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Market Researcher States That Bitcoin is an Indicator for Geopolitical Turmoil

Nicolas Colas, a market researcher and Co-founder of market research firm DataTrek Research, says that Bitcoin could be used as an indication for geopolitical turmoil.

Bitcoin serving as indicators

On August 14, in a CNBC interview, Colas had claimed that Bitcoin was one of the few assets whose price had predicted the Hong Kong’s protest which also involved its local capital flight.

He had said that he believed that Bitcoin was a safe haven when asked by the interviewer. He said:

“We are definitely seeing that, and really are perked up around the Hong Kong protests and some of the currency flight that happened out of Hong Kong and the mainland, and Bitcoin was one of the few assets that we watched that actually predicted that uncertainty ahead of time. Nothing else was really moving, Bitcoin was.”

Colas expressed his certainty about the digital currency’s ability to hit the $20,000 mark again, saying that the currency is still new and in its infant stage and had a lot of room for growth.

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Crypto Markets Waver with $30 Billion in a Bitcoin Sell-Off

One of the largest market dumps of the year occurred on the 24th of September. This had been predicted by many but the extent of it still remains a shock. Over $30 billion has been dumped from crypto assets. This bearish triangle pattern exhibited by Bitcoin for the past months reached its lowest- $8000.

Since late last week, Bitcoin has been slipping off and Bakkt figures are unimpressive. The market has however not reacted to this occurrence. Bitcoin dropped below five figures and is yet to recover. It descended in late June and began to rise as support was broken at $9500. Thereafter, it was dumped back to $8000. As expected of this zone, there was massive support and lots of buyers were triggered leading to an hourly closure of $8600 dollars where it has remained for the time being.

Goldberg Peter Schiff, a regular Bitcoin basher wasted no time reacting on twitter. He twitted that bitcoin had finally broken below the support line of the descending triangle it has been carving out for months. He described the pattern as a very bearish technical pattern and a confirmation that a major top has been established. He believes that the risk of a rapid descent to $4000 or less is high.

Josh Rager, an analyst gave a more balanced prediction as compared to the extreme $4000 fall of Peter Schiff. He said that if Bitcoin does not break above its current level, there would be another retest of the support below. If the current situation isn’t a bear trap, he sees the price heading down to $7000. He added that many buyers are waiting for prices between $6180 and $6500.

With the situation of bitcoin, the rest of the crypto markets are in a somewhat grim condition. Thus, September 25, has been one of the largest market dumps of the year.

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Veteran Trader Peter Brandt Warns Bitcoin Can Go Below $1000

As reported in our earlier article, Bitcoin on Thursday dipped below $6,000. However, as the fall was still in progress while writing the article, the price even fell further to $3,000 before bouncing back to $5,000.

Veteran market trader and analyst, Peter Brandt on Friday issued a statement that said that the Bitcoin price may fall further in the future, as low as $1,000.

The reason for such chaos in the crypto market is attributed to the ripple effect of what is happening in the US stock market and the Coronavirus fear amongst the people. Not to forget the travel bans between the US and Europe as President Trump announced new travel restrictions due to the spread of the coronavirus.

Peter Brandt is a renowned market analyst when it comes to rightly predict the next market movement ranging from market crash to all-time highs of market capitalizations. The statement from his end came out on Friday via his tweet where he was responding to the question if $5,500 is the bottom for Bitcoin or can it go further down due to coronavirus effect.

In response to that question, Peter Brandt replied that if he looks at the chart without any bias, the price of Bitcoin might go as low as $1,000.

Now before we all start accusing him of being a pessimist and further contributing to this FUD, it is important to note that Peter Brandt is not a crypto skeptic. He is one of the few rational analysts in the crypto space who is bullish on Bitcoin and believes a bounce in Bitcoin price to as high as $14,000 in the near future.

How the rest of the crypto market is reacting towards the coronavirus

With Bitcoin crumbling as low as $3,000 before bouncing back to $5,000 within a few minutes, altcoin prices also took a really hard hit in this chaos. Currently (time of writing), according to coinmarketcap.com, Ethereum is down by 26.71% ($127), Bitcoin Cash is down by 30% ($170), ZCash is down by 26% ($26.14) and Ripple XRP is down by 20% ($0.15).

