Značka: federal reserve

Bitcoin sees worst monthly close in 2 years as traders watch $16.7K

Bitcoin (BTC) attempted to flip $17,000 to support on Dec. 1 after sealing its lowest monthly close in two years.BTC/USD 1-hour candle chart (Bitstamp). Source: TradingViewBitcoin gains inch up as November endData from Cointelegraph Markets Pro and TradingView showed BTC/USD circling $17,100 in a second intraday charge at higher levels. The pair managed to avoid losses as the monthly candle closed, instead seeing solid daily gains of around 4.5% for Nov. 30.Nonetheless, Bitcoin shed 16.2% for the month, making November 2022 its worst since 2019.BTC/USD monthly returns chart (screenshot). Source: CoinglassThe more buoyant mood coincided with comments from the United States Federal Reserve. In a speech on inflation and the labor market, Chair Jerome Powell openly stated that smaller interest rate hikes could begin as soon as December.“Monetary policy affects the economy and inflation with uncertain lags, and the full effects of our rapid tightening so far are yet to be felt,” he said. “Thus, it makes sense to moderate the pace of our rate increases as we approach the level of restraint that will be sufficient to bring inflation down. The time for moderating the pace of rate increases may come as soon as the December meeting.” Powell characteristically cautioned on heralding a full turning point in policy, something markets had been keenly awaiting throughout the year.“Given our progress in tightening policy, the timing of that moderation is far less significant than the questions of how much further we will need to raise rates to control inflation, and the length of time it will be necessary to hold policy at a restrictive level,” he added.Nonetheless, stocks reacted positively, the S&P 500 and Nasdaq Composite Index ending the day up 3.1% and 4.4%, respectively, in line with Bitcoin.No euphoria among tradersIn responses of their own, meanwhile, crypto market commentators were equally cool on the immediate prospects despite the moderate month-end gains.Related: Bitcoin capitulation 4th-worst ever as BTC hodlers lose $10B in a weekCrypto Tony warned that bulls were “getting cocky” into December, and that now was not a suitable blind entry point.“Now is not the time to go all in, thinking this is the bottom on Crypto,” he told Twitter followers.“We have yet to see : – A macro higher high and higher low (Market structure trend change) – Bull volume coming in – Spot buys on the increase – Completed corrective structure.”BTC/USD annotated chart. Source: Crypto Tony/ TwitterA key level to hold for continuation of the “bullish market structure,” he added, was $16,700.Michaël van de Poppe, founder and CEO of trading firm Eight, agreed on the importance of an area focused on $16,700 for his own strategy.The views, thoughts and opinions expressed here are the authors’ alone and do not necessarily reflect or represent the views and opinions of Cointelegraph.

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NY Fed launches 12-week CBDC pilot program with major banks

The Federal Reserve Bank of New York’s Innovation Center, or NYIC, announced that it would be launching a 12-week proof-of-concept pilot for a central bank digital currency, or CBDC.In a Nov. 15 announcement, the New York Fed said the program would explore the feasibility of an “interoperable network of central bank wholesale digital money and commercial bank digital money operating on a shared multi-entity distributed ledger” on a regulated liability network. Banking giants including BNY Mellon, Citi, HSBC, Mastercard, PNC Bank, TD Bank, Truist, U.S. Bank and Wells Fargo will be participating in the pilot by issuing tokens and settling transactions through simulated central bank reserves.“The NYIC looks forward to collaborating with members of the banking community to advance research on asset tokenization and the future of financial market infrastructures in the U.S. as money and banking evolve,” said NYIC Director Per von Zelowitz.The proof-of-concept project will test the “technical feasibility, legal viability, and business applicability” of distributed ledger technology, as well as simulate tokens and explore regulatory frameworks. The NY Fed said the project could “potentially be extended to multi-currency operations and regulated stablecoins.”Related: US lawmaker lays out case for a digital dollarThe launch of the NYIC pilot project followed the center releasing research on its wholesale central bank digital currency program on Nov. 4. The first phase of the CBDC trial, dubbed Project Cedar, tested foreign exchange spot trades to determine whether a blockchain solution could improve “speed, cost, and access to cross-border wholesale payments.”Federal regulators in the United States have not reached any consensus on whether to launch a digital dollar in the country, but agencies and those in the private sector have been exploring the possibility. Following U.S. President Joe Biden issuing an executive order aimed at establishing a framework on digital assets, some lawmakers questioned what Congress’ role might be in passing legislation in support of a CBDC and how a digital dollar might curtail similar innovations from the private sector.

