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Market Wrap: Bitcoin Traders Expect Big Move as Volatility Plummets

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Bitcoin opened the week still stuck in a price range just above $9,000 Monday, moving less than 0.2% from Friday’s close as of 20:00 UTC (4 p.m. ET), according to Bitstamp.

At 00:00 UTC on Monday (8:00 p.m. Sunday ET), bitcoin (BTC) was changing hands around $9,115 on spot exchanges such as Bitstamp. Despite a brief dip below $9,800 on Saturday afternoon, bitcoin did not trade above $9,200 or below $9,000 on Monday.

Ether (ETH), the second-largest cryptocurrency by market capitalization, climbed less than 1% from its daily open Monday and traded around $226 as of 20:00 UTC (4 p.m. ET).

jun-29
Bitcoin trading on Bitstamp since June 24
Source: TradingView

Exchange inflows from bitcoin miners are pouring in as bitcoin continues to trade in the low $9,000s. A seven-day moving average shows inflows from miners to exchanges have reached their highest levels all year. This might be a bearish signal, according to some analysts.

glassnode-studio_bitcoin-miners-to-exchanges-7-d-moving-average-2
Exchange inflows from bitcoin miners since January
Source: Glassnode

Miners aren’t really speculators with the bitcoins held on their balance as inventory,” said Austin Storms, founder of mining mobile infrastructure company BearBox They’ll readily sell it for cash to reduce risk or expand operations, he added. But to infer that miners sending coins to exchanges is a bearish market signal, according to Storms, is a “big reach.” 

See also: Why Bitcoin Will Take a Long Time to Dethrone the Dollar

Miners make up a small percentage of daily sell pressure, he explained. Using this data to justify a bearish market thesis is “exploratory analysis that wants to be confirmatory,” said Storms. “People are bored with the $9,100-$9,400 range and are looking for any reason we might depart from it soon.” 

Bitcoin’s volatility is plummeting as it continues to trade in a tight price range. According to data from Skew, the ether-bitcoin implied volatility dropped to an all-time low over the weekend, and the Bitcoin Volatility Token (BVOL) launched by FTX earlier this year, which tracks market volatility, has fallen for nearly 20 consecutive days.

eth-btc-2
Ether / Bitcoin implied volatilty spread
Source: Skew

With volatility at historic lows, CoinGecko research analyst Daryl Lau told CoinDesk he would “definitely not be surprised to see a big move.” Sunday’s brief drop below $9,000 was “bought up on low volumes,” he noted. Cryptocurrency exchange volumes and the continued correlation to the S&P 500, which briefly broke below 3,000 Monday morning, seem to be signalling a “downward move” for bitcoin, Lau said. 

As the market tries to decide which way to exit its current price range, some traders are increasingly frustrated. “Consolidations can be frustrating for short-term traders, particularly those who trade on leverage and attempt to catch breaks,” said Matt Ficke, head of Capital Markets at OKCoin. Bitcoin has closed between $9,050-$9,820 price points for the past seven weeks, according to OKCoin weekly charts. 

See also: Bitcoin Facing Greater Price Volatility Than Ether in Q3, Options Market Data Suggests

To Ficke, the market is “testing or debating whether or not bitcoin can decouple from equity performance in this macro environment.” 

Other markets

Decentralized finance assets were some of the biggest losers on Monday, according to 24-hour price change data from Messari. Compound (COMP), which was “soaring” several days ago, is down 9.5%. Also down are nexo (NEXO) by 3.7%, basic attention token (BAT) 3.26%, and matic network (MATIC) by 2.6 percent. All price changes were as of 20:00 UTC (4:00 p.m. EDT).

In commodities, gold stayed mostly flat on Monday down less than 0.05% as of 20:00 UTC (4:00 p.m. ET). The yellow metal traded around $1,771. 

See also: Crypto Long & Short: What Trends in Volatility Could Mean for Bitcoin

Meanwhile, major stock indices are mostly green on Monday. 

The FTSE 100 index in Europe gained roughly 1.5% from its daily open at the time of publishing. The S&P 500 also gained nearly 1.5% Monday despite growing fears over an nation-wide increases in coronavirus cases. Only the Nikkei 225 dropped Monday, closing with a loss of more than 1%.

