Warren Buffett dumps $13.3B in stocks — A warning sign for Bitcoin and risk-assets?
The “Oracle of Omaha” has increased Berkshire Hathaway’s cash holdings by $2 billion in Q1, signaling his decreasing confidence in risk-assets.
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Značka: Stock Market
Goldman Sachs' bearish macro outlook puts Bitcoin at risk of crashing to $12K
A sequence of macro warnings coming out of the Goldman Sachs camp puts Bitcoin (BTC) at a risk of crashing to $12,000.Bitcoin in “bottom phase?”A team of Goldman Sachs economists led by Jan Hatzius raised their prediction for the speed of Federal Reserve benchmark rate hikes. They noted that the U.S. central bank would increase rates by 0.75% in September and 0.5% in November, up from their previous forecast of 0.5% and 0.25%, respectively.Fed’s rate-hike path has played a key role in determining Bitcoin’s price trends in 2022. The period of higher lending rates — from near zero to the 2.25-2.5% range now — has prompted investors to rotate out of riskier assets and seek shelter in safer alternatives like cash.Bitcoin has dropped by almost 60% year-to-date and is now wobbling around its psychological support of $20,000. Some analysts, including a pseudonymous trader Doctor Profit, believe BTC’s price has entered the bottom phase at current levels. However, the trader warned:”Please consider FEDs next decisions. 0.75% [rate hike] already priced in, 1% and we see blood.”BTC/USD price performance comparison between 2012-2016 and 2020-2022. Source: Doctor Profit/TradingViewOn the other hand, Bitcoin’s consistently positive correlation with the U.S. stock market, particularly the tech-heavy Nasdaq Composite, poses deeper correction risks.Sharon Bell, a strategist at Goldman Sachs, suggests the recent rallies in the stock market could be bull traps, echoing her firm’s warning that equities could crash by 26% if the Fed gets more aggressive with its rate increases to fight inflation.Interestingly, the warnings coincide with a recent rise in Bitcoin short positions held by institutional investors, according to CME data highlighted in the Commodity Futures Trading Commission’s (CFTC) weekly report.CME Bitcoin derivatives held by smart money. Source: CFTC/Ecoinometrics”Definitely a sign that some people are counting on a risk asset meltdown this fall,” noted Nick, an analyst at data resource Ecoinometrics.Options consensus see BTC at $12KBitcoin options expiring at the end of 2022 show most traders betting on the BTC price dropping all the way down to the $10-000-12,000 area.BTC options open interest by strike price. Source: CoinglassOverall, the call-put open interest ratio was 1.90 on Sep. 18, with call options for the $45,000 strike price carrying the maximum weight. But strike prices between $10,000 and $23,000 showed at least four puts for every three calls — which is perhaps a more realistic, interim evaluation of market sentiment.Related: Tired of losing money? Here are 2 reasons why retail investors always loseFrom a technical perspective, Bitcoin’s price could drop by roughly 30% to $13,500 as the price forms a convincing inverse up-and-handle pattern.BTC/USD daily price chart with inverse cup-and-handle breakdown setup. Source: TradingViewConversely, a decisive rally above the 50-day exponential moving average (50-day EMA; the red wave) near $21,250 could invalidate this bearish setup, positioning BTC for a rally toward $25,000 as its next psychological upside target.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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Why September is shaping up to be a potentially ugly month for Bitcoin price
Bitcoin (BTC) bulls should not get excited about the recovery from the June lows of $17,500 just yet as BTC heads into its riskiest month in the coming days.The psychology behind the “September effect”Historic data shows September being Bitcoin’s most worst month between 2013 and 2021, except in 2015 and 2016. At the same time, the average Bitcoin price decline in the month is a modest -6%.Bitcoin monthly returns. Source: CoinGlassInterestingly, Bitcoin’s poor track record across the previous September months coincides with similar downturns in the stock market. For instance, the average decline of the U.S. benchmark S&P 500 in September is 0.7% in the last 25 years.S&P 500 performance in August and September since 1998. Source: BloombergTraditional chart analysts have dubbed this annual drop-off as the “September effect.”Analysts argue that investors exit their market positions after returning from their summer vacations in September to lock gains, or even tax losses, ahead of the year’s close. Meanwhile, they also note that individual investors liquidate their assets in September to pay for their children’s annual school costs.Bitcoin’s correlation with the stock market has been largely positive during and after the coronavirus pandemic. Therefore, in addition to the September effect, these mirroring price trends could also increase BTC’s likelihood of dropping high in the ominous month.So expect low volume, chop & random violent moves in either direction. The point of this post isn’t to fearmonger anyone. Always a green markets somewhere. I’m sharing insight on what to expect to save newer retail traders from