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- Bitcoin’s price has recovered 40 percent of the bear market drop. The breakout has bolstered the bullish setup on the weekly chart, which is currently reporting the strongest buying pressure in six months. As a result, BTC looks set to break above the psychological resistance of $10,000.
- The price has already rallied nearly 130 percent so far this quarter. Hence, a temporary correction due to bull exhaustion cannot be ruled out.
- The outlook, however, will remain bullish as long the price is held above recent lows near $7,500.
Bitcoin’s (BTC) price has erased 40 percent of the sell-off seen in the twelve months to December 2018 and looks set to rise above $10,000.
The leading cryptocurrency by market value rose above $9,740 on Bitstamp earlier today, retracing more than 40 percent of the drop from the record high of $19,666 reached in December 2017 to the low of $3,122 hit in December 2018. The global average price, as calculated by CoinMarketCap, is just $150 away from achieving that milestone.
As of writing, BTC is changing hands at $9,840 on Bitstamp – the highest level since May 2018 – representing 31 percent gains from lows near $7,500 seen on June 10.
It is worth noting that bitcoin’s latest leg higher is a accompanied by a rally in gold prices. The yellow metal has risen from 1,320 to $1,411 over the last ten days.
The positive correlation between the two assets contradicts the divergent price action seen in the preceding seven months.
For instance, BTC fell from $6,200 to levels near $3,100 in four weeks to December 14, 2018. During the same time period, gold went from $1,200 to $1,300 and further extended the rally to $1,346 (Feb. 20 high). By early May, the yellow metal was down 6 percent from February highs, while bitcoin was up 76 percent from December lows.
The change from negative correlation to positive correlation, if sustained, could boost bitcoin’s appeal as digital gold. Many including the likes of Tyler Winklevoss, founder of Winklevoss Capital Management, already consider bitcoin as gold 2.0.
It remains to be seen if the two assets continue to move in the same direction in the near future. That said, technical charts indicate bitcoin is likely to extend its ongoing bullish run to levels above $10,000.
Weekly chart
Bitcoin’s convincing move above the widely tracked 38.2 percent Fibonacci retracement hurdle of $9,442 has strengthened the bullish case put forward by the higher lows, higher highs pattern, ascending 5- and 10- week moving averages and Chaikin money flow index, which is currently reporting strongest buying pressure in six months with a reading of 0.35.
As a result, the cryptocurrency looks set to test the next major resistance range marked by the April 2018 high of $9,949 and the psychological resistance of $10,000.
A high-volume weekly close above $10,000 would expose the 50 percent Fibonacci retracement resistance of $11,394.
It is worth noting that the cryptocurrency is up nearly 140 percent on a quarter-to-date basis (from April 1’s opening price). The bulls usually take a breather following such stellar rallies.
So, a sudden correction cannot be ruled out. That said, the outlook would turn bearish only if the price violates the bullish higher lows pattern with a move below $7,500.
Disclosure: The author holds no cryptocurrency at the time of writing
Bitcoin image via CoinDesk archives; charts by TradingView
Crypto mining hardware giant Bitmain Technologies Ltd. is said to be relaunching its initial public offering (IPO) plans, but this time in the U.S. instead of Hong Kong.
According to a Bloomberg report citing “people with knowledge of the matter,” Bitmain is consulting with advisers over a U.S. public listing, potentially in the second half of 2019. The firm – the world’s biggest manufacturer of crypto mining devices – plans to lodge documents with the U.S. Securities and Exchange Commission in July, according to the sources.
Last September, Bitmain filed to IPO on the Hong Kong Stock Exchange (HKEX), however that effort looked to have met resistance and ultimately the firm let its filing lapse in March.
According to one of Bloomberg’s sources, Bitmain may be reducing its previous fundraising target to roughly $300 million–$500 million in the U.S. offering, although that figure is not yet set in stone. It had hoped to raise up to $3 billion via the HKEX share offering.
Bloomberg adds that the preparations for the U.S. IPO are still in the early stages and are subject to change.
Bitmain declined to comment on the news, according to the report.
Bitmain co-founder Jihan Wu image via CoinDesk archives
The NEM blockchain project is launching a development studio to support its move towards a major protocol upgrade later in 2019.
According to a press release emailed to CoinDesk, the new NEM Studios is being created by NEM Holdings, the non-profit holding company of NEM Ventures, and the NEM Foundation to help with strategy and backend development for NEM’s planned “Catapult” protocol upgrade.
Catapult is aimed to provide enterprises with a “high speed, configurable and scalable blockchain solution,” the release states.
NEM Studios’ development activities are to be funded by NEM Core, and is now seeking to hire a CTO and a development team to assist with building the Catapult Core protocol and API layer. Chair and trustee of NEM Holdings and chair of the investment committee for NEM Ventures David Shaw – who also advises the Catapult project– will lead NEM Studios as director.
A steering committee comprised of David Shaw, NEM Foundation President Alexandra Tinsman, and Nate D’Amico from NEM’s Project Management Committee will lead the “go-to-market” strategy for the upgrade.
Shaw said:
Catapult is planned to become the core NEM code supporting both private and public blockchains. As per the press release, it will include smart contract plug-ins allowing a range of capabilities such as digital asset creation, decentralized swaps, advanced account systems and business logic modeling.
The news comes soon the NEM Foundation was forced to make major staffing cutbacks following a shortfall in its finances. Tinsman confirmed in March that the foundation had laid off about 100 people – a mix of consultants and full-time staffers – over a period of a month.
The project was also forced to request that around $8 million of NEM reserves be released in stages to support its continued operations.
Tinsman had told CoinDesk in January that the funding issues were down to “the mismanagement of the previous governance council.”
NEM conference booth image courtesy of NEM Foundation
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