Archive for Cryptocurrencies – Page 2

26 Jun

Bitcoin: Waits on key risk event

By ForexTime

  • Bitcoin ↓ over 8% on Monday
  • Roughly 2% above $60,000 support
  • Over past year US PCE triggered moves of ↑ 0.9% & ↓ 2.3%
  • Key point of interest – $60,000
  • Technical levels – $60,254.93, $57,5656.20 and $66,365.11

Bitcoin’s extended losses have set off alarm bells for bulls, with prices sinking below $60,000 for the first time since early May!

The world’s largest cryptocurrency collapsed over 8% on Monday thanks to cooling demand for Bitcoin ETFs and uncertainty over US interest rates. Developments revolving around the failed Mt. Gox exchange compounded the overall negativity, allowing sellers to dominate the scene.

Despite prices rebounding in the previous session, sentiment remains fragile with bears on standby to pounce again. In the near term, Bitcoin’s fate may be tied to Friday’s US PCE deflators.

The Fed’s preferred inflation gauge – the Core PCE has the potential to impact bets around when the central bank will cut rates in 2024. Any changes to these expectations may impact cryptocurrencies which have displayed sensitivity to interest rates.

Traders are currently pricing in a 70% probability of a 25-basis point cut in September with a move fully priced in by November.

Fun fact: Over the past year, the US PCE deflators have triggered upside moves of as much as 0.9% or declines of 2.3% in a 6-hour window post-release.

Taking a look at the technicals

With Bitcoins’ weekly price chart showing a potential double top, this PCE report could not be better timed to determine the cryptos’ next course of action- above or below the double top neckline.

Notice how volume declined into the second top of the pattern.

Bitcoin on the daily time frame may be in a potential symmetrical triangle, bouncing off the lower bound trendline (support) on yesterday’s price action.

Interestingly, this bounce off the support area of the symmetrical triangle coincides with an entry and exit out of the oversold zone of the RSI.  

The Relative Strength Index (RSI) is an indicator that highlights overbought and oversold zones.

Key levels to look out for in a decline include:

  • $60,254.93 – The neckline area of the potential double-top pattern
  • $57,5656.20 – The 200-day simple moving average (SMA)
  • $56,457.70 – The lowest price between Bitcoins all time High ($73,711.39) and the most recent swing high ($69,498.98)

In a rally, the following levels are significant points of interest

 

  • $66,365.11 – The 50-day simple moving average
  • $71,428 – The upper bound trendline of the symmetrical pattern

Forex-Time-LogoArticle by ForexTime

ForexTime Ltd (FXTM) is an award winning international online forex broker regulated by CySEC 185/12 www.forextime.com

Cryptocurrencies Financial News
13 Jun

Target Thursday: 3 cryptos met expectations, with one surprise winner

By ForexTime

  • Cryptos soared post-CPI, tumbled after Fed
  • Avalanch rose as much as 6.2%, up 5.1% for the day
  • Solana rose as much as 6.3%, up 3.9% for the day
  • Chainlink rose as much as 6.9%, up 5.8% for the day
  • Dogecoin rose as much as 7.5%, up 5.5% for the day

 

It was a wild Wednesday for global financial markets!

Major US stock indices hit fresh record highs, while the US dollar saw its 2nd largest single-day decline so far this year!

Markets swung wildly as investors and traders reacted to the surprise cooling in US inflation, as measured by the consumer price index (CPI).

They also reacted to the Fed’s latest projections for fewer rate cuts this year.

The Fed’s just-released “dot plots” forecasted just one single rate cut for the year, fewer than the 3 previously forecasted back in March 2024.

However, in percentage terms, Wednesday belonged to cryptos – as expected.

 

We revisit our article published on Tuesday, June 11th, in which we asked the question:

“Which crypto could see the biggest moves this week?“

And here’s what we wrote:

“Of the 11 different cryptocurrencies offered by FXTM, Avalanch, Dogecoin and Solana have offered the biggest reactions to the US CPI prints and Fed decisions from the past 12 months.”

