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The Fed, the Merge and $22K BTC — 5 things to know in Bitcoin this week

Bitcoin (BTC) starts a pivotal week on a firm footing as bulls succeed in wiping out weeks of losses.

After closing the latest weekly candle at $21,800, its highest since mid-August, BTC/USD is back on the radar as a long bet.

The end to an extended period of downside interspersed with sideways price action now appears firmly at an end, with volatility expected to form a major theme in the coming days.

In fact, few weeks in Bitcoin’s history have been as hectic as this one is likely to be.

In addition to the Ethereum Merge on Sept. 15, the United States inflation trend will come under scrutiny on Sept. 13 with the release of August Consumer Price Index (CPI) data. The recipe for unpredictability is there.

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Crypto traders eye ATOM, APE, CHZ and QNT as Bitcoin flashes bottom signs

The United States equities markets rallied sharply last week, ending a three-week losing streak. The S&P 500 rose 3.65% last week while the Nasdaq Composite soared 4.14%. Continuing its close correlation with the U.S. equities markets, Bitcoin (BTC) also made a strong comeback and is trying to end the week with gains of more than 7%.

The sharp rally in the stock markets and cryptocurrency markets are showing signs of a bottoming formation but it may be too early to predict the start of a new bull move. The equities markets may remain on the edge before the release of the U.S. inflation data on Sept. 13 and the Federal Reserve meeting on Sept. 20-21.

Crypto market data daily view. Source: Coin360

Along with taking cues from the equities markets, the cryptocurrency space has its own important events to look forward to. Both the Ethereum’s Merge and Cardano’s (ADA) Vasil hard fork scheduled in the next few days could heighten volatility in several cryptocurrencies.

Although choppy markets increase the risk, they may offer short-term trading opportunities to nimble traders. Let’s study the charts of five cryptocurrencies that look interesting in the near term.

BTC/USDT

Bitcoin soared above the 20-day exponential moving average ($20,662) on Sept. 9, which was the first indication that the selling pressure could be reducing. The bears are attempting to stall the recovery at the 50-day simple moving average ($21,946) but a positive sign is that the bulls have not given up much ground.

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Terra back from the dead? LUNA price rises 300% in September

Terra has become a controversial blockchain project after the collapse of its native token LUNA and stablecoin TerraUSD (UST) in May. But its recent gains are hard to ignore for cryptocurrency traders. 

LUNA rising from the dead?

After crashing to nearly zero in May, LUNA is now trading for around $6, a whopping 17,559,000% price rally in less than four months when measured from its lowest level. 

Meanwhile, LUNA's performance in September is particularly interesting, given it has rallied by more than 300% month-to-date after a long period of sideways consolidation.

LUNA/USDT daily price chart. Source: TradingView

Terra ecosystem in September

It is vital to note that LUNA also trades with the ticker LUNA2 across multiple exchanges.

In detail, Terraform Labs, the firm behind the Terra project, divided the old chain into Terra Classic (LUNC) and Terra LUNA 2.0 (LUNA/LUNA2).


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Bitcoin short squeeze ‘not over’ as BTC price eyes 17% weekly gains

Bitcoin (BTC) stayed higher into the Sep. 10 weekly close as optimistic forecasts favored $23,000 next.

BTC/USD 1-hour candle chart (Bitstamp). Source: TradingView

$23,000 targets remain in place

Data from Cointelegraph Markets Pro and TradingView showed BTC/USD hitting $21,730 on Bitstamp overnight — the most since Aug. 26.

The pair managed to conserve its prior gains despite low-volume weekend trading conditions being apt to amplify any weakness.

Among analysts, excitement was palpable going into the new week, one which should prove pivotal for short-term crypto price action.

The Ethereum (ETH) Merge and fresh United States inflation data were the top catalysts expected to influence the market.

