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4 On-Chain Metrics Show the Bitcoin Price Is Primed for Bullish Explosion

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4 On-Chain Metrics Show the Bitcoin Price Is Primed for Bullish Explosion

Amid recent macroeconomic extremes, Bitcoin has maintained a quiet stance, almost eerie for its HODLers. Nonetheless, its hashrate and accumulation are soaring — what could this mean for its price?

Bitcoin has been consolidating in a narrow range between $18,800 and $20,200 since the mid-Sept price fall. In volatile markets like cryptocurrency, similar quiet periods of consolidation are rare. 

Recent Glassnode findings show that the current BTC price action resembles both pre-crash November 2018 and pre-rally March 2019. Despite price downturns, mining and accumulation statistics are improving. Let’s look into what this means for the health of the network.

Bitcoin hashrate makes new ATH 

Last week, the Bitcoin hashrate made a new all-time high of 242 exahashes per second.

Source: Glassnode

In the chart below, we can see that Bitcoin’s longer-term, slower hash ribbon was once again overtaken by the faster ribbon, indicating improved mining conditions in late August. Since the price saw no major uptick during this time, the rise in hashrate was likely due to more efficient mining hardware and more mining rigs working in general.

Source: Glassnode

Historically, these hash ribbon moving average swaps precede price gains. Historically, when the hash-rate drops and subsequently recovers, major BTC price bottoms have been made. 

Is a price bottom in?

Apart from the hashrate, Bitcoin accumulation levels also reached a 7-year high. CryptoQuant data shows that 6-month-old and older Bitcoins now make up 74% of the realized cap. During the 2019 and 2015 bottoms, this score sat at 70% and 77%, respectively.

Source: CryptoQuant 

Lastly, for the first time in this cycle, the percentage of supply in loss has reached the 50% level.

CryptoQuant data shows that the price bottoms during previous cycles normally occur when the percentage of supply in loss reaches 50% or more.

Source: CryptoQuant

The current data shows the highest percentage of losses at 52% on the daily chart, 50.4% on the weekly (7DMA), and 48% on the monthly (30DMA). 

While quite a few metrics suggest that BTC should be near a bottom, the overall momentum will likely still depend on macroeconomic conditions as well as its correlation with the Nasdaq and S&P 500. 

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All the information contained on our website is published in good faith and for general information purposes only. Any action the reader takes upon the information found on our website is strictly at their own risk.

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EU Parliament to ‘Vote on Adopting the Regulation on MiCA’ — Expert Says Industry Needs Legal Clarity

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EU Parliament to ‘Vote on Adopting the Regulation on MiCA’ — Expert Says Industry Needs Legal Clarity

In a recent statement, the European Parliament said its members would shortly “vote on adopting the regulation on markets in crypto-assets (MiCA).” According to the parliamentary body’s think tank, the envisaged regulations are expected to provide “legal certainty for crypto-assets not covered by existing EU legislation.” A crypto counselor, Paulius Vaitkevicius, said any regulation of crypto is likely to result in more capital and talent coming into the space.

‘Harmonized Rules’ for Crypto-Assets at EU Level

After months of discussions and negotiations which culminated in the June 30 preliminary agreement, the European Parliament (EP) is now set to “vote on adopting the regulation on markets in crypto-assets (MiCA).” The vote is set to take place during the legislative body’s plenary session. European leaders assert that the adoption of MiCA will lead to the creation of “harmonized rules for crypto-assets at [the] E.U. level.”

According to a Nov. 29 briefing by the parliament’s think tank, the harmonized crypto rules are expected to provide “legal certainty for crypto-assets not covered by existing EU legislation.” In the briefing, the EP also argues that the rules will not only enhance the protection of consumers and investors but will also “promote innovation and use of crypto-assets.”

Through MICA, European authorities also hope “to regulate [the] issuance and trading of crypto-assets as well as the management of the underlying assets.”

While European leaders like European Central Bank president Christine Largade are pushing for tougher regulation — MiCA II — some critics of the proposed legislation argue that the envisaged regulations in their current form may stifle innovation.

Legal Clarity Attracts Mature Players

Commenting on the European Union’s drive to regulate cryptocurrencies, Paulius Vaitkevicius, founder and crypto counselor at the law firm VILP Solutions, said the prevailing “Wild West environment” is not helpful to all parties. He also told Bitcoin.com News that without guidelines or regulatory frameworks “and with a number of situations where industry players collapse, we might end up in a situation where we will have only a handful of investors left in the industry.”

