Bitcoin Technical Analysis: BTC Breaks Below $50,000
Daily Bitcoin BTC Price Analysis
- The Bitcoin price lost nearly $9,000 in its overall valuation.
- The parabolic SAR has reversed from bullish to bearish.
Over the last 48 hours, the Bitcoin price has dropped from $57,380 to $48,750. As we have noted before and as noted by Joseph Young, the $48,000 support line is absolutely critical. Let’s see what’s going on behind the scenes.
Bitcoin Price Plummets Down
BItcoin price has dropped down by nearly $9,000 as the sellers have taken full control of the market. There are two more signs that tells us that the overall outlook isn’t looking particularly good:
- The MACD is about to reverse from bullish to bearish.
- The parabolic SAR has flipped from positive to negative.
Image: BTC/USD daily
The Bitcoin price is sitting under strong resistance levels. On the downside, there is a significantly robust support at the 20-day SMA ($48,000). Ths support is critical, since a further break below this line will take BTC to the 50-day SMA ($40,000).
Janet Yellen: Bitcoin Is Inefficient For Transactions
Janet Yellen, the recently appointed Secretary of the US Treasury, said that Bitcoin is frequently used in illicit transactions and that it is an inefficient form of payment. At the recent DealBook DC Policy Project event, Yellen commented on the measures that the US has to take in its post-COVID-19 economic recovery. Notably, she discussed the role played by digital assets in this as they could facilitate “faster and cheaper” payment methods.
However, in Yellen’s opinion, cryptocurrencies’ current forms present “many issues” that have to be studied thoroughly. Some of these problems include “consumer protection and money laundering.” Interestingly, her comments came during a steep correction in Bitcoin’s price.
She went on to bash the flagship crypto by saying that it’s “extremely inefficient for conducting transactions” and it’s a highly speculative asset. Yellen previously asserted that the rise of the crypto industry had increased the risks of vulnerabilities as criminals tend to employ them for illicit actions.
Yellen also hinted that the US Federal Reserve could join other central banks in following the growing trend of a central bank digital currency (CBDC). The US has discussed this idea in the past few years but has remained indecisive. On the other hand, China has made significant progress and is actively testing its own version with various trials.
Analyst Says North American Bitcoin ETF Could Soon Shatter $1 Billion in Assets Under Management
The first North American Bitcoin exchange-traded fund (ETF) will soon reach $1 billion in assets under management (AUM), according to a Bloomberg analyst. In a recent tweet, senior analyst Eric Balchunas predicted that the Purpose Bitcoin ETF could hold more than double its current AUM. Purpose Bitcoin ETF is trading under the BTCC ticker on the Toronto Stock Exchange (TSX).
Canada Bitcoin ETF BTCC traded $350m (CAD+USD) today, a 40% jump from yesterday (defying typical Day Two drop-off) and 3x more than any other ETF (unreal). Proportionally speaking, this is equivalent to about $5 billion in volume in the US (or about 7x more than GBTC). Two-day AUM is estimated at $330m.
Also, BTCC will likely reach $1 billion in AUM by the end of next week. The biggest ETF in Canada is only $8 billion. The second biggest is $5 billion. I wouldn’t be surprised if this passes one or both of them in [the] next couple months (barring a nasty selloff, which is possible).
The fund’s issuer, Purpose Investments, reported that the Bitcoin ETF hit $421.8 million in AUM within the first few days of its launch. It also claimed to have recorded $80 million worth of trading volume in its first hour on the market.
The CEO of the firm Som Seif also anticipates that the ETF will grow significantly in size and that the fund will help accelerate the growth of the cryptocurrency sector as a whole. He noted that by making Bitcoin more accessible to investors through ETF, Purpose can expedite the process of “bringing cryptocurrency into the mainstream.”
Mastercard And Visa Make Case For Bitcoin
MasterCard earlier announced that it is adding support for a few cryptocurrencies on its payments network. The company had noted that the addition of cryptocurrencies will allow its customers to “save, store and send money in new ways” while creating new opportunities for merchants as well.
Around the same time, Visa also reaffirmed its plans to continue to work on cryptocurrency payments and on-ramps, indicating that the firm has long-term plans for the sector. The two payment companies’ foray into crypto is just one example of the increasing involvement of mainstream technology and payment companies delving into Bitcoin as an investment as well as a form of payment. According to a Cointelegraph report, Bitcoin analyst Tone Vays said:
Bitcoin has not yet entered the start of the adoption phase, it is still in the speculation/investment phase. The biggest news surrounding, Elon Musk & Tesla buying Bitcoin as a strategic reserve instead holding cash. Mastercard & Visa being interested in the first step for actual adoption for users but once users actually get comfortable using/spending/receiving Bitcoin via Lightning, they slowly start to phase out Visa & Mastercard from their life.
Mastercard’s announcement comes at a time when the number of confirmed payments per day on the Bitcoin network has been growing steadily. The number of payments on the network is measured by the number of recipients receiving funds in a transaction.
The metric emphasizes the value of the Bitcoin network as a reliable way of transferring funds without the involvement of third parties. Over the last year, confirmed payments per day have peaked from an average of around 500,000 to 869,000.
The details of how Visa and Mastercard plan to approach processing cryptocurrency payments through their networks are still a little unclear. However, it’s clear that these companies moving into the cryptocurrency space will reinforce the legitimacy of the industry.
Ever since PayPal began allowing customers to buy, sell and hold crypto on its platform, Bitcoin and other digital assets have been further legitimized as an asset class that is now being accepted by traditional finance firms. Commenting on Bitcoin’s mainstream adoption, Yavin, managing partner of Cointelligence Fund, told Cointelegraph that cryptocurrencies are indeed “gaining more momentum than ever before.”
Massive Corporate investments from companies like Tesla and MicroStrategy have increased Bitcoin’s popularity greatly. However, Google Trends has shown that the search interest for “Bitcoin” is still below the levels seen in 2017, despite the significant price increase and growing corporate adoption.
This likely means that whales and corporations are driving up the market, while retail investors are largely staying on the sidelines. However, the acceptance by these giants may change the way retailers and individuals look at digital assets. According to Arbel Arif, founder and CEO of Shopping.io, large firms acting as “a bridge that connects the common shopper to cryptocurrencies like this is pivotal for the entire industry as crypto is being taken seriously worldwide as a form of payment.”
Bitcoin Price is Expected To Reach These Levels
We expect the Bitcoin price to drop to the 20-day SMA ($48,000). However, what happens after is completely dependent on the actions the buyers and sellers take around this zone.