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Binance removes 3 stablecoins, Russia eyes cross-border crypto payments and UK exudes crypto positivity: Hodler’s Digest, Sept. 4-10

Coming every Saturday, Hodler’s Digest will help you track every single important news story that happened this week. The best (and worst) quotes, adoption and regulation highlights, leading coins, predictions and much more — a week on Cointelegraph in one link.

Top Stories This Week

 

US Fed vice chair Michael Barr favors hard line on crypto, OCC acting head no friendlier

Global crypto regulation remains a prevalent topic looming over the sector. Recent comments from United States Federal Reserve Board Vice Chair for Supervision Michael Barr and Acting Comptroller of the Currency Michael Hsu favored a lean toward more government overwatch. Barr expressed a desire for stablecoin regulation as well as crypto-related banking regulations. Hsu’s comments included looking at the industry cautiously.

 

GameStop doubles down on crypto amid a new partnership with FTX US

GameStop is teaming up with crypto exchange FTX US in a promotional partnership. So far, 2022 has seen GameStop pursuing increasing involvement in the crypto space, evident in its NFT marketplace launch and its new gaming division devoted to Web3. GameStop has a long-term vision for crypto involvement, according to CEO Matt Furlong during a Q2 fiscal year earnings call.


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3 major mistakes to avoid when trading cryptocurrency futures markets

Many traders frequently express some relatively large misconceptions about trading cryptocurrency futures, especially on derivatives exchanges outside the realm of traditional finance. The most common mistakes involve futures markets’ price decoupling, fees and the impact of liquidations on the derivatives instrument.

Let’s explore three simple mistakes and misconceptions that traders should avoid when trading crypto futures.

Derivatives contracts differ from spot trading in pricing and trading

Currently, the aggregate futures open interest in the crypto market surpasses $25 billion and retail traders and experienced fund managers use these instruments to leverage their crypto positons.

Futures contracts and other derivatives are often used to reduce risk or increase exposure and are not really meant to be used for degenerate gambling, despite this common interpretation.

Some differences in pricing and trading are usually missed in crypto derivatives contracts. For this reason, traders should at least consider these differences when venturing into futures markets. Even well-versed derivatives investors from traditional assets are prone to making mistakes, so it’s important to understand the existing peculiarities before using leverage.

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BTC price nears $21.7K as whales boost Bitcoin 'almost perfectly'

Bitcoin (BTC) sought to overturn August resistance on Sep. 10 as whale buy-levels dictated BTC price action.

BTC/USD 1-day candle chart (Bitstamp). Source: TradingView

Whales provide short-term price ceiling

Data from Cointelegraph Markets Pro and TradingView showed BTC/USD hitting new multi-week highs of $21,671 on Bitstamp.

The pair capitalized on a short squeeze which began early on Sep. 9, taking it around 10% higher after plumbing the lowest levels since the end of June.

Analyzing the events, on-chain monitoring resource Whalemap noted that clusters of buy-ins by whales had effectively allowed Bitcoin to put in a floor.

$19,000 had been a high-volume zone of interest for buyers previously, and this thus remained unviolated during the visit to two-month lows.

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3 reasons why Bitcoin traders should be bullish on BTC

Bitcoin (BTC) has been in a rut, and BTC’s price is likely to stay in its current downtrend. But like I mentioned last week, when nobody is talking about Bitcoin, that’s usually the best time to be buying Bitcoin. 

In the last week, the price took another tumble, dropping below $19,000 on Sept. 6 and currently, BTC bulls are struggling to flip $19,000–$20,000 back to support. Just this week, Federal Reserve Chairman Jerome Powell reiterated the Fed’s dedication to doing literally whatever it takes to combat inflation “until the job is done,” and market analysts have increased their interest rate hike predictions from 0.50 basis points to 0.75.

Basically, interest rate hikes and quantitative tightening are meant to crush consumer demand, which in turn, eventually leads to a decrease in the cost of goods and services, but we’re not there yet. Additional rate hikes plus QT are likely to push equities markets lower and given their high correlation to Bitcoin price, a further downside for BTC is the most likely outcome.