Also, future conferences and global crypto gathering events like EDCON conference have been canceled and no new updates on new dates have been released yet. It is a matter of time and patience to see what happens next. Share your predictions with us in the comment section below.

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Understanding the Market Structure of Oil and its Correlation with Bitcoin

Market Highlights

The price of crude oil dropped below zero for the first time in history.

Sellers were paying buyers to make deliveries of crude oil in a move to evade the possibility of sustaining storage costs.

Demand for oil has reduced so much that all the storage facilities are at overcapacity with no interested buyers.

The downtrend of oil prices started in January after the Coronavirus outbreak and has only accelerated thereafter.

The low demand for Crude oil is due to various reasons such as the Travel and Aviation ban followed by half of the world currently living under lockdown.

Before understanding the market structure of the oil, we need to understand that the oil market is a highly manipulated market due to the personal and monetary interests of various stakeholders. Understanding human conflicts, geopolitics, and principles of extraction, storage, and demand are the prerequisites of understanding how the oil market works.

Market History of oil

2004-2008: The demand for crude oil increased after a sustained increase in demand from developing countries. This initiated a parabolic movement of oil’s price as the demand outstripped the supply. Further, the OPEC nations were not interested in upgrading their extraction and storage facilities in order to bring the price of oil to an equilibrium.

2008-2009: The price of oil crashed due to a worldwide recession which reduced the demand for oil drastically and forced OPEC nations to take corrective measures.

2010-2011: The price of oil started increasing from 2010 after the Arab spring which increased political instability and caused fear in markets as the majority of the world’s oil reserves were at high risk including Libya, Syria, Iran, Iraq, Egypt, etc. Further, the economic recovery and increase in demand from India and China for oil increase the price of the commodity.

2011-2012: The OPEC nations came to an agreement to extract more oil thereby increasing the supply in order to supplement the world demand and remove the fears of conflict that had spiraled out of control causing fear in the markets.

2014-2015: The USA started the extraction of shale reserves which reduced the price of oil significantly, pushing Venezuela into an economic meltdown coupled with hyperinflation and sanctions. Further, the OPEC started a price war by letting the price of oil fall hoping that the decline in price would make shale reserves extraction unprofitable leading US shale producers to shut down.

2016-2018: The OPEC agrees to cut its production output in a bid to prop up the price. Various OPEC nations were suffering a serious and dangerous downturn with high costs of extractions as compared to US counterparts, due to which they agreed to decrease the supply in order to reach a better equilibrium price.

2018-2019: USA and EU nations imposed sanctions on Iran thereby cutting off its exports and the demand for oil on the international market. Reducing and weakening the demand for oil from countries like India, China, Japan, Germany, etc.

2020-Present: The price of oil started collapsing from the month of January as international flights started to shutdown. With the aviation and traveling industry under restrictions the demand for oil reduced significantly. As the spread of the virus accelerated and nations all around the world went into lockdown with the suspension of domestic travel, the demand for oil saw a sharp decline, and storage facilities around the world found it difficult to store oil with no buyers in the market.

What led to the oil price crash?

1. The increase in inventory at the rate of 6-7 million barrels per week.

2. Cushing hub, where a majority of oil is stored saw its facilities completely filled.

3. Traders who were not able to take the delivery sold it on for the available prices.

4. The fall in price and the fear of May futures expiring on Tuesday ie, April 21 intensified the selling of oil.

5. The drop in price triggered mass liquidations and margin calls on various positions held by financial institutions, traders, etc, driving the price down even more.

6. Liquidation of positions also removes liquidity from the market spreads thereby accelerating the crash with poor liquidity on the books.

The correlation between Bitcoin and oil:

The correlation between Bitcoin and oil has always been to the minimum when compared to the correlation between oil and Equities where the correlation is as high as 80%.

Even though the correlation index between Bitcoin and oil is slow, both of the commodities have a similar market structure, where Bitcoin experienced a parabolic advance in 2017 due to an increase in media attention, due to the ICO rush. After that time, Bitcoin has largely been traveling in a downtrend channel breaking the momentum and rallying due to fundamental time to time.

