Category: Markets

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Australia Bitcoin Economics Ethereum Gold Markets Worldwide

‘Rich Dad’ Author Robert Kiyosaki Warns of Global Financial Crash Looming

Author Robert Kiyosaki has been outspoken on Twitter, expressing his take on the current economic situation, America’s leadership, and a fear that the world is headed for “the biggest crash in world history”. He urges citizens to buy Bitcoin, Ethereum, gold, and silver.

Concerns over US spending and approval of a monumental stimulus package are driving fear and uncertainty over the value of a dollar. Inflation is looming as the US continues to enter money into circulation. Bitcoin and other cryptos are gaining value, while the US Dollar (USD) continues to lose.

In a video posted to YouTube, the author of Rich Dad, Poor Dad expresses his views on the current world economy, his disapproval of US monetary policy, and the benefits of crypto.

US Dollar is Losing Its Purchasing Power – Buy Bitcoin

Since 1900, the USD has lost about 97 percent of its purchasing power. This means that whatever used to cost US$1 now costs US$31 – keep in mind that inflation affects this estimate.  

The US recently approved a stimulus package to the value of US$1.9 trillion, which suggests that the purchasing power of the USD against bitcoin may decline even further. When comparing the USD price against the Satoshi, which is 100 millionths of a bitcoin, it appears that since the inception of BTC the USD is losing up to 99 percent of its purchasing value each year. The US$1,400 stimulus cheque that the US Government is handing out to every citizen is likely to continue this trend.

Australia Is Turning to Crypto

The worrying US economic situation is being observed all over the world, and Australia is feeling it too. Many Australians are turning to crypto as wages fail to keep up with the consumer price index (CPI), the cost of living continues to increase, and job insecurity is at an all-time high.

Figures from Australian Bureau of Statistics indicate that the CPI has been rising consistently over the past 10 years.

The Australian CPI quarterly change. Source: ABS

The number of Australians turning to crypto to become financially free is on the rise, keeping pace with the demand for workers to be paid in crypto and millennials turning away from traditional avenues of investing, such as property, instead opting for crypto.

Take Note from Venezuela

Venezuela is a prime example of what happens when hyperinflation sets in. The Latin American country’s currency, the bolívar, is the world’s weakest and literally no longer worth the paper it is printed on. Creative artists have instead started turning the notes into bags and wallets, which they can sell for more than the currency is worth.

Venezuela is now ranked third in terms of bitcoin adoption and joins many Latin American countries to take the crypto route. Extremely high levels of inflation are forcing nations to turn to crypto as their native currencies continue to lose purchasing power.

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Bitcoin Cardano Crypto News Ethereum Markets Ripple Solana Trading

$2.5 Billion Longs Liquidated As Crypto Market Sees Sudden Drop

Over the past two days, more than US$2.5 billion longs have been liquidated as the crypto market sees yet another drop.

Traders woke up to a rough Monday as the crypto market saw up to double-digit percentage losses across the board. The sudden drop saw Solana, Cardano and Ripple (XRP) drop millions from their market caps, and Bitcoin (BTC) and Ethereum (ETH) plunge 10.4 and 14.7 percent respectively over the past seven days, according to data from CoinGecko.

More than $1B got liquidated in this 24 hours, therefore making total liquidation in 2 days more than $2.5B! from CryptoCurrency

What are Liquidations?

Liquidations occur when traders borrow excess capital from exchanges or brokerages to place bigger bets on the assets they trade, known as margin trading or trading futures.

Traders pay a fixed fee for borrowing while exchanges close out these positions at a predetermined price. If a trader’s collateral is equal to the loss on that position, a trade then becomes ‘liquidated’.

Of all the traders liquidated in the past few days, a shocking 91 percent of them were in the ‘long’ market. Being in the long market means traders had put on positions betting on higher asset prices.

According to data from Bybt, 136,690 traders were liquidated in the past 24 hours, while the total value of liquidations during that period reached over US$635 million.

Total liquidations observed. Source: Bybt

Investors REKT

Liquidations of US$236 million BTC and US$216 million ETH were recorded, while large-cap altcoins such as Solana (SOL) and XRP saw liquidations worth US$26 million and US$17 million respectively in that 24-hour period.

The largest single liquidation order took place on Bitfinex-ETH, to the value of US$14.52 million.

The dip has investors confused and fuming as the market drop comes only days after BTC had reached a “Golden Cross”. One Reddit user aptly described his dismay at the situation:

Today’s dip is proof that TA is useless. “Golden Cross” my ass from CryptoCurrency

The golden cross is a chart pattern that is generally seen as an indicator of bullish price action to come, but this is not always the case. Given the market is more mature, diminishing returns ought to be expected.

