Bitcoin suffered from hefty losses, which were enhanced by Russia’s central bank proposal to ban cryptocurrencies and mining. While Bitcoin was able to post some recovery off its lows, are we in front of a moderate recovery?
During the crypto meltdown stablecoins saw moderate increase in trading volumes. Stablecoins are cryptocurrencies that strive to maintain a stable market price. USDT (Tether), a
stablecoin Stablecoin Unlike other cryptocurrencies like Bitcoin and Ethereum, stablecoins are cryptocurrencies that have been designed to keep a stable value. Placing a greater emphasis on stability over volatility can be a huge draw for some investors. Many individuals can be turned off from large swings and uncertainty presented by cryptos relative to other traditional assets.Stablecoins control for this volatility by being pegged to another cryptocurrency, fiat money, or to exchange-traded commodities, including gold, silver, or others. Advantages of StablecoinsOf note, stablecoins redeemable in currency, commodities, or fiat money are also said to be backed, whereas those tied to an algorithm are not considered to be so.There are several advantages of asset backed crypto. First, these coins are stabilized by assets that fluctuate outside of the crypto space, that is. This can help mitigate the financial risk associated with these assets.For example, Bitcoin and altcoins are highly correlated, so that cryptocurrency holders cannot escape periodic price falls. Stablecoins control for this vulnerability, allowing for the diversification of risk in a portfolio.Stablecoins also possess a mechanism for redeeming the asset backing them. This grants an additional level of confidence associated with the coin and are unlikely to drop below the value of the underlying physical asset, due to the effects such as arbitrage.For example, fiat-pegged coins are coins that are tied to a specified amount of fiat currency, usually on a one-to-one ratio (i.e.1 StablecoinX = $1). The companies that issue these currencies must have fiat reserves in the equivalent amount of the stablecoins they have issued.Crypto-pegged stablecoins constitute coins that are tied to a specified amount of another cryptocurrency, such as Bitcoin or Ethereum. Algorithmic stablecoins use supply-and-demand to automatically maintain a stable value. Unlike other cryptocurrencies like Bitcoin and Ethereum, stablecoins are cryptocurrencies that have been designed to keep a stable value. Placing a greater emphasis on stability over volatility can be a huge draw for some investors. Many individuals can be turned off from large swings and uncertainty presented by cryptos relative to other traditional assets.Stablecoins control for this volatility by being pegged to another cryptocurrency, fiat money, or to exchange-traded commodities, including gold, silver, or others. Advantages of StablecoinsOf note, stablecoins redeemable in currency, commodities, or fiat money are also said to be backed, whereas those tied to an algorithm are not considered to be so.There are several advantages of asset backed crypto. First, these coins are stabilized by assets that fluctuate outside of the crypto space, that is. This can help mitigate the financial risk associated with these assets.For example, Bitcoin and altcoins are highly correlated, so that cryptocurrency holders cannot escape periodic price falls. Stablecoins control for this vulnerability, allowing for the diversification of risk in a portfolio.Stablecoins also possess a mechanism for redeeming the asset backing them. This grants an additional level of confidence associated with the coin and are unlikely to drop below the value of the underlying physical asset, due to the effects such as arbitrage.For example, fiat-pegged coins are coins that are tied to a specified amount of fiat currency, usually on a one-to-one ratio (i.e.1 StablecoinX = $1). The companies that issue these currencies must have fiat reserves in the equivalent amount of the stablecoins they have issued.Crypto-pegged stablecoins constitute coins that are tied to a specified amount of another cryptocurrency, such as Bitcoin or Ethereum. Algorithmic stablecoins use supply-and-demand to automatically maintain a stable value. Read this Term that was launched in 2015 is considered by many an alternative to the US Dollar. Tether is pegged to the US Dollar.
According to Kaiko, Binance’s volumes in BTC have dropped dramatically since 2018. At its peak bitcoin held 90% of the volumes and is currently orbiting around just 10%.
source: Kaiko
Data also revealed investors realized their long positions, which accelerated the sell-off in BTC. It is worth noting that USDT remained very stable in terms of trading volumes.
It has been reported that $2.5 billion of crypto-related transactions were made via Visa in the first fiscal quarter of 2022. Despite the recent volatility the demand for cryptocurrencies is still present.
Crypto Regulations
Despite the recent recovery one of the main concerns are regulatory measures. The Russian government is currently heading for regulating the crypto markets instead of a complete ban (as proposed by the central bank). Putin stated that he backs crypto mining as it provides Russia with competitive edge in the field.
Fitch credit rating agency warned that banning cryptocurrencies may curb innovation and negatively affect Russian bank’s technological development.
