Riding The Wave News Summary #14
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News
Table of Contents
BTC price faces crucial trend battle as Bitcoin RSI confirms breakout
Willy Woo: ‘Peak fear,’ but on-chain metrics say it’s not a bear market
US crypto executive order looms — 5 things to watch in Bitcoin this week
Eth2’s Altair upgrade goes off smoothly, with 98.7% of nodes now upgraded
El Salvador Turns to the US-based AlphaPoint in Bid to Bolster its Chivo Bitcoin App
The Sandbox (SAND) metaverse token gains 40% after Snoop Dogg, Warner Music partnership
Tweets
BTC price faces crucial trend battle as Bitcoin RSI confirms breakout
Data from Cointelegraph Markets Pro and TradingView shows that sustained BTC price action above $37,000 this week has allowed the relative strength index (RSI) to diverge from a multi-month downtrend.
After going from $36,700 to $39,280 in February, Bitcoin still lacks the momentum needed to challenge $40,000 resistance.
That could soon change, however, as one trader shows that RSI has now exited its dive deep into “oversold” territory.
the available supply has been dwindling, with the implication that any price trigger could have deeper consequences thanks to there simply being less BTC involved.
This illiquid supply trend is further expected to continue upward “relentlessly” in 2022.
The RSI moving upwards is a good sign but it doesn’t mean we can’t go lower before recovering. What I’m looking for is a switch in market momentum which I haven’t seen yet. A pump-up past $40,000 or a big news event that is positive for Bitcoin could help to cause a momentum shift although a drop-down further and people jumping in at a high volume could also do so. In the short term, this drop has been painful but drops like these force Bitcoin into the hands of people that are less likely to sell and therefore will likely hold til new highs.
Willy Woo: ‘Peak fear,’ but on-chain metrics say it’s not a bear market
Willy Woo, a Bitcoin (BTC) analyst and co-founder of software firm Hypersheet, believes that on-chain metrics show that BTC is not in a bear market despite observing “peak fear” levels.
Speaking on the What Bitcoin Did podcast hosted by Peter McCormack on Sunday, Woo cited key metrics such as a strong number of long term holders (wallets holding for five months or longer) and growing rates of accumulation suggest that the market has not flipped the switch to bear territory:
“Structurally, on-chain, it’s not a bear market setup. Even though I would say we’re at peak fear. No doubt about it, people are really scared, which is typically [...] an opportunity to buy.”
In the short term, Woo noted that “you don’t often get this kind of pullback without it relief bouncing” and that a potential capitulation down to the $20,000 doesn’t appear feasible, as it would replicate the 2018 crash into a bear market in the space of just three months as opposed to a year.
“You know, back in 2019 to 2020, if you looked on-chain at what the investors were doing, they were accumulating, but you just couldn’t see any impact of price because the price was really dictated by traders on the futures exchanges,” he said.
I agree that this drop is more likely to be a mid-cycle drop rather than a bear market as we aren’t seeing any signs other than the price dropping (which as noted in the article can happen even when the price shouldn’t be as low as it is listed on exchanges due to the price determination process).
US crypto executive order looms — 5 things to watch in Bitcoin this week
At $37,900, even that close was not enough to satisfy analysts’ demands, and the all-too-familiar rangebound behavior Bitcoin has exhibited throughout January thus continues.
The question for many, then, is: What will change the status quo?
Amid a lack of any genuine spot market recovery despite solid on-chain data, it may be an external trigger that ends up responsible for a shake-up. The United States’ executive order on cryptocurrency regulation is due at some point in February, for example, while exact timing is unknown.
The Biden administration’s upcoming executive order on crypto, ostensibly moved forward to February, could put the cat among the pigeons once again in terms of already battered sentiment.
The specter of the Infrastructure Bill remains for many a market participant, and further disadvantageous treatment of the crypto phenomenon would be seriously unwelcome from a country now hosting the lions share of the Bitcoin mining hash rate.
Behind the scenes, the more comforting trend of seasoned Bitcoin hodlers clinging to their assets continues to play out.
Data from on-chain analytics firm Glassnode this week confirms that the number of coins that last moved between five and seven years ago has reached an all-time high.
Separate figures from CryptoQuant, which tracks 21 major trading platforms, further confirm that balances are at their lowest since 2018.
After spending almost all of January in the depths of “extreme fear,” accompanied by a revisit of rare lows seen only a handful of times, the Crypto Fear & Greed Index is finally looking up.
On Sunday, the Index exited the “extreme fear” zone — a reading between 0 and 25 — for the first time since Jan. 3.
Fear & Greed uses a basket of factors to determine overall market sentiment, and its range highs and lows have accurately depicted extremes in price.
The fear and greed index isn’t always a great predictor of momentum as it tends to lag (I prefer to use it as an indicator of if we are in a good buying/selling area) as it measures market sentiment.
I do agree with the executive order potentially being impactful but based on our current state I am not sure if it will have much impact unless it releases extremely bullish or bearish news. I also want to note that the government, in general, has tended to delay crypto-related information releases so I wouldn’t be surprised if this executive order was delayed or ended up being vaguer than expected.
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