EU Parliament to 'Vote on Adopting the Regulation on MiCA' — Expert Says Industry Needs Legal Clarity

Therefore, to stop this from happening the crypto industry needs legal clarity, which according to Vaitkevicius, “bring[s] in more mature players to the industry from both project and investor sides.” Explaining why he is in favor of regulating the industry, Vaitkevicius said:

From my personal experience, such players have been seeking regulations and clarity already for some time and waiting for the right moment to step in properly. With regulations, we will see these firm steps and as a result additional capital and talent coming to the industry space.

Meanwhile, some crypto opponents have said if appropriate regulatory frameworks were already in place, Sam Bankman-Fried’s shenanigans would have been exposed much earlier. However, when asked about the validity of this argument, Vaitkevicius said the opinion that on paper FTX itself was “one of the most regulated players in the industry” undermines this theory. He added:

“Regulation is a good step forward, but [this] needs to be followed by other elements to be functional in real-life situations and achieve the pursued goals.”

What are your thoughts on this story? Let us know what you think in the comments section below.

Terence Zimwara

Terence Zimwara is a Zimbabwe award-winning journalist, author and writer. He has written extensively about the economic troubles of some African countries as well as how digital currencies can provide Africans with an escape route.

Image Credits: Shutterstock, Pixabay, Wiki Commons

Disclaimer: This article is for informational purposes only. It is not a direct offer or solicitation of an offer to buy or sell, or a recommendation or endorsement of any products, services, or companies. Bitcoin.com does not provide investment, tax, legal, or accounting advice. Neither the company nor the author is responsible, directly or indirectly, for any damage or loss caused or alleged to be caused by or in connection with the use of or reliance on any content, goods or services mentioned in this article.

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Uzbekistan Approves Rules for Issuance and Circulation of Crypto Assets

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Uzbekistan Approves Rules for Issuance and Circulation of Crypto Assets

Uzbekistan Approves Rules for Issuance and Circulation of Crypto Assets

The authority responsible for crypto oversight in Uzbekistan has determined the order of issuing and circulating digital assets in the country. The main reason behind the move is to establish a mechanism that would allow local companies to attract capital through coins and tokens.

Uzbekistan Government Sets Out to Regulate Digital Asset Investments

The National Agency of Perspective Projects (NAPP), under the President of Uzbekistan, has released a new regulation on the procedures for the issue, registration, and release in circulation of crypto assets in the Central Asian Nation.

The document provides basic legal definitions for crypto assets and makes distinction between the different types. It introduces requirements for crypto issuers, depositaries and custodians and determines their obligations, including those concerning relations with customers.

The authority has also approved rules for the establishment and maintaining of an electronic register of crypto assets and adopted accounting standards for the rights associated with them and those of their holders.

Crypto depositories will be responsible for providing services for the issuance, registration, circulation, and storage of crypto assets. Issuers can use them or other electronic platforms, the NAPP said, pointing out that the nominal value of the coins must be expressed only in the national fiat, the Uzbekistani som.

The agency emphasized that the issuance of unsecured tokens is prohibited. Using words such as “state,” “state-secured,” “state-supported,” “Uzbekistan,” “Uzbek,” “national,” and “som” in the names of the cryptos is banned. The regulator also clarified:

The main purpose of the adoption of this document is to create a new mechanism for business entities to attract investments and develop their activities by issuing and registering the issue of secured tokens.

The NAPP further warned against any unauthorized activities related to the circulation of crypto assets in the country or the use of services by providers that have not obtained a license to offer them. The same applies to firms involved in the mining of cryptocurrency.

Uzbekistan has been taking steps towards the comprehensive regulation of its crypto sector with several decrees signed by President Shavkat Mirziyoyev and resolutions by the National Agency of Perspective Projects. The country recently licensed two companies to provide exchange services.

Do you think Uzbekistanis will benefit from the new regulations adopted by the country’s crypto watchdog? Tell us in the comments section below.

Lubomir Tassev

Lubomir Tassev is a journalist from tech-savvy Eastern Europe who likes Hitchens’s quote: “Being a writer is what I am, rather than what I do.” Besides crypto, blockchain and fintech, international politics and economics are two other sources of inspiration.