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New York Fed collaborates with Singapore MAS to explore CBDCs

The Federal Reserve Bank of New York’s New York Innovation Center (NYIC) and the Monetary Authority of Singapore (MAS) will launch a joint experiment with wholesale central bank digital currencies (wCBDCs). Regulators are keen to test the wCBDCs potential for cross-border wholesale payments. On Nov. 11, the MAS announced the launch of Project Cedar Phase II x Ubin+. In its framework, NYIC and MAS will leverage wCBDCs as a settlement asset in cross-border cross-currency transactions. The aim is to assess the possible ability of wCBDC to reduce settlement risk. Leong Sing Chiong, Deputy Managing Director at MAS, highlighted the concept of “interoperability,” which lies at the core of the experiment: “The project takes a practical approach and designs for any future wholesale CBDC to be interoperable across networks, while maintaining each network’s autonomy.”As the statement goes, Project Cedar Phase II x Ubin+ will not advance any specific policy outcome, nor does it signals any imminent decisions on issuing a CBDC by the Federal Reserve. A report with the project’s findings should be released in 2023. On Nov. 4, NYIC released a report on the first phase of Project Cedar. During the first phase, spot transactions were carried out between different currencies on different ledgers through a permissioned blockchain network with an unspent transaction data output model.Related: The Clearing House stands up for bank rights, opposes CBDC in comments for US TreasuryProject Cedar complements the Boston Fed’s work on a retail CBDC in Project Hamilton, being conducted in conjunction with the Massachusetts Institute of Technology’s Digital Currency Initiative. Ubin+ is MAS’ international initiative to improve efficiency and reduce the risks of cross-border foreign exchange settlement by advancing cross-border connectivity and interoperability of wholesale digital currencies.The Fed still has no plans to issue a CBDC, NY Fed Executive Vice President and Head of Markets Michelle Neal said at a presentation in Singapore, but it has investigated foreign exchange spot settlement “from the perspective of the Federal Reserve.”

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Crypto no more in top 10 most-cited potential risks: US central bank report

While proponents of traditional finance remain keen on dismissing Bitcoin (BTC) and the crypto ecosystem as financial risks, a survey conducted by the Federal Reserve Bank of New York — one of the 12 federal reserve banks of the United States — revealed 11 factors that overshadow crypto in terms of risk in 2022.Geopolitical tensions, foreign divestments, COVID-19 and high energy prices were found to be some of the most-cited potential risks for the US economy, according to a central bank survey published by the Federal Reserve System.Federal Reserve Bank of New York survey results. Source: Federal Reserve SystemOut of the 14 factors that pose a financial risk, crypto stands at the 11th position — revealing a change in investor mindset owing to the continued efforts of crypto entrepreneurs to educate the masses. Some of the pressing risk concerns raised by the respondents were related to the power struggle of global economies, which includes the U.S.-China tensions, the Russia-Ukraine war, higher energy prices, rising inflation, the COVID-19 pandemic and cyberattacks, to name a few.However, the U.S central maintains its anti-cryptoposition when it comes to evaluating the risks in crypto investment. It pointed out in the report that selected cryptocurrencies — including BTC, Ether (ETH), Binance Coin (BNB), Cardano (ADA) and XRP — are down about 69 percent in value compared to the Nov. 2021 peak, adding that:“Speculation and risk appetite appear to be the primary driving forces of crypto-asset prices, which have recorded big swings in recent years.”The central bank also cited the collapse of the Terra (LUNA) ecosystem, highlighting that entities that had direct exposure to the in-house stable TerraUSD (UST) found themselves in financial distress, sometimes leading to bankruptcy.”Related: Joe Biden unhappy with Elon Musk for buying a platform that “spews lies”On the other side of the world, India launched its home-grown central bank digital currency (CBDC) for the wholesale segment. While the country is still opposed to the idea of mainstreaming cryptocurrencies, the pilot project saw the involvement of nine local traditional banks, which include the State Bank of India, Bank of Baroda, Union Bank of India, HDFC Bank, ICICI Bank, Kotak Mahindra Bank, Yes Bank, IDFC First Bank and HSBC.Related reports suggested that India’s central bank — the Reserve Bank of India (RBI) — plans to launch the digital rupee for the retail segment within a month in select locations.

