In today’s article we talk about Bitcoin continuing the massive price rally and some analysts and professionals are saying it will be bigger than the last one that got us to 20K. Also in the news ledge crypto wallets had their database compromised and lost 1M users personal information.
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The current price of Bitcoin is at $11,030.11 up 0.73%
The current price of Ethereum is at $317.34 up 0.68%
The current price of EOS is at $2.00 down 0.79%
The current price of XRP is at $0.240777 up 0.32%
The current price of ADA is at $0.141150 down 1.68%
The current price of LINK is at $7.18 down 1.70%
As always this publication is sponsored by CoinCasso cryptocurrency exchange. So if you’re unsatisfied with your crypto currency exchange, like Coinbase that crashes every single time that the price drops or goes up, consider checking out CoinCasso in the link.
With bitcoin rising to its highest level in 11 months this week, some investors are beginning to worry that the cryptocurrency is overbought and may be due for notable price drop.
But analysts suggest that’s an overreaction.
Bitcoin’s price rose to $11,319 on Monday, the highest level since August 2019, according to CoinDesk’s Bitcoin Price Index.
At time of writing, the cryptocurrency is trading near $11,100, representing a 18% gain from lows near $9,400 observed a week ago.
The sudden rally has pushed the 14-day relative strength index (RSI) above 80.00.
A measurement of over 70.00 is considered overbought, meaning the bullish move is now overstretched.
Asim Ahmad, co-chief investment officer at London-based Eterna Capital, said that an above-70 RSI does not necessarily imply an impending major price slide.
More likely it indicates that the bullish move is overstretched and vulnerable to consolidation or a minor retracement at worst, Ahmad said.
Lennard Neo, head of research at Stack funds, explained the RSI can stay inflated for longer periods in a strongly trending market, adding that other indicators are showing strong buying momentum.
The RSI is based on price and remained elevated during the previous bulls runs.
Bitcoin remained bid and rose 160% in the second quarter of 2019 (above left) despite the RSI printing highs above 70.00 several times during the three-month period.
A similar pattern was observed during the bull market frenzy of 2017 (above right).
Back to summer 2020 and the overbought measurement on the RSI may keep the cryptocurrency hovering around $11,000 for some time. Support is seen around $10,500.
Rotation of money out of the DeFi space and traditional markets and into bitcoin would create momentum for the cryptocurrency, said Neo.
Prices could rise quickly toward $12,000 in the short-term if the U.S. Federal Reserve signals higher tolerance for inflation. That could yield another sell-off for the greenback and send gold above the $2,000 mark.
Bitcoin still remains vulnerable to a sell-off in equities, as was seen during the wider markets crash in March, according to Joel Kruger, a currency strategist at LMAX Digital.
Ledger said customer details have been stolen in a data breach that may well have been exploited for over two months.
In a note to clients Wednesday, CEO Pascal Gauthier said the French hardware wallet provider fell victim to a large-scale data breach from an unauthorized third party.
The hacker, whose identity remains unknown, gained access to Ledger’s e-commerce and marketing database.
Customers affected include those who signed up for Ledger’s newsletter or to receive promotional material.
Information stolen included email addresses, with a smaller “subset” of 9,500 customers also having their full names, postal addresses and phone numbers exposed.
In total, the company estimates around one million email addresses have been stolen.
Payment information, passwords and cryptocurrency funds have not been affected.
The data breach was first detected as part of a bug bounty program on July 14.
Ledger estimates the data may have been accessed from April until the end of June.
A Ledger spokesperson confirmed to CoinDesk the data breach has now been fixed.
The wallet provider has now alerted the French authorities and is filing a complaint with the public prosecutor.
Ledger said it has not found customer information disseminated online nor has it received any ransom demands.
Cameron Winklevoss, the billionaire founder of cryptocurrency exchange Gemini, believes the next Bitcoin (BTC) bull run will be much different. When compared to previous bull markets, Winklevoss noted that there is substantially more capital, infrastructure, and better projects.
“The next Bitcoin bull run will be dramatically different. Today, there’s exponentially more capital, human capital, infrastructure, and high-quality projects than in 2017. Not to mention the very real specter of inflation that all fiat regimes face going forward. Buckle up!”
Various data points hint at a significant increase in the amount of capital held by investors in the cryptocurrency market. Major cryptocurrency exchanges have also received more regulatory clarity, improving the infrastructure of the market.
Capital flows into the Bitcoin market
Two metrics primarily show that more money could be involved in the latest Bitcoin rally. First, the market capitalization of Tether (USDT) has surpassed $10 billion. Second, the assets under management (AUM) by Grayscale Investments recently achieved a new high.
To date, Tether is the biggest stablecoin in the cryptocurrency market. Investors, especially in countries with regulatory uncertainty, rely on the stablecoin to trade crypto assets. A rapid rise in the market cap of Tether could indicate more money is waiting to deploy on crypto exchanges.
Grayscale’s crypto-asset trusts are arguably the most widely-utilized investment vehicles by institutions to gain exposure to cryptocurrencies. Within the last quarter, the assets under management in Grayscale’s suite of products hit an all-time high at $5.1 billion.
Grayscale CEO Barry Silbert said:
“In 2013, everybody thought we were crazy for launching a Bitcoin investment fund. Well, look at us now…”
The confluence of Tether’s market cap and Grayscale’s ballooning assets under management shows that capital held by institutions and retail traders continues to increase substantially.
Crypto market infrastructure is improving
In 2020, exchanges and banks in the U.S. primarily saw regulatory clarity regarding cryptocurrencies.
The Office of the Comptroller of the Currency of the U.S. (OCC) allows banks to provide and operate crypto custodial solutions. It is essentially a green light for financial institutions in the U.S. to get involved in the cryptocurrency market.
JPMorgan is also reported to have accepted Gemini and Coinbase, two of the largest spot exchanges in the U.S., as clients. Through this, the fear of strained banking relationships affecting exchanges and users has subsided.
Clarity around cryptocurrencies by major U.S. regulators and banks could improve the perception of the asset class by the mainstream. This means if Bitcoin approaches a new bull market, the improved sentiment around the entire industry could benefit BTC adoption and its value.
Crypto startups are finding relevant use cases
Overall, projects and companies in both the Bitcoin and crypto markets are seemingly increasing in quality. This is partially due to increased regulatory clarity and the fact that more traditional firms are willing to
collaborate with crypto firms.
As an example, Bitcoin Lightning startup Zap is working with Visa and has participated in its Fintech Fast Track Program. This allows Zap to launch Visa cards as a part of the partnership.
Zap CEO Jack Mallers said:
“We’re contractually obligated to launch one in the next 12 months and we plan on launching one in the next few months.”
Better projects, increased capital, and improving infrastructure are resulting in boosted confidence levels among Bitcoin investors and this is raising sentiment across the entire sector. In the medium-term, high-profile investors are hopeful BTC would reflect these factors.
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Bitcoin Looks Overbought but Analysts Play Down Drop Fears
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