View profile

Bitcoin Fear and Green Index Newsletter. Block 25

Bitcoin Fear and Green Index Newsletter. Block 25
By Bitcoin Fear And Greed Index • Issue #25 • 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 tested a major trend-shifting level and failed to initiate a break, only to then rebound off critical support and launch the very first rally of 2022. In today’s newsletter, I will talk about intra-cycle trends and the potentiality of a bullish shift in momentum. I will also detail the most likely spark behind the current rally.
Is The Bearish Trend Over?
In an attempt to answer this question most effectively, I will utilize a trend extrapolation method based on the bear trend of early 2021.
First, a quick summary of the intra-cycle trend constituents. The intra-cycle trend indicator is made up of the 20, 50, and 100 day moving averages (Yellow, Blue, Red). Whenever the 20 MA breaks above the 100 MA, it indicates a bullish shift in momentum where the short-term fluctuations in price are significantly outperforming the long term average. When the 20 MA crosses below the 100 MA, the opposite becomes true.
Today’s focus will be on how the final stage of the last bear trend played out, and the resemblance between the previous and current bear trend in that regard. The chart above illustrates the striking similarities between both trends. First, is the false break of the 20 MA followed by a failed test of that level. Also note how in both trends, the false break resulted in major price capitulation, forming a lower low within the local range of each trend. The second resemblance is the time in which it took Bitcoin to revisit the 20 MA and initiate another test (~2 weeks). The third and final similarity revolves around the aggressive fashion in which Bitcoin approached the 50 MA following the breach of the 20 MA. In both instances, Bitcoin broke through the 20 MA and came in contact with the 50 MA within a 5-day period. During that period of both trends, there was no pullback or correction whatsoever.
Bitcoin is currently testing the 50 MA around $43,000. If Bitcoin is able to flip this moving average into immediate support, it would be highly indicative of a potential rally towards ~$47,000. When Bitcoin broke above the 50 MA during the previous bear trend, it rallied virtually uninterrupted above the 100 MA. There was only 1 pullback that preceded the golden cross (20MA over 100MA) before the general trend shifted bullish.
If history is any indication, then Bitcoin seems to be emulating the final phase of a prolonged bear trend.
Knowing what we know now, it would be easy for us to assume that Bitcoin is on the verge of a definite trend reversal. I would not make that assumption. The main purpose behind this trend extrapolation is to highlight the fascinating similitude between the two bear trends, and to say that if history was to repeat or rhyme, then this would be the most likely scheme. That said, there are a lot of future variables, be it macroeconomic events or others, that could negate this scenario.
What Sparked The Rally?
The chart above tells the story of a drawn-out struggle and an eventual relief. For the past 3 months, Bitcoin was under the oppression of the 21 day EMA. Every test was met with relentless rejections or false breaks that led to price capitulation, effectively creating lower lows and continuing the bearish trend. That was not the case during the past week. Following the severe price capitulation to $33,000 after a failed test of the 21 EMA, Bitcoin initiated a slow ascent in an attempt to revisit the same moving average once again. That attempt was met with a failed initiatory test. At that point in time, Bitcoin was faced with a crossroads in which it can either break below the critical Point of Control at $36,500, effectively rendering the test unsuccessful, or it could find support around that level and rebound from it in an attempt to retest the 21 EMA for a second time. Bitcoin found valid support at the point of control and rebounded off that level, breaking through the 21 EMA with virtually no resistance. Knowing the significant role of the 21 EMA when it comes to dictating the trajectory of the short-term trend, it becomes clear why this break was crucial for the bulls. In essence, holding the critical point of control after a failed initiatory test was the spark behind the aggressive launch of this rally.
What Sustained The Rally?