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Funding rates hit 6-month high before CPI — 5 things to know in Bitcoin this week

Bitcoin (BTC) starts the second week of November battling some familiar FUD — how will BTC price action react?The largest cryptocurrency managed a weekly close just below $21,000 on Nov. 6 — an impressive multi-week high — but remains fixed in a sticky trading range.Despite seeing highs of nearly $21,500 over the past week, there has yet to be a catalyst capable of breaking the market status quo, but the coming week has as good a chance as any of doing so. Nov. 10 will see key United States inflation data for October released, while jobless claims and multiple speeches from Federal Reserve officials may also impact risk asset volatility.An unexpected twist from within the crypto realm comes in the form of turmoil involving exchange FTX, Alameda Research and Binance.Concerns over liquidity have escalated as Binance CEO, Changpeng Zhao, reveals a plan to sell off his platform’s entire stash of FTX’s proprietary token, FTT.Bitcoin reacted in line with market sentiment overnight, but going forward, will the debacle prove any more than classic crypto FUD?Cointelegraph takes a look at some of the major factors set to influence BTC price action in the coming days.FTX worries disrupt weekly closeWhile falling into the weekly close, BTC/USD still managed to post its highest such weekly candle close since mid-September.Data from Cointelegraph Markets Pro and TradingView shows the week to Nov. 6 being capped at $20,900 on Bitstamp.BTC/USD 1-week candle chart (Bitstamp). Source: TradingViewWith that, Bitcoin defends its trading range and avoids any noticeable break of its current paradigm — lurching between $19,000 and $22,800 since August.While heading nearer the top of the range, the FTX news involving Binance appeared to dampen the mood significantly, ultimately costing Bitcoin the $21,000 mark.“As part of Binance’s exit from FTX equity last year, Binance received roughly $2.1 billion USD equivalent in cash (BUSD and FTT),” Binance CEO, Changpeng Zhao (also known as “CZ”) wrote in a Twitter thread. “Due to recent revelations that have came to light, we have decided to liquidate any remaining FTT on our books.”Zhao added that divesting itself of its FTX holdings would take Binance “a few months,” acknowledging that markets could be impacted throughout.In his own thread, Sam Bankman-Fried, CEO of FTX, meanwhile referenced what he called “unfounded rumors” regarding liquidity issues.“We’re grateful to those who stay; and when this blows over we’ll welcome everyone else back,” he wrote in one optimistic post to followers overnight.The market reaction has so far been less positive; a look at the top ten cryptocurrencies by market cap shows 24-hour losses on some tokens nearing 10% at the time of writing.For Bitcoin traders, it is time to take advantage of the retracement in a week they believe should result in further upside.“Lost lower time frame support. Nice little pullback. Will be looking to re-long when it finds it’s next support,” popular trading account IncomeSharks wrote in an update.A separate post focused on potential cross-crypto gains.“Total marketcap looking great on the daily. Bull or bear, I think there’s enough people still sitting on cash to push up to 1.5 trillion,” it read.Total crypto market cap 1-day candle chart. Source: TradingViewMichaël van de Poppe, founder and CEO of trading firm Eight, also said that he would be looking for “buy the dip opportunities” across crypto in the short term.A classic counter-perspective came from fellow trader Il Capo of Crypto, who argued that $21,500 will mark the high point in a downtrend set to continue.“Seeing whales wanting to fill asks at 21500. A very quick scam pump to this level would be the perfect end of the party. ETH to 1700s,” part of a tweet stated.CPI and U.S. midterms in focusThe Federal Reserve dominated the last week of October when it came to crypto-asset performance thanks to its decision to raise interest rates by another 0.75%.As this is implemented, markets will be watching another key figure this week — Consumer Price Index (CPI) data for October.Estimates put year-on-year inflation at 7.9%, as per economists surveyed by Bloomberg, down 0.3% versus September.Any lower-than-expected CPI readout could be a boon for crypto and riskassets, as it notionally increases the chances of the Fed pulling back on rate hikes sooner.Before CPI and jobless claims, however, there is the issue of the U.S. midterm elections to deal with — a potential source of volatility in and of itself.“Personally, I am in no rush just yet to start buying,” well-known social media personality @CryptoGodJohn told followers. “CZ vs SBF drama, Midterm elections Tuesday, CPI Thursday. This will be the biggest week of crypto that will set the tune for the end of the year.”The rate hike announcement was something of a fake tone-setter, having sparked volatility which canceled itself out within days.Fellow commentator Capital Hungry meanwhile warned of the impact of stronger CPI inflation:“If US CPI this week is still high we are going to see that upside on gold reversed, USD strength back and Equities bears back in play.”The U.S. dollar index (DXY) was making up for lost ground at the time of writing, having seen a dramatic 2% daily decline on Nov. 4.U.S. dollar index (DXY) 1-day candle chart. Source: TradingViewFunding rates run hotIn a warning signal to bulls — and particularly late longs — Bitcoin funding rates are surging on derivatives exchanges.As noted by Maartunn, a contributor to on-chain analytics platform CryptoQuant, funding rates are now at their highs in six months.Funding rates are a mechanism used in perpetual contracts to keep their price close to the Bitcoin spot price. Highly positive funding rates suggest that the market expects BTC/USD to go higher and traders are paying for the privilege to go increasingly long BTC.The effect can be detrimental, as a price decrease ends up liquidating large numbers of overly bullish positions.“And at this moment, Funding Rates are very high. Traders are betting on higher prices and are willing to pay a serious amount of interest,” Maartunn explained alongside CryptoQuant data. “That doesn’t have to be bearish perse, but when price start to move against them they might be forced to get out their position or it will be liquidated.”Bitcoin funding rates annotated chart. Source: Maartunn/ TwitterAs Cointelegraph reported, last month saw record liquidations for 2022 as Bitcoin made its way to $21,000.Maartunn added that funding was “something to keep an eye on in the coming days.”Miners miss out on difficulty readjustmentBitcoin’s network fundamentals remain in an interesting, if not wholly bullish state.The latest data from on-chain monitoring resource BTC.com confirms that network difficulty decreased by 0.2% on Nov. 7 — far less than previously estimated.Bitcoin network fundamentals overview (screenshot). Source: BTC.comThe result has implications for miners, who have seen profits squeezed even as hash rate hits new all-time highs.A major difficulty decrease would have helped level the playing field for some, and its absence keeps up pressure on certain players.Even Bitcoin’s largest public miners are “underperforming BTC heavily” in the current environment, Sam Rule, market analyst at UTXO Management, revealed last week. As Cointelegraph reported, the combination of high hash rate and low miner profitability is nonetheless a potential cause for classifying Bitcoin as undervalued.The Bitcoin Yardstick continues to edge further into its “cheap” zone this month, having seen rare lows.Bitcoin Yardstick chart. Source: GlassnodeSentiment gauge hits three-month highIt might not all be doom and gloom for crypto market sentiment.Related: Buying Bitcoin ‘will quickly vanish’ when CBDCs launch — Arthur HayesAccording to the Crypto Fear & Greed Index, cold feet are getting shaken off in Bitcoin’s run to its highest since September.Fear & Greed, which measures sentiment with a normalized score of 0-100 using a basket of factors and offers various labels — extreme greed, greed, neutral, fear and extreme fear — to categorize them, reached its highest since mid-August at the weekend.At 40/100, the optimism proved unsustainable thanks to the market retracement into the new week, and as of Nov. 7, 33/100 is in place — firmly within the “fear” bracket.Crypto Fear & Greed Index (screenshot). Source: Alternative.meThe views and opinions expressed here are solely those of the author and do not necessarily reflect the views of Cointelegraph.com. Every investment and trading move involves risk, you should conduct your own research when making a decision.

