The Bitcoin [BTC] tide is changing once again after starting the week on a very bearish note. This time it looks like we might just get a bit of a relief rally. This is especially now that whales are re-accumulating after a noteworthy discount.
BTC whale activity increased in the last two days according to a CryptoQuant analyst under the pseudonym maartunn. The analysis takes note of increased BTC transfers from all exchanges to derivatives exchanges flow mean. According to his analysis,
“A higher or increasing amount shows more whales are depositing on derivative exchanges.”
Of course, whale accumulation is bound to trigger an increase in buy pressure and a subsequent price pump. This might explain BTC’s mid-week bounce back from its 7 September low of $18,510 to $19,285. The latter also aligns with July support levels.
BTC and external factors
There are other factors supporting BTC’s current upside. For example, the dollar index has experienced a significant pullback in the last 24 hours after briefly being oversold.
Many investors have been using the greenback as a go-to when the commodities markets crash. Traders are, thus, bound to start using their cash reserves when the dollar index starts showing signs of weakness.
Interesting place to see the Dollar Index rejected as it lines up with the RSI downtrend.
Short-term equity rally into CPI data release next week? pic.twitter.com/4ALJkNlHiY
— Lark Davis (@TheCryptoLark) September 7, 2022
BTC’s slight recovery unsurprisingly comes after a brief dip into oversold territory. It, thereby, makes sense that a flow of liquidity from the USD to BTC is observed.
On the on-chain side of things, we can see higher inflows than outflows. Receiving addresses currently outweigh sending addresses, thus a net-positive demand from 4 September.
The combination of these factors confirms that BTC is currently experiencing a wave of demand. However, this does not guarantee the end of the bearish short-term trend. The recent bearish conditions in the market were due to concerns related to inflation and larger economic conditions.
On the other hand, the long-term outlook remains bullish. Savvy analysts such as Panthera Capital’s Dan Morehead are doubling down on the BTC’s bullish narrative.
Dan noted during a recent Bloomberg interview that Bitcoin has already started its next rally phase. He also expects it to be bumpy at first, which means that traders should expect some pullbacks on the way up.
Furthermore, Dan’s take on BTC’s macro outlook aligns with the expectations of many analysts. Investors should, however, note that black swan events are commonplace in the crypto market.
Hence, investors should consider the potential for another major crash and prepare for such an outcome.
Cardano founder Charles Hoskinson calls for an end to Bitcoin mining
Cardano founder Charles Hoskinson calls for an end to Bitcoin mining Oluwapelumi Adejumo · 4 hours ago · 2 min read
Hoskinson predicted that more wrapped Bitcoin would be on other blockchain networks in the next five years.
2 min read
Updated: October 4, 2022 at 1:13 pm
Cover art/illustration via CryptoSlate
Cardano founder Charles Hoskinson explained why he thinks Bitcoin mining should be stopped and all existing units of the assets should be converted into wrapped Bitcoin (wBTC) in an Oct. 3 Twitter broadcast.
Wrapped Bitcoin is BTC on smart contracts-enabled platforms like Ethereum (ETH), Cardano (ADA), and others.
Bitcoin’s PoW is the “gold mine” – Charles Hoskinson
According to Hoskinson, if Bitcoin’s network is shut down, the flagship digital asset can continue to exist as wrapped Bitcoin on other networks. In his view, the industry would not need the proof-of-work consensus mechanism because it is the “gold mine” to get the asset.
Hoskinson pointed out that the Bitcoin blockchain is only optimized for the mining process presently. According to him, efforts to build on the blockchain have recorded little success because it is not designed for that purpose.
The Cardano founder highlighted that Bitcoin’s “gold mine” consumes a lot of energy, considering that the number of BTC left to mine is less than what is already in circulation. He stated that the continued running of Bitcoin mining is not a good investment of energy.
Meanwhile, Hoskinson conceded that Bitcoin maximalists wouldn’t agree with his idea because they would argue that “[PoW] is the source of truth and a counter-balance to banks.”
Wrapped Bitcoin will broaden BTC usage.
Hoskinson stated that moving all mined Bitcoin to the broader crypto ecosystem through wrapping can help broaden its usage and adoption.
Citing El Salvador’s adoption, Hoskinson said that while Bitcoin is digital gold with real utility and can act as a good store of value, the asset is not a good means of exchange and unit of account because of its volatility.
So, wrapped Bitcoin could be used to create stablecoins that can serve as a means of exchange and unit of account because they are on other smart contracts-enabled networks built for those purposes.
“[Wrapped Bitcoin] could be used in all kinds of Dapps and smart contracts and potentially be used by nation-states to create a means of exchange and unit of account to actually have a stable currency they could use with a sound monetary policy.”