 

And once again, those 3 cryptos duly delivered massive moves on Wednesday, June 12th!

But they were pipped for the day’s total performance by a “dark horse” – Chainlink.

 

Here’s a recap of Wednesday’s full-day performance:

  1. Chainlink rose 5.8%
  2. Dogecoin rose 5.5%
  3. Avalanch rose 5.07%
  4. Solana rose 3.9%
  5. Cardano rose 3.5%
  6. Polygon rose 3.1%
  7. Ethereum rose 1.9%
  8. Ripple rose 1.9%
  9. Litecoin rose 1.7%
  10. Bitcoin Cash rose by 1.3%
  11. Bitcoin rose 1.2%

 

In terms of immediate post-CPI gains, Chainlink also managed to muscle its way into the leading pack:

  • Dogecoin rose as much as 7.5%
  • Chainlink rose as much as 6.9%
  • Solana rose as much as 6.3%
  • Avalanch rose as much as 6.2%

 

Then came along the Fed’s dot plot.

Cryptos then tumbled at the thought of higher-for-longer US interest rates.

Even those downside moves were massive for these 4 cryptos:

  • Solana fell as much as 6.7%
  • Dogecoin fell as much as 5%
  • Avalanch fell as much as 4.6%
  • Chainlink fell as much as 3.8%

 

Hence, with Chainlink’s smaller decline (in % terms), that explains why Chainlink was the biggest-gainer for Wednesday as a whole!

 

Those above-mentioned figures are also far superior compared to yesterday’s performance for Bitcoin – the world’s largest and most popular crypto:

  • Post-CPI: rose as much as 3.09%
  • Post-Fed: fell as much as 3.94%
  • ended Wednesday up just 1.2%

 

All in all, yesterday’s price action demonstrated yet again the volatile nature of cryptocurrencies.

Still, such big price moves may have been happy hunting grounds for traders with massive risk appetites who may have walked away with outsized profits, and perhaps a great trading story to tell as well.

Forex-Time-LogoArticle by ForexTime

ForexTime Ltd (FXTM) is an award winning international online forex broker regulated by CySEC 185/12 www.forextime.com

Cryptocurrencies Financial News
11 Jun

Which cryptos could see biggest moves after US CPI/Fed meeting?

By ForexTime

  • Bitcoin, Ethereum falling over 3% each today
  • Markets angsty ahead of Wednesday’s US CPI, Fed decision
  • Avalanch has seen biggest up/down moves post-CPI
  • Dogecoin, Solana historically more reactive to Fed meetings
  • Traders could profit from big crypto volatility mid-week

 

The world’s 2 largest cryptos, Bitcoin and Ethereum, are both falling over 3% each!

 

 

These declines come on the eve of some ultra-important US economic events that could rock global financial markets.

 

On Wednesday, June 12th, markets will find out the latest:

  • @12:30 GMT: US consumer price indices (CPI), which measure inflation, for May 2024
  • @18:00 GMT: Fed interest rate decision and “dot plot” (Fed officials’ forecasts for US interest rates)
  • @18:30 GMT: Press conference by Fed Chair Jerome Powell

Note that the monthly CPI releases and the Fed meetings are not often scheduled on the same day.

Hence, markets are set up for what could be a “double-whammy” Wednesday.

 

We’ve already written extensively about why these events impact financial markets worldwide.

This article will focus exclusively on the crypto world.

 

Which crypto could see the biggest moves this week?

Of the 11 different cryptocurrencies offered by FXTM …

Avalanch, Dogecoin and Solana have offered the biggest reactions to the US CPI prints and Fed decisions from the past 12 months.

 

Let’s break this down by the respective marquee events: US CPI and Fed meeting.