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FX spot settlement in 10 seconds: NY Fed releases results of wholesale CBDC research

The Federal Reserve Bank of New York Innovation Center has released a report on the first phase of its Project Cedar wholesale central bank digital currency (wCBDC) Nov. 4. The Fed still has no plans to issue a CBDC, NY Fed executive vice president and head of markets Michelle Neal said at a presentation in Singapore, but it has investigated foreign exchange spot settlement “from the perspective of the Federal Reserve.” Its prototype wCBDC, intended for use by financial institutions rather than the public, was able to implement transactions dramatically faster and more securely than the current standard.A foreign exchange spot transaction was chosen as the use case for the 12-week first phase of Project Cedar because of its relative simplicity and that type of transaction is often used as part of broader, more complex transactions. It also represents a market with $7 trillion in daily turnover with less than 40% of it settled on a payment-versus-payment basis and transactions typically taking two days.FED NY Project Cedar Test results from the experiment revealed that the #blockchain-enabled payments system settles transactions in fewer than ten seconds on average and that throughput across the system increases as additional currencies are included. #Cryptocurency pic.twitter.com/sTn6ZnCnUY— The light shines in the darkness (@MatthewLINY) November 4, 2022Project Cedar used a specially designed distributed ledger to carry out transactions between different currencies on different ledgers. It was a permissioned blockchain network with an unspent transaction data output model. In test scenarios, FX spot trades were atomically settled, that is simultaneously or else the transaction fails, in under ten seconds, with throughput increasing as the number of currencies increased.Related: BIS releases full report on mBridge wholesale CBDC platform after successful pilotDirector of the NY Fed Innovation Center Per von Zelowitz said in a statement: “Project Cedar Phase I revealed promising applications of blockchain technology in modernizing critical payments infrastructure, and our inaugural experiment provides a strategic launch pad for further research and development regarding the future of money and payments from the U.S. perspective.”The NY Fed Innovation Center was established in 2021. Project Cedar complements the Boston Fed’s workon a retail CBDC in Project Hamilton, being conducted in conjunction with the Massachusetts Institute of Technology’s Digital Currency Initiative. That project released its first results in February. CBDC research is being actively pursued by the vast majority of central banks worldwide.