It has been speculated that the Biden administration will issue an executive order on cryptocurrencies as early as next month. The speculations suggest cryptocurrencies are viewed as national security threat by the US administration.
Biden’s approach to cryptocurrencies may hold the key to whether Bitcoin and other cryptocurrencies will be able to recoup the losses. It is important to note that aside cryptocurrencies, NFTs are expected to be regulated as well.
Bitcoin Forecast, Will it Bounce?
From a technical angle it is a struggle to see the gold at the end of the rainbow. Despite BTCUSD recent gains the price must firmly break above $42,000. Based on BTCUSD daily chart the price is painting lower highs and lower lows, which may be a distinct sign of an established downtrend.
Before the regulations kick in we may witness more partnerships and decentralized exchanges (DEX) in the market. While the technical outlook is based only on the daily chart (short-term), such news may have a positive effect on bitcoin.
At the time of this writing, BTC Long / Short ratio is almost identical with a slight inch towards long positions:
source: Coinglass
The shutdown of crypto miners in Kazakhstan is expected to end in February. The state electricity provider KEGOC blamed
crypto mining Crypto Mining Cryptocurrency mining is defined as the process through which the transactions of a digital currency are authenticated then published to blockchain. For every crypto transaction conducted, a crypto miner is in charge of authenticating the information which, if approved, is then updated in the blockchain. Currently, the most popular cryptocurrencies being mined are Bitcoin, Litecoin, Ethereum Classic, Monero, and DASH. How is Cryptocurrency Mined?The process of crypto mining itself involves the solving of complex mathematical equations through the application of cryptographic hash functions. The crypto miner who can solve the solution first can authorize that cryptocurrency transaction while also receiving small cryptocurrency payments in exchange for services rendered. Crypto mining is competitive, tedious, and generally requires that miners possess advanced computers with specialized hardware, increased processing power, and an unwavering internet connection. Electricity, cost of internet, and computing hardware make up the bulk of the expenses that affect the net revenue created through crypto mining. Most cryptocurrency miners generate no than a couple of dollars per day. To perform crypto mining, miners must possess computer hardware that is accompanied by a graphical processing unit (GPU) chip or an application-specific integrated circuit (ASIC). Recommended computer brands include both Windows and Linux since non-Windows systems tend to have a difficult configuration process. Once acquired, crypto miners must ensure that they have a constant internet connection, have a means to cool-off hardware, possess a legitimate cryptocurrency mining software.Miners also often require membership with both online mining pools and cryptocurrency exchanges. Cryptocurrency mining is defined as the process through which the transactions of a digital currency are authenticated then published to blockchain. For every crypto transaction conducted, a crypto miner is in charge of authenticating the information which, if approved, is then updated in the blockchain. Currently, the most popular cryptocurrencies being mined are Bitcoin, Litecoin, Ethereum Classic, Monero, and DASH. How is Cryptocurrency Mined?The process of crypto mining itself involves the solving of complex mathematical equations through the application of cryptographic hash functions. The crypto miner who can solve the solution first can authorize that cryptocurrency transaction while also receiving small cryptocurrency payments in exchange for services rendered. Crypto mining is competitive, tedious, and generally requires that miners possess advanced computers with specialized hardware, increased processing power, and an unwavering internet connection. Electricity, cost of internet, and computing hardware make up the bulk of the expenses that affect the net revenue created through crypto mining. Most cryptocurrency miners generate no than a couple of dollars per day. To perform crypto mining, miners must possess computer hardware that is accompanied by a graphical processing unit (GPU) chip or an application-specific integrated circuit (ASIC). Recommended computer brands include both Windows and Linux since non-Windows systems tend to have a difficult configuration process. Once acquired, crypto miners must ensure that they have a constant internet connection, have a means to cool-off hardware, possess a legitimate cryptocurrency mining software.Miners also often require membership with both online mining pools and cryptocurrency exchanges. Read this Term for the large outage that took place in country.
As opposed to crude oil (nymex) where the price lifts when the rigs are shutdown due a hurricane, a resumption of crypto mining may contribute to BTC recovery. It may a couple of weeks for the impact to seen.
Armenia is also making available an old thermal plant for the purpose of crypto mining. The old plant to be rented to industrial firms that wish to use the plant for mining cryptocurrencies.
With time, crypto mining outages and resumption of mining may play a role in strategic fundamental analysis of cryptocurrencies.
Summary
To summarize, while the short-term trend for Bitcoin may be bearish, the broader fundamental outlook is suggesting some recovery at the time of this writing. Partnerships may be fundamental drive for short-term volatility, which may increase until regulations are implemented.
BTCUSD is trading at $37,830 at the time of this writing.