Even though we know that Bitcoin halving is right around the corner, the technicals are indicating a steep downturn is possible with the RSI trending towards 0, which represents that the price is overbought and will trend downwards. BBands is also tightening and trending in towards a downward momentum. It is highly unlikely that the blockchain market will face an upturn where there is no economic recovery or rally in the world and people are living paycheck to paycheck. Even though Bitcoin halving is a strong fundamental what is happening around the world negates its benefits as Bitcoin is a high-risk asset class and investors are wary of taking any investment decisions when a global recession is right at the doorstep.

Further, it is highly unlikely that money from the equity markets and the oil market will move towards Bitcoin and other cryptocurrencies as the institutions are cutting down risk and taking what all they have. Furthermore, retail investors are also personally affected by the lockdown and allocating resources to Bitcoin and cryptocurrencies ignoring that they would need money in the coming months for survival is highly unlikely.

The analysis provided by the author is purely educational in nature and does not continue any legal, investment, financial, or trade advice. Please do your research before investing or taking any financial decision.

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References:

[1] Institue for Environmental Diplomacy and Security, Basic Principles of Economics and Rising Oil Prices, James M. Jeffords Center, the University of Vermont, available at https://www.uvm.edu/ieds/node/468.

[2] A. Mudgill, What led crude oil prices fall below $0 a barrel, Economic Times, dated 22 April 2020.

[3] B. Pulmer, Oil prices keep plummeting as OPEC starts a price war with the US, Vox, dated 28 November 2014.

[4] T. DiChristopher, Oil Suffers its worst monthly drop in more than two years during ugly October for markets, CNBC, dated 31 October 2018.

[5] L. Elliot, Middle East Crisis may leave world over an Oil Barrel, The Guardian, dated 7 February 2011.

[6] J. Baffes et al, The great plunge in oil prices: Causes, Consequences, and Policy Responses, World Bank Group, dated March 2015, available at http://pubdocs.worldbank.org/en/339801451407117632/PRN01Mar2015OilPrices.pdf.

Pantera Capital CEO Dan Morehead Predicts Bitcoin Price Rebound Despite Slow Economic Recovery

Several crypto analysts and experts are bullish on the Bitcoin price after the halving event, which is expected to occur in a few days. Pantera Capital CEO and founder Dan Morehead commented on such matters. In an April 30 letter to investors, Morehead examined the year-to-date performance of Bitcoin before the May 12 halving in comparison to venture capital, oil, and gold. He has predicted that there is more than a 50-50 chance that Bitcoin will climb up massively and will peak over $100,000 in August 2021.

Pantera Capital is a San Francisco-based cryptocurrency and blockchain hedge fund.

The Current Global Recession Fuels Bitcoin Boom

In his letter addressed to investors, the Pantera Capital founder examined the current distressing and confusing time across markets. He said that with the current recession, a V-shaped recovery for the world’s economy is unlikely. He wrote the letter, referring to a more rapid recovery in the economy. He mentioned that school closings could make it difficult for Americans with children to get back to work even if retailers, restaurants, and stores reopen. He said that many school districts are not slated to reopen their door until September. Morehead’s conclusion is that the economy would pick up until schools reopen.

The Pantera Capital CEO also talked about other impediments to economic recovery like a decline in the number of air or sea travels, a large number of restaurants closing permanently, oil and stock markets adversely affected, and other behavioral changes tied to the coronavirus crisis.

According to Morehead, Bitcoin’s slow rebound and gains in the broader markets could push investors into the crypto market. He stated that Bitcoin has already outperformed other traditional assets like oil, stock, and real estate.

In the letter, the Pantera CEO revealed that the company’s Bitcoin Fund has been extremely doing well on getting new subscriptions as investors are seeking new opportunities. He said that people are aware that they are in the downward swing of a U-shaped recovery for the economy. As a result, people are thinking of alternative assets. Of course, they are thinking Bitcoin could potentially perform much better than the stock market.

Morehead stated that a sluggish market is a key component, which could play into a further appreciation of Bitcoin.

He revealed that the upcoming halving would have an effect on the price of Bitcoin and the general cryptocurrency market. According to him, based on the historical data, the halving has been a bullish catalyst. He said: “If the new supply of Bitcoin is cut in half, all else being equal, the price should rise.”