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The crypto market bottom is ‘almost in’ — Market Talks chats with trader Korean Jew Crypto

On this week’s episode of Market Talks, we welcome Jake, also known as “Korean Jew Crypto” on Twitter and the founder of “The Trading Dojo,” a platform that provides quality coaching and education to help traders identify profitable trades on their own. The wide reaching interview covered KJ’s take on how to trade the Federal Open Markets Committee and Consumer Price Index events, along with his views on how Federal Reserve policy is impacting crypto prices. According to KJ: “In regards to what Powell said, and the way the news cycle has been, a few weeks ago I was adamant that something has changed. I was quite bearish and expecting a support break for BTC, ETH and everything else. We got the dip on Friday that swept everyone out of the tight range but it was immediately bought back…Bullard from the Fed had some bullish things to say and we reclaimed the support and held on with nice volume, as well as in stocks. I said to my friends and the dojo, something is different. That was supposed to breakdown but there were buyers there. The market just feels very different.” When asked about whether or not Dogecoin’s (DOGE) recent 100%+ pump is a one-off or a sign of a wider trend change, KJ said: “I feel there’s something bigger behind it, personally. When you’re comparing structure, even thorough price rejected at a certain level, it’s actually starting to look quite bullish to me. I wouldn’t be surprised to see a reflation trade where price goes up to like $0.55, comes down and then marks up again.” KJ suggested that Elon’s new leadership of Twitter “people are speculating that there is going to be some sort of DOGE integration involved. I think it’s a reasonable speculation actually.” Is the market bottom in? In regards to a wider turn around in sentiment, investors’ appetite for risk and the crypto market carving out a bottom, KJ explained that DOGE’s recent bullish price action is: “Showing that there’s a greed element that is there again. In the past the DOGE move would have gotten sold off, somewhat immediately, not the numbers that it did. We might have got a 20% move that was sold off by the end of the day. Litecoin as well also shows greed in the market and risk taking behavior and this risk, in my opinion, is not being taken by “normies” yet. These are more powerful players that are willing to do so.”To hear more alpha from KJ, tune in to Market Talks here, and come back every Thursday at 12:00 pm ET to hear feature interviews with some of the most influential and inspiring people from the crypto and blockchain industry. Head on over to Cointelegraph’s YouTube page and smash those Like and Subscribe buttons for all our future videos and updates.The views and opinions expressed here are solely those of the author and do not necessarily reflect the views of Cointelegraph.com. Every investment and trading move involves risk, you should conduct your own research when making a decision.

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Bitcoin price hits $20.8K as volatility ensues over Fed 75-point rate hike

Bitcoin (BTC) saw instant volatility on Nov. 2 as the United States Federal Reserve enacted a fourth consecutive 0.75% interest rate hike.BTC/USD 1-hour candle chart (Bitstamp). Source: TradingViewFed hints more hikes to comData from Cointelegraph Markets Pro and TradingView showed BTC/USD initially dropping to $20,200 before momentarily rebounding to $20,800.The Fed confirmed the 0.75% hike, which marks its most intensive hiking schedule in forty years, in a statement.“The Committee seeks to achieve maximum employment and inflation at the rate of 2 percent over the longer run. In support of these goals, the Committee decided to raise the target range for the federal funds rate to 3-3/4 to 4 percent,” it stated. “The Committee anticipates that ongoing increases in the target range will be appropriate in order to attain a stance of monetary policy that is sufficiently restrictive to return inflation to 2 percent over time.”Analysts had long predicted increased volatility around the rate decision. At the time of writing, Fed Chair Jerome Powell was still to deliver comments on the move, something markets would be keenly eyeing for trajectory cues.“Beware, volatility will remain high during this event, fake-outs happen before the real move takes place!” Michaël van de Poppe, founder of trading firm Eight, told Twitter followers.The Fed’s decision had been nonetheless widely expected, as per CME Group’s FedWatch Tool, with Cointelegraph reporting on a theory that sticking to the script would still offer crypto a shot at further upside.Fed target rate probabilities chart. Source: CME GroupHow long can the hikes go on?Should Powell hint at possible slower increases or a pivot in policy, the situation could however turn dramatically.Related: New Bitcoin Yardstick metric says $20K BTC now ‘extraordinarily cheap’“The market rallying ~13% off the lows was this expected 75 bps. It’s all about the presser now,” popular account CryptoISO summarized. “We knew the fed had telegraphed an eventual slowdown/pause Not a pivot but more of a reassessment as data comes out to see how it is flowing through. 75 bps each time wont work.”Federal funds rate chart. Source: St. Louis FedThe statement confirmed that Fed officials had voted unanimously for 0.75%. The views and opinions expressed here are solely those of the author and do not necessarily reflect the views of Cointelegraph.com. Every investment and trading move involves risk, you should conduct your own research when making a decision.