 

Using a 6-hour timeframe after the monthly CPI releases from the past 12 months:

  1. Avalanch rose by as much as 16.7%, or fell as much as 7.1%
  2. Solana rose by as much as 7%, or fell as much as 5.2%
  3. Bitcoin Cash rose by as much as 5.7%, or fell as much as 3.4%
  4. Chainlink rose by as much as 4.7%, or fell as much as 4.1%
  5. Bitcoin rose by as much as 4.3%, or fell as much as 2.9%
  6. Litecoin rose by as much as 3.4%, or fell as much as 4.2%
  7. Ethereum rose by as much as 3.4%, or fell as much as 3.1%
  8. Ripple rose by as much as 3.2%, or fell as much as 7.1%
  9. Dogecoin rose by as much as 3%, or fell as much as 3.8%
  10. Polygon rose by as much as 4.1%, or fell as much as 5.9%
  11. Cardano rose by as much as 3.9%, or fallen as much as 4.8%

 

In the 6 hours after each of the FOMC rate decision announcements (the timeframe includes Fed Chair Jerome Powell’s press conference) over the past 12 months:

  1. Dogecoin rose by as much as 14.1%, or fell as much as 2.5%
  2. Solana rose by as much as 11.3%, or fell as much as 6%
  3. Avalanch rose by as much as 9.2%, or fell as much as 6.1%
  4. Bitcoin Cash rose by as much as 8.4%, or fell as much as 3.7%
  5. Cardano rose by as much as 7.9%, or fell as much as 3%
  6. Chainlink rose by as much as 6.9%, or fell as much as 3.3%
  7. Polygon rose by as much as 6.6%, or fell as much as 6.3%
  8. Ethereum rose by as much as 6.6%, or fell as much as 5.3%
  9. Bitcoin rose by as much as 5.8%, or fell as much as 3.4%
  10. Litecoin rose by as much as 4.5%, or fell as much as 6%
  11. Ripple rose by as much as 4.4%, or fell as much as 5%

 

These biggest-in-class moves by Avalanch, Dogecoin, and Solana should produce sizeable opportunities for traders tomorrow.

How might cryptos react to US CPI and Fed meeting?

While markets are certainly complex organisms, here are some simple scenarios that traders could refer to as a guide ahead of tomorrow’s highly-anticipated events.

 

Cryptos may fall if:

  • US inflation comes in higher-than-expected
  • Fed dot plot points to just 1 or zero rate cuts for 2024
  • Fed Chair Jerome Powell signals to the world that the intended US rate cuts have to be delayed

 

Cryptos may rise if:

  • US inflation comes in lower-than-expected
  • Fed dot plot sticks to its March 2024 forecasts for 3 rate cuts this year
  • Fed Chair Jerome Powell refuses to sound “hawkish” but instead assures the world that rate cuts are indeed on the way

 

Either way, cryptocurrencies are set to deliver big moves, depending on how much markets are surprised tomorrow.

Forex-Time-LogoArticle by ForexTime

ForexTime Ltd (FXTM) is an award winning international online forex broker regulated by CySEC 185/12 www.forextime.com

Cryptocurrencies Financial News
05 Jun

Bitcoin: Breaks $71k ahead of US NFP

By ForexTime 

  • Bitcoin ↑ 5% this week
  • Roughly 4% away from all-time high
  • Over past year NFP triggered moves of ↑ 2.5% & ↓ 1%
  • Key level of interest – $72,000

Are Bitcoin bulls gearing up for another charge higher?

Well, the world’s largest cryptocurrency has jumped almost 5% this week, trading around $71,000 as of writing.

Bitcoin along with other cryptocurrencies seem to be supported by the prospect of lower US interest rates in 2024. But another major factor is the monster inflows into exchange-traded funds holding the tokens.

According to data from Coinglass among other sources, Bitcoin ETFs saw a whopping $886.6 million inflows on Tuesday!

Source: Coinglass 

This was the best day of inflows since mid-March and the second-largest amount since spot ETFs launched this year. These bullish forces may keep the “OG” crypto buoyed ahead of Friday’s US jobs data.

As covered in our trade of the week, the incoming NFP report is likely to influence bets around when the Fed cuts rates in 2024.

Traders are currently pricing in a 75% probability of a 25-basis point Fed cut in November with a move fully priced in by December.

Any changes to these expectations may influence cryptocurrencies which have shown sensitivity to interest rates.