Post-Halving Prediction

Currently, crypto experts are still divided on whether the Bitcoin price will fall or rise after the halving in May. There is no common consensus within the Bitcoin community regarding whether Bitcoin halving is already priced in or whether there would be a significant price movement. Some experts believe that the Bitcoin price will not indicate any significant movement, and the Bitcoin halving is already priced in.

However, a majority of experts believe that halving would have a significant effect, and the cryptocurrency could reach a new all-time high towards the end of the year. They argue that Bitcoin’s fundamentals seem promising and expect Bitcoin price to reach $20,000 by the end of the year as the impact of the halving and the further development of the technology would bring the cryptocurrency further into the mainstream. Fear of missing out may influence several investors to enter the market just before the halving. Consequently, that fresh capital could push Bitcoin price above $20,000 by the end of the year. Overall, the opinions indicate that there are both bearish and bullish views showing that the halving could affect the Bitcoin price significantly. But there are more bullish opinions projecting a rising price of Bitcoin.

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Canadian Regulator Charges Coinsquare Executives For Crypto Market Manipulation

The Ontario Securities Commission (OSC), Canada’s largest market regulator, has settled charges with Coinsquare cryptocurrency exchange. The executives of the Toronto-based crypto exchange firm have not only agreed to step aside from the firm but also to pay administrative penalties as part of an agreement with the regulator. The commission found the cryptocurrency exchange had engaged in market manipulation, which is a violation of the Ontario Securities law.

Weird Crypto Market Cybercrime

In a hearing held on July 21, the Ontario Securities Commission approved a settlement reached between the regulator and Coinsquare. As part of the settlement, Coinsquare president Virgile Rostand and CEO Cole Diamond admitted to authorizing market manipulation through reporting of inflated trading volumes. Furthermore, Diamond admitted to have retaliated against an internal whistleblower who reportedly raised several concerns about the practice.

As a result, Rostand and Diamond agreed to resign from their positions and paid penalties of $900,000 and $1 million respectively, the regulator said.

Rostand and Diamond have also been banned from acting as directors and registrants for three years. This means that they cannot influence the management of the company for the stated period. Felix Mazer, Coinsquare’s Chief Compliance Officer, also was accused of failing to fulfil the duties of his crucial role as the CCO. As part of the agreement, Mazer has also resigned from his position and paid $50,000 to the regulator. Mazer has also been banned from acting as an officer of a registrant or a direction for one year.

As a company, Coinsquare is also required to pay $200,000.

The regulator has ordered Coinsquare to obtain new management and seek compliance with the IIROC (Investment Industry Regulatory Organization of Canada) and other regulations. The crypto company also has been ordered to create an independent whistleblower program, an independent board of directors, and implement processes to ensure its trading platform aligns with securities laws.

According to the regulator, Coinsquare engaged in market manipulation by inflating 90% of its trading volumes with fake trades between 2018 July and 2019 December.

The OSC’s director of enforcement, Jeff Kehoe, said that the settlement is a significant milestone as it marks the first time a firm has been disciplined under 2016 laws barring retaliation against a whistleblower.

Consequences of Crypto Market Manipulation

Instances of the crypto market being manipulated have existed for a long time now. However, market manipulation is not just a concern with the cryptocurrency market. Traditional financial also suffers from the problem. But because of the liquidity of the traditional financial market, it is harder and more difficult to spot market manipulations. Traditional financial markets are much more heavily regulated than the cryptocurrency markets. While in recent years, market manipulations have slowed in the crypto industry when compared to earlier days, there is still clear evidence of the problem. The crypto space, which is still largely unregulated, suffers a lot. There are a lot of losers, and very few winners from this situation and impacts are highly detrimental to the cryptocurrency industry.

China's Antitrust Agency Urged By the PBOC to Probe Alipay and WeChat Pay

The People’s Bank of China (PBOC) has urged the country’s top antitrust agency, the State Council Information Office of China to probe the market dominance of Alipay and WeChat Pay in the payment service sector.

The two payment giants have the majority share of China’s cashless payment scene as reported by Reuters. The Chinese mobile banking sector recorded about 56.2 trillion yuan ($8 trillion) in the third quarter of 2019, and of these, Alipay dominated by 55% while WeChat Pay commanded 39%.