So, yeah, there’s not a strong investment thesis for Bitcoin right now from the perspective of price action and short-term gains. But what about those who have a longer investment horizon?

Let’s quickly review 3 charts that suggest investors should be buying Bitcoin.

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Will Bitcoin’s rally sustain? DXY, SPX, GC and WTI could have the answer

Federal Reserve Chairman Jerome Powell said in a question and answer session hosted by the Cato Institute on Sept. 8 that the central bank will continue to hike rates until inflation is under control. However, these comments did not rattle the markets as much as most would have anticipated, indicating that traders might have already factored in a 75 basis point rate hike in the Fed’s next meeting on Sept. 20–21.

Bitcoin has been strongly correlated with the S&P 500 and inversely correlated with the United States dollar index (DXY) for the past several weeks. With the DXY cooling off after hitting a two-decade high, risky assets have been attempting a recovery.

Crypto market data daily view. Source: Coin360

U.S. equities markets are attempting to snap a three-week losing streak while Bitcoin (BTC) has soared above the psychological level at $21,000.

Does the rally in the equities and crypto markets indicate that the risk-on sentiment is back? Let’s analyze five asset classes to review their trends and determine where they might go in the next few days.

BTC/USDT

Bitcoin rebounded off the strong support at $18,626 on Sept. 7 and broke back above the breakdown level of $19,520 on Sept. 9. This may have triggered short-covering by the aggressive bears, which propelled the price above the 20-day exponential moving average (EMA) ($20,434).

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3 Bitcoin price metrics suggest Sept. 9’s 10% pump marked the final cycle bottom

The correlation between Bitcoin (BTC) and stock markets has been unusually high since mid-March, meaning the two asset classes have presented near-identical directional movement. This data might explain why the 10% rally above $21,000 is being dismissed by most traders, especially considering S&P 500 futures gained 4% in two days. However, Bitcoin trading activity and the derivatives market strongly support the recent gains.

Curiously, the current Bitcoin rally happened a day after the White House Office of Science and Technology Policy released a report investigating the energy usage associated with digital assets. The study recommended enforcing energy reliability and efficiency standards. It also suggested federal agencies provide technical assistance and initiate a collaborative process with the industry.

Bitcoin/USD (orange, left) vs. S&P 500 futures (blue). Source: TradingView

Notice how the peaks and valleys on both charts tend to coincide, but the correlation changes as investors’ perceptions and risk assessments vary over time. For example, between May 2021 and July 2021, the correlation was inverted most of the period. Overall, the stock market posted steady gains while the crypto markets collapsed.

More importantly, the chart above shows a huge gap being opened between Bitcoin and the stock market as stocks rallied from mid-July to mid-August. A comparison using the same scale would be better, but that does not work due to the difference in volatility. Still, it is reasonable to conclude that historically these gaps tend to close.

The S&P 500 futures declined 18% in 2022 until Sept. 6, while Bitcoin dropped 60.5% during the same period. So it makes sense to assume that if investors’ appetite for risk assets returns, assets with higher volatility will outperform during a rally.

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Bitcoin price cracks $21K as trader says BTC buy now 'very compelling'

Optimism increases over a macro Bitcoin bottom as daily gains top 9% for BTC/USD on the Wall Street open.

Ethereum's potential fork ETHPOW has crashed 80% since debut — More pain ahead?

The listing of ETHPOW (ETHW) across multiple crypto exchanges has been followed by a huge drop in price despite some initial success. 

ETHPOW drops 80% 

On the daily chart, ETHW's price dropped by more than 80% to $25 on Sept. 10, over a month after its market debut.

ETHW/USD daily price chart. Source: TradingView

For starters, ETHPOW only exists as a futures ticker, for now, conceived in anticipation that an upcoming network update on Ethereum could result in a chain split.

Ethereum will undergo a major protocol change called the Merge by mid-September, switching its existing consensus mechanism from proof-of-work (PoW) to proof-of-stake (PoS).