Golden nugget: Over the past year, the US jobs report has triggered upside moves of as much as 2.5% or declines of 1% in a 6-hour window post-release.

 

What does this mean?

Bitcoin is trading roughly 4% away from its all-time high at $73850.

So essentially, a disappointing jobs report that fuels rate cut bets could push prices closer to all-time highs.

Just to be clear, past price movements do not guarantee future results but can be used to highlight how Bitcoin has reacted to the US jobs report.

It’s not only Bitcoin that may experience big moves on Friday…

  • AVALANCH: ↑ 4.0 % or ↓ 2.0%
  • CARDANO: ↑ 3.4% or ↓ 1.6%
  • SOLANA: ↑ 3.2 % or ↓ 2.7%
  • CHAINLINK: ↑ 3.0 % or ↓ 1.2%
  • DOGECOIN: ↑ 2.8 % or ↓ 1.1%
  • LITECOIN: ↑ 2.2 % or ↓ 1.0%
  • BITCOINC: ↑ 2.0 % or ↓ 1.7%
  • ETHEREUM: ↑ 2.0% or ↓ 1.3%
  • POLYGON: ↑ 1.7% or ↓ 1.5%
  • RIPPLE: ↑ 1.7% or ↓ 1.1%

All 10 cryptos listed above are offered by FXTM as Crypto CFD’s.

Technical outlook…

Bitcoin remains trapped within a range on the weekly charts with bulls approaching the $72,000 resistance.

Prices have turned bullish on the daily charts after the breakout above $70,000. The upside momentum may take the crypto towards the $72,000 resistance level in the short term.

  • A solid breakout above $72,000 could open a path toward the all-time high at $73850.
  • Should prices fall back below $70,000, bears may target $67,000.

Forex-Time-LogoArticle by ForexTime

ForexTime Ltd (FXTM) is an award winning international online forex broker regulated by CySEC 185/12 www.forextime.com

Cryptocurrencies Opinions
29 May

Bitcoin: Shaky ahead of PCE inflation data

By ForexTime 

  • Bitcoin ↑ 14 month-to-date
  • Could be rocked by US inflation data
  • Over past year PCE triggered moves of ↑ 1% & ↓ 2.3%
  • Technical levels –  $70,000 & $67,000
  • Keep eye on Ethereum, Solana & Litecoin among others

The past few days have been volatile for the world’s largest cryptocurrency.

Bitcoin initially rallied above $70,000 last week due to market optimism around the prospect of spot Ethereum ETFs. However, prices crashed below $67,000 just hours before the SEC’s actual approval. Although bulls returned to the scene, upside gains were capped by fresh developments concerning the failed Mt. Gox exchange.

Still, Bitcoin could be in store for another wild ride this week thanks to the incoming US PCE inflation data.

All eyes will be on the Fed’s preferred inflation gauge – the core personal consumption expenditure index which could impact bets around when the Fed will cut interest rates.

As of writing, traders are currently pricing in a 74% probability of a 25 basis point Fed cut in November with a move fully priced in by December.

Note: In general, cryptocurrencies are indirectly affected by interest rates because of their high risk.

So essentially, high interest rates may sap appetite for riskier investments like crypto, and vice versa.

Fun fact: Over the past year, the US PCE report has sparked upside moves of as much as 1% or declines of 2.3% in a 6-hour window post-release.

Just like Bitcoin, here is how these other cryptos have reacted post-release…

Ethereum: ↑ 1% or ↓ 2%

Solana: ↑ 2.4 % or ↓ 2.8%

Ripple: ↑ 1.3 % or ↓ 2%

Dogecoin: ↑ 1.5 % or ↓ 2.7%

Litecoin: ↑ 3.6 % or ↓ 3.5%

Note: Past price movements do not guarantee future results but can be used to highlight how cryptos have reacted to the US PCE deflators.

Looking at the bigger picture, Bitcoin is up roughly 14% this month and still boasting year-to-date gains over 60%.

Prices remain trapped within a range on the weekly charts with support at $60,000 and resistance at $72,000.

