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Bitcoin Fear and Green Index Newsletter. Block 16

Bitcoin Fear and Green Index Newsletter. Block 16
By Bitcoin Fear And Greed Index • Issue #16 • View online
Welcome to this week’s issue of Bitcoin Fear and Green Index Newsletter. It is a community-driven effort, and we all hope to see this newsletter grow with quality insight and analytics from community contributors like yourself. Read till the end to learn how you can participate.

Current Bitcoin Fear and Greed Index
This week’s Technical Analysis
This past week, Bitcoin had the biggest flash crash since May of this year. The story does not end here however. In this newsletter, I will go through what Bitcoin did on the chart over the past week. I’ll also explain the 3 different scenarios that could take place and ultimately decide the future of this cycle.
First and foremost, let’s go back to Monday, the 29th of November. Bitcoin opened the day around $52,250 and continued to trade within a relatively tight range around that price for the next couple of days. The 3rd of December however, was when Bitcoin broke down from that range to the low of ~$51,750. And on the 4th, Bitcoin had a flash crash that saw the price plummet all the way down to $42,000. From the high of that week at around $59,150, Bitcoin had crashed -29%, and -39% from the all time high at $69,000. It’s important to note that Bitcoin opened the current week below the market support band, but I’ll speak more on that later. As of this writing, the price has bounced back from the lows of the crash, and is currently trading around $49,000.
Looking at the chart above would help us understand the different scenarios that could take place in the early future. Let’s go through them one by one.
  • The first and most bullish scenario would have Bitcoin closing this week above the market support band. If this scenario was to take place, the cycle would be back in business with no worries regarding a consolidation phase.
  • The second scenario would take place if Bitcoin does not close this week above the support band, but still holds the line at the 50 SMA. This would tell us that the price will most likely enter a short consolidation phase going into January of 2022 before ultimately breaking above the market support band. The 50 SMA plays a major role in keeping the integrity of the cycle intact, even after a flash crash. We can see on the chart above how Bitcoin bounced right off the 50 SMA in July after closing its first week of the entire year at the 50 SMA. This bounce ended up saving the cycle.
  • The third scenario would see Bitcoin breaking and closing candles below the 50 SMA. This would tell us to expect a long and tedious bearish consolidation phase that could potentially go 3-6 months into 2022.
With all of that in mind, I see the current state of the market as a massive opportunity to accumulate at prices that were only available 2+ months ago. These flash crashes are normal in this space and they happen around 2 times a year. So, if you felt like you missed the boat on crypto during the previous leg, well, the boat is back and only you can ultimately decide as to whether this is a rare opportunity or a lapse of judgement for your future self. That being said, have a bullish week, until we meet again.
TA review by @CryptoSultan21
Bitcoin Adoption News This Week
I had to write all the code before I could convince myself that I could solve every problem, then I wrote the paper.” ― Satoshi Nakamoto
Bitcoin Hash Rate Near Full Recovery From China Ban
The Bitcoin hash rate has showcased deep resiliency since the Chinese Bitcoin mining ban, having climbed over 80% in five months to get close to its previous highs! When the country with the largest share of Bitcoin hash rate at the time began enforcing nationwide efforts to crack down on the industry, a considerable amount of miners were forced offline. As a result, the Bitcoin network total hash rate plummeted to 84.79 exahashes per second (EH/s) in early July, per Coin Metrics data. The metric has since recovered almost completely, and at the time of writing, sits at 156.6 EH/s  less than 16% away from a new all-time high. It has retracted from a local top made at 167.18 EH/s on November 17. As miners started relocating their farms and getting back online, plugging more hash power to Bitcoin, the network’s mining difficulty began adjusting upwards. According to the report, there have been nine consecutive positive difficulty adjustments since July, a record-breaking stat resulting in a total 65.8% increase in mining difficulty.