excruciating pain. Be patient and embrace the suck— Seven V. Matos (@Sevenvmx) August 22, 2022Fed eyes 75bps rate hikeBitcoin’s losses in 2022 were drawn from fears of the Federal Reserve’s rate hikes and the complete unwinding of its $120 billion monthly bond-buying plan to tackle rising inflation.But the market’s narrative shifted to hopes that inflation had peaked. The belief strengthened after the July U.S. consumer price index (CPI) came at 8.5% versus 9.1% in the month prior, leading to speculations that the Fed would tone down its tightening plans. It coincided with Bitcoin and S&P 500 recouping small portions of their yearly losses, as illustrated below.BTC/USD versus S&P 500 (SPX) daily price chart. Source: TradingViewBut several analysts believe that Bitcoin’s recovery could be a bull trap, a “relief rally” that will trap investors who think the market has bottomed.The psychology of a relief rally Price gets just bullish enough to fool you that this rally is the real deal. There could be an end to the pain. Then BLAMO, the market rugs you shattering your hopes. Expect this a few more times during the bear!#bitcoin #crypto— Lark Davis (@TheCryptoLark) August 22, 2022
Moreover, most Fed officials still favor raising by 75 basis points at their next meeting in September, given their pledge to bring inflation down to 2%.Related: Wen moon? Probably not soon: Why Bitcoin traders should make friends with the trendAs a result, Bitcoin and S&P 500 risk continuing their prevailing correction trend in September, eyeing more yearly lows.Bitcoin technicals hint at drop to $17.6KFrom a technical perspective, Bitcoin will decline toward $19,250 by September if it breaks out of its current “bear flag” pattern. The bearish continuation setup is illustrated in the four-hour chart below.BTC/USD four-hour candle price chart featuring “bear flag” setup. Source: TradingViewMeanwhile, on the daily chart, BTC has been breaking down from its rising wedge pattern since Aug. 19. The bearish reversal setup’s profit target comes to be near $17,600, as illustrated in the chart below. BTC/USD daily price chart featuring rising wedge breakdown setup. Source: TradingViewOverall, September looks like it could once again be a red month for Bitcoin based on technical, fundamental and macro factors.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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Worst quarter in 11 years as Bitcoin price and activity plunges
Bitcoin (BTC) has seen its worst quarterly loss in 11 years with price and activity on the blockchain both plunging over the last three months. The second quarter ending June 30 saw Bitcoin’s price fall from around $45,000 at the start of the quarter to trade at $19,884 before midnight ET on June 30 according to CoinGecko, representing a 56.2% loss according to crypto analytics platform Coinglass. It’s the steepest price fall since the third quarter of 2011, when BTC fell from $15.40 to $5.03, a loss of over 67% and worse than the bear markets of 2014 and 2018, when Bitcoin’s price slumped 39.7% and 49.7% in their worst quarters respectively. The past quarter saw eight weekly red candles in a row for Bitcoin and the month of June saw a draw down of over 37%, the heaviest monthly losses since September 2011 which saw the price fall more thaner 38.5% in the month.There are also signs that investors are keeping their powder dry — or they’ve run out of funds — during the bear. Activity on the blockchain is taking a dive with Bitcoin’s spot volume — the total amount of coins transacting on the blockchain — dropped over 58.5% in just nine days according to a June 29 analysis from Arcane Research.But its not just crypto markets in turmoil. Thanks to sky high inflation and rising interest rates the traditional stock market has also taken a pounding, with some calling it the “worst quarter ever” for stocks.Charlie Bilello, CEO of Financial advisory firm Compound Capital Advisors shared a chart on Twitter showing the S&P 500 index was down 20.6% in the first half of 2022, the worst start to the year for the index since 1962, when price return was -26.5%. The S&P was down 20.6% in the first half of 2022, the worst start to a year for the index since 1962. $SPX pic.twitter.com/OMcX7yfP5o— Charlie Bilello (@charliebilello) June 30, 2022The difficult economic conditions have seen a swath of staff layoffs from crypto companies including Gemini, Crypto.com and BlockFi. Most recently the crypto and stock trading platform Bitpanda cut its employee count by approximately 277 full-time and part-time employees.Related: 80,000 Bitcoin millionaires wiped out in the great crypto crash of 2022Crypto is closely tied to the wider tech sector and the tech heavy NASDAQ composite index has fell by almost 22.5% over the second quarter.A “Tech Layoff Tracker” from technology jobs board TrueUp reveals over 26,000 tech employees across 200 company wide cutbacks just in June alone.Tech Layoff Tracker. Source: TrueUpOver the quarter, 307 layoffs impacted over 52,000 staff with one of the largest coming from Elon Musk’s Tesla, with 3,500 impacted. Crypto exchange Coinbase features twice, firstly for its June 2 hiring freeze and job offer rescission of nearly 350 people and second for its June 14 staff layoff, affecting 1,100 individuals.