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3 striking similarities with past Bitcoin price bottoms — But there’s a catch

Bitcoin (BTC) has been consolidating inside the $18,000–$20,000 price range since mid-June, pausing a strong bear market that began after the price peaked at $69,000 in November 2021.Many analysts have looked at Bitcoin’s sideways trend as a sign of a potential market bottom, drawing comparisons from the cryptocurrency’s previous bear markets that show similar price behaviors preceding sharp bullish reversals.Here are three strikingly similar trends that preceded past market bottoms.2018’s sideways trend for BTC priceThe 2018’s Bitcoin bear market serves as a major cue for a potential market bottom in 2022 if one looks at its eerily similar price trends and indicators.One of the key indicators is Bitcoin’s 200-week exponential moving average (200-week EMA; the blue wave in the chart below). In 2018 and 2022, Bitcoin entered a long period of sideways consolidation after closing below its 200-week EMA.BTC/USD weekly price chart featuring 2018 bear market fractal. Source: TradingViewExcept in 2018, Bitcoin’s sideways trend lasted for 1 days, with the price reclaiming its 200-week EMA as support, followed by moves toward approximately $14,000 in June 2019. In 2022, the sideways trend entered its 19th day on Oct. 28 but awaits a clear breakout above the 200-week EMA near $26,000.Additionally, Bitcoin’s weekly relative strength index (RSI) hints at a potential bottom formation. In 2018, the RSI’s drop into its oversold territory (below 30) was followed by the BTC’s price sideways trend and eventually by a fully-fledged bullish reversal.That is halfway similar to Bitcoin’s RSI trend in 2022, given it slipped below 30 in June and followed up with Bitcoin’s sideways price action between $18,000 and $20,000 levels. That could follow up with a bullish reversal phase if the 2018 fractal is repeated.2013–2015 bull trap supportBitcoin’s 2022 bear market also shares similarities to the price trends witnessed in 2013–2015, comprising a descending trendline resistance, a weak bull trap support trendline and a horizontal support level.BTC/USD weekly price chart featuring 2014–2015 bear market fractal. Source: TradingViewBTC’s price dropped 82% from its December 2013 top of around $1,200. In doing so, Bitcoin attempted to close thrice above its descending trendline resistance (marked with A, B and C in the chart above). Simultaneously, the price drew limited support from another descending trendline, resulting in bull trap rallies.Bitcoin eventually bottomed at a horizontal trendline support near $200, following it up with a strong breakout above the descending trendline resistance, reaching the 0.236 Fib line of $429. By December 2017, its price had reached nearly $20,000.Bitcoin 2013–2015 bear market on weekly chart (zoomed version). Source: TradingViewIn 2022, Bitcoin’s price has ticked all the boxes regarding mirroring its 2013–2015 bear market, except for the breakout above the descending trendline resistance. Bitcoin 2022 bear market on weekly chart (zoomed version). Source: TradingViewThus, BTC/USD could see a rally toward $30,000, the 0.236 Fib line, in early 2023 if the breakout occurs.Bitcoin MVRV-Z scoreFrom an on-chain analysis perspective, Bitcoin’s 2022 downtrend has made it as undervalued as it was at the end of previous bear markets.For instance, Bitcoin’s Market Value-to-Realized Value (MVRV) Z-score, which measures the coin’s over/undervalued relative to its “fair value,” has dropped into the region that has coincided with previous bear market bottoms, as shown below.Bitcoin MVRV-Z Score vs. market bottoms. Source: GlassnodeThe on-chain indicator increases Bitcoin’s possibility to bottom inside the $18,000–$20,000 region — in line with the two fractals discussed above.Different this time? Unlike previous years, Bitcoin’s 2022 bear market occurred primarily due to the United States Federal Reserve’s interest rate hikes in response to persistently higher inflation. The U.S. central banks tightening measures removed excess cash from the economy, thus leaving investors with little capital to speculate on risk-on assets. As a result, Bitcoin fell alongside U.S. stocks with a strong correlation coefficient of 0.80 as of Oct. 28. Related: Bitcoin mirrors 2020 pre-breakout, but analysts at odds whether this time is differentPreviously, the Bitcoin market recovered weeks or months after its correlation with U.S. stocks dropped below zero. The chart below shows four instances from 2014–2016, 2017–2018, 2019–2020 and 2021.BTC/USD weekly price chart. Source: TradingViewTherefore, Bitcoin carries risks of bearish continuation if its correlation with U.S. stocks remains positive. Meanwhile, over 2,000 CME Bitcoin options contracts expiring by the end of this year show a net bias toward put positions. In other words, traders have been anticipating more downside for BTC price.CME Bitcoin options position distribution. Source: Ecoinometrics“Traders see the possibility of Bitcoin sliding towards $10,000 to $15,000 but anything lower than that is given a low probability,” said Nick, an analyst at data resource Ecoinometircs.As Cointelegraph reported, the $10,000–$14,000 area remains an area of interest for a possible price bottom if a breakdown occurs from the current levels. The views and opinions expressed here are solely those of the author and do not necessarily reflect the views of Cointelegraph.com. Every investment and trading move involves risk, you should conduct your own research when making a decision.

