is a chart that shows the trend in the Bitcoin MVRV ratio over the last few years:

As is visible in the above graph, the Bitcoin MVRV ratio has been above the 1 mark during the past few months. The metric broke above this line in January when the rally started. Besides a retest in March, the indicator has remained above this level since then, implying that the holders have enjoyed profits.

The 1 level has been important historically for the asset. Still, the quant notes that another value is notable: 1.2. This line has supported the asset a few times in the past, as the analyst has highlighted in the chart (the yellow boxes).

Most recently, Bitcoin found support at this level in June, where the cryptocurrency could propel itself back up with a sharp rally. The metric is heading down and again approaching a retest of this line, as its current value is 1.27.

Naturally, a successful retest could be positive news for Bitcoin, but a failure might lead to an extended drawdown for the asset’s price.

BTC Price

As the chart below shows, Bitcoin has continued to consolidate recently, with the asset’s price still trading around the $25,700 level.

The First Digital USD (FDUSD) stablecoin has recorded a significant rise in its market cap following an announcement by the Binance exchange in August. FDUSD, a dollar-pegged stablecoin, was recently launched on June 1, 2023, debuting on the Ethereum network and the BNB Smart Chain. The token was officially listed for specific trading pairs on the crypto exchange in July.

Binance’s Directive Drives Adoption Of FDUSD 

On August 31, Binance confirmed reports of intention to halt support for Binance USD (BUSD) stablecoin following the regulatory embargo on the token’s issuance.

Back in March, The New York Department of Financial Services (NYDFS) had ordered Paxos Trust, the issuing company of BUSD, to cease minting the stablecoin. Since then, BUSD’s market supply has taken a nosedive, crashing by over 80% in the last eight months. 

According to an official post, the exchange will begin the gradual termination of all BUSD products on its platform, urging its 150 million customers to swap their BUSD tokens for other assets before February 2024. 

In particular, the crypto exchange encouraged users to convert their BUSD to FDUSD, touting incentives such as zero trading fees and a 1:1 direct swap ratio. 

According to data from CoinMarketCap, FDUSD’s market cap value has grown by 21.49% from August 31, rising from $324.75 million to its current value of $394.68 million.

This indicates that Binance’s promotion of FDUSD as a BUSD alternative is paying dividends, resulting in a rapid rise in the former’s adoption over the last few days. 

For context, the market cap metric represents the total value of a cryptocurrency based on its market price and the number of circulating tokens. Since FDUSD is a stablecoin with a fixed value of $1, CoinMarketCap’s data means that over 70 million FDUSD tokens entered circulation over the past week. 

In addition, according to the DeFi analytics platform, DeFiLlama, FDUSD now ranks as the ninth largest stablecoin in the crypto market ahead of other popular assets such as Gemini USD (GUSD). 

Binance Announces New FDUSD Trading Pairs

In other news, Binance unveiled three new FDUSD trading pairs on September 6, maintaining its stablecoin support. 

These trading pairs are DOGE/FDUSD, SOL/FDUSD, and XRP/FDUSD, which will become available for trading on September 7 at exactly 08:00 UTC.

This move comes a week after Binance announced the “gradual” discontinuation of its support for the BUSD token while directing users to convert their BUSD token to other assets. The exchange has begun discontinuing by delisting eight BUSD isolated and cross-margin pairs.

Following these announcements, the BUSD market fall continues, with the token’s market share now valued at an all-time low of $2.73 billion. More data from DeFiLlama shows that the BUSD market cap is down by 4.16% and 12.23% in the last one and seven days, respectively. 

Nevertheless, BUSD remains an important item in the market, ranking as the fifth largest stablecoin in the crypto space.

On-chain data shows the divergence between the Bitcoin long-term holders and short-term holders has grown to record levels recently.

Bitcoin Market Has Been Continuing Its Shift Towards HODLing

As an analyst in a post on X explained, the gap between the speculators and HODLers in the market has only grown wider recently. The “short-term holders” (STHs) and the “long-term holders” (LTHs) are the two primary cohorts that the entire Bitcoin market can be divided into.

The STHs refer to all those investors who purchased their coins less than 155 days ago, while the LTHs include the holders who have been holding onto their tokens beyond that period.

Statistically, the longer an investor keeps their coins dormant, the less likely they become to sell them at any point. Due to this reason, the STHs are usually the group with the weaker conviction of the two.

The LTHs often hold through volatile periods in the asset without moving an inch, which has earned them the popular name “diamond hands.” The STHs, on the other hand, tend to sell quickly whenever FUD emerges in the sector, or a profitable selling opportunity appears.