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Bitcoin plunges as Putin announces 'special military operation' in Ukraine
Global crypto and stock markets plunged after Russian President Vladimir Putin announced on a national broadcast that his army would conduct a “special military operation” in Ukraine. As the sun began to rise in Ukraine, the Russian army launched missiles around several areas of the country, including the capital of Kiev and the city of Kharkiv.The Bitcoin (BTC) price has dropped 7.26% to $35,000 today according to Cointelegraph Markets Pro. Ethereum (ETH) dropped 9.48% and Ripple (XRP) dropped 9.24% today. The overall crypto market cap has dropped 8.25% to $1.58 trillion.Volatility is spiking on other major global financial indexes as the S&P 500 (GSPC) and the Dow Jones Industrial Average (DJI) are down nearly 2% in the last hour. Ethereum founder Vitalik Buterin, who lived the first six years of his life in Kolomna in Russia, tweeted at about 4am UTC in Russian that (according to a rough translation) he is:“Very upset by Putin’s decision to abandon the possibility of a peaceful solution to the dispute with Ukraine and go to war instead. This is a crime against the Ukrainian and Russian people. I want to wish everyone security, although I know that there will be no security. Glory to Ukraine.” He added later in English: “Reminder: Ethereum is neutral, but I am not.”Очень расстроен решением Путина отказаться от возможности мирного решения спора с Украиной и вместо этого начать войну. Это преступление против украинского и русского народа.Хочу желать всем безопасности, хотя знаю, что не какой безопасности не будет.Слава Украине.— vitalik.eth (@VitalikButerin) February 24, 2022Advisor to Atlas DEX Altcoin Sherpa tweeted that the focus should be on the people involved and not the effect on markets. Thoughts are with all of those in Ukraine tonight. We sometimes forget that there are real people living in these situations and it’s not all about the market. — Altcoin Sherpa (@AltcoinSherpa) February 24, 2022
Analyst Will Clemente, Lead Insights Analyst at Bitcoin mining company BlockWare, tweeted:Thoughts and prayers are with everyone in Ukraine.— Will Clemente (@WClementeIII) February 24, 2022
The price of oil has spiked to $99.50 in response to Russia’s actions. Podcast host and crypto investor Anthony “Pomp” Pompliano pointed out that since Russia is the world’s third largest producer of oil, “The impact of this situation is going to be felt globally.” Russia is the third largest oil producer in the world.Oil just hit $100 a barrel. The impact of this situation is going to be felt globally.— Pomp (@APompliano) February 24, 2022
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Ethereum eyes $3.5K as ETH price reclaims pandemic-era support with 40% rebound
Ethereum’s native token Ether (ETH) looks poised to hit $3,500 in the coming sessions as it reclaimed a historically strong support level on Feb. 5.Ethereum price back above key trendlineETH price rising above its 50-week exponential moving average (50-week EMA; the red wave in the chart below) means the price also inched above $3,000, a psychological support level that may serve as the ground for Ether’s next leg up.ETH/USD weekly price chart. Source: TradingViewThe 50-week EMA was instrumental in maintaining Ether’s bullish bias across 2020 and 2021. For instance, it served as a strong accumulation zone during the market correction in the second and third quarters last year, pushing ETH price from around $1,700 to as high as $4,951 (data from Binance).As a result, reclaiming the 50-week EMA as support has opened up the possibility of additional upside moves toward the next resistance target near the 20-week EMA (the green wave in the chart above), which comes to be around $3,500.Meanwhile, a decisive break above $3,500 could have ETH/USD test a horizontal resistance trendline that constitutes an ascending triangle pattern. Such a move would put the Ethereum token en route to its previous record high near $5,000. ETH/USD weekly price chart. Source: TradingViewJobs report could play spoilersThe latest buying in the Ethereum market appeared as strong earnings from Amazon.com Inc. boosted investors’ confidence in riskier assets, including technology stocks and Bitcoin (BTC).ETH/USD versus Nasdaq Composite weekly price chart. Source: TradingViewEther rallied by more than 11% after the earnings release on Friday. The price jump also boosted its week-to-date profits higher to nearly 16%, its best week since August 2021.However, the rally appeared in conflict with the latest nonfarm payroll (NFP) data, also released on Friday. Despite fears that Omicron would curtail business activity, the U.S. companies added 467,000 jobs in Jan. 2022, beating market expectations by a wide margin.U.S. nonfarm payroll data. Source: Bureau of Labor Statistics, BloombergThe NFP report underscored how difficult