Brazilian Bitcoin Exchange Raises $50 Million In Extension Round
2TM, the owner of Mercado Bitcoin, the largest Latin American Bitcoin exchange, has raised an extra $50 million in an extension round that initially captured $200 million from SoftBank Group Corp, reported Bloomberg. The company received investments from private equity firm 10T Holdings and Tribe Capital, a venture capital fund based out of San Francisco with investments in FTX and Kraken. Brazilian venture capital firm PIPO Capital Gestao de Investimentos Ltda. is also participating in the round, per the report. “After a torturous path trying to explain a technology as disruptive as blockchain, we are now able to convince Brazilian investors about its possibilities and also venture capitalists about the potential of Latin American markets,” 2TM co-founder Gustavo Chamati told Bloomberg. Chamati said the investment’s proceeds would be geared toward growth and the development of new products. His company aims to expand into Chile, Colombia, Mexico, and Argentina. “We are very happy to bring to our firm specialized investors such as Tribe Capital and 10T Holdings,” 2TM CEO Roberto Dagnoni told Bloomberg, adding that they plan on getting another round of private investment before considering going public.
Bitcoin Node Maker Nodl Launches Lightning-Only Product
Hardware Bitcoin node provider Nodl has introduced Nodl Light, a Lightning Network node offering geared toward merchants in developing countries. The lightweight device enables merchants to accept Bitcoin payments through Lightning while retaining complete control of their wallets and keys. “Merchants using Nodl light will have full control over a dedicated Lightning node while benefiting from shared Bitcoin Core and payment processing resources hosted by Nodl in their cloud infrastructure,” per the statement. “This hybrid setup is a novel, modular approach that highlights efforts made to bring Bitcoin to a wider public while maintaining a strong focus on security.” The company sought to create an effortless way for merchants in the Central American country to accept Bitcoin in exchange for their goods and services in a self-sovereign way. The open-source node-in-a-box solution aims to help people be genuinely inserted into the Bitcoin economy, enabling them to be truly financially sovereign. When using custodial or centralized Bitcoin solutions, most of the monetary network’s value proposition is lost.
Croatia’s Largest Retail Chain Now Accepts Bitcoin Payments Online
Croatia’s largest food retailer has enabled Bitcoin as a payment option in its online shop, the company said in a statement! Konzum has become the first local retail chain to offer customers the choice, allowing them to purchase everyday consumer items with Bitcoin. “Bitcoin owners can buy and pay for groceries, hygiene, and household items and other products from the rich offer of our online store with more than 12,000 products,” Kozum said, according to a translated version of the statement. Reuters reported that Konzum is part of the Balkan region’s biggest food producer and retailer, Fortenova Grupa. The report also noted that Konzum’s shops are popular among tourists visiting Croatia, who will now be able to purchase products online with Bitcoin. The company said it plans to enable the new payment option in its physical stores soon. “As the largest retail chain in Croatia, which in its almost 65-year history is a continuous leader in the domestic market in terms of business results and technological achievements, we are proud to be leaders in another area that is rapidly developing and dictating the future,” Konzum board member Uroš Kalinić said. Konzum implemented the new payment avenue through a partnership with local fintech Electrocoin and their PayCek system, a Bitcoin payment processor. The system provides a QR code for the customer to scan and pay using their Bitcoin wallet of choice while fixing an exchange rate as the purchase begins to protect the consumer from volatility.
SEC Chairman: Bitcoin Competes With The U.S. Banking System
Bitcoin is a competitor to the U.S. banking system and its worldwide consensus,” the Securities and Exchange Commission (SEC) Chairman Gary Gensler said on Wednesday. “We layered over our digital money system about 40 years ago with money laundering and various sanctions and regimes around the globe; we layered that over a digital currency system called our banking system,” Gensler said. “In 2008, Satoshi Nakamoto wrote this paper in part as a reaction, an off-the-grid type of approach. It’s not surprising that there’s some competition that you and I don’t support but that’s trying to undermine that worldwide consensus.” Gensler’s remarks came during the DACOM Summit 2021, a compliance and market integrity event live-streamed on Wednesday. The SEC chairman joined Jay Clayton, who was in Gensler’s shoes as the commission’s head a few years past, for a conversation around Bitcoin, cryptocurrencies, digital assets, exchange-traded funds (ETFs), and decentralized finance.