Now, here is a chart that shows the trend in the supplies of these BTC investor groups throughout the history of the cryptocurrency:

The graph shows that the Bitcoin LTH supply has been on an uptrend during the past couple of years, while the STH supply has been going down recently. This would suggest that the overall supply of the cryptocurrency is continuously becoming more dormant.

The gap between these groups is the widest it has ever been, as the LTH supply is nearing the 15 million BTC mark, while the STH supply has dropped under the 2.5 million BTC level.

The latter’s latest value is the lowest it has ever been since 2011 when the asset was still in its infancy. It would appear that short-term speculators in the market have thinned to record lows.

Last month, Bitcoin witnessed a sharp crash from above the $29,000 level to below the $26,000 mark, and the asset has not recovered. As is apparent from the chart, though, the LTHs haven’t cared about the asset’s struggle at all, as their supply has only continued to head up while the STHs have shrunken down further.

The LTH group remaining strong and continuing its growth may not affect the market in the short-term, but during longer periods, the supply continuing to become locked in the wallets of these HODLers could have a bullish impact due to how supply-demand dynamics work.

BTC Price

At the time of writing, Bitcoin is floating around the $25,700 mark, registering a dip of 6% over the past week.

In a crucial development for the financial markets, the US Dollar Index (DXY) has surged to its highest level since March, marking a pivotal moment for Bitcoin and the broader crypto sector. The DXY, which gauges the Greenback’s performance against a basket of six major currencies, has extended its gains above the 104.000 mark in the past four day, reaching a five-month peak at 104.907. At press time, the DXY was trading at 104.773.

From a technical standpoint, the DXY has exhibited a bullish bias, especially after surpassing the 200-day Moving Average (DMA) on Thursday last week. For the DXY to solidify its bullish stance, it needs to surpass the year-to-date (YTD) high of 105.882, which would then bring the 106.000 mark into focus. Surpassing this level could set the stage for the DXY to challenge the November 30 daily high of 107.195 and potentially rally towards March’s 21 high of 107.993.

However, on the flip side, if the DXY were to dip below 104.538, it could trigger a correction, targeting the 200-DMA (currently at $103.326). In the short term, while the DXY remains bullish, it must breach the 38.2% Fibonacci retracement level at $105.368.

Renowned macro analyst Henrik Zeberg weighed in on the DXY’s trajectory, predicting that DXY bulls shouldn’t get too excited, “I just love this BEARISH – bullish move in DXY. Let the DXY Bulls get overly excited! Exactly what is needed for the reversal. 106.0 – 106.3 (is key).”

How Will Bitcoin Respond To DXY’s Strength

The inverse correlation between Bitcoin and the DXY has been a topic of interest in recent years. With the DXY’s recent surge, concerns are mounting about potential downward pressure on Bitcoin and crypto in the short-term. Some analysts believe that another uptick in the dollar could push Bitcoin towards the $23.500 mark, especially given the relatively low levels of open interest (OI) and volume for BTC.

Glassnode founders Yann Allemann and Jan Happel provided insights into Bitcoin’s outlook, noting, “Mid-term outlook: Favorable risk/reward, but short-term, uncertain ($25.8k – $26.8k). Possible downside ($23.8k – $24.8k) due to bearish trend. Signs of bottoming: RSI bullish divergence, fading volatility. […] We’re close to the bottom, but the environment is still unstable.”

Elaborating on the current market conditions, they added, “We’re in an unstable environment. Wait for the dip or buy the breakout. Bitcoin Risk Signal near extremes. $25.8k – $26.8k is No Man’s Land. The mid-term risk/reward is favorable for BTC and crypto.” Moreover, they predict that Bitcoin will bottom out in mid-September when the DXY reaches its top, setting Bitcoin and crypto up for a stellar October.

At press time, BTC price remained stagnant below $27,800.

As Ethereum (ETH) grapples with quite a tense market sentiment, crypto investors are on edge, with some sounding cautionary alarms about the potential for further price erosion before any sign of recovery. 

The second-largest cryptocurrency by market capitalization has faced tumultuous weeks, with its price bouncing off the $1,626 support level, giving bulls a glimmer of hope.

In a bid to regain lost ground, Ethereum needs to engineer a bullish breakout from the overhead trendline, aiming to potentially push its price back up to $2,020. 

ETH Bullish Breakout Looms, But Challenges Persist

Over the past few weeks, Ethereum has witnessed multiple rebounds from the support trendline, thwarting sellers’ attempts to instigate a significant correction. The current ETH price hovers around $1,629, showing modest 24-hour gains of 0.5% but a seven-day dip of 4.9%.