Recognizing the economic impact of monopoly, the People’s Bank of China while fast-tracking the development of its digital Yuan wants a level playing field for all stakeholders. Despite the large market share it commands, Alipay is anti-Bitcoin as it banned all BTC related transactions back in October 2019.

Similarities to US Tech Firm’s Antitrust Hearing

The call by the PBOC on the country’s antitrust agency bears similarities to the antitrust hearing the Big 4 Tech firm of the United States had with the House’s Antitrust Subcommittee. The grilling session which took place virtually saw the lawmakers accuse the companies including Amazon, Apple, Facebook, and Google of using anti-competitive practices to squash other smaller competing firms.

While sources close to the matter said that the State Council Information Office of China has been gathering information on Alipay and Tencent for about a month, it has not yet decided to launch any formal probe despite taking the PBOC recommendations very seriously.

The firms, both those in the United States and China alike are high tech-driven and all have products and services highly in demand during the coronavirus induced global pandemic. With China’s plan to dominate the world’s tech standard, a potential move to limit the dominance of Alibaba Group Holdings Alipay and Tencent Holdings WeChat will help level the playing field as worthy of a foremost global tech leader

Cause for Concern? Ethereum's 15 Minutes of Extreme Volatility Explained

Ethereum’s price on the crypto market underwent a lot of fluctuations in the span of 15 minutes yesterday, causing quite a stir in the crypto community.

Market Experts on Ethereum

Across major coin exchanges, such as Binance Futures, Ethereum (ETH) peaked at $418, but within 5 minutes, it dropped by 25%. Eventually, it climbed back to $385 within a 10-minute span.

The reason behind ETH’s price fluctuations has been speculated upon by market experts, who are saying that the $410 to $420 range has always been a historical resistance area since 2017. Also, the sudden 25% drop of ETH led to a cascade of futures liquidations across major crypto exchanges and extreme movement for Ethereum.

Ethereum Has Big Plans for The Future

Global markets analyst Alex Krüger commented on Ethereum’s price fluctuation and said that though ETH underwent a “blowoff top” of 25%, a blowoff doesn’t have to be “the top”, meaning that Ethereum’s market value may still escalate further. Despite the digital asset’s sudden market correction, a lot of crypto investors still remain positive about the blockchain ecosystem’s outlook.

With the launch of ETH 2.0 testnet set for August 4, much is to be anticipated of Ethereum. Kelvin Koh, co-founder of cryptocurrency venture capital firm Spartan Black, stands by the belief that ETH is leading the crypto market’s uptrend. With the launch of ETH 2.0 testnet’s first phase, there is much to be expected of the blockchain ecosystem. Koh added:

“Depending on how hard ETH runs, the successful launch of phase 0 may culminate in a near term peak for ETH and other large caps.”

Ethereum Introduces Testnet Medalla

As Ethereum is transitioning from a Proof-of-Work format to a Proof-of-Stake, Ethereum 2.0, dubbed “Medalla” will be launched in at least 3 phases, the first being phase 0. Ethereum hopes that by separating the testing in phases, aspects of the new blockchain can be covered methodically and perfected before release.

Phases 0, 1, and 2 each outlines a different concept. Phases 0 focuses on all the machinery behind ETH 2.0’s consensus, and it tracks the validators and their transaction balances. Phase 1’s main objective is to handle the addition and storage of new and old data associated with ETH 2.0. Finally, Phase 2 adds execution to ETH 2.0, and it enables programs to be run on top of it.

Ethereum Dominates The DeFi Scene

Ethereum Foundation has come a long way since its beginning, with new projects such as ETH 2.0 in the horizon. Last Thursday marked the anniversary of Ethereum’s official network launch. The blockchain ecosystem has since expanded its growth, with it currently holding the majority of DeFi applications run on a blockchain. As the pioneer of DeFI applications and with their rising popularity, Ethereum seems to be having a pretty good bull run this year, despite its setback on the crypto market on August 2.

The new multi-client testnet that Ethereum has been planning for quite some time is set to launch on August 4, at 1 pm UTC. However, all pre-launch criteria must be met beforehand.