Despite the choppiness on the daily charts, prices are still respecting a bullish channel with technical indicators signalling further upside. The candlesticks are trading above the 50, 100 and 200-day SMA while the MACD points above zero but bears seem to be eyeing $67,000.

  • A solid breakout above $70,000 may open a path toward $72,000.

  • Should prices slip below $67,000 this could open a path toward $65,000.

Forex-Time-LogoArticle by ForexTime

ForexTime Ltd (FXTM) is an award winning international online forex broker regulated by CySEC 185/12 www.forextime.com

Cryptocurrencies Financial News
22 May

Ethereum: ETF D-Day looms

By ForexTime 

  • Ethereum ↑ over 20% this week
  • Crypto could rally another 35,000 points
  • Prices bullish on D1 but RSI overbought
  • Key level of interest at $3806.49 & $40000

Ethereum is back in the spotlight after soaring over 20% this week.

The world’s second-largest cryptocurrency by market cap has been boosted by growing expectations around US regulators finally approving spot ETFs.

Investors remain hopeful after the US Securities and Exchange Commission (SEC) showed an interest in giving the green light after months of uncertainty.

This could be a pivotal moment for Ethereum which may ride the crest of this ETF wave to a fresh year-to-date high beyond $4094.

However, this will depend on what the SEC does tomorrow (Thursday, May 23rd) – the final deadline to decide on VanEck’s spot Ethereum application.

Just like we saw with Bitcoin ETFs, the approval of an Ethereum ETF would increase the exposure of the cryptocurrency. This may lead to potential inflows of new investors due to the easier and greater access.

Regarding the technicals, Ethereum bulls (those looking to see Ethereum prices rally), could set their sights on these near-term resistance levels.

  • $3806.49: – The 261.8 Fibonacci level where price is testing today after being rejected yesterday.

  • $40000: – A psychologically important level.

The crypto bears (those looking to see prices of Ethereum decline), on the other hand may take advantage of a possible “buy the rumour sell the fact scenario”, and have their sights set on the near term support at:

  • $3445.05 which is the golden 161.8 Fibonacci ratio.

The Fibonacci retracement tool is drawn from May 6th, high at $3221.68 to May 14th, low at 2860.24.

Looking at the Relative Strength Index (RSI), an indicator that highlights zones in the market that are saturated with buyers (overbought) and sellers (oversold), Ethereum is technically overbought.

Forex-Time-LogoArticle by ForexTime

ForexTime Ltd (FXTM) is an award winning international online forex broker regulated by CySEC 185/12 www.forextime.com

Cryptocurrencies Opinions
06 May

Trade Of The Week: Ripple ready to create waves?

By ForexTime

  • Ripple waits on SEC response
  • Crypto ↓ 12% year-to-date
  • Rangebound on D1 timeframe
  • Key levels of interest 0.5675, 0.5350 & 0.4750
  • Breakout on the horizon?

Our focus falls on Ripple due to the legal drama with the US Securities and Exchange Commission (SEC).

This could be a big week for the crypto depending on how markets react to the SEC’s reply to the ongoing lawsuit.

But before we discuss how to take advantage of this opportunity, here are the basics:

What is Ripple?

Ripple is a money transfer network created to serve the needs of financial services.

XRPUSD is a tailored cryptocurrency to work on the Ripple network.

When was it created?

Ripple was founded in 2004 as Ripplepay but the first XRP ledger was launched in 2012.

Why should you care? 

Ripple created the XRP token with the goal of solving a real-world problem with blockchain and Cryptocurrency.

Some fun facts about XRP:

  • You can’t mine Ripple.
  • The total supply of XRP is capped at 100 billion.
  • Around 55 billion are in circulation.
  • It’s down 12% year-to-date.
  • Over 70% away from its all-time high.

The lowdown…

In December 2020, the SEC sued Ripple for selling digital tokens without registering the token.

Fast-forward to today, although these claims have been partially dismissed by the court – the SEC has asked that Ripple Labs be fined a whopping $2 billion.

