2019-5-3 14:39 |
It is exactly 11 months since Bitcoin (BTC) retested the psychological $100 million market cap mark. Good news is, after today’s terrific performance, the world’s most valuable digital asset now has a market cap exceeding $100 billion at $101 billion.
That’s an impressive performance but, this was largely expected. However, at current valuation, Bitcoin is back to June 2018 levels and retesting important resistance levels.
Rally Associated with Tether (USDT)?But what could be the reasons behind this rejuvenation, accelerating ramp-up and boosting Bitcoin prices? First, it has to do with the FUD around USDT (Tether), BitFinex and threats of a lawsuit by the New York Office of the Attorney General. The decision of iFinex honchos to approve the co-mingling of Tether reserves for the sake of satisfying BitFinex investors and honoring clients’ withdrawal request was interpreted as fraud.
That is despite lack of a comprehensive audit—by any of the top-4 audit firms–on Tether Limited reserves assuring the community that the 1:1 peg against the USD holds. It got worse because iFinex General Counsel did confirm that Tether was 74 percent backed and the company had a fractional reserve system in place mirroring banks but with better capitalization.
“Tether’s reserves of cash and cash equivalents alone (without the line of credit) would cover approximately 74 percent of the outstanding amount of tether.”
Insufficient reserves and general uneasiness by the community triggered a “coin run” from BitFinex but even in the midst of fear and uncertainty, Tether, the space’s most liquid stable coin, was firm, tracking the USD and maintaining its peg. That’s a huge boost for Bitcoin (BTC) and the crypto community in general. But it is increasingly becoming clear that the drama, the melee around Tether (USDT), do contribute to the coin’s success. This is what happened on Oct 15, 2018:
As we highlighted, Tether, is unique because first of all, there are no KYC and AML requirements meaning there are no third parties that require collection of user data unlike most stable coins fronted by CoinBase, USDC, or Gemini, Gemini Dollar for example. Then again, it is widely used by exchanges meaning delisting it can be catastrophic—not a PR stunt like what Binance did to Bitcoin SV.
What about Bitcoin (BTC) Technical Candlestick Arrangements?Even so, technical candlestick arrangement favors Bitcoin (BTC) prices. All the same, it is imperative that Bitcoin (BTC) prices rally past $6,000 for trend continuation. This is despite a firm close above a multi-month resistance trend line visible in the weekly chart. Now that prices are retesting $6,000, we have a retest after last year’s depreciation saw BTC—and the crypto space, tumble to Dec 2018 lows.
In a typical retest, two things may happen in weeks ahead. Either prices will rally above $6,000 invalidating bears of Q4 2018 or, tumble, dropping below $5,000 in a bear trend continuation phase typical of a bear breakout pattern. Contrarian theory? If so, bulls will be crashed. If not, analysts’ projection of Bitcoin soaring to $10,000 or $50,000 is on the cards.
Do you think Bitcoin (BTC) Will Rally or Contrarian Theory play out?
The post Bitcoin (BTC) Market Cap above $100 Billion, Watch Out for Contrarians…Q4 2018 Bears May Flow Back appeared first on Ethereum World News.
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