After the break of the 21 EMA, Bitcoin then went into a transitory hold of a range between $41,000 and $42,000. What separates this hold from any other hold I’ve ever seen, is the time that Bitcoin spent within that narrow of a range. The chart above illustrates the 28-hour long squeeze of the Bollinger Bands. A pinch of that extent and tightness is rare to say the least. The bandwidth being at more than a 1-year low further corroborates that point. This was exceedingly indicative of imminent volatility. Following this extended squeeze, Bitcoin then broke out of that range and into the local high of ~$44,500. The assumption of which direction this volatility was going to take Bitcoin could have been supported by the fact that the squeeze was preceded by a bullish trend, and that a continuation was the most likely scenario. Of course, no one knew where Bitcoin was heading to definitively, but this would have been a reasonable outlook at the time.
With that said, have a bullish week, until we meet again.
TA review by @CryptoSultan21
Bitcoin Adoption News This Week
Any sufficiently advanced technology is indistinguishable from magic.”
— Arthur C. Clarke on Bitcoin
Bitcoin Educational Center Launches in El Salvador
Peer-to-peer bitcoin platform Paxful has launched an educational center in El Salvador to help citizens learn about and better utilize Bitcoin. The initiative, called La Casa Del Bitcoin, aims to propel bitcoin adoption with free knowledge as the majority of the Salvadoran population still struggles with the technology. Paxful said in a statement that the center would provide the population of San Salvador, El Salvador, with free training and events that increase awareness around the benefits of having bitcoin as a medium of exchange in the local community. “The center will further drive the next wave of Bitcoin mass adoption and equip growing segments such as small merchants and local businesses with tools to connect to a global community of users,” the statement said. Classes and training will go live to the public starting Thursday, February 3, as the center welcomes anyone interested in better interacting with Bitcoin and Lightning. “Peer-to-peer platforms are driving adoption in emerging markets, and as a people-powered platform, we understand that education is crucial to the next wave of adoption,” Paxful CEO Ray Youssef said in a statement. “The center will provide education, accessibility, and opportunity to a population that has been ignored by traditional finance, and demonstrate the real-world benefits of Bitcoin to emerging markets.” In addition to providing educational resources, the center will also house offices of Paxful and of Built With Bitcoin Foundation, a humanitarian organization devoted to leveraging Bitcoin to create equitable opportunity through clean water, access to quality education, sustainable farming, and humanitarian support.
Bipartisan Bill to Eliminate Taxes for Small Bitcoin Transactions
A bipartisan bill introduced would exempt bitcoin transactions from tax obligations if the associated capital gains are $200 or less, seeking to incentivize the digital currency’s usage as a medium of exchange in the U.S. economy. Currently, any gain obtained from the sale of cryptocurrency must be reported as a taxable income regardless of the size or purpose of the transaction. “Antiquated regulations around virtual currency do not take into account its potential for use in our daily lives, instead of treating it more like a stock or ETF,” said Rep. Suzan DelBene, co-author of the bill, in a statement sent to Bitcoin Magazine. “However, virtual currency has evolved rapidly in the past few years with more opportunities to use it in our everyday lives. This commonsense bill cuts the red tape and opens the door to further innovations, ultimately growing our digital economy.“ The Virtual Currency Tax Fairness Act was co-authored by Rep. David Schweikert and co-sponsored by Representatives Darren Soto and Tom Emmer. “Virtual currency is reshaping our everyday lives, and the United States needs to recognize this and work to treat these currencies fairly in our tax code,” Schweikert said in a statement. “This legislation is an important step forward, and it lays the groundwork for growing the digital economy.” Using bitcoin as a payment method entails a sale for the Internal Revenue Service (IRS) as the payer disposes of part of its BTC holdings in exchange for a good or service. If the funds being spent had been acquired at a lower U.S. dollar price, the difference would be characterized as capital gains, of which reporting and taxing would be required. The legislation seeks to amend the Internal Revenue Code of 1986 to remove these requirements when the capital gain observed doesn’t exceed $200, hence specifically targeting smaller transactions in a push to incentivize, or at least better enable, usage of bitcoin as a means of payment in the U.S.