This has evolved into an ongoing legal battle, creating much uncertainty over the outlook for Ripple.

The bigger picture

How this legal standoff between Ripple and SEC plays out could significantly impact Ripple’s outlook and market regulation in the wider crypto space.

The SEC must file a sealed reply brief by Monday 6th May and the redacted version (excluding sensitive information) for the public by Wednesday 8th May.

Note: In the lawsuit, the SEC proposed a $2billion fine but Ripple has countered with a much lower settlement of $10 million. 

What does this mean?

After over 3 years, the SEC vs Ripple saga could be coming to an end.

The next major step is for the court to decide on the financial penalty size with the final ruling expected between July and September 2024. 

A bright spot

Last month, Ripple announced plans to launch a stablecoin pegged 1:1 to the US dollar in 2024. 

Note: A stablecoin is a form of digital asset that can be used to make payments. 

Should this become a reality, it could boost the utility of XRP – potentially leading to higher prices. Last Friday, Ripple’s CTO David Schwartz announced that more information about the stablecoin will be presented in mid-June.

Focusing on this week…

It’s all about the SEC’s reply to the ongoing lawsuit:

  • A favorable response from the SEC may reduce the odds of a hefty fine –  potentially boosting XRP.
  • If the SEC presses on with the $2 billion fine and the court case drags on, this could hit XRP.

Looking at the technical…

XRPUSD remains choppy on the daily charts with bulls and bears locked in a fierce tug-of-war.

Support can be found at 0.4750 while resistance is at 0.6650. Still, prices seem to be pushing higher after creating a 2024 low at 0.4059 back in mid-April. However, prices are trading below the 50, 100, and 200-day SMA. 

  • A solid breakout and daily close above 0.5675 could inspire a move toward the 200-day SMA and 0.6650.
  • Should prices slip back below 0.5350 could trigger a decline towards 0.4750. 

Forex-Time-LogoArticle by ForexTime

ForexTime Ltd (FXTM) is an award winning international online forex broker regulated by CySEC 185/12 www.forextime.com

Cryptocurrencies Financial News
01 May

Bitcoin stumbles below $60k ahead of Fed

By ForexTime 

  • Bitcoin ↓ over 15% in April
  • Crypto hit by “higher for longer” stance
  • Fed meeting in focus
  • 261.8 Fibonacci level key reference point
  • RSI signals that prices are near oversold

Could the party already be over for Bitcoin bulls?

Well, the “OG” crypto ended April over 15% lower despite the infamous halving event almost two weeks ago.

Investor appetite for Bitcoin has been hit by the prospects of “higher for longer” US interest rates with ETF outflows feeding bears further. According to Bloomberg, a group of almost a dozen US spot Bitcoin ETFs saw net outflows of $182 million in April. 

Since the launch of Bitcoin ETFs in January 2024, we may have entered a phase in the crypto currency’s evolution where it responds more to economic data releases, especially from the U.S.

Market participants will today have their attention turned towards the U.S Federal Reserve rate decision this evening which is expected to conclude with rates left unchanged at 5.5%.

So, attention will be directed towards the policy statement and comments from Federal Reserve Chair Jerome Powell for fresh clues on the central bank’s next move.

And that’s not all…

Friday’s US jobs data promises to rock this crypto as investors are looking to see data continue to show strength in the US labor market.

  • Average Hourly Earnings: est. 0.3%
  • Unemployment rate: est. 3.8%
  • Non-Farm Employment Change: est 240k

Note: Traders are currently pricing in a 75% probability of a 25-basis point cut by November with a move fully priced in for December. 

Bitcoin has already shed roughly 6% today and may extend losses if the Fed strikes a hawkish stance.

From an Elliot Wave perspective, Bitcoin is in a correction phase following its year-to-date high of $73850, which marked the end of wave 5.

It has since been confined within a downward-sloping channel, later morphing into a falling wedge.

While putting this article together, Bitcoin is piercing through the downward-sloping support line. A break will only be confirmed if we have the current daily candle stick close below the support line.

