Here is Why Bitcoin Can’t Sustain $10,000 Level
Since Bitcoin, the flagship cryptocurrency broke through a globally anticipated $10,000 resistance level on May 8, 2020, it has failed to sustain that level despite Bitcoin Halving of May 12.
Even with the reports of Whales accumulating substantial bitcoins and a recent report by Santiment that the number of wallets holding more than 100 BTC has been on the rise in the past week, the dominant cryptocurrency remained deviant.
In May, Investors King perused why the digital currency may not attract enough buyers to sustain the expected bullish run.
Here is Why Bitcoin continues to disappoint even with the projected supply short-fall that normally trailed Bitcoin Halving.
Regardless of what Bitcoin traders and investors think, the demand for the coin has always been bolstered by retail traders and investors, among which it is the most popular.
The activities of these retail traders and investors are presently limited given the current price of a unit Bitcoin. Meaning, even though the Bitcoin supply has dropped following halving, the number of miners exchanging their rewards to fund operation and the available Bitcoin within the system is more than the present demand.
Therefore, while the ongoing acquisition by Whales will help establish strong support for the coin above $9000, it won’t be enough to force a bullish run and sustain it above $10,519 resistance levels until institutional investors or outside fund flow into the system.
However, with the surge in global uncertainty, the expected fund may not flow into the system in the near-term as predicted in our analysis in May. Also, with the renewed interest in US assets following the surprise rebound in the job market and the 12 percent of GDP worth of stimulus being pumped into the US economy, institutional investors may not look the way of Bitcoin or the entire crypto market uncertain global risk normalise.
On the downside, a break of $8,730 support level will open up $8,231 and turn the momentum bearish as shown above.
Bitcoin Breaks $40,000 Price Levels Amidst Optimism and Regulatory Developments
Bitcoin on Monday broke $40,000 resistance levels following a 2.9% surge in price to $40,867 per coin.
The world’s largest digital currency has now appreciated by 146% in 2023 as more institutional investors continue to increase their investments in the unregulated cryptocurrency space.
Investors are exhibiting growing confidence in the Federal Reserve’s apparent conclusion of rate hikes amid a cooling inflation backdrop.
This shift in sentiment has redirected attention to the anticipated extent of rate cuts in the coming year, prompting a rally across global markets.
The cryptocurrency industry is currently in anticipation as regulatory decisions, particularly regarding applications for the first US spot Bitcoin exchange-traded funds (ETFs), hang in the balance.
Bloomberg Intelligence anticipates the approval of a batch of these ETFs by the Securities & Exchange Commission (SEC) by January.
“Bitcoin continues to be supported by optimism around SEC approval for an ETF and Fed rate cuts in 2024,” noted Tony Sycamore, a market analyst at IG Australia Pty.
Technical analysis points to $42,330 as the next significant level to monitor in Bitcoin’s upward trajectory.
Despite recent crackdowns in the industry, including legal actions against figures like Sam Bankman-Fried and Binance, Bitcoin has proven resilient.
Optimists argue that these regulatory measures, alongside the potential approval of ETFs, signify the maturation of the crypto industry and the prospect of a broader investor base.
According to Su Yen Chia, co-founder of the Asia Crypto Alliance, recent enforcement actions “have instilled confidence among investors,” noting that Bitcoin is aligning with momentum in traditional finance as expectations of Fed rate hikes fade.
MicroStrategy Chairman Michael Saylor Bolsters Bitcoin Bet with $593.3 Million Purchase
Michael Saylor, chairman and co-founder of MicroStrategy Inc., has intensified his commitment to Bitcoin with a substantial investment of $593.3 million, expanding the enterprise-software company’s cryptocurrency holdings.
In a filing on Thursday, MicroStrategy revealed the acquisition of 16,130 Bitcoins in November, elevating its total holdings to approximately $6.5 billion.
This move represents Saylor’s most significant purchase since the acquisition of 19,452 Bitcoins for just over $1 billion in February 2021.
Saylor initiated MicroStrategy’s Bitcoin investments in 2020 and has accelerated these efforts throughout 2023, aligning the company with the cryptocurrency’s resurgence after a challenging period marked by rising interest rates and notable crypto-related incidents.
Stepping down from the CEO position a year ago, Saylor emphasized his focus on advancing MicroStrategy’s dual strategy with a primary emphasis on Bitcoin.
MicroStrategy’s stock has witnessed a remarkable 250% surge this year, surpassing Bitcoin’s 125% rally.
The optimism stems from the anticipation of potential approval for a Bitcoin exchange-traded fund (ETF) in the United States.
Contrary to concerns that an ETF approval might diminish demand for MicroStrategy’s stock, analysts like Matthew J. Maley, Chief Market Strategist at Miller Tabak + Co., suggest that an ETF could enhance interest in the asset class without significant cannibalization.
In conjunction with its Bitcoin investment, MicroStrategy entered into an agreement with Cowen and Company, Canaccord Genuity, and BTIG to offer up to $750 million of common stock.
The initial announcement of this stock offering in August outlined intentions to utilize the proceeds for Bitcoin purchases, working capital, and debt repurchases.
Coinbase’s November Surge Sparks Investor Enthusiasm Amid Crypto Volatility
Coinbase Global Inc. has witnessed a 62% surge in its shares this month, capturing the attention of investors amidst the current volatility in the cryptocurrency landscape.
While FTX’s Sam Bankman-Fried faces a fraud conviction, and Binance navigates regulatory scrutiny, traders are flocking to Coinbase, betting on increased business, especially if authorities greenlight Bitcoin-focused exchange-traded funds (ETFs).
This surge, adding $12 billion to Coinbase’s market value in November alone, marks a significant turnaround for the largest US crypto exchange.
The stock has more than tripled in 2023, defying the broader market trends and eclipsing the average analyst price target of approximately $84.
“Coinbase is in a better position today than really any other point as a public company,” notes Needham & Co. analyst John Todaro.
He sees 2022 and 2023 as pivotal years, weeding out weaker players in the industry. “Those who survived are going to come out of that stronger. And Coinbase is one that survived.”
The optimism surrounding Coinbase is fueled by regulatory clarity and the potential approval of US-listed Bitcoin ETFs, expected as early as January, according to Bloomberg Intelligence. Bitcoin’s nearly 130% surge in 2023 adds to this positive outlook.
Investors who bet against Coinbase shares have faced losses of $1.3 billion in the past 30 days, as the company overcame losses reported for seven consecutive quarters.
While competitors face legal challenges, the resolution of Binance’s dispute with the US Department of Justice is seen as a positive for Coinbase.
“A healthy development for the industry is positive for Coinbase, and an abrupt exit of large players is not,” highlights Oppenheimer & Co. analyst Owen Lau. The settlement with Binance is expected to uphold higher compliance standards for crypto exchanges.
Despite this surge, maintaining momentum remains uncertain, with over 40% of Wall Street analysts holding a hold-equivalent rating for Coinbase.
Notably, Cathie Wood’s Ark Investment Management LLC, although reducing its Coinbase holdings, remains the fourth-largest shareholder, emphasizing a cautiously optimistic stance in the crypto space.
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