According to recent price analysis, if buyers maintain their pressure and the support trendline remains resilient, Ethereum could witness a 5-6% surge. Such a surge could challenge the persistent descending trendline that has dominated the ongoing corrective phase, and breaking past this resistance is crucial for a more pronounced recovery.

Ethereum’s Dwindling On-Chain Activity Raises Concerns

While Ethereum’s price struggles, there has been a noticeable decline in transaction volume and overall activity on the Ethereum blockchain. Recent data shows that transaction volume has hit a nine-month low, accompanied by daily transaction fees reaching an eight-month low. 

This trend has sparked concerns within the crypto community, with a growing consensus that users are losing interest in the Ethereum blockchain and possibly exploring alternatives.

Around mid-April, there was a significant shift in investor sentiment towards Ethereum, which was then trading at approximately $2,140 and had experienced substantial gains for the year.

During the following four months, there was a consistent trend of large-scale selling by Ethereum “whales,” individuals holding between 10 and 10,000 ETH in their crypto wallets. These whales are often regarded as informed and influential players in the cryptocurrency market.

One notable development that has raised eyebrows is the actions of Ethereum co-founder Vitalik Buterin. Observers have noted that Buterin has been transferring substantial amounts of Ethereum from his public wallets to other cryptocurrency wallets over the past month.

The approximate sum of $6 million worth of Ethereum being moved has led some to view this as a potential red flag. Comparable to corporate insiders selling their shares when anticipating a price decline, Buterin’s actions have added to the uncertainty surrounding Ethereum’s future trajectory.

With investors cautiously optimistic about a potential price rally, Ethereum must overcome significant challenges, including breaking past key resistance levels and reigniting user interest in its blockchain. All eyes remain on Ethereum’s next moves, as well as Buterin’s, along with crypto enthusiasts bracing for what the future holds for this influential digital asset.

(This site’s content should not be construed as investment advice. Investing involves risk. When you invest, your capital is subject to risk).

Featured image from Adobe Stock

Shiba Inu (SHIB) has been making headlines once again, but this time for all the wrong reasons. The popular meme token has been under sustained selling pressure, leading to a significant crack in a critical support level. 

Despite the recent launch of Shibarium, a blockchain platform aimed at enhancing the SHIB ecosystem, the bearish sentiment seems to have a firm grip on the token’s price chart, raising concerns about the long-term outlook.

The crack in SHIB’s armor became evident as it breached the crucial $0.00000807 support level, resulting in a 7.3% decline in its price over the past seven days. Currently, SHIB is trading at $0.00000764, as reported by CoinGecko, with a modest 1.5% gain in the last 24 hours. However, these numbers only tell part of the story.

Shiba Inu’s Bearish Indicators Abound

A deeper dive into the technical indicators as revealed in a recent report reveals a grim picture for SHIB. The Chaikin Money Flow (CMF) has seen a substantial decline, resting at the zero mark as of press time.

This signifies a lack of buying pressure and strong capital outflows. Moreover, the Relative Strength Index (RSI) remains in a downtrend, hovering just above the oversold zone, highlighting the absence of demand for SHIB.

Intriguingly, the report also points out that the levels at which bears could potentially profit might serve as a price reversal zone for bulls, drawing parallels with price action observed in early June. However, the 24-hour liquidation data from Coinglass suggests a muted possibility of a bullish uptick in the near future.

Shiba Inu: The Indian Connection

Despite the challenging times for SHIB, it continues to make waves on WazirX, one of India’s leading cryptocurrency exchanges. According to a recent tweet from the exchange, SHIB held its ground among the top three most traded digital currencies in August, alongside giants like Bitcoin and XRP. 

Top five traded coins on WazirX in August:

$USDT
$BTC
$SHIB
$XRP
$ETH pic.twitter.com/Xes1MlAl95

— WazirX: India Ka Bitcoin Exchange (@WazirXIndia) September 5, 2023

According to a report, this trend mirrors the performance observed in June and July, where these tokens showcased resilience, often trading in tandem with Bitcoin, the market’s heavyweight.

The lackluster performance of SHIB in the face of the Shibarium launch and the bearish technical indicators raise concerns about its long-term prospects.

Meanwhile, a price reversal cannot be ruled out, and SHIB’s latest dip could be just a bullish opportunity in disguise.

(This site’s content should not be construed as investment advice. Investing involves risk. When you invest, your capital is subject to risk).

Featured image from Getty Images