A break of the lower downward sloping line (support) which has acted as a demand zone since March 5th, 2024, may see Bitcoin bears (those looking to see the cryptocurrency decline further) set their sights on the following near-term support levels.

  • 58054.45: The 261.8 Fibonacci level

  • 54969.63:  An important price value

  • 50000: A psychologically important round number

The Fibonacci level is taken from the November 21st low of 15475.50 to the July 13th, 2023, high of 31789.20.

On the other hand, Bitcoin bulls, (those looking to see the cryptocurrency rally), may have their eyes set on the following near-term resistance levels.

  • 58054.45: The 261.8 Fibonacci level

  • 59423.42: The downward-sloping trendline of the falling wedge

  • 63575.67: The upper resistance of the downward-sloping channel

When considering the Relative strength index, – an indicator that identifies overbought (too many buyers) and oversold zones (too many sellers), It is worth noting that Bitcoin is flirting with the  oversold level

Forex-Time-LogoArticle by ForexTime

ForexTime Ltd (FXTM) is an award winning international online forex broker regulated by CySEC 185/12 www.forextime.com

Cryptocurrencies Financial News
22 Apr

Trade Of The Week: Are Ethereum ETF’s coming?

By ForexTime 

  • Bitcoin halving done and dusted
  • Ethereum in focus ahead of SEC decision
  • ETH ↓ 20% from 2024 peak
  • Prices trending higher on D1 chart
  • Key levels at 100 day SMA, $3255 and 50-day SMA

Bitcoin’s halving event is done and dusted! Marking a landmark moment in the world of digital assets.

This shifts our focus towards Ethereum which could be rocked by the Securities and Exchange Commission’s (SEC) looming decision to vote on Ethereum spot ETF applications.

The world’s second-largest cryptocurrency has shed over 20% from the 2024 high, though still up 40% year-to-date.

Fun fact: Ethereum hit an all-time high of $4866.4 in November 2021.

The lowdown 

One of the key forces supporting Ethereum in Q1 was growing anticipation over a green light from the SEC on May 23rd following the spot Bitcoin ETF approval in January.

Fast-forward to today, confidence has significantly declined over the SEC approving the ETF applications.

The bigger picture 

Just like we have seen with Bitcoin ETFs, the approval of an Ethereum ETF would increase exposure to the cryptocurrency.

It will provide easier and greater access to the world’s second-largest digital currency without having to own it – representing potential inflows of new investors.

Where we are now

Much has changed since the start of 2024 with the lack of engagement between the SEC and applicants sapping confidence over the possibility of an approval on May 23rd.

On top of this, recent news about the SEC investigating companies associated with the Ethereum Foundation adds another layer of uncertainty ahead of the decision.

A bright spot 

Hong Kong regulators have recently approved Bitcoin and Ethereum ETFs, marking another positive step towards mainstream acceptance.

Such a development could spark acceptance from other regulators in Asia and across the world.

What does this all mean?

In a nutshell, Ethereum prices could turn volatile over the next few weeks as the SEC decision looms.

Where there is volatility, this presents potential trading opportunities.

How to take advantage of this

There are 2 potential outcomes to the SEC’s spot ETF decision on May 23rd.

    1) SEC rejects all Ethereum ETF applications.

This seems to be the expected outcome for markets with the approval seen later in the year or even 2025. Nevertheless, the initial disappointment could hit Ethereum prices – capping upside gains from other forces.

    2) SEC approves Ethereum ETF applications.

This decision may catch markets by surprise, triggering an aggressive appreciation in Ethereum prices due to the prospects of fresh inflows from retail and institutional investors.

What about the technicals?

The technicals paint a mixed picture on the daily charts. Although Ethereum is respecting a bearish channel, support can be found at $2855 and the 100-day Simple Moving Average.

  • A solid breakout and daily close above $3255 may open a path toward the 50-day SMA at $3475 and $3724.
  • Should prices slip back below the 100-day SMA at $3063.8, this could open a path back towards $2855. A solid bearish move under $2855, could fuel a further selloff towards the 200-day SMA.

