Bitcoin Breaks Resistance
On-chain data shows Bitcoin's recent surge to $11K is not pressuring traders to sell, meaning BTC could rally higher.
On July 26 blockchain data analyst Glassnode uploaded surprising data about Bitcoin’s latest trip to five figures and suggested that the current journey above $10,000 US will be much different than the last few.
Bitcoin had passed $10,000 several times in 2020, but Glassnode's analysis suggests that this time differs from the rest because of the Bitcoin days destroyed indicator.
Bitcoin days destroyed is a measure of the value of each BTC transaction, considering how long it has been since the coins involved last moved. Previously, jumps above $10,000 resulted in an increase in the Bitcoin days destroyed metric, suggesting that long-term holders were using the opportunity to trade or sell. So far, however, this latest rally has yet to repeat the trend.
"In contrast to the last two times BTC hit $10,000 (USD), we haven't seen an increase in #Bitcoin Days Destroyed today," Glassnode summarised.
BTC/USD suddenly crushed the last remaining resistance below $10,000 on Monday, rising to hit highs of $11,200. The bitcoin price has added some 20% over the last seven days after being stuck in a two-month range since May, struggling to see much volatility. It remained relatively stagnant in the $9,000 to $9,500 range, consolidating under the $10,500 resistance level before surging past $11,000.
Many industry analysts are confident the bitcoin price is going to continue to soar, citing fundamental and technical strength - i.e. bitcoin halving effects and breaking long term resistance levels.
"There are significant changes since March in the way that institutional investors view bitcoin," Joe DiPasquale, said the chief executive of BitBull Capital.
"Now that institutions have moved into bitcoin in 2020, the price has shown more support over the last couple of months. We will not see a repeat of the March crash, but bitcoin will still remain somewhat more volatile than equities."
"I think the price needs to take a bit of breather—it has moved quite a lot in a short period of time," Bill Herrmann, the managing partner of hedge fund Wilshire Phoenix, said via email, adding he could see the bitcoin price hit its all-time highs by the end of the year "if we continue to receive regulatory clarity and continued institutional adoption," pointing to last week's decision by the U.S. Office of the Comptroller of the Currency to allow banks in the country to custody digital assets as triggering the latest rally.
"It is huge for the space and that should serve as a tailwind for quite some time."
Cautious optimism that Bitcoin is destined for higher levels still has become a theme in itself among traders in recent months.
When PayPal sparked rumours of crypto acceptance in June (which we spoke about here), for example, talk immediately turned to Bitcoin's potential to break not only $10,000 but as much as $12,000 in the short term.
Network fundamentals remain encouraging, while the last two days spurt similarly marks a firm contrast to the pattern of compression that Bitcoin exhibited in prior weeks. A cycle of higher lows and lower highs had placed BTC/USD in a narrowing corridor that analysts agreed must soon break - which has happened.
Altcoins have been similarly bullish, with Ether (ETH) breaking firm resistance at $280 (USD) in a move which gained even more than Bitcoin.
The second-largest cryptocurrency by value after bitcoin has added almost 50% to its price in the last week and pushed on due to a surge of interest in decentralized finance, sometimes known as DeFi—the idea that blockchain entrepreneurs can use bitcoin and crypto technology to recreate traditional financial instruments such as loans and insurance.
Ethereum has been further boosted by the soaring price of Chainlink (LINK), a token that powers a decentralized network designed to connect smart contracts to external data sources and is built on top of ethereum's blockchain (available to buy at Ainslie Wealth by phone or in person).
The value of Chainlink's link token has more than doubled since early May, adding to its already massive gains over the last year.
“Ethereum is one of those game-changing projects," Adam Traidman, chief executive of cryptocurrency wallet BRD and maker of Blockset, an enterprise-grade blockchain data integration platform, said via email.
"I can tell you firsthand that ethereum is the most requested chain, right up there with bitcoin, that companies ask Blockset to support, likely due to its capabilities of building private chains."
With crypto breaking its resistance levels and entering a bull market, the all-time highs of $20,000 US are insight. The fundamentals of the asset class have shown clear signs of growth for months and now the technical chart agree - who knows how high crypto will soar this time?
In more exciting news for Ainslie’s Gold Standard (AUS) and Silver Standard (AGS) gold and silver backed tokens, today we announce the launch of both on the Elbaite exchange (www.elbaite.io) . Elbaite is a Melbourne based cryptocurrency exchange service provider with a focus on safety for traders. Traders can buy and sell Bitcoin, Ethereum and other major cryptocurrencies directly with AUD and now with both AUS and AGS tokens.
The platform utilizes the use of AUD escrow functionalities and on-chain transactions to ensure security, and safety.
The Elbaite platform is focused on allowing buyers and sellers to be able to connect, and perform direct peer-to-peer cryptocurrency transfers directly from the sellers wallet to the buyers wallet without Elbaite (exchange) holding the cryptocurrency.