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Bitcoin is close to a two-year low. What awaits it next

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Experts explain what factors put pressure on cryptocurrencies and when you can expect positive changes in the market

Since the beginning of the year, the capitalization of digital currencies has decreased by 60% — to $934 billion. The “crypto winter” collapsed the price of bitcoin by 70% of the historical maximum of $69,000.

Tokens of meta-vendors and NFT-projects, as well as currencies of DeFi-platforms were hit hardest — coins lost in price from 70% to 85% since the beginning of the year. Cryptocurrencies on exchanges fell the least: their quotes fell by 46%-57%.

Since mid-June, bitcoin rates have been fluctuating in the range of $18,000 — $22,000. Because of the falling quotes, some institutional investors and credit crypto platforms have already faced financial problems, and mining companies are forced to sell all the mined bitcoin to cover operating costs.

Is there potential for bitcoin growth in the near term, or is a true reversal in the market still to come? Experts described the current price dynamics in the cryptocurrency market and told when the turning point may occur.

Bitcoin price dynamics

The current week “pleases” traders with increased volatility. After bitcoin went below $19K on July 13, the panic was very strong.

If you look at the chart of BTC from the point of view of technical analysis, “the price is in a horizontal channel with a width of about $4000. Approximately the same channel was formed in May-June and as a result the price strongly “fell”.

Now there are already a lot of touches in the new channel as the upper and lower edges, so with a high degree of probability, the exit from the channel will occur in the next couple of weeks, the expert suggested. On July 13, the price “pushed back” from the lower boundary; that is, we can hope that the growth will continue to the upper boundary.

There is full synchronization with the index S & P 500, from its movement now directly depends on the dynamics of bitcoin and other top cryptocurrencies. A breakdown of the horizontal channel upwards will open a target to levels around $26k, while a breakdown downwards will open a target of $16k.

Influence of external factors

The most likely negative scenario, which implies the fall of the entire crypto market, and bitcoin — to $15,000 in the next month.

Cryptocurrencies are seen as a tool to hedge inflation risks. But on the other hand, digital assets now correlate strongly with the stock market, and the latter will inevitably show a decline due to high inflation in the U.S., despite all the efforts of the Fed to curb this growth.

At the next meeting of the U.S. Federal Reserve will decide to raise the key rate again. This is already obvious, and in the run-up to the meeting, capital will start to exit high-risk assets.

In August, bitcoin will fall to multi-year lows, but this does not cancel the forecast for the growth of bitcoin in the perspective of 3 years. Bitcoin will return to growth in the autumn.

In the second half of 2023, a new bullish cycle will begin in anticipation of another halving. And bitcoin will update to new all-time highs within 12 months of it — between May 2024 and May 2025.

Intermediate bottom

Soon we expect mostly sideways movement with the risk of another renewal of annual lows for BTC, ETH, and some other capitalized assets.

Such dynamics are unlikely to lead to a significant drop in quotations, and the new lows will allow market participants to enter assets more profitable, the expert explained. He said he expects the prices will recover sharply after the possible decline of BTC up to $17,000 and ETH — up to $900.

Until the end of July, the crypto market will form an intermediate bottom, which will give cryptocurrencies an opportunity to strengthen within 2-3 months; Pershikov said. The current dynamics will remain until the end of the month, while growth in individual assets and the market will begin in August. 

Cryptocurrency

ETH Dips Into Undervaluation Zone, Is Altseason Around the Corner?

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Ethereum’s price metrics are flashing signals that suggest that the long-awaited altcoin season (altseason) may be around the corner.

According to a report by the market analytics platform CryptoQuant, the relative price of ether (ETH) compared to bitcoin (BTC) may have seen the bottom for this cycle. Previously, such low levels have been followed by periods where ETH significantly outperformed BTC, triggering a broader altcoin rally.

ETH Recovers From Undervalued Zone

In the last seven days, the ETH/BTC price ratio has surged 38% from its lowest level since January 2020. The current price ratio has been historically associated with ETH price bottoms, which have preceded altseasons. Still, the metric needs to rally above its 365-day moving average before ETH can record a new and sustainable leg against BTC.

To substantiate the possibility of a strong mean-reversion potential, CryptoQuant pointed out that ETH recently dipped into an extreme undervalued zone relative to BTC. This was evident in the ETH/BTC Market Value to Realized Value ratio, which plunged to its lowest level for the first time since 2019.

Similar cases of an MVRV ratio dip recorded in 2017, 2018, and 2019 were followed by periods where ETH outperformed BTC.

ETH Sees Bullish Signals

Recently, ether’s price has been on a positive trajectory, and this performance has coincided with higher spot trading volume relative to BTC. The ratio of ether’s spot trading volume relative to BTC rose last week to 0.89, a level not seen since August 2024. This signalled that market participants increased their exposure to ETH compared to Bitcoin.

CryptoQuant mentioned that traders’ increased exposure to ETH compared to BTC has also happened from 2019 to 2021, during which ETH outperformed BTC by 4x. Ether’s spot trading volume has also begun to grow faster than bitcoin’s, indicating higher demand for the second-largest crypto asset.

Furthermore, investors also favor ETH through their allocations to exchange-traded funds (ETFs). Higher ETH purchases have triggered a spike in the ETF holdings ratio since late April.