Investors should approach with caution, and not rely on a single indicator to guide them. Many factors influence the price, none of which is predictable.

Just a ‘Bit’ Too Soon

September is proving itself to be a worthy opponent to those finding their way in the crypto market.

Investors are still reeling from the previous round of liquidations on September 7, in which over US$3.7 billion worth of cryptos were liquidated after BTC and other major altcoins tanked.

During that period, a total of 375,824 traders were forced out of the market after becoming overleveraged as sudden crypto price drops were experienced.

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Bitcoin Crypto News Market Analysis Markets Trading

Bitcoin Price Hits Golden Cross, Bull Run Imminent?

After showing signs last month, the holy grail of technical analysis is finally upon us – bitcoin has reached a “Golden Cross”, which typically is viewed as an indicator of bullish price action on the horizon.

What is a Golden Cross?

In the world of technical analysis (TA), the golden cross is a chart pattern where a shorter-term moving average (MA) crosses above a longer-term moving average. This is typically considered to be a bullish signal.

BTC golden cross. Source: Reddit

When considering a golden cross, the most commonly used moving averages are the 50- and 200-day periods. Once the crossover happens, the longer-term moving average is typically considered to be a strong area of support.

The opposite of a golden cross is a death cross, where a shorter-term moving average crosses below a longer-term moving average. This is typically considered to be a bearish signal.

What Happened with Previous Golden Crosses?

Since inception, there have been six Golden Crosses and in four cases it has resulted in massive price action. In the past two instances, it has resulted in values increasing by five and three times respectively.

Let’s examine how bitcoin has fared in each of the previous six Golden Crosses.

May 2020: + 600 percent

February 2020: +5 percent

April 2019: +150 percent

November 2015: +7,000 percent

July 2014: +0.5 percent

February 2012: +21,000 percent

What’s the TLDR?

It’s clear that in general, golden crosses tend to result in rather bullish price action, but not always. Given that the market is more mature, diminishing returns ought to be expected.

Importantly, one shouldn’t overly rely on any single indicator – a multiplicity of variables have an impact on the price, none of which is predictable. Experienced investors know this and are no doubt taking it into account going forward. Just recently, bitcoin looked unstoppable as it crossed US$50,000, before declining sharply shortly thereafter to US$44,500.

If you’re interested in upping your technical analysis game, be sure to consult Crypto News Australia‘s guide to bear and bull markets.

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Crypto Exchange Markets Tether

Crypto Flash Crash as Tether Prints $3 Billion Worth of USDT

The crypto market experienced one of its most volatile days this week since the China miner debacle, with whales taking part in a major sell-off that caused a downward spiral in the market and Tether needing to print over $3 billion in USDT.

A Sell-Off Domino Effect

Ever heard of “buy the rumour, sell the news”? As Bitcoin (BTC) inched towards its all-time high, news of El Salvador’s world-first to make bitcoin legal tender was on many crypto enthusiasts’ minds.

When the day finally came on September 7, the price started falling from above US$52,500 to below US$44,000 the following day. It dipped, but the dip was exacerbated by over-leveraged positions, since the market was in a very bullish state. Trader and analyst Scott Melker blamed large-volume traders for bitcoin’s plunge:

When the price started to dip, it was enough to trigger liquidations of those who were long on Bitcoin. In essence, there was a domino effect where the drop prompted more people to sell, in turn triggering more liquidations, which led to more people selling and so on. 

BTC/USD 4-hour candle chart. Source: TradingView

According to data from futures trading platform Bybt, US$1.5 billion in bitcoin had been liquidated in the 24 hours of the dip, while US$900 million in Ethereum suffered the same fate. In a previous major dip, leveraged traders lost nearly US$10 billion.

Overall, crypto derivatives saw a 32 percent haircut in [open interest] following this correction.

Vetle Lunde, analyst, Arcane Research

Before the dump, open interest in bitcoin futures was trending upward to its highest level since May. When looking at the altcoins, traders also reckoned the price would continue to rise.

A very hefty and bullish appetite for altcoins in the last month might have contributed to exaggerating the chaos in the market.

Vetle Lunde, analyst, Arcane Research

According to CoinGecko, both Bitcoin (BTC) and Ethereum (ETH) were hit with 11 percent and 15 percent losses respectively, with a 13 percent drop in the overall crypto market cap in 24 hours. The plunge wiped billions off the overall market, which is worth about US$2.35 trillion.