Binance.US Opens Crypto Assets Marketplace to Millions of Florida Cryptocurrency Traders

Binance.US has expanded into Florida, crypto traders of the third most populated state within the United States can now register to one of the world’s leading crypto marketplaces.

Binance.US, the United States division of global cryptocurrency exchange Binance, will now open its digital assets marketplace to Florida citizens.

According to the Binance.US website on Aug.24, Binance’s crypto asset platform and exchange will now be available to Florida traders.

Florida was originally one of the 13 states that Binance was unable to launch into last September when it opened its doors to 37 other American states—due to the additional vetting requirements of the Florida state licensure regime.

Chief Executive Officer of Binance.US, Catherine Coley who grew up in Orlando, Florida made a further and more personal announcement on Twitter:

“Florida woman brings crypto marketplace to home state.”

As mentioned above, Florida is the third most populated state in the United States with over 12 million adults in residence, it is also now the 38th state where Binance’s services are available.

SEC Enlist Ciphertrace to Regulate Binance Chain

As recently reported by Blockchain.News, the United States Securities and Exchange Commission (SEC) would like to see CipherTrace analytics firm in charge of regulating Binance Chain, as it declares that the blockchain-based firm is “the only known blockchain forensics and risk intelligence tool that can support the Binance coin (BNB) and all tokens on the Binance network.”

CipherTrace is reputed in the crypto industry for protecting financial institutions from digital assets fraud and cybercrime, among other things. It prides itself on “growing the blockchain economy by making it safe for users, and it is trusted by the government.”

Binance Chain is a blockchain created to host the Binance coin “BNB” and it underlies the Binance Dex, which is a decentralized exchange built by Binance, the largest crypto exchange on the market by volume.

The contract was granted to CipherTrace on Aug 1, by the SEC. Though Binance Chain runs on a public blockchain system, the SEC would like to see more regulatory order with transactions, as anti-money laundering is on the rise and regulatory compliance needs to be instilled on the platform for it to operate smoothly.

Veteran Analyst Peter Brandt Exited Stocks and Bitcoin Portfolio, Returned To US Dollar

Commodity trading veteran Peter Brandt recently cashed out all his Bitcoin, forex, and stock holdings that constituted his portfolio and moved his assets back into home US currency. The trading legend sold his portfolio in Bitcoin, the foreign exchange market, and stocks and moved the assets into US dollars right before the all-round market and Bitcoin crash two days ago.

Peter Brandt is a legend trending expert known in crypto circles for accurately forecasting the historic collapse of the Bitcoin price in 2018. He is the CEO and founder of the Global trading firm Factor LLC, which trades forex, proprietary capital, fixed income, and equity markets.

Peter is regarded as one of the world’s greatest authorities on the use of classical charting principles to trade futures and forex markets.

Market Crash

What is Peter Brandt’s reasoning? He thinks that the U.S market bubble is in its final stage before it pops. This is what he believes about the US market: “Fight the Fed at your own doom. Getting bearish too early can wipe you out. Market in final blow-off to 12-year bull market. Bubbles can expand further than anyone expects possible, then burst tragically. Great profits in final push.”

After five bearish months, the US dollar index rebounded slightly (+0.5%) this week. Bitcoin and gold responded negatively to that development, with Bitcoin trading at $10,455 at the time of writing the article, a decline of more than 12% on the day, owing to heavy losses suffered in the present crypto markets.

The US stock market also posted its largest sell-offs since June, after leading stocks like Google, Tesla, Apple retreated from all-time highs.

The strengthening US dollar and increasing exchange inflows contributed to the painful Bitcoin plunge.

Serious Bitcoin Warning

Peter Brandt sold all his Bitcoins as he has been extremely skeptical when it comes to the cryptocurrency’s future. In March this year, Bitcoin fell to $3,000 before bouncing back to $5,000. Peter warned traders that Bitcoin price may decline further in the future as below as $1,000.

He reasoned that cryptocurrencies and Bitcoin would not get their big break thanks to the problems with the fiat economy. He forecasted that in the future, the world would adopt the so-called SDRs (special drawing rights) global reserve unit based on multiple fiat currencies (GBP, USD, EUR, AUD, JPY, CAD, CNH, JPY, crude oil, silver, and gold. Bitcoin or other cryptocurrencies will not be part of the basket.