“The growing ETH allocation likely reflects expectations of relative outperformance, possibly driven by catalysts such as recent scaling upgrades or a more favorable macro environment,” CryptoQuant explained.

Additionally, ETH is seeing lower sell pressure relative to BTC, as seen in exchange inflow data. The exchange inflow ratio has fallen to its lowest level since 2020, indicating that ETH is facing significantly lower selling pressure than BTC. This has always been a bullish signal for ETH, supporting further gains for the cryptocurrency.

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Bitcoin to $175K? Analyst Says Moon Mission Is ‘Solid as a Rock!’

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Bitcoin (BTC) is holding steady at around $103,000, but the calm could be the eye of the storm.

With volatility compressing and the CME gap still looming like a ghost at $91,970, crypto analysts are torn on whether BTC is headed for glory at $175,000 or prepping for a brutal fakeout.

The Bull Case: $175K or Bust?

Egrag Crypto isn’t mincing words. In a recent X post, the analyst, more well-known for his takes on XRP, proclaimed that Bitcoin going to $175,000 was “Solid as a Rock!” According to him, that price region is BTC’s “cycle top,” referencing historical EMA breakouts and a 10X extension from 2017’s $20,000 peak.

The crypto trader pointed out that, in the past, Bitcoin pumped hard whenever it closed above the 21-week EMA. His breakdown: Pump 1, 60%; pump 2, 170%; pump 3, 75%. That’s an average jump of 101%, which Egrag applied directly to the market’s post-April 21 momentum to reach the $175,000 price level. “Men lie, women lie, numbers don’t,” he quipped.

However, not everyone is dancing. Investor Daan Crypto Trades is painting a sobering picture of weekend stagnation and low volatility, with BTC locked in a tight $101,000 to $105,000 range. “We won’t see that much action from Bitcoin for now,” he shrugged, citing low liquidity over the weekend and a possible breakout looming.

The Bearish Wrinkles

Still, an unfilled CME gap between $91,970 and $92,520 feels like the real twist. Some traders believe BTC must revisit this zone before any meaningful climb can happen.

“From the current price, BTC would need to drop around 12% to close this gap,” Egrag Crypto wrote. However, he predicted there was more likelihood of a rally through the $130,000 to $140,000 Fibonacci levels before a 33% correction, followed by a final push to his fabled $175,000.

At the time of this writing, BTC was still 4.9% below its all-time high set in January. Its latest price represents a slight 0.4% dip in the last seven days, but it has still outperformed the broader crypto market’s 1.6% drop in the same period.

The next move is critical: will the flagship crypto blast off to $175,000 as the permabulls promise, or will the CME gap drag it down first?

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Are Bitcoin Mining Stocks Mispriced? Here’s What On-Chain Data Is Telling Investors

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The on-chain intelligence platform CryptoQuant has unveiled a framework for monitoring the revenues of leading public Bitcoin mining companies. This methodology tells whether the companies are undervalued or overvalued in real time.

CryptoQuant revealed in its latest weekly report that the framework tracks miners’ addresses on the Bitcoin blockchain and their BTC production. This enables analysts to derive revenue metrics not disclosed via traditional corporate procedures.

The Valuation Methodology

The Bitcoin mining companies monitored through CryptoQuant’s framework include Marathon Digital (MARA), Riot Blockchain (RIOT), and Core Scientific (CORZ). The analytics firm also tracked the revenue metrics of Hive Digital Technologies (HIVE), CleanSpark (CLSK), Bitfarms (BITF), TeraWulf Inc. (WULF), Cipher Mining (CIPHER), and IREN (IREN), formerly Iris Energy.

According to the report, CryptoQuant analysts estimated daily mining revenues directly from block rewards and transaction fees by tracking miner addresses. The revenue estimates are annualized and compared to the mining firms’ market cap. From there, the analysts offer a forward-looking valuation framework similar to a price-to-sales ratio. CryptoQuant calls this the Market Cap to Annualized Daily Revenues (MCAR) ratio.

The MCAR ratio tells whether a miner’s underlying Bitcoin production or USD-denominated revenue supports the company’s valuation.

“By comparing each company’s market capitalization to its annualized revenue on a daily basis, investors can identify which firms are potentially overvalued or undervalued. This enables more informed portfolio allocation—favoring companies whose market valuations lag behind their revenue generation while reducing exposure to those trading at excessive premiums,” CryptoQuant stated.

WULF and MARA Valued at Relative Premiums

From CryptoQuant’s analysis, the MCAR ratios for WULF, MARA, RIOT, CLSK, HIVE, and IREN are 5.1, 4.4, 3.7, 3.3, 1.9, and 1.8, respectively. These numbers reflect how much investors pay for every dollar of estimated annual revenue in real time.

WULF and MARA have the highest valuation multiples, so CryptoQuant believes they are priced at a significant premium compared to the other firms. RIOT, CLSK, and HIVE are not as overvalued, so their market valuations hover within the same range as their revenue generation.

CryptoQuant found that IREN has the lowest valuation despite posting strong growth in its BTC production. This suggests that the company is likely undervalued by the market. On the brighter side, the firm faces a potential upside if it becomes repriced in the market.

“The current valuation dispersion opens opportunities for relative value strategies by identifying firms like IREN that may be lagging in market recognition despite solid operational performance,” the analytics firm added.

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