“Horrible chart damage being done in BTC and the rest of the crypto market,” tweeted crypto analyst and author Glen Goodman.

Tether Printing $3 Billion for Dip Cashouts

The combined value of the crypto market has dropped from above US$2.4 trillion to $2.1 trillion, with bitcoin itself now falling below a US$1 trillion market cap, meaning that a lot of cryptocurrencies left the market and were converted to stablecoins or fiat.

According to Whale Alert, the Tether treasury minted US$1 billion multiple times. This is usually caused by increased demand for the stablecoin, which can happen directly with Tether or indirectly through people acquiring more Tether. This leads to those directly at the Tether window getting freshly minted supply to satisfy demand.

The current number of Tether token-holders can be around 882k, not taking into account that one person might have many wallets and that it’s used as a trading pair for many cryptocurrencies.

Tether had previously been scrutinised for having a bit of a shady reserve, but it has recently been clarified. At the moment, Tether is the fifth-largest cryptocurrency by market cap due to its wide usage.

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DeFi Markets

New WallStreetBets Defi App Aims to ‘Take Over’ Traditional Financial Markets

Popular subreddit WallStreetBets (WSB) aims to take over traditional finance with a new application called WSB DApp, a protocol that allows traders to swap synthetic stocks backed by blockchain technology. 

‘DeFi’ing Wall Street’

The r/WallStreetBet group claims it has created a decentralised platform that solves the “fees and market manipulation problem” coming from traditional financial institutions. The protocol is a direct market that allows borderless trading, open 24/7.

Landing page of WSB DApp.

Synthetic Stocks and $WSB

Users can trade synthetic stocks backed by blockchain technology. Synthetic tokens are an options strategy designed to emulate a long stock position in the stock market.

The protocol also has its own native token, $WSB, of which there are 1 billion in circulation. WSB is priced at 0.03 with over US$1 million worth of WSB exchanged in the past 24 hours.

The token has been performing pretty well in the market. One-month metrics show WSB is up 58 percent to date, and its aggregate WSB market valuation hit over US$30 million last weekend.

Jaime Rogozinski and WallStreetBet

According to a recent video on Twitter posted by @wallstreetbets, the project is led by Jaime Rogozinski , a Mexican writer and founder of WallStreetBets, and author of WallStreetBets: How Boomers Made the World’s Biggest Casino for Millennials.

Video posted by WallStreetBets. Source: Twitter.com

The subreddit group has become one of the largest communities in the retail trading world, featured in several important outlets including CNN, Forbes and Fortune, especially after the community joined forces to purchase massive amounts of GME stocks and hold them in an attempt to drive the stock price higher and defy hedge funds, causing worldwide controversy.

The GME hype might be over but now WSB wants to bring a more democratic space, rooted in the core concepts of decentralised finance, concepts that seemed flipped over when last week the SEC quietly signed a deal to spy on crypto/DeFi transactions with Californian analytics firm AnChain.AI.

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Bitcoin Cardano Crypto News Ethereum Markets

Crypto Extends Recent Gains, Market Rebounds Back to $2 Trillion

It’s good news for the crypto community as the market recovers positively after months of constant price corrections, once again crossing the US$2 trillion threshold.

Ethereum Up 18%, ADA Surges 40%

On August 11, the overall crypto market retook its $2 trillion peak following months of massive price corrections that wiped $1 trillion from the market. Bitcoin and most cryptocurrencies were on the green, especially Ethereum, which has been up over 18 percent following the activation of the London hard fork.

Throughout last week, BTC surged 14%, currently priced at US $47,239 as per data from Coinmarketcap. BNB is up 17%, Ripple by 39%, and the one that surprised everyone is ADA, which performed extremely well in the market – up by 40% – after Cardano founder Charles Hoskinson announced that the Alonzo hard fork is imminent. DOGE almost took the protagonism of ADA by surging 39% in the market.

Market Thrives Despite Regulatory Hurdles

The crypto market is ignoring global regulatory uncertainties. Many thought the recent bipartisan infrastructure bill imposed by American authorities would tumble the market, yet it didn’t have as strong an effect as expected. 

As Crypto News Australia has reported, the battle for crypto amendments in the US sparked a heated discussion between politicians and industry leaders on Twitter, many calling for proper, revised amendments to change the bill’s outdated and poorly written language. There might be a light at the end of the tunnel with Democrat Senator Anna Eshoo urging House of Representatives Speaker Nancy Pelosi to amend some of the flaws in that bill.