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3 historically accurate Bitcoin on-chain metrics are flashing 'bottom'

Bitcoin (BTC) and other riskier assets slipped on Oct. 21 as traders scrutinized macro indicators that suggest the Federal Reserve would continue to hike rates. Nonetheless, the BTC/USD pair remains rangebound inside the $18,000–$20,000 price range, showing a strong bias conflict in the market.BTC price holding above $18K since JuneNotably, BTC’s price has been unable to dive deeper below $18,000 since it first tested the support level in June 2022. As a result, some analysts believe that the cryptocurrency is bottoming out, given it has already corrected by over 70% from its record high of $69,000, established almost a year ago.BTC/USD daily price chart. Source: TradingView”During the 2018 bear market, BTC saw a max drawdown from peak to trough of 84%, lasting 364 days, while the 2014 cycle lasted longer, bottoming after 407 days,” noted Arcane Research in its weekly crypto market report, adding: “Both bottoms were followed by unusually low volatility.”Bitcoin’s historical drawdowns. Source: Arcane ResearchIn addition, a flurry of widely-watched on-chain Bitcoin indicators also hints at a potential bullish reversal ahead. Let’s look at some of the most historically significant metrics. Bitcoin MVRV-Z ScoreThe MVRV-Z Score assesses Bitcoin’s overbought and oversold statuses based on its market and fair value. Historically, when Bitcoin’s market value crosses the fair value, it indicates a market top (the red zone). Conversely, it indicates a market bottom (the green zone) when the market value crosses below the fair value.Bitcoin MVRV Z-Score. Source: GlassnodeThe MVRV-Z Score has been in the green zone since late June, suggesting Bitcoin is bottoming out.Reserve RiskBitcoin’s Reserve Risk assesses the confidence of the token’s long-term holders relative to its price at the point in time. Historically, a higher Reserve Risk (the red zone) has coincided with market tops, reflecting lower investment confidence at record-high Bitcoin prices.Conversely, higher confidence and a lower Bitcoin price mean a lower Reserve Risk (the green zone), or better risk/reward for investing.Bitcoin Reserve Risk vs. price. Source: GlassnodeBitcoin’s Reserve Risk plunged into the green zone in late June, suggesting that BTC may undergo a strong bullish reversal sooner or later.Bitcoin Puell MultipleThe Puell Multiple reflects the ratio of the daily Bitcoin issuance (in U.S. dollars) and the 365-day moving average of daily issuance value.Related: Bitcoin bear market will last ‘2-3 months max’ — Interview with BTC analyst Philip SwiftHistorical data shows the Bitcoin market bottoming out when the Puell Multiple drops into the green zone defined by the 0.3–0.5 range. Conversely, the market peaks out when the ratio crosses into the 4–8 red zone.Bitcoin Puell Multiple vs. price. Source: GlassnodeAs of October, Bitcoin’s Puell Multiple is inside the green zone, suggesting a potential price reversal ahead to the upside.As Cointelegraph reported, the BTC balance on cryptocurrency exchanges has also fallen to multi-year lows at the fastest pace since June, suggesting that current price levels are becoming an important area of accumulation. The views and opinions expressed here are solely those of the author and do not necessarily reflect the views of Cointelegraph.com. Every investment and trading move involves risk, you should conduct your own research when making a decision.

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Bitcoin price hits 1-week lows as Fed rate hike rumors unsettle market

