Bitcoin prices fell for the third consecutive session on Tuesday as a stronger US dollar countered the US Senate’s approval of a long-pending coronavirus stimulus package.
The flagship cryptocurrency plunged by 0.56 percent to $22,602 per token ahead of the London opening bell. Meanwhile, Bitcoin Futures on the Chicago Mercantile Exchange dropped 0.66 percent to $23,030, pointing to mildly higher bullish sentiment in the market despite recent setbacks.
There was some profit-booking noted during Bitcoin’s runup to its record high of $23,400 on Sunday. It also occurred as the US dollar edged up, helped by fears of an advanced coronavirus mutation in the UK that prompted a fresh round of lockdown and travel bans. The outlook pushed risk-on assets in Europe lower, thus helping the greenback.
Bitcoin typically trades inversely to the dollar.
The cryptocurrency, therefore, risked plunging further lower into the week as the greenback sentiment flares up. Historically, the corrections that follow the BTC/USD exchange rate’s upside rallies target its 20-period moving average as support. Considering a fractal repeat, the pair is now targeting levels close to $20,000.
The prediction also draws cues from Bitcoin’s “overbought” levels on higher-timeframe charts. For instance, the Relative Strength Indicator reading on the one-week graph is near 81—which is way above the ’70’ threshold. The chart sees Bitcoin correcting to as low as $15,000 in the coming weekly sessions.
The US Senate voted Monday night in favor of the Congressional leaders’ $900 billion stimulus bill. It will now make its way to the White House, where the outgoing President Donald Trump will sign it into law.
Coupled with the Federal Reserve’s vow to keep purchasing government and corporate debts amid a low-interest environment, the stimulus package intends to make the US dollar weaker in the coming sessions. Meanwhile, hopes that the COVID-19 vaccine will be effective on the new virus strain would limit the greenback’s growth.
That aims to benefit Bitcoin as it heads into 2021 with a flurry of institutional investments. Some strategists see the cryptocurrency to hit anywhere between $100,000 to $400,000 as long as fiat depreciation continues and fears of higher inflation sustain.
“Looking at the increase of USD supply in the last 12 months and it’s the trajectory for the next 12, it’s easy to see that Bitcoin’s 2020 price increase isn’t as substantial as it looks, and the continued entry of institutions and sovereigns will dwarf anything to date.” — wrote Brendan Blumer, the co-founder/CEO of Block.One.
Author: By TeamMMG
Buy the Dip in Bitcoin If and When It Comes
Bitcoin prices have been on fire lately, rallying more than 21% this month. However, the rally started long before December, as the cryptocurrency gained 28.2% in October and more than 42% in November.
In all, bitcoin prices are up more than 120% so far in the fourth quarter. If it were to close out the quarter right now, it would be bitcoin’s best performance since Q2 2019.
The latest performance is even more impressive, as bitcoin finally broke out over the key $20,000 mark. In 2017, the cryptocurrency was flying higher on hype and momentum. It started off the year near $1,000 and cleared $19,500 less than 12 months later in December.
Any move of that nature will get the public’s attention.
Now though, we’ve had a few years to let prices mellow out a bit, slowly drawing in real buyers with staying power. Better yet, we’re starting from a higher base. In 2016, bitcoin was only a few hundred dollars. It didn’t take long to get toward $20,000.
While 2019 ended with a nice ramp in prices, the cryptocurrency topped out near $13,000 before retreating and finding support near $6,500. That’s about 15 times higher than where it was trading in mid-2016.
Looking at the way bitcoin trades is actually an important observation. Like it or not, technicals play a role in the way many assets trade. That’s particularly true for bitcoin, in my opinion.
In many assets, particularly here in the U.S., there are a number of different ways that regulators and exchanges can impact the “flow” of the market. First, there are set trading hours. But there are also circuit breakers, day-trading rules, uptick rules and other considerations for trades to make before stepping into the ring.
The great thing about bitcoin is that it’s largely a “true market,” meaning it doesn’t have as much influence and noise in the way it trades. When bulls are bullish, they can drive the stock up. When sellers get in control, they can crush it down.
Bitcoin trades like a true market, and that’s great for investors — even though it can put you on an emotional rollercoaster at times. That’s not to say regulations are a bad thing, as they in fact bring legitimacy to the table.
Instead, all of this is to say that bitcoin’s technicals will continue to be a driver among buyers and sellers.
Bitcoin prices were under pressure on Monday morning, falling to the 10-day moving average where it quickly found support. I had been looking for a move to new all-time highs, which has recently been achieved with the surge to $24,000.