Jack Dorsey Is Now Focused On ‘Making Bitcoin More Than An Investment’
Payments giant Square will change its corporate name to Block Inc., the company said in a statement Wednesday. Square Crypto, it’s subsidiary focused on funding Bitcoin development, is now called Spiral. The name alludes to Spiral’s focus, Bitcoin, as it continues to grow “like a spiral from a single point, encompassing more and more space until it touches everything,” Square tweeted. “Once Square decided to rebrand, we knew it was time for our own long-overdue rebrand,” per Spiral’s website. “After all, Square Crypto was never the best name for our team.” Having “Square” tied to its name “drew a direct line between the corporate benefactor we are supposed to be independent of and us,” Spiral said. On the other hand, having “crypto” in its name led to confusion, as the company is focused solely on Bitcoin. An intention to better separate Square’s many product lines and offerings was also the backbone reason for the corporate rebranding to Block. Square will now only represent Block’s Seller business. “We built the Square brand for our Seller business, which is where it belongs,” Jack Dorsey, co-founder, and CEO of Block said in the statement. “Block is a new name, but our purpose of economic empowerment remains the same. No matter how we grow or change, we will continue to build tools to help increase access to the economy.“ Square Inc. is expected to be legally changed to Block Inc. on December 10, but the company’s NYSE ticker symbol, SQ, will not change. Square, Cash App, TIDAL, and TBD will maintain their respective brands.
It’s Time For South Korea To Embrace Bitcoin, Says KRX Chairman
It’s time to explore ways to embrace Bitcoin,“ Korea Exchange (KRX) Chairman Son Byung-doo said, according to a report by local outlet Chosun. Byung-doo drew parallels between Bitcoin and the traditional capital markets, calling for investor protection and transaction stability measures. “We need to study ways to embrace virtual assets as ‘know-how’ in the capital market,” Byung-doo reportedly said. The number of domestic cryptocurrency exchange users in South Korea has increased despite local financial authorities maintaining a stance that Bitcoin is “outside the realm of finance.” According to the report, there are over 5 million users in domestic Bitcoin exchanges. The daily trading volume of cryptocurrency has also increased and is close to reaching the trading value of South Korea’s stock exchange, KRX. “Since virtual assets have become ‘major’ investment assets, it is time to prepare an institutional framework,” Byung-doo added. “Now is the time for exchanges to compete directly with overseas exchanges.” The KRX chairman has noticed the increased investor appetite for Bitcoin exposure in his country and is looking for ways to learn more about and “embrace” the asset class. Unsatiated thirst can lead to investors looking elsewhere.
Goldman Sachs And Others Exploring Bitcoin-Backed Loans
Goldman Sachs and a handful of other Wall Street banks are exploring ways to do institutional cash loans with Bitcoin as collateral, CoinDesk reported. The report cited three people familiar with the plans of a group of tier-one U.S. banking institutions interested in the activity. However, most banks would not custody “physical” Bitcoin to make the loans but instead, resort to synthetic products such as futures. The idea is to emulate tri-party repo agreements, the report said. It is a type of repurchase agreement in which a third-party agent facilitates the transaction between buyer and seller by taking custody of the collateral and ensuring proper delivery of cash and the involved assets to each party as per the agreement’s terms. “Goldman was working on getting approved for lending against collateral and tri-party repo,” one of the people told CoinDesk. “And if they had a liquidation agent, then they were just doing secured lending without ever having Bitcoin touch their balance sheet.” A second person from a large institutional trading firm shared that while some banks will use a third party to make the loan, others plan to use their own balance sheet. “We’ve probably spoken to half a dozen big banks about [Bitcoin-backed loans],” the second person reportedly said. “Some of them are in the next three to six months category and some are further out. What’s interesting is some of these banks will use their own balance sheet to make the loan. Others will syndicate this out.” According to the report, Coinbase and Fidelity Digital Assets were cited as potential custodians the banks were in discussions with.
Bitcoin hype cycles are waves hitting the shore & then receding from it. Every subsequent wave is bigger. Those who cling onto the shore despite the force of the receding flow succeed.“ ― @misir_mahmudov
Stay Safe & Stack Sats!
Bitcoin Adoption News by @CuredSausage
Community
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