Despite the regulatory uncertainty, bulls are taking the upper hand, and the Bitcoin Fear & Greed Index is finally showing extreme greed after three months. We could also have a new wave of SMSFs approaching the market, as happened on April 8 this year.

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Crypto News Dogecoin Markets

Dogecoin Up 40% in Past Week Amid Announcement of Chainalysis Coverage

Popular meme cryptocurrency Dogecoin (DOGE) is making headlines again. In about seven days, the cryptocurrency recorded up to a 40 percent increase in value and significant growth in trading volume, following an announcement that Chainalysis will start providing insight on crypto.

Dogecoin Records US$199 Billion in Transactions

As the crypto market continued to bounce back from the mid-April crash, Dogecoin recorded over US$199 billion worth of transactions, making it the fourth-largest cryptocurrency by 30-day trading volume. 

Even with those numbers, the current price of Dogecoin is 62 percent below its all-time high of US$0.73 on CoinMarketCap. However, it’s worth noting that the cryptocurrency has already risen by 29 percent since the start of August at today’s price of US$0.2745, following the announcement from Chainalysis.

  • Dogecoin price chart. Source: CoinMarketCap

Dogecoin investors are generally triggered by bullish development, which usually incites enough buying momentum to push the price upwards, as seen in the case of its Coinbase listing and tweets from Elon Musk. 

Chainalysis to Provide DOGE Coverage

Going forward, the blockchain data and analysis company will provide insight on how Dogecoin is used, alongside other popular cryptocurrencies. According to Chainalysis, the data will help users and organisations to stay compliant.

As Dogecoin has grown in popularity, it has become susceptible to malicious actors. There have been reported cases where scammers ran fake Dogecoin giveaways, making more than US$40,000. In some cases, Musk was impersonated in 10x pay-back crypto scams.

Dogecoin has become the most frequently requested new coin for Chainalysis to cover from our customers in both the public and private sectors. We’re excited to answer their calls today.

Chainalysis
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Bitcoin Crypto News Market Analysis Markets Trading

Bitcoin Bulls Say Golden Cross is ‘Imminent’

The bitcoin golden cross is a highly anticipated technical indicator that typical foreshadows bullish price action. Bitcoin analysts, investors and traders are looking closely at current price movements which at present suggest a strong push is imminent in the coming weeks.

What is the Golden Cross?

According to Binance Academy, a golden cross is a chart pattern where a shorter-term moving average (MA) crosses above a longer-term moving average. This is typically considered to be a bullish signal.

A golden cross occurs in three phases:

  1. There’s a downtrend where the shorter-term MA is below the longer-term MA.
  2. The market reverses and the shorter-term MA crosses over the longer-term MA.
  3. A continued uptrend starts and the shorter-term MA stays above the longer-term MA.

When considering a golden cross, the most commonly used moving averages are the 50- and 200-day periods. Once the crossover happens, the longer-term moving average is typically considered to be a strong area of support.

Golden cross example. Source: Binance Academy

The opposite of a golden cross is a death cross, where a shorter-term moving average crosses below a longer-term moving average. This is typically considered to be a bearish signal.

Potential Signs of Bitcoin Golden Cross

The chart below illustrates the potential intersection between the blue line (50-day MA) and black line (200-day MA), signalling a potential golden cross. Notice the inverse (death cross) that occurred towards the end of June highlighting a market crippled by fear.

Signs of golden cross. Source: Rekt Capital

Analysts suggest that a golden cross so soon after a death cross would create a “face-melting pump” reminiscent of the 2013 and 2017 bull cycles.

Rekt Capital, one of the more active technical analysts on Twitter, suggests it may well happen within days.

Will US$50,000 Prove to Be a Strong Resistance Level?

Despite the bullish talk of golden crosses and positive on-chain metrics, others have been more circumspect suggesting that bitcoin first needs to overcome the psychological barrier of US$50,000.

At this point, momentum appears to have shifted towards the bulls. Well-known podcaster Scott Melker seems to think so too and offers some interesting insights into the current market dynamics.

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Australia Investing Markets Regulation

What is Delaying the Aussie Crypto ETF?

One of the final pieces of the cryptocurrency ETF puzzle is deciding how the arrangements with custodians will work. To that end, the Australian Securities and Investments Commission (ASIC) is in the final stages of consultation to decide if a crypto ETF will be traded locally.

This year, ASIC is expected to finalise its market consultation on the potential for digital currency ETFs for the Australian market. While it is still in discussion with relevant stakeholders, a few more creases need to be ironed out.

However, earlier in the year, it was reported that the Aussie crypto ETF could launch on the ASX in 2021.