Bitcoin (BTC) dipped further below $19,000 on Oct. 21 as rumors circulated over the United States Federal Reserve.BTC/USD 1-hour candle chart (Bitstamp). Source: TradingViewFed still on track for major November rate hikeData from Cointelegraph Markets Pro and TradingView showed BTC/USD abruptly dropping before the Wall Street open, hitting lows of $18,660 on Bitstamp.A recovery took the pair higher, and it was attempting reclaim $19,000 as support at the time of writing. The action came as commentators claimed the Fed was softening its policy on rate hikes ahead of the Nov. 1–2 Federal Open Market Committee (FOMC) meeting. Citing mainstream media quotations from Fed officials, they suggested that the November hike could be the last 75-basis-point adjustment, with smaller ones following.“Some officials are more eager to calibrate their rate setting to reduce the risk of overtightening,” Nick Timiraos, chief economics correspondent at the Wall Street Journal, summarized. “But they won’t want to dramatically loosen financial conditions if and when they hike by 50 bps (instead of 75). This meeting could allow officials to get aligned on next steps.”Timiraos came in for skepticism following his words, with some accusing him of “leaking” data that would be sensitive for markets.”How silly that there’s a designated Fed leaker that can drop a timely tweet thread and instantly impact global markets,” popular commentator Stack Hodler wrote.”Imagine the havoc if someone hacked this guys account and leaked a 100bps raise. Yields rocket and we get UK pension crisis 2.0 — what a janky monetary system.”According to CME Group’s FedWatch Tool, the odds of a 75-basis-point hike next month remained almost guaranteed, with a mere 6.2% chance of 50 basis points.Target rate probabilities chart. Souce: CME GroupDollar retreats after yen seals more lowsU.S. equities saw a confident start to trading on the day, while the U.S. dollar swiftly lost ground after earlier causing fresh pain for trading partner currencies.Related: Global recession may last until near 2024 Bitcoin halving — Elon MuskThe U.S. dollar index (DXY) was below 113 at the time of writing, having spiked to near 114 hours prior.U.S. dollar index (DXY) 1-hour candle chart. Source: TradingView“It’s all about DXY and the consolidation between recent highs and D1 uptrend,” popular crypto trader and analyst Pierre explained, citing the earlier analysis.In a sign of how problematic the dollar’s rise was becoming, the Japanese yen weakened past the psychologically significant 150 mark — a 32-year low.”Unless the BOJ gives in in its bond yield suppression, the yen will continue to power lower. JPY 150 breeched,” Alasdair Macleod, the head of research for Goldmoney, forecast.USD/JPY 1-month candle chart. Source: TradingViewThe views and opinions expressed here are solely those of the author and do not necessarily reflect the views of Cointelegraph.com. Every investment and trading move involves risk, you should conduct your own research when making a decision.

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Will ETH price crash to $750? Ethereum daily active addresses plunge to 4-month lows

Ethereum has witnessed a substantial drop in its daily active address (DAA) count over the last four months, raising fears about more downside for Ether (ETH) price in the coming weeks.Stagnant Ethereum price spooks investorsThe number of Ether DAA dropped to 152,000 on Oct. 21, its lowest level since June, according to data provided by Santiment. In other words, the plunge showed fewer unique Ethereum addresses interacting with the network.Ethereum daily active address count on a daily timeframe. Source: SantimentInterestingly, the drop comes after Ether’s 80%-plus correction from its November 2021 high of around $4,850. This coincidence could mean two things: Ethereum users decided to leave the market and/or paused their interaction with the blockchain network after the market’s downturn.Santiment analysts blamed the drop on “weak hands,” sentimental traders who drop out of the market during a bearish or stagnant phase, noting:“Disinterest [is] at a high as [the Ethereum] prices have stagnated.”Notably, Ether’s price has been trading inside the $1,200-$1,400 range for over a month, accompanied by a drop in weekly trading volumes.Disinterest among investors is also visible across Ethereum-based investment funds. These funds witnessed outflows worth $3.9 million in the week ending Oct. 14, according to CoinShares’ latest weekly report. Capital flowing in and out of crypto funds. Source: CoinSharesMoreover, these outflows have reached $368.70 million on a year-to-date (YTD) timeframe.40% ETH price crash in playCrypto prices have tumbled across 2022 with other riskier assets, brought down by global central banks’ tightening policies to tame rising inflation. However, they risk bearish continuation as inflation remains elevated, prompting more rate hikes in the future.⚠️BREAKING:*MAY 2023 FED FUND FUTURES HIT 5.00% AS TRADERS PRICE IN ANOTHER RATE HIKEpic.twitter.com/7aX0tobNvt— Investing.com (@Investingcom) October 20, 2022Ethereum could suffer due to inflation-related macro risks. In other words, ETH/USD could slip below its prevailing rising trendline support, thus triggering a classic continuation setup called ascending triangle, as illustrated in the chart below.ETH/USD weekly price chart featuring ascending triangle breakdown setup. Source: TradingViewThe profit target of an ascending triangle pattern is measured after the adding the maximum distance between its horizontal trendline resistance and rising trendline support to the breakdown point. As a result, ETH’s downside target comes to be around $750, or 40% lower than current price levels.Related: Why is the crypto market down today?Conversely, a rebound from the lower trendline could have Ether eye a rally toward the upper trendline. In other words, a climb toward $1,800 in October, up 40% from current prices.The views and opinions expressed here are solely those of the author and do not necessarily reflect the views of Cointelegraph.com. Every investment and trading move involves risk, you should conduct your own research when making a decision.

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