But as much as bulls love a runaway-train rally, a dip would be the most helpful to keep the longer-term move intact. Remember, we are here for the long haul, not a couple of weeks. A dip back into the low $20,000s would give buyers an excellent buying opportunity.
A few years ago, there was a ton of skepticism surrounding bitcoin and other cryptocurrencies. Now, it’s becoming more accessible and more legitimate. Consumers didn’t know what bitcoin was. Many still don’t. But the education of cryptocurrency has continued over the years, and with more education has come more trust.
Companies continue to get involved in the cryptocurrency. For some, that means buying it outright and holding it along with its cash and equivalents. For others, we have some of the most reliable names in the business acting as a broker, allowing investors to buy and sell bitcoin and other cryptocurrencies.
These are the kind of developments we need to see in order to get more investors interested in buying bitcoin — and that’s what will continue to take prices higher. It helps when legendary investors like Paul Tudor Jones are championing the cryptocurrency as well.
The increasing financial aid from Congress, the Federal Reserve and various global central banks makes bitcoin and other alternative currencies another consideration. It’s why gold has also done well this year (although not nearly as well as bitcoin).
Central banks have had to take action against the economic impacts from the novel coronavirus, and there’s nothing wrong with that. But it weakens fiat currencies and strengthens other assets whose supplies cannot be magically raised overnight.
I don’t know how this all ends — no one does. But it’s likely that bitcoin will be there. Thus, we are buyers on the dip.
On the date of publication, neither Matt McCall nor the InvestorPlace Research Staff member primarily responsible for this article held (either directly or indirectly) any positions in the securities mentioned in this article.
Matthew McCall left Wall Street to actually help investors — by getting them into the world’s biggest, most revolutionary trends BEFORE anyone else. Click here to see what Matt has up his sleeve now.
Matt McCall and the InvestorPlace Research Staff, Editor, MoneyWire
Billion-Dollar Wealth Manager Skybridge Capital Plans to Launch a Bitcoin Fund – 22 December 2020
Billion-Dollar Wealth Manager Skybridge Capital Plans to Launch a Bitcoin Fund
In mid-November, a filing registered with the U.S. Securities and Exchange Commission (SEC) had shown that the investment firm Skybridge Capital may invest in crypto assets like bitcoin. Over a month later, Skybridge Capital filed another registration form with the U.S. SEC (Form D) as it plans to launch a bitcoin fund.
The wealth management firm run by Anthony Scaramucci, Skybridge Capital, is launching a bitcoin fund called the Skybridge Bitcoin Fund L.P. The news of the Skybridge’s fund stems from a Form D Securities and Exchange Commission filing. The New York-based company manages over $9.2 billion assets under management (AUM) and the filing shows it wants to manage a bitcoin (BTC) fund for accredited investors.
According to the filing submitted on December 21, 2020, it will be for accredited investors who can purchase $50k or more. It’s a pooled investment and hedge fund, and as for the issuance-size Skybridge has declined to disclose. Further, the Skybridge Bitcoin Fund will follow Rule 506(c) that allows the solicitation and general advertisement of the offering to accredited investors.
Skybridge Capital was founded in 2005 by Anthony Scaramucci, Brett S. Messing, Raymond Nolte, and Troy Gaveski. The news of the Skybridge Bitcoin Fund filing on Monday follows the company explaining that the firm’s G II Fund “may hold long and short positions in digital assets.” Of course, after the Form D filing was revealed for the Skybridge Bitcoin Fund, bitcoin proponents discussed the entry on social media and forums.
“Boom! Skybridge Capital is doubling down on Bitcoin,” tweeted Kevin Rooke. “They just registered the Skybridge Bitcoin Fund with the SEC, one month after allowing two of their other funds to invest in bitcoin.”
The founder of Skybridge Anthony Scaramucci was also a former White House director of communications. Scaramucci has said in an interview that “a fan” of cryptocurrencies and believes that “digital assets have a future.”
The Skybridge founder also did an interview with Anthony ‘Pomp’ Pompliano and discussed bitcoin and the current structural issues in America. “There’s something here,” Scaramucci told Pompliano. “There’s value to the notion that I can exchange value with you, confidentially — and I can exchange it through a mechanism that looks very secure.”
“Blockchain is going to get tighter, and more reformed, and more secure,” Scaramucci added. “People are going to have more confidence in it, and I don’t think it can be stopped.”
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Author: Added by: danyagames2007