Forex-Time-LogoArticle by ForexTime

ForexTime Ltd (FXTM) is an award winning international online forex broker regulated by CySEC 185/12 www.forextime.com

Cryptocurrencies Opinions
15 Apr

Trade Of The Week: Bitcoin Halving vs. Geopolitical Fears

By ForexTime 

  • Big week for “OG” crypto
  • Halving event looms large
  • Watch out for geopolitical tensions
  • Prices under pressure on D1 chart
  • Key levels at $61500, $65000 and $68000

In case you missed the memo, Bitcoin’s halving is almost here!

This is a significant event that reduces the mining rewards for the “OG” crypto by half.

But before we cover what, when, why and how to prepare for this event…

Watch out for geopolitical tensions.

Bitcoin along with other cryptocurrencies may be influenced by escalating geopolitical tensions in the Middle East.

On Saturday, Bitcoin prices tumbled over 8% as risk aversion soured appetite for riskier assets. The “OG” crypto along with other altcoins may be in store for more pain despite the upcoming halving if tensions escalate further between Israel and Iran.

With the above said, here is a quick lowdown:

In our 2024 market outlook, bitcoin was one of the assets we picked that could see monster moves.

The approval of Bitcoin ETFs back in January has boosted its mainstream acceptance with fresh inflows propelling the cryptocurrency to all-time highs. In fact, at one point in Q1 prices were up over 70%.

Note: Bitcoin is currently trading 10% away from its all-time high.

    1) What is the Bitcoin halving?

This event reduces the rewards for mining new blocks in the Bitcoin blockchain by half.

It happens approximately every four years with the first halving taking place in 2012.

Fast forward, we a less than a few days away from the fourth halving which will reduce the block reward from 6.25 BTC to 3.125 BTC.

Note: At launch in 2009, the reward was 50 BTC per block.

    2) When is it expected?

While the exact date of the halving is unknown, it is expected to happen when the total number of bitcoin blocks hit 740,000. Market expectations range between April 19th and April 20th.

    3) Why does it happen?

To put things into context, imagine if you are in the business of mining a precious resource, and suddenly, the rewards received from extracting the resources are halved. Will it still be worth all the effort?

It is the same concept with Bitcoin mining which is designed to slow down supply and increase scarcity – potentially leading to higher prices if demand remains strong.

    4) How can you take advantage of this?

Historically, post-halving periods have seen significant price increases with the one back in May 2020 no exception. Prices appreciated a whopping 230% over a 7-month period, reaching an all-time high just below $29,000 by year end.

Should history repeat itself once again, this could propel Bitcoin to fresh all-time highs over the next few months.

It does not end here…

Given the hype this major event may create and increased attention towards the crypto space, it could indirectly impact altcoins.

So, watch out for Ethereum, Dogecoin, Solana and Avalanche which have shown a positive correlation above 90% to Bitcoin’s move at any given 5-day rolling period over the past 5 years!

On the flip side…

The market reaction to the upcoming Bitcoin halving could be different.

Bitcoin has come a long way since the first halving back in 2012 with much more media coverage and awareness compared to the past. Essentially, the expected bullish reaction to the upcoming halving may already be priced in.

Meaning, traders may end up adopting a ‘buy the rumour, sell the fact’ response to the event with the expected rally delayed or even disappointing expectations.

    5) Technical forces

Prices seem to be under pressure following the sharp selloff witnessed on Saturday. Although the broken symmetrical triangle may support bears, prices are trading within a wide range on the daily charts. Support can be found around $61500 and resistance at $73850.

  • A solid breakout and daily close back above $65000 may open a path towards $68000 and $71000 before bulls challenge $73850.
  • Should $65000 prove to be reliable resistance, this could trigger a selloff towards $61500 and $60000.

Forex-Time-LogoArticle by ForexTime

ForexTime Ltd (FXTM) is an award winning international online forex broker regulated by CySEC 185/12 www.forextime.com

Cryptocurrencies Opinions
← Previous Page
Next Page →