La Haus Sells First House In Colombia For Bitcoin
Latin American real estate market leader La Haus has closed another home sale for bitcoin, the first in Colombia after recently selling a property in Mexico, Valora Analitik first reported. La Haus’ VP of innovation and future, Jehudi Castro, told Bitcoin Magazine that the transaction represented a downpayment for an apartment at Natura City, an exclusive apartment complex owned by Titles and Real Estate Developments, which is being built in the Bellavista sector, Santa Marta, in the north of Colombia. Castro added that the apartment cost approximately $98,000 in total, which at the time of writing translates to about 2.45 BTC. The buyer paid 0.03 bitcoin in the downpayment and will make incremental payments in bitcoin until the apartment’s construction is completed, which is expected to happen in 2025. “We are working to bring this type of alternative to the rest of the country so that the payment methods and the form of investment are not a barrier to access residential goods,” Castro said, per the report. Bitcoin’s power shone by frictionlessly completing the transaction across borders, as the buyer was traveling internationally at the time of purchase. Payment processing company OpenNode facilitated the transaction to be made instantly through the Lightning Network.
Superfood Chain Everbowl Adopts Bitcoin Standard
Everbowl, a craft superfood chain based in California, will now run its business operations on a Bitcoin standard and convert all of its cash reserves to bitcoin, the company said in a statement. “We’ve concluded that running the business exclusively on cash isn’t the most advantageous, nor the safest, method of running a business in 2022 and beyond,” Everbowl founder and CEO, Jeff Fenster, said in a statement. “Also, I understand that it is still early in terms of corporate adoption, as well as governmental adoption of Bitcoin, but we plan to make a contribution to this cause by leading with our example. A disruptive growth company should always position itself ahead of the pack and take the lead by adopting new technologies early rather than late. We believe it’s a matter of ‘when,’ not ‘if,’ that the Bitcoin Standard will become the Gold Standard,” Fenster added. Fenster said he started to rethink his company’s treasury strategy “in light of the excessive debasement of the U.S. dollar coupled with a 39-year high inflation rate.” The chief executive then began to learn more about the structure of a Bitcoin standard, after which the decision to adopt it became natural. “The value of the cash within our company is eroding at an unsustainable rate,” Fenster added. “I strongly encourage all business leaders to at a minimum do their own research on Bitcoin to better understand the strategy.” Everbowl will also offer its employees the option to be paid in bitcoin, a move the company will formally announce soon.
Canadian Trucker Protest Bypasses Restrictions With Bitcoin
Freedom Convoy, a cohort of Canadian truckers protesting for the end of COVID-related mandates in the country and the restoration of the Canadian Charter of Rights and Freedom, had received C$10 million ($7.8 million) in donations until its fundraising platform, GoFundMe, froze their funds alleging violations of its terms of service. “GoFundMe supports peaceful protests and we believe that was the intention of the Freedom Convoy 2022 fundraiser when it was first created,” GoFundMe said in a statement. “We now have evidence from law enforcement that the previous peaceful demonstration has become an occupation, with police reports of violence and other unlawful activity. This fundraiser is now in violation of our Terms of Service (Term 8, which prohibits the promotion of violence and harassment) and has been removed from the platform,” the platform said. In this statement, GoFundMe also said donors who wanted a refund had to submit a request until February 19; otherwise, the money would be sent to other “credible and established charities.” After a huge backlash, however, the platform issued an updated statement saying that all donations would be automatically refunded to donors. Despite this being a positive change for those expecting refunds after GoFundMe’s abrupt removal, the furnishing of automatic refunds was likely the expectation of many, without the need for such an update. The changes instituted by GoFundMe demonstrate how traditional payment rails can be politicized and stopped at will, most often sidelining movements that defy the status quo of their jurisdiction by cutting off access to donation avenues altogether.