According to him, the wrapped Bitcoin is still Bitcoin because it would still have all the properties and features of the asset.
Bitcoin, Ethereum Technical Analysis: BTC Back Above $20,000, USD Hits 2-Week Low
Bitcoin was back above $20,000 on Tuesday, as the U.S. dollar fell to its lowest point in two weeks versus several G7 currencies. The stronger dollar has impacted purchasing power in cryptocurrencies, and commodities like crude oil, which last week fell to a nine-month low. Ethereum was also up, hitting a five-day high.
Bitcoin (BTC) briefly rose above $20,000 on Tuesday, as the U.S. dollar continued to decline versus other major currencies.
This has resulted in the world’s largest cryptocurrency climbing to a peak of $20,071.20 earlier in today’s session.
Today’s high is the strongest point that BTC/USD has traded at since September 30, and is marginally below a ceiling of $20,200.
As can be seen from the chart, earlier bulls retreated from the market as BTC neared the aforementioned resistance point.
Overall, the rally began following a breakout of another point of uncertainty, this being the ceiling of 49.00 on the relative strength index (RSI).
The index is now tracking at 52.22, which is slightly below a resistance of 53.00, and this seems to be another reason why BTC has slipped from its earlier high.
Like BTC, ethereum (ETH) also rose to a five-day high in today’s session, moving above a key resistance level in the process.
Following a low of $1,294.41 to start the week, ETH/USD raced to an intraday high of $1,355.89 earlier in the day.
The move saw ethereum break out of its ceiling of $1,330, with the 14-day RSI also moving beyond a point of resistance.
Looking at the chart, the indicator rose above its ceiling of 41.50, and as of writing, is tracking at 44.82.
This is the strongest reading for the index since September 15, when ETH was trading at a high of $1,470.
In order to move back towards those levels, the RSI will need to break out of an upcoming ceiling of 45.00.
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Could we see ethereum hit $1,400 before the end of the day? Leave your thoughts in the comments below.
Eliman brings an eclectic point of view to market analysis, he was previously a brokerage director and retail trading educator. Currently, he acts as a commentator across various asset classes, including Crypto, Stocks and FX.
Image Credits: Shutterstock, Pixabay, Wiki Commons
Disclaimer: This article is for informational purposes only. It is not a direct offer or solicitation of an offer to buy or sell, or a recommendation or endorsement 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.
Will Terra Classic (LUNC) Get Back On Track With These Revival Plans
LUNA Classic (LUNC) is heading to become the new retail favorite and has even overtaken Shiba Inu’s popularity. The altcoin climbed by 66% after Binance announced the LUNC burn program on September 26.
Since the Terra Classic Community laid its roadmap on September 29, LUNC has faced intense criticism and unrequested suggestions.
Most recently, popular crypto investor David Gokhshtein, who had been a strong LUNC critic, has come up with a newer approach, and it was observed that he was passively supporting the community. Gokhstein tweeted that LUNC needed more than the regular token burn to sustain the project. The critic believes that the community needs to infuse utility to remain relevant or reach key milestones like Shiba Inu [SHIB].
The LUNC Community Perseveres
It is noteworthy that the LUNC community has no intentions of quitting, even after all the attacks. Earlier, the community claimed to work independently of the wanted Terra founder, Do Kwon. The development activity on LUNC also showed the advancements and hinted that the LUNC community had started working per its publicized roadmap.
The LUNC stablecoin whale supply was 42 at press time, which was the position it fell to since increased interest on 25 September. According to the on-chain data platform Santiment, the whale’s trust in the token was not as much as it used to be.
The LUNC community had different views than Gokhshtein’s on the burn rate aspect; this was because the LUNC burn had continued to increase since Binance lent its support. Over the last 24 hours, the total LUNC burned was 7.87 billion. Half of this number was achieved after the 1.2% tax activation.
LUNC didn’t act like it needed any utility to achieve its goal or grab the crypto community’s attention, mainly because the LUNC volume increased incredibly in the last 24 hours. On 2 October, LUNC left the 300 million zone and went as high as 1.3 billion. At press time, while the volume had decreased to $838.06 million, the LUNC price continued to hold at $0.00033.
Despite all these disturbances, the LUNC community remained resolute in its pursuit of importance. In a recent tweet, the LUNC community seemed to be calling out two crypto exchanges to expand the 1.2% tax burn rate support. Coinbase was slowing down on the listing, which was already agreed upon.
LUNC and Bitcoin
The larger ecosystem, including Bitcoin, is still bearish even after the LUNC price indicated a flip of the $0.000308 to $0.000327 support area after five days of struggling. Considerably, the LUNC Classic price is not correlating very closely to the Bitcoin price. However, a sudden sell-off for the big crypto could affect LUNC. The price meltdown could constitute a 60% loss from the current position.
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