Bitcoin suffered from hefty losses, which were enhanced by Russia’s central bank proposal to ban cryptocurrencies and mining. While Bitcoin was able to post some recovery off its lows, are we in front of a moderate recovery?
During the crypto meltdown stablecoins saw moderate increase in trading volumes. Stablecoins are cryptocurrencies that strive to maintain a stable market price. USDT (Tether), a
stablecoin Stablecoin Unlike other cryptocurrencies like Bitcoin and Ethereum, stablecoins are cryptocurrencies that have been designed to keep a stable value. Placing a greater emphasis on stability over volatility can be a huge draw for some investors. Many individuals can be turned off from large swings and uncertainty presented by cryptos relative to other traditional assets.Stablecoins control for this volatility by being pegged to another cryptocurrency, fiat money, or to exchange-traded commodities, including gold, silver, or others. Advantages of StablecoinsOf note, stablecoins redeemable in currency, commodities, or fiat money are also said to be backed, whereas those tied to an algorithm are not considered to be so.There are several advantages of asset backed crypto. First, these coins are stabilized by assets that fluctuate outside of the crypto space, that is. This can help mitigate the financial risk associated with these assets.For example, Bitcoin and altcoins are highly correlated, so that cryptocurrency holders cannot escape periodic price falls. Stablecoins control for this vulnerability, allowing for the diversification of risk in a portfolio.Stablecoins also possess a mechanism for redeeming the asset backing them. This grants an additional level of confidence associated with the coin and are unlikely to drop below the value of the underlying physical asset, due to the effects such as arbitrage.For example, fiat-pegged coins are coins that are tied to a specified amount of fiat currency, usually on a one-to-one ratio (i.e.1 StablecoinX = $1). The companies that issue these currencies must have fiat reserves in the equivalent amount of the stablecoins they have issued.Crypto-pegged stablecoins constitute coins that are tied to a specified amount of another cryptocurrency, such as Bitcoin or Ethereum. Algorithmic stablecoins use supply-and-demand to automatically maintain a stable value. Unlike other cryptocurrencies like Bitcoin and Ethereum, stablecoins are cryptocurrencies that have been designed to keep a stable value. Placing a greater emphasis on stability over volatility can be a huge draw for some investors. Many individuals can be turned off from large swings and uncertainty presented by cryptos relative to other traditional assets.Stablecoins control for this volatility by being pegged to another cryptocurrency, fiat money, or to exchange-traded commodities, including gold, silver, or others. Advantages of StablecoinsOf note, stablecoins redeemable in currency, commodities, or fiat money are also said to be backed, whereas those tied to an algorithm are not considered to be so.There are several advantages of asset backed crypto. First, these coins are stabilized by assets that fluctuate outside of the crypto space, that is. This can help mitigate the financial risk associated with these assets.For example, Bitcoin and altcoins are highly correlated, so that cryptocurrency holders cannot escape periodic price falls. Stablecoins control for this vulnerability, allowing for the diversification of risk in a portfolio.Stablecoins also possess a mechanism for redeeming the asset backing them. This grants an additional level of confidence associated with the coin and are unlikely to drop below the value of the underlying physical asset, due to the effects such as arbitrage.For example, fiat-pegged coins are coins that are tied to a specified amount of fiat currency, usually on a one-to-one ratio (i.e.1 StablecoinX = $1). The companies that issue these currencies must have fiat reserves in the equivalent amount of the stablecoins they have issued.Crypto-pegged stablecoins constitute coins that are tied to a specified amount of another cryptocurrency, such as Bitcoin or Ethereum. Algorithmic stablecoins use supply-and-demand to automatically maintain a stable value. Read this Term that was launched in 2015 is considered by many an alternative to the US Dollar. Tether is pegged to the US Dollar.
According to Kaiko, Binance’s volumes in BTC have dropped dramatically since 2018. At its peak bitcoin held 90% of the volumes and is currently orbiting around just 10%.
source: Kaiko
Data also revealed investors realized their long positions, which accelerated the sell-off in BTC. It is worth noting that USDT remained very stable in terms of trading volumes.
It has been reported that $2.5 billion of crypto-related transactions were made via Visa in the first fiscal quarter of 2022. Despite the recent volatility the demand for cryptocurrencies is still present.
Crypto Regulations
Despite the recent recovery one of the main concerns are regulatory measures. The Russian government is currently heading for regulating the crypto markets instead of a complete ban (as proposed by the central bank). Putin stated that he backs crypto mining as it provides Russia with competitive edge in the field.
Fitch credit rating agency warned that banning cryptocurrencies may curb innovation and negatively affect Russian bank’s technological development.
