Volatility around Bitcoin and Crypto trading | Skilling
Bitcoin crashed 87% on Binance’s U.S. Exchange due to Algo Bug
The price of Bitcoin rapidly plunged about 87% on Binance’s U.S. exchange on Thursday morning, sinking to as low as $8,200 from around $65,000. This did not happen on other venues, and on Binance the level almost immediately snapped back to where it had been.
Mistakes like this happen throughout finance when, for instance, traders mess up details of their intended trades, entering the wrong price or order size. An erroneously large trade, as one example, can overwhelm an exchange’s order book, leading to a quick and massive decline.
Bitcoin’s next test seen as $90,000 after pause, strategists say
Bitcoin has stalled after reaching a record on Wednesday, but strategists are already speculating how high the next rally will take it - $100,000 or $90,000.
The digital currency is sitting in the low $60,000s as traders want to see how the landscape shifts now that the first U.S. Bitcoin futures exchange-traded fund is in play. The largest cryptocurrency was up 0.6% to $63,077 as of 12:25 p.m. in Hong Kong on Friday after peaking on Wednesday at nearly $67,000. The move into unprecedented territory had chartists looking for new strongly bullish target levels.
Uncertainty around Crypto regulation - Bitcoin and Shiba Inu surge as Ethereum rallies
Speculation for all things crypto-related has intensified. Bitcoin, after soaring back to its all-time highs of around $65,000 per bitcoin - close to its mid-April peak - is surging after the launch of the first Bitcoin-linked exchange-traded fund in the U.S.
The bitcoin price has increased around 35% since mid-September amid building hype around the long-awaited ETF. Meanwhile, Ethereum, the second-largest cryptocurrency after bitcoin, is again closing on the closely-watched $4,000 per ether level. Meme coin Shiba Inu also hit all-time highs in the past week before the Musk effect sent it lower after a tweet that the Tesla CEO does not own Shiba.
As excitement over the ProShares' bitcoin futures ETF reaches fever pitch, bullish crypto analysts have predicted the bitcoin price could climb as high as $168,000 by the end of 2021 if demand meets the high expectations.
With Bitcoin nearing an all-time high, popular crypto traders and analysts seem confident that we’re no longer in a supposed bear market. Bitcoin’s current market cap is more than $1.2 trillion. A conservative estimate predicts BTC reaching a $4 trillion market cap by November 2022, which would bring BTC’s price point to around $200,000.
It’s also possible that a price surge could happen a lot sooner. Regardless of the timeline, analysts predict the overall value for cryptocurrencies will be $10 trillion by the end of this cycle. The overall cryptocurrency market cap currently sits at more than $2.6 trillion.
Weak stocks and fresh worries over Evergrande failed to keep Bitcoin down for long. Oct. 21, Bitcoin (BTC) passed $66,000. It gained $2K in hours after the BTC price bounced near a previous all-time high.
BTC/USD 1-hour candle chart (Bitstamp). Source: TradingView
Data from Cointelegraph Markets Pro and TradingView showed BTC/USD recovering from a dip to $64,000 overnight. The move had come in step with a comedown in stocks, which were reacting to renewed concerns over Chinese property giant Evergrande. Nonetheless, Bitcoin managed to preserve higher levels, resulting in only a brief trip below the $64,900 threshold, which had held as the BTC record since April this year.
$75,000 is the next target. The monthly candle for October, analysts noted, is already larger than the entire Bitcoin all-time high from December 2017. The levels to keep an eye on are around 75k, 87k, and 96k, derived from recent price action using the Fibonacci retracement tool.
BTC/USD Chart with Fibonacci levels Source: cointelegraph.com
As Cointelegraph reported, “Fibonacci is responsible for long-term BTC price findings, which currently put the peak of this cycle’s bull run at as much as $300,000. The trough, by contrast, could be anywhere from $47,000 to $60,000 — still an order of magnitude higher than last cycle’s $3,100 floor.”
New York gets tough on Crypto lenders. What it means for investors
New York has some of the strictest cryptocurrency exchange rules of any U.S. state. The BitLicense regulation it passed in 2015 means any company wanting to buy, sell, store, or issue a virtual currency would need a license.
New York Attorney General Letitia James just took action against five crypto lending firms. Two crypto exchanges have been told to cease and desist while three need to answer detailed questions about their operations.
What are Crypto lending products and why do authorities want to shut them down?
Crypto lending-earning products allow customers to take out loans using crypto as collateral. The platforms use the interest from those loans to pay high rates to investors who deposit money. These can be over 10 times the rates you'll find with traditional savings accounts, but the products carry much more risk.
What to look out for...
Crypto miners lead the charge within the curated basket of stocks. Marathon Digital Holdings Inc., Hut 8 Mining Corp. and Bitfarms Ltd. are up at least 180% so far this year. Galaxy Digital Holdings Ltd., the crypto asset manager headed by Michael Novogratz, has doubled in value this year, the data show.
A lot of retail investors seem to believe that investment starts and ends with stocks. But trading cryptocurrencies is not just a hype – it is a trend that is booming. Volatility in the market has captured the attention of investors everywhere, and rising prices make crypto an interesting product for trading.
If you predict prices will go up or down, it makes sense to start speculating on cryptocurrency price movements with Contracts For Difference. With CFDs you don't have to buy cryptocurrencies on an exchange as you don't own the underlying asset. Taking a position on cryptos with CFDs means you can trade on both rising and falling markets (bullish or bearish).
How can traders capitalize on the bitcoin trend and expected volatility that’s likely to span into next year? By considering the ripple effects of crypto pricing pressures, capitalizing on market volatility by going long or short with Crypto CFDs. But it is always a good idea to stay diversified across different asset classes
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Not investment advice. Past Performance is not indicative of future results. Trading cryptocurrency may not be available depending on your country of residence.