Australian Securities and Investments Commission (ASIC).

Issues Still to be Finalised

Custodianship is an issue. According to Caroline Bowler, CEO of digital currency exchange BTC Markets, “The trend is for ETFs to physically hold the underlying digital currencies they reference. This raises the question of how custody of these assets would be managed.”

As it stands, there isn’t a suitable onshore custodial solution. So that’s something that needs to be worked out with custodial providers.

Caroline Bowler, BTC Markets

The current lack of relevant regulation and standards for custodians and exchanges is casting a shadow of uncertainty. Standards still need to be set and a regulatory body chosen to ensure the protection of investors.

The composition of crypto ETFs and their benchmark reference are also issues to be considered before local crypto ETFs can be traded.

But as ASIC recently noted as part of its consultation on crypto-asset-based ETPs and other investment products, there is real risk of harm to consumers if these products are not developed and operated properly, given the unique features and risks associated with them.

Alex Vynokur, CEO, BetaShares

It remains to be decided which method of ETF will work the best for the market, considering the needs of investors and their security and safety. With many Australian millennials planning on retiring at 50 with the help of crypto and ETFs, it’s obvious that there is a demand.

Different Kinds of ETFs

Depending on which products investors prefer, both active and passively managed ETFs could be traded.

A passive ETF is an investment that replicates the performance of the asset it references, and the portfolio is updated regularly (generally quarterly) to reflect changes in the reference index – for instance, the S&P/ASX 200.

On the other hand, actively managed ETFs invest in assets that are bought and sold by a portfolio manager on a more dynamic basis, depending on the manager’s view of the market and investment thesis.

Another model might be for an ETF to hold not just digital currencies but also companies whose products are built on distributed ledger technology, digital currency exchanges, and other listed and unlisted firms that are exposed to blockchain through their operations. This could be similar to a basket investment like ‘FAANG’, where investors can invest in a basket of industry leaders.

To successfully launch a crypto ETF in Australia, an issuer will need to show evidence that the underlying crypto asset has robust liquidity, transparency and price discovery, which we believe will only apply to a small subset of crypto assets.

Alex Vynokur, BetaShares

ETFs Provide Safety for Investors

Some of the risks associated with investing in the digital asset class may be mitigated by accessing digital currencies through an ETF, traded through a highly regulated environment such as a national stock market.

Fund managers who seek to offer such investment products should be required to demonstrate a track record of risk management and organisational competency in managing retail investment products.

Alex Vynokur, BetaShares
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Bitcoin Crypto News Market Analysis Markets Trading

BTC Breaks Over $60,000 AUD Triggering Key Bullish Indicator

The evidence is mounting that bitcoin is likely to continue its recent upwards price momentum. In what is widely regarded as a bullish market signal for the asset, bitcoin has now risen above the 200-day simple moving average (MA), an indicator watched closely by investors to determine whether the asset is trending either bullish or bearish.

Bitcoin moves above 200 day moving average. Source: Happy Lisaa (Twitter)

Bitcoin Reclaims 200 MA – What Next?

In advance, analysts were broadly in agreement that a daily close above bitcoin’s 200 MA was bullish.

Once the 200 day MA was surpassed, analysts began offering suggestions as to what sort of resistance might be on the horizon.

Katie Stockton of Fairlead Strategies argued that if the price continued upwards as she expected, it was likely to encounter resistance close to US$51,000. William Noble, chief technical analyst of research platform Token Metrics, offered similar input:

$43,700 is an important resistance point for bitcoin … if bitcoin moves above that level, and successfully retests it, the uptrend can accelerate. $49,000 could be the next stop and I would not rule out a gap move back to the highs at $64,000.

William Noble, chief technical analyst, Token Metrics

Others, such as Jake Wujastyk of TrendSpider, put the resistance level for bitcoin around US$45,000. According to him, the next level to watch above this would be the US$50,000 psychological level.

This sentiment was shared by John Iadeluca, founder and CEO of Banz Capital:

The price of $50,000 stands as a key psychological, as well as technical, level that holds immense selling pressure.

John Iadeluca, founder/CEO, Banz Capital

Focusing on on-chain analytics, Will Clemente suggested that bitcoin still had some way to go to address the current supply shock under way:

Bitcoin Gains Despite Regulatory Uncertainty

Remarkably, bitcoin’s current upwards trend is happening at a time of great regulatory uncertainty in the US, where a bill looks set to be passed that will have deleterious consequences for the entire crypto industry. For some reason or another, bitcoin doesn’t seem to care.

Honey badger doesn’t care. Source: Marek_BTC