Disclosure

The leader in blockchain news, CoinDesk is a media outlet that strives for the highest journalistic standards and abides by a strict set of editorial policies. CoinDesk is an independent operating subsidiary of Digital Currency Group, which invests in cryptocurrencies and blockchain startups.

Source: https://www.coindesk.com/market-wrap-bitcoin-traders-expect-big-move-as-volatility-plummets

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Bitcoin Dropped To $9,050 Following Stock Market Tumble: Friday Price Watch

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Bitcoin and most altcoins have retraced slightly in the past 24 hours, after a few days of gains. Interestingly, similar price fallbacks are visible in the traditional stock markets, as the Dow Jones is down by 1.4%.

Bitcoin’s False Breakout

After the unsuccessful attempt to conquer $9,500, Bitcoin hovered above the significant 50-MA level at $9,300. However, the primary cryptocurrency has since slipped below it as it went from $9,440 to its current position at $9,150 in a few hourly candles. On some exchanges, such as Bitstamp, BTC plunged as low as $9,050.

BTCUSD 5m. Source: TradingView
BTCUSD 5m. Source: TradingView

During the increase to nearly $9,500, speculations rose that BTC whales manipulated the price to create volume to place large sell orders and reduce slippage. The end goal is for retail traders to start placing buy orders after the asset reaches an area of high liquidity – in this case, above the $9,300 50-MA. Ultimately, such traders typically have their positions liquidated, and so far, it appears that the execution was successful.

At the time of this writing, Bitcoin is close to the major support line situated at $9,000. It’s also a psychological level that managed to hold the asset’s price above it on several occasions lately.

If BTC turns bullish again, it would have to conquer all over again the $9,300 resistance, followed by $9,500, and $9,800, in case of an especially decisive run.

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Following The Stock Markets

Whether it’s price manipulation or another example of an increased correlation with the stock markets, it’s unclear. Nevertheless, when Bitcoin dropped by 3%, somewhat similar happened to the Dow Jones index. DJI went down from its daily high of 26,100 to 25,545 at one point before recovering slightly to 25,700.

The S&P 500 index also went on a negative spiral yesterday from 3,180 to its daily low of 3,116 but managed to close at 3,152. Nasdaq, on the other hand, closed with slight gains of 0.5% despite also diving intraday.

These primarily adverse developments came after news from Florida, indicating an uptick of coronavirus deaths. It also impacted the EU-based stocks, as the composite Stoxx 600 declined by nearly 1%, while London’s FTSE 100 dropped by 1.7%.

Altcoins Retrace

The altcoin market had several consecutive positive days, marking some impressive double-digit increases. DeFi tokens, riding the latest trend in the cryptocurrency space, were particularly notable.

However, they couldn’t keep the momentum going, and most altcoins are in the red today. Ethereum and Ripple slip by approximately 3% to $238 and $0.197, respectively.

Cryptocurrency Market Overview. Source: coin360.com
Cryptocurrency Market Overview. Source: coin360.com

Litecoin’s nosedive is similar, and LTC is below $44 now. Tezos’s price decrease is quite significant by nearly 5% to $2,44. After marking a new all-time high of $6,51 two days ago, Chainlink is now at $5,92. In other words, LINK has dropped by 9.3% since then.

Despite the tanking altcoins, Bitcoin couldn’t capitalize on the movement, and its dominance over the market remains below 63%.

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Disclaimer: Information found on CryptoPotato is those of writers quoted. It does not represent the opinions of CryptoPotato on whether to buy, sell, or hold any investments. You are advised to conduct your own research before making any investment decisions. Use provided information at your own risk. See Disclaimer for more information.

Cryptocurrency charts by TradingView.


Source: https://cryptopotato.com/bitcoin-dropped-to-9050-following-stock-market-tumble-friday-price-watch/

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Bitfinex to Face New York Courts Over Missing $850 Million in Cryptocurrency Funds

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A New York state court ruled that the exchange, and companies connected to it, must face court claims according to Bloomberg. Last year, New York Attorney General Letitia James accused Bitfinex of hiding the loss of more than $850 million in client and corporate funds.