Canada’s KPMG Adds Bitcoin To Its Treasury
Canada’s KPMG has added bitcoin to its corporate treasury through Gemini Trust Company’s execution and custody services, a first for the Canadian member of KPMG International Limited, a British-Dutch multinational professional services network, and one of the Big Four accounting organizations. “The investment illustrates the firm’s outlook on emerging technologies underpinned by blockchain,” the company said in a statement. KPMG said it established a governance committee with stakeholders from finance, risk management, advisory, audit, and tax to provide oversight and approve the bitcoin allocation, which also included one other cryptocurrency. The committee performed a “rigorous risk assessment process” that included a review of the many different risks the allocation could pose. Tax and accounting implications were also assessed. “This investment reflects our belief that institutional adoption of crypto assets and blockchain technology will continue to grow and become a regular part of the asset mix,” Canadian managing partner of advisory services at KPMG in Canada, Benjie Thomas, said in a statement. “Investors such as hedge funds and family offices to large insurers and pension funds are increasingly gaining exposure to crypto assets, and traditional financial services such as banks, financial advisors and brokerages are exploring offering products and services involving crypto assets.” KPMG is a full-service audit, tax, and advisory firm owned and operated by Canadians for over 150 years. The company provides consulting, accounting, auditing, and tax services in the country with its over 8,000 employees in more than 40 locations. KPMG did not disclose the size of the allocation.
Jack Dorsey’s Cash App Integrates Bitcoin’s Lightning Network
Users of Block’s mobile payments platform Cash App can now make instant and free bitcoin payments through the Lightning Network, the company tweeted. The integration of Bitcoin’s second-layer protocol for faster and cheaper transactions was made possible by the Lightning Development Kit, an open-source project developed by another company owned by Block, Spiral. Spiral operates completely independently of its parent company and Jack Dorsey, the CEO of Block and ex-CEO of Twitter, also has little direct control over it. Instead, the self-directed group of developers, designers, and project managers work together to advance the adoption of bitcoin. The Lightning Development Kit (LDK) is a flexible Lightning implementation geared towards developers who want to integrate Bitcoin’s Lightning Network into their applications frictionlessly. It abstracts away the complexities of Lightning, enabling developers to integrate the network easier and faster into their apps. Jack Dorsey said in a fireside chat last week with Michael Saylor, the CEO of software intelligence company MicroStrategy, that having Cash App integrate Lightning through the Spiral’s work was one of the proudest moments of his career. Lightning adoption has skyrocketed since El Salvador made bitcoin legal tender in September, prompting users to use the faster payment rails to buy their daily breakfast at McDonald’s or their morning coffee at Starbucks. Despite critics saying that Bitcoin cannot be used as a means of exchange due to its base layer’s slow settlements, Lightning empowers Bitcoin to handle the smallest of payments for little to no cost. Now, all Cash App users can also leverage Lightning to send small payments instantly and for free. However, it seems that Cash App cannot yet receive Lightning transactions itself — only send them.
The number one benefit of information technology is that it empowers people to do what they want to do. It lets people be creative. It lets people be productive. It lets people learn things they didn’t think they could learn before, and so in a sense, it is all about potential.” - Steve Ballmer
Stay Safe & Stack Sats!
Bitcoin Adoption News by @CuredSausage
This week’s issue is supported by Crypto Jobs List - the largest source of web3 jobs. There are hundreds of remote jobs that let your earn Bitcoin and other cryptocurrencies as a part of your marketingwriting or engineering job in this industry.
Participate in the next newsletter block!
We release this newsletter weekly and would love to feature the best contributors. Three sections are up for grabs:
  • This week’s chart, TA
  • This week’s regulation news
  • Major adoption news. Who’s accepting BTC/crypto?
To participate, submit your write up via this form. Best content will be featured and authors credited. ✌️
Did you enjoy this issue?
Bitcoin Fear And Greed Index

Join our community-driven newsletter, where we cover Technical Analysis, Adoption and Regulatory news. Read till the end to learn how you can participate!

In order to unsubscribe, click here.
If you were forwarded this newsletter and you like it, you can subscribe here.
Powered by Revue