Therefore, Ethereum will obsolete its army of miners, replacing them with "validators," which are nodes that would perform the same tasks by merely staking a certain amount of tokens with the network.

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Bitcoin squeezes past $20K on US dollar dip as BTC price gains 8.7%

Bitcoin (BTC) bounced past $20,000 on Sep. 9 as a much-anticipated “short squeeze” took hold.

BTC/USD 1-hour candle chart (Bitstamp). Source: TradingView

Trader: BTC could go to $25,000

Data from Cointelegraph Markets Pro and TradingView showed BTC/USD adding as much as $2,700 (8.7%) in hours on the day, reaching its highest since Aug. 26.

After weeks of ranging punctuated with successive moves to the downside, Bitcoin thus finally gave bulls what they wanted.

For popular trading Twitter account Il Capo of Crypto, the upside still had potential to continue at the time of writing, with BTC price action eyeing $21,000.

“Bears very weak here, imo it keeps going up soon,” he forecast.

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Here’s why Terra Classic price has soared by 250% in September

Terra Classic (LUNC) has outperformed all top-ranking cryptocurrencies so far in September gaining nearly 100% in the past seven days alone.

Terra Classic outperforms crypto market

The token surged more than 250% month-to-date to reach $0.000594 on Sept. 8, its best level on record. Whereas Bitcoin (BTC) dropped 4% and Ether (ETH) gained only 3.5% in the same period.

The profits in the Terra Classic market appeared despite its association with the defunct Terra (LUNA) token, a $40 billion project that collapsed in May. Terra Classic is a rebranded version of the same Terra project and thus has been the subject of skepticism from analysts and investors since its debut.

But, traders have ignored such warnings in recent weeks, with a flurry of fundamental catalysts influencing them to purchase LUNC.

Staking service

A new staking service went live on the Terra Classic chain on Aug. 27, serving as the first major cue behind the ongoing LUNC price rally. 

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Bitcoin analyst who called 2018 bottom warns 'bad winter' may see $10K BTC

Bitcoin (BTC) could dive another 50% from current levels if the upcoming winter proves a major test for Europe.

That was the conclusion of a veteran crypto market analyst this week, with BTC/USD failing to reclaim $20,000 support.

In an interview with Cointelegraph, Filbfilb, creator of trading suite Decentrader, forecast a potential BTC price bottom coming in at as low  $10,000 in 2022.

As the European energy crisis intensifies, risk assets face a major test, he believes, and the extent to which crypto suffers depends considerably on how diplomacy can win out to avert a major emergency into 2023.

The figures are not just pie in the sky; at the height of the last halving cycle’s bear market in 2018, Filbfilb perfectly timed the market bottom as BTC/USD put in a floor of $3,100.

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Insiders’ guide to real-life crypto OGs: Part 1

Crypto OGs — slang for Original Gangsters — have acquired almost a mythical and godly reputation in an industry populated with libertarians, anti-government rebels, innovators, get-rich-quick scammers, hackers and degen investors with rampant gambling addictions and toxic social media behavior. 

Who are these OGs exactly? Unlike the rich and powerful in the traditional finance and conventional tech sector, crypto OGs are often protected by a layer of decentralized anonymity in a particularly wild corner of cyberspace. Who deserves this mythical label? The year they got into crypto? Their current net worth? Their lifestyle? Their impact on the industry?

How can you separate the randos and wannabes from the OGs? Without further ado, here’s our guide to spotting OGs at any networking party, written with insider tips from real-life OGs.

 

 

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Will Ethereum keep rallying versus Bitcoin? ETH price technicals hint at 60% gains ahead

Ethereum's native token Ether (ETH) shows the potential to log major gains versus Bitcoin (BTC) with the ETH/BTC pair nearing yearly highs. 

Ether paints classic bullish reversal pattern

The bullish cues come from a classic technical pattern called the inverse head and shoulders, which develops when the price forms three troughs below a common support level known as neckline. The middle trough, or head, is deeper than the other two, called the shoulders. 