Panama Firm in The Spotlight

The firms in question have made claims that the funds were deposited in a company called Crypto Capital Corp, based in Panama. These were then seized by various governmental authorities and the exchange has been battling to recover them ever since. Last year, the New York Attorney General accused Bitfinex of hiding more than $800 in losses.

Bitfinex was founded in 2012, and became the largest international cryptocurrency exchange after Mt. Gox imploded in 2014. It has been embroiled in controversy surrounding its stablecoin, Tether, and whether it is actually backed by real dollars.

Tether market capitalization has surged this year as its treasury keeps minting more tokens to keep up with demand. So far in 2020, USDT has surged 125% in terms of market capitalization from $4.1 billion to $9.2 billion according to CoinMarketCap.com. It is currently the third-largest cryptocurrency in terms of market cap, and the provider of the majority of liquidity on exchanges around the world.

Crypto Capital Corp has been repeatedly accused of money laundering and spurious activities shuffling Tether around through a number of shell companies.

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The appeals court rejected the argument that Tether is not a security or commodity, and reaffirmed that the court has jurisdiction over its issuer.

Bloomberg added that the court also rejected the argument that since Bitfinex is not based in New York, it shouldn’t be answerable to or have to produce certain documents for New York authorities. It added that traders based in New York had been using Tether. The Attorney General added;

“Today’s decision validates our office’s ability to use its broad and comprehensive investigative powers to protect New Yorkers. Not even virtual currencies are above the law. We are pleased with the court’s decision, and will continue to protect the interest of investors in the marketplace.”

What is Backing Tether?

Bitfinex has been very cagey regarding the true backing behind Tether, changing its statement in 2018 to read;

“Every tether is always 100% backed by our reserves, which include traditional currency and cash equivalents and, from time to time, may include other assets and receivables from loans made by Tether to third parties, which may include affiliated entities (collectively, “reserves”)”

This rather vague declaration only deepens the doubt around the crypto exchange and the world’s largest stablecoin. It seems that the courts, in New York at least, also want some answers.

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Source: https://cryptopotato.com/bitfinex-to-face-new-york-courts-over-missing-850-million-in-cryptocurrency-funds/

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Accomplice in Alleged $722M Bitcoin Ponzi Scheme Pleads Guilty to Charges

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One of four men charged with defrauding investors of more than $722 million through a long-running cryptocurrency mining scheme has pleaded guilty to charges against him.

The man, a 35-year-old Romanian programmer called Silviu Catalin Bacali, was arrested in Germany in December 2019. He was charged with one count of a conspiracy to commit wire fraud as well as a conspiracy to offer and sell unregistered securities. He faces a maximum of five years in prison and a fine of $250,000.

Three others — Matthew Brent Goettsche, Russ Albert Medlin, Jobadiah Sinclair Weeks and Joseph Frank Abel — were charged in connection with the scheme in the United States that same month.

Prosecutors allege that the scheme — operational between April 2014 and December 2019 — solicited money from investors in exchange for shares in purported cryptocurrency mining pools. Investors were awarded bonuses for recruiting further investors into the network. 

The indictment cites correspondence between Goettsche and Balaci in which they allegedly discussed how to fake mining earnings and referred to their investors as “sheep.”  

While the other defendants allegedly offered investors the choice of investing in three separate Bitcoin (BTC) mining pools, Bacali admitted that he himself was unaware that the BitClub Network operated more than one pool.

Further correspondence between the programmer and Goettsche from 2015 apparently revealed that Bacali was asked to “bump up the daily mining earnings starting today by 60%,” which he objected to as being “not sustainable” and “ponzi teritori [sic.]”.

He is nonetheless charged with changing figures to mislead investors at his accomplice’s urging. Bacali has also confirmed prosecutors’ allegation that the scheme fleeced at least $722 million worth of BTC from investors.

Early warning signs

In March 2017, Cointelegraph reported on allegations that BitClub had launched a malleability attack on the Bitcoin network. The scheme had also been flagged as suspicious by crypto media news outlet 99Bitcoins as early as 2016.

Source: https://cointelegraph.com/news/accomplice-in-alleged-722m-bitcoin-ponzi-scheme-pleads-guilty-to-charges

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