Bitcoin Breaks Days Above $10k Record
Seems like a great day for the grandfather of crypto. As of September 28th, bitcoin has had 63 consecutive days above $10k price level. Although this is a great milestone not everything is peachy and grand. Let’s determine the current state of bitcoin and if it’s ready to move above or below $10k.
Record Breaker
Let’s start off with making sense of the recent record break. What does this tell us about bitcoin? Not much. Other than the fact that it’s survived the test of time and it’s not the fad many people believed it to be. The last record was set from December 1st, 2017 to January 31st 2018. This was when bitcoin reached its all-time-high, above $19,900. This was a drastic movement, approximately 100% in just 2 weeks. It’s self evident that we are not living in those times, with bitcoin being relatively stagnant.
According to Coin Metrics, the 180-day returns volatility for bitcoin has plummeted 41% in September. This means that $10k is, figuratively speaking, our new normal.
MACD Now Bearish
We continue to see evidence that bulls are running out of juice. The $11k psychological level might be too much for them to overcome without significant external help. Early Monday Sep. 28th, we saw movement at $10,950 but alas, it was not maintained. The MACD histogram is used to identify trend changes and strength. From that we determine whether the market is in control of the bulls or bears. As of Monday we saw a bearish shift. Along with that we see the 5- and 10- week averages create a bearish crossover. Technical traders would see this as an opportunity to get out while times are good.
Hack? What Hack?
On September 26th, major South Korean exchange KuCoin confirmed a hack attack affecting $150 million in user funds. Surprisingly, the markets didn’t feel a thing. As of now there continues to be little concern over the selling power that these hackers have. It seems we have moved away from being concerned over liquidity and low market capitalization.
This hack is estimated to be the fourth-largest in history and investors remain unfazed. According to Whale Alert, millions of dollars worth of tokens have been moved from the source of the hack into the popular decentralized exchange, Uniswap. Although, the hack did not involve bitcoin directly you’d assume the price would reflect some concerns over the space.
Less Volatile Than Stocks
News of hacks, scams and other malicious acts would have shaken the crypto markets in the early years but it seems we’re further along in the adoption process. Volatility was something that the space felt frequently due to low market capitalization. This would mean that your USD had more power in the space. Now, you’ll need to be a big player to slightly move the market.
When compared to traditional finance, bitcoin isn’t as volatile as people presume it to be. For example, Tesla has seen large daily moves since the end of June. Bitcoin felt a sub-1.25% daily move in 14 out of the last 27 days. Tesla, on the other hand, only achieved sub-1.25% moves 6% of the time over the same period. This means that Tesla is a lot jumpier than bitcoin in the recent weeks. Worst of all Tesla has seen a month-to-date price decline of 18%, worst than bitcoin’s 6%.
Institutional Investors Keep Coming
With less volatility bitcoin continues to be considered as an alternative investment. This can be seen with major institution fund, Greyscale Investments. They managed to obtain 17,000 bitcoin in the last seven days. This was driven by massive institution on-boarding. This acquisition is valued at $182 million worth of bitcoin, adding to their $4.7 billion in assets under management. This metric is more significant when compared to the above $10k record breaker. It’s big money coming in the market that keeps bitcoin prices high and stable.They’re in it for the long-run and investors in the vehicle do not have direct control of the bitcoin it represents. As of now Grayscale’s Bitcoin Trust has 2.14% of the entire 21 million bitcoin supply that will ever exist. What was meant to be decentralized is becoming the opposite as more and more institutions with deep pockets enter the space.