Image Credits: Shutterstock, Pixabay, Wiki Commons

Disclaimer: This article is for informational purposes only. It is not a direct offer or solicitation of an offer to buy or sell, or a recommendation or endorsement of any products, services, or companies. Bitcoin.com does not provide investment, tax, legal, or accounting advice. Neither the company nor the author is responsible, directly or indirectly, for any damage or loss caused or alleged to be caused by or in connection with the use of or reliance on any content, goods or services mentioned in this article.

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Bitcoin Rallies as PCE Price Index Comes in Below Expectations

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Bitcoin Rallies as PCE Price Index Comes in Below Expectations

Bitcoin rose 1.5% as U.S. Core Personal Consumption Expenditure Price Index for Oct. 2022 came in 0.1% lower than analysts’ estimates of 0.3%.

The PCE Price Index, which measures changes in consumer spending and is released monthly by the U.S. Bureau of Economic Analysis, revealed that prices for goods and services rose 0.2% month-on-month in Oct. 2022. The so-called core PCE Price Index excludes food and energy prices.

PCE Price Index of 0.2% Causes Bitcoin to Rally

Shortly after the release of the core PCE Price Index, Bitcoin was up 1.5% in the previous 24 hours to cross the psychological $17,000 mark before falling to $16,988.

BTC/USD
BTC/USD | Source: TradingView

The world’s largest cryptocurrency continued a rally that started after Fed chair Jerome Powell hinted in a Nov. 30, 2022, speech that the central bank could slow down its interest rate hikes at the next meeting of the Federal Open Markets Committee in Dec. 2022.

“It makes sense to moderate the pace of our rate increases as we approach the level of restraint that will be sufficient to bring inflation down,” Powell said.

Ethereum was also up roughly 0.3% to trade at $1,268.49 at press time, with Solana racking gains of 1.2% before falling back to 0.5%.

Crypto heatmap
Source: Coin360

The S&P 500 increased by 5.38%, and the Dow Jones Industrial Average rose by 5.67%. The Dow later fell by 400 points in anticipation of U.S. employment data, due for release on Dec. 2, 2022.

PCE Price Index paints a broader picture of macroeconomic conditions

The latest PCE data also revealed that the core PCE Price Index was up 5% from a year ago, compared to a year-on-year increase of 5.2% in Sep. 2022.

PCE Price Index Chart
Source: YCharts

The Federal Reserve began using the PCE Price Index as the headline indicator of U.S. inflation levels in 2012. Unlike its predecessor, the Consumer Price Index, the PCE Price Index tracks a broader range of goods and services that fall under the categories of durable goods and non-durable goods. It is, however, unable to capture minor fluctuations in the prices of everyday items like cereal and clothing.

Despite CPI not being the Fed’s leading indicator of inflation for the last ten years, investors are still happy to mine monthly CPI numbers for nuggets of optimism, which is often reflected in stock market behavior. Bitcoin rallied in tandem with S&P 500 and Dow Jones futures on Nov. 10, 2022, as the so-called core CPI for Oct. 2022 came 0.3% below market expectations at 0.3%.

PCE Price Index rally could mark a short-term upside for Bitcoin

Bitcoin’s rally in tandem with the stock market could be a sign that the cryptocurrency may be more susceptible to macroeconomic movements in the medium to short term, even as the industry grapples with the fallout from the collapse of major crypto exchange FTX.

Its rally to $17,000 plus in early trading on Dec. 1, 2022, was its highest level since the Bahamian exchange collapsed under the weight of mass withdrawals in early Nov. 2022.

“The risk relief rally is coming at just the right time for Bitcoin,” said Craig Erlam of Oanda. 

Eight CEO and technical analyst Michaël van de Poppe noted that the news was positive.

PCE Index MoM comes in at 0.2%, while 0.3% expected.

Positive!

— Michaël van de Poppe (@CryptoMichNL) December 1, 2022

But some experts still believe that Bitcoin is unlikely to take off on a major rally soon and will face resistance from the June 2022 price of $17,600.

Before the collapse of FTX, Bitcoin tracked the stock markets closely, as investors in both stocks and crypto danced to the tune of the Federal Reserve’s tightening monetary policy. The central bank has increased interest rates six times in 2022 in response to a booming U.S. economy, fueled partly by excess pandemic-era stimulus money.

For Be[In]Crypto’s latest Bitcoin (BTC) analysis, click here.

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