it is for the Federal Reserve to forecast interim changes in the economy. Nonetheless, it also ensured that the U.S. central bank would go ahead with its plans to raise short-term benchmark rates at its March 15-16 meeting.In a press conference last month, Fed chair Jerome Powell said they would continue raising interest rates after the March hike, faster than they did during the past decade if the labor market looks stronger and inflation remains above their 2% target. Related: US Federal Reserve is making some analysts bullish on Bitcoin againThe news prompted a selloff across riskier assets, with data showing that cryptocurrency investment products processed outflows worth $61 million every week in January 2022.”It’s important to note that there’s still significant investor demand for digital asset investment products, but institutions seemingly reacted to the Fed by offloading their positions,” noted Michael Sonnenshein, chief executive of Grayscale Investments.Crypto investment vehicles performance in Jan. 2022. Source: CryptoCompare, FTThe pullback scenarioThe bearish scenario with the price below the 50-week EMA could have ETH test its ascending channel’s lower trendline near $2,500 as support. Meanwhile, a decisive close below the trendline would bring Ether’s Fibonacci retracement levels closer, as shown in the chart below.ETH/USD weekly price chart featuring Fib retracement levels. Source: TradingViewIf the bearish scenario unfolds, the possibility of the ETH/USD pair dropping below $2,000 cannot be ruled out.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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BTCS stock jumps 44% after announcing first-ever dividend payable in Bitcoin
On Jan. 5, Nasdaq Composite logged its biggest daily loss since February last year. But for one of its listed companies, the day turned out to be extremely bullish.Blockchain stock soarsThe share value of BTCS Inc. (BTCS), a blockchain technology company, surged nearly 44% to $4.36 at the New York closing bell, thus becoming the third-best performer on Nasdaq after Lixte Biotechnology (LIXT) and Mainz Biomed BV (MYNZ).Top Nasdaq performers as of Jan. 5, 2022’s close. Source: TheStockMarketWatch.com In contrast, Nasdaq plunged 3.3% on January 6, its losses driven primarily by the release of the minutes of the Federal Open Market Committee (FOMC) meeting in mid-December last year. In detail, the minutes revealed the Federal Reserve officials’ intention to raise interest rates faster than anticipated. The Fed scare did not impact BTCS, for it arrived on the same day the company announced “Bividend,” the first-ever dividend payable in Bitcoin (BTC) by a Nasdaq-listed company. Excerpts from a press release published on Jan. 5 reveal that:”BTCS intends to pay $0.05 per share in Bitcoin, based on the Bitcoin price on the ex-dividend date. Investors who do not elect to receive the Bividend in Bitcoin will receive a cash dividend of $0.05.”Investors/traders took the announcement as a cue to raise their bids for the BTCS stock, insofar that its value per share jumped to $5.05 on Jan. 5, a three-week high. However, the stock price later fell by more than 13.50% amid profit-taking sentiment but overall closed the day in profits.The BTCS correction continues BTCS dropped by another 8% to $4.01 per share following the New York opening bell on Jan. 6, this time in sync with Nasdaq, which fell nearly 1%.BTCS daily price chart. Source: TradingViewThe selloff appeared to have accelerated after BTCS tested its 50-day exponential moving average (50-day EMA; the velvet wave in the chart above) near $5.12 as resistance. In a similar fashion, the 20-day EMA (the green wave) attempted to limit BTCS’s downside momentum by acting as support.Related: Bitcoin price drops to $43.7K after Fed minutes re-confirm plans to hike ratesAs BTCS looked rangebound between the two critical moving averages, some financial experts warned investors to not invest in the stock based on hype surrounding its Bitcoin dividend launch. That included Ivory Johnson, founder of Delancey Wealth Management. The chartered financial consultant recommended that investors buy Bitcoin directly if they want to buy it instead of seeking its exposure via BTCS.”When buying any stock, your decision should be based on the fundamentals of the company itself,” he told CNBC.Douglas Boneparth, president of Bone Fide Wealth, called Bividend a “really neat bridge” for institutional investors who want to own Bitcoin. Nonetheless, he noted that BTCS’s offering is more a feature and less a product, underscoring that investors should focus on other factors before buying BTCS shares, such as the company’s future cash flows. Currently, BTCS is trading nearly 85% lower than its all-time high of $32.40, established earlier in Jan. 2021.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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