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Bitcoin Drops to $29K in Sudden Sell-Off, Lesser-Known Bitcoin Indicator Signals Onset of Major Bull Run, & more.

Apr 19, 2023

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Bitcoin Drops to $29K in Sudden Sell-Off

Bitcoin (BTC) slid more than 3% in just 15 minutes during European morning hours on Wednesday, taking the largest cryptocurrency by market capitalization to below $30,000. Further declines took it as low as $29,000, CoinDesk data shows.
While the sell-off didn't appear to stem from any fundamental reason immediately, an unusually large sell order on crypto exchange Binance and an unexpectedly high U.K. March inflation figure of more than 10% may have influenced market sentiment.
Also in the mix: a so-called long squeeze. More than $25 million in bitcoin futures were liquidated. Longs, or bets on rising prices, made 98% of the positions.
"The hotter-than-expected U.K. CPI may have weighed over risk assets, including BTC. But the gravity of the reaction has been far, far more severe than in other asset classes," Vetle Lunde, a senior analyst at K33 Research, told CoinDesk, using the acronym for consumer price index.
"Seems to be more of a leverage washout. Binance OI in BTCUSDT perps fell 5.1% in 15 minutes, effects more severe in ETH with larger liquidation volume than BTC," Lunde said, referring to open interest, or the total number of contracts in the futures market, and also to perpetual futures contracts.

"16K BTC is unusual size to be market sold solely from Binance spot usually the kind of sale happens before bad news comes out," @52kskew opined in a follow-up tweet.

Large liquidations can signal the local top or bottom of a steep price move, which may allow traders to position themselves accordingly.

Full Article

Lesser-Known Bitcoin Indicator Signals Onset of Major Bull Run

A lesser-known but historically reliable bitcoin price indicator has flipped positive, signaling the onset of a major bull market.
Bitcoin's (BTC) reserve-risk multiple has crossed above zero, turning positive for the first time since October 2021, according to blockchain analytics firm Glassnode.
The previous crossovers above zero paved the way for parabolic price rallies. "In 2012, 2013, 2015, 2019 and 2020, it resulted in gains of 2,830%, 566%, 6,400%, 99% and 487%, respectively," on-chain analyst Ali Martinez tweeted Monday.
Glassnode defines reserve risk as a long-term cyclical indicator, comparing the incentive to sell at the going market price with long-term holders resisting the temptation to liquidate. A lower reading indicates strong conviction among "HODLers" – slang for long-term crypto investors – and vice versa.
The reserve-risk multiple is calculated by dividing the daily indicator value by its 365-day moving average.

The bullish implication is consistent with bitcoin's tendency to chalk up outsized rallies in the months leading up to the mining reward halving.

Full Article

Crypto firms will develop 'offshore' without clear US rules, Coinbase chief says

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