It has been speculated that the Biden administration will issue an executive order on cryptocurrencies as early as next month. The speculations suggest cryptocurrencies are viewed as national security threat by the US administration.
Biden’s approach to cryptocurrencies may hold the key to whether Bitcoin and other cryptocurrencies will be able to recoup the losses. It is important to note that aside cryptocurrencies, NFTs are expected to be regulated as well.
Bitcoin Forecast, Will it Bounce?
From a technical angle it is a struggle to see the gold at the end of the rainbow. Despite BTCUSD recent gains the price must firmly break above $42,000. Based on BTCUSD daily chart the price is painting lower highs and lower lows, which may be a distinct sign of an established downtrend.
Before the regulations kick in we may witness more partnerships and decentralized exchanges (DEX) in the market. While the technical outlook is based only on the daily chart (short-term), such news may have a positive effect on bitcoin.
At the time of this writing, BTC Long / Short ratio is almost identical with a slight inch towards long positions:
source: Coinglass
The shutdown of crypto miners in Kazakhstan is expected to end in February. The state electricity provider KEGOC blamed
crypto mining Crypto Mining Cryptocurrency mining is defined as the process through which the transactions of a digital currency are authenticated then published to blockchain. For every crypto transaction conducted, a crypto miner is in charge of authenticating the information which, if approved, is then updated in the blockchain. Currently, the most popular cryptocurrencies being mined are Bitcoin, Litecoin, Ethereum Classic, Monero, and DASH. How is Cryptocurrency Mined?The process of crypto mining itself involves the solving of complex mathematical equations through the application of cryptographic hash functions. The crypto miner who can solve the solution first can authorize that cryptocurrency transaction while also receiving small cryptocurrency payments in exchange for services rendered. Crypto mining is competitive, tedious, and generally requires that miners possess advanced computers with specialized hardware, increased processing power, and an unwavering internet connection. Electricity, cost of internet, and computing hardware make up the bulk of the expenses that affect the net revenue created through crypto mining. Most cryptocurrency miners generate no than a couple of dollars per day. To perform crypto mining, miners must possess computer hardware that is accompanied by a graphical processing unit (GPU) chip or an application-specific integrated circuit (ASIC). Recommended computer brands include both Windows and Linux since non-Windows systems tend to have a difficult configuration process. Once acquired, crypto miners must ensure that they have a constant internet connection, have a means to cool-off hardware, possess a legitimate cryptocurrency mining software.Miners also often require membership with both online mining pools and cryptocurrency exchanges. Cryptocurrency mining is defined as the process through which the transactions of a digital currency are authenticated then published to blockchain. For every crypto transaction conducted, a crypto miner is in charge of authenticating the information which, if approved, is then updated in the blockchain. Currently, the most popular cryptocurrencies being mined are Bitcoin, Litecoin, Ethereum Classic, Monero, and DASH. How is Cryptocurrency Mined?The process of crypto mining itself involves the solving of complex mathematical equations through the application of cryptographic hash functions. The crypto miner who can solve the solution first can authorize that cryptocurrency transaction while also receiving small cryptocurrency payments in exchange for services rendered. Crypto mining is competitive, tedious, and generally requires that miners possess advanced computers with specialized hardware, increased processing power, and an unwavering internet connection. Electricity, cost of internet, and computing hardware make up the bulk of the expenses that affect the net revenue created through crypto mining. Most cryptocurrency miners generate no than a couple of dollars per day. To perform crypto mining, miners must possess computer hardware that is accompanied by a graphical processing unit (GPU) chip or an application-specific integrated circuit (ASIC). Recommended computer brands include both Windows and Linux since non-Windows systems tend to have a difficult configuration process. Once acquired, crypto miners must ensure that they have a constant internet connection, have a means to cool-off hardware, possess a legitimate cryptocurrency mining software.Miners also often require membership with both online mining pools and cryptocurrency exchanges. Read this Term for the large outage that took place in country.
As opposed to crude oil (nymex) where the price lifts when the rigs are shutdown due a hurricane, a resumption of crypto mining may contribute to BTC recovery. It may a couple of weeks for the impact to seen.
Armenia is also making available an old thermal plant for the purpose of crypto mining. The old plant to be rented to industrial firms that wish to use the plant for mining cryptocurrencies.
With time, crypto mining outages and resumption of mining may play a role in strategic fundamental analysis of cryptocurrencies.
Summary
To summarize, while the short-term trend for Bitcoin may be bearish, the broader fundamental outlook is suggesting some recovery at the time of this writing. Partnerships may be fundamental drive for short-term volatility, which may increase until regulations are implemented.
BTCUSD is trading at $37,830 at the time of this writing.