An inverse head and shoulders setup resolves after the price breaks above the neckline while accompanying an increase in trading volume. As a rule of technical analysis, its profit target comes at a length equal to the maximum distance between the head's lowest point and the neckline. 

So far, Ether has painted a similar pattern, and it now awaits breakout above the neckline, as illustrated in the chart below.

ETH/BTC weekly price chart featuring "inverse head and shoulders" breakout setup. Source: TradingView

If ETH's price climbs decisively above the neckline, then the Ethereum token's upside target in 2022 will be around 0.136 BTC, up approximately 60% from current price levels.

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Bitcoin whales send BTC to futures exchanges in ‘classic’ bottom signal

Bitcoin (BTC) whales are betting on a rebound as fresh data shows “classic” bottom behavior.

According to on-chain analytics platform CryptoQuant, large-volume investors are moving coins to derivatives exchanges en masse this month.

Analyst: Whales protectin positions “forming a local bottom”

As BTC/USD hit its lowest levels since the end of June, whales were responding kind.

In one of its Quicktake market updates posted on Sept. 7, CryptoQuant analyst Maartunn flagged a marked uptick in the monthly average number of transactions made between spot exchanges and derivatives platforms.

Whales, Maartunn argued, are hedging their losses and transferring funds to use in futures bets.

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Bitcoin is pinned below $20K as the macro climate stifles hope for a sustainable BTC bull run

Bitcoin (BTC) crashed below $19,000 on Sept. 6, driving the price to its lowest level in 80 days. The movement not only completely erased the entirety of the 32% gains accrued from July until Aug. 15, it also wiped out $246 million worth of leverage long (buy) futures contracts.

Bitcoin price is down for the year but it’s important to compare its price action against other assets. Oil prices are currently down 23.5% since July, Palantir Technologies (PLTR) has dropped 36.4% in 30 days and Moderna (MRNA), a pharmaceutical and biotechnology company, is down 30.4% in the same period.

Inflationary pressure and fear of a global recession have driven investors away from riskier assets. By seeking shelter in cash positions, mainly in the dollar itself, this protective movement has caused the U.S. Treasuries' 5-year yield to reach 3.38%, nearing its highest level in 15 years. By demanding a loftier premium to hold government debt, investors are signaling a lack of confidence in the current inflation controls.

Data released on Sept. 7 shows that China's exports grew 7.1% in August from a year earlier, after increasing by 18% in July. Furthermore, Germany's industrial orders data on Sept. 6 showed a 13.6% contraction in July versus the previous year. Thus, until there's some decoupling from traditional markets, there's not much hope for a sustainable Bitcoin bull run.

Bears were overly optimistic

The open interest for the Sept. 9 options expiry is $410 million, but the actual figure will be lower since bears became too overconfident. These traders were not expecting $18,700 to hold because their bets targeted $18,500 and below.

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Cardano (ADA) eyes 15% rally despite Charles Hoskinson's fear over 'macro factors'

Cardano (ADA) will undergo a major network update called "Vasil" on Sept. 22, potentially making its blockchain more scalable and cheaper. Nonetheless, the news has failed to spark any decisive upside momentum in ADA's market.

Macro factors weigh on ADA's best upside scenario

In detail, ADA's price has risen approximately 3.5% to $0.51 since the Vasil launch announcement, including a circa 14% rally followed by its near-perfect wipeout. In other words, traders initially bought the Vasil hype but were quick to exit markets, as illustrated by the price action below.

ADA/USD four-hour price chart. Source: TradingView

Cardano founder Charles Hoskinson blamed "macro factors" for ADA's underperformance despite the Vasil euphoria, noting that the crypto markets, on the whole, are "disconnected from reality." He added:

"Cardano has never been stronger and frankly many other projects are also solid across the industry, yet you don't see that reflected — just a sea of red."

The statements appeared as riskier assets prepared for another deep plunge in the days leading up to the Federal Open Market Committee's (FOMC) meeting on Sept. 20 through 21.

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