7K Bitcoin...080
Market Cap: $220,000,000,000 (Higher)
BTC Dominance: 59.2% (Higher)
Bitcoin Price: $7,400 (Higher)
We’ve seen the market continue to climb, and Bitcoin’s dominance reach levels not seen since December 2017.
Will Bitcoin keep on climbing?
Normally, I would say the entire market has been climbing but really it is mostly Bitcoin that has absorbed most of the capital that appears to be flooding into the market.
After many hours of research trying to see ‘why’ this move is happening, nothing really came up. Markets are often irrational and move due to bigger players in the space, not necessarily due to news. However, the question I have is whether the bigger players are institutional capital flooding into the crypto space, or whether it is large exchanges manipulating the price of Bitcoin through Tether and other means.
While I want to believe that this is organic, there are a few reasons that prevent me from doing so…
1) Tether’s legal issues.
I’ve mentioned a few times over the past weeks of Tether’s legal issues that they are going through, and the fact that they are not in fact backed 1:1 with the dollar.
Bitfinex have apparently raised over 1 Billion to cover the outstanding losses of around 750 Million, and in return have promised a percentage of their revenue over the next few years.
My concern is, why would institutional investors invest in a company that has seemingly conducted in fraudulent practises and is being investigated by the New York Attorney General.
It seems highly unlikely that they have raised this capital in such a short period of time.
2) Institutional Investors would be very cautious…
Due to the reason above, the NYAG could at any point issue a takedown of Bitfinex or get an injunction to stop all trading activity of their exchange and Tether operations. This could potentially mean Tether could be frozen for a period of time.
3) Withdrawals Open Tomorrow
Over the past week - while we’ve seen the bulk of this rally - Binance (the largest exchange by volume) has closed deposits and withdrawals, meaning no capital can leave the exchange. This has of course limited the potential outflow of capital, and possibly restricted the bears to a degree.
However, I do want to touch on possible reasons that the market could be about to shift into the major bull market that everyone is expecting. Towards the end of the chart above you can see the ‘disbelief’ rally, in which there is a price surge but the market seems to be sceptical about it. We could very much be in this stage, I am sceptical for many reasons, and so are many others… is this a sign that we are near another bull rally?
I wouldn’t use this indicator alone, but I have it in the back of my mind to know that I may be wrong, and this rally could be natural market movement, in which case I’ll just jump back into the market upon a correction.
Hope this helps for those who aren’t sure what to do.
All the best,
Devin