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Bitcoin pulls back from brink of $50,000


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Bitcoin pulls back from brink of $50,000

 

2021-02-15T025117Z_1_LYNXMPEH1E03F_RTROPTP_4_CRYPTO-CURRENCY-ETF.JPG

A representation of virtual currency Bitcoin is seen in front of a stock graph in this illustration taken January 8, 2021. REUTERS/Dado Ruvic/File Photo

 

SINGAPORE (Reuters) - Bitcoin pulled back from a record high on Monday and other cryptocurrencies slipped, as investors took profits from a record-breaking rally that had pushed bitcoin close to $50,000.

 

Bitcoin fell as much as 5.6% to $45,914 in Asian trading hours after having posting a record peak of $49,714.66 on Sunday, while rival crypto ethereum slid more than 8%.

 

Once on the fringes of finance, bitcoin is fast gaining legitimacy as an asset class and has leapt 20% in the week since electric carmaker Tesla Inc announced it had $1.5 billion in bitcoin and would accept the currency as payment.

 

It is up more than 60% for the year to date and has gained more than 1,100% since hitting a one-year low last March.

 

"There's this unadulterated wave of big players (buying) that has continued to push the price higher," said Chris Weston, head of research at Melbourne brokerage Pepperstone. "We might be seeing one or two big funds just cashing out," he said.

 

"The big question is: OK, you want to buy the pullback, but how big is the pullback that we are talking about?"

 

Besides Tesla's investment, Bank of NY Mellon last week said it formed a new unit to help clients own and trade digital assets.

 

Bloomberg reported on Saturday that Morgan Stanley's investment arm is weighing a bet on bitcoin.

 

(Reporting by Tom Westbrook; Editing by Kim Coghill and Sam Holmes)

 

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-- © Copyright Reuters 2021-02-15
 
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This was no normal pullback, I've been watching the Bitcoin market quite closely over the last few days as it approached $50k

 

There was been a concerted effort to keep the price below $50k, on the Binance exchange the huge number of sell orders lined up ($35 million at one point) at a price of around $50k and many other very large sell orders appearing a little lower than this - classic price suppression.

 

In a market where everything's ticking along nicely it can be very hard to get people to sell when the price looks like it's going to increase. Many people trade with large margins, like 10x the funds they have on the exchange and they're trading with pretty large amounts of money.

 

Most of them will have a stop loss in place and the only way to make these traders to sell is to force the price down so the stop loss is triggered or they get liquidated due to not having enough funds remaining to cover their holdings (a margin call) which in reality isn't a margin call in the traditional sense to add more funds, it's a straight up liquidation where you lose the lot.

 

Such 'sudden and unexpected' drops are common as it brings a large volume of sellers, both people watching the market and those with stop losses and liquidations due to their current position becoming insolvent.

 

It's a shake out of sorts, a tactic to buy as many coins as you can prior to an expected price increase, such actions would not be tolerated in traditional stock exchange markets but they're relatively normal in the crypto markets which can still be considered the 'Wild West' of trading.

 

Classifying this as a natural 'pullback' due to the price being too high at this stage is plain wrong - it's a direct manipulation by larger players who want to buy at lower prices before allowing it to move up. The big guys 'eating' the small guys.

 

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On a slight tangent (or fork if you will) from BTC,.... I'd be interested in comments on 'why not BCH' as a store of value as well?  Sold my free coins when it was $3300 or so in 2017, but am almost tempted to put 40 or so in if it dips back to $380-$400.   Most folks at present look at ETH as silver to BTC's gold, but technically speaking, BCH is probably the better silver comparison.  When I think why not, the first thing for me is that I dislike Roger Ver, but if I look at the coin itself, it's faster than BTC, actually works better for P2P transfers, and is just as secure.

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Most people are aware that Bitcoin is heading towards unprecedented gains this year, but some seem to be uncritically swallowing the hype, believing all the magic will happen right away, and are making highly-leveraged bets on that basis.

When my brother got in at 30k I warned him that it would keep swinging up and down like crazy, but that the whole point was that, at key points spread throughout the year, we would see the sort of big run-up we've just experienced and that each time it would then fall back to a higher base level.

Unless you have made bets that it would, we really don't need to see Bitcoin break through 50k this week. We are still only halfway through February, Biden has only been in the White House for a month, still lots of time left for this unique year to unfold.

I don't care if some experienced traders are successfully managing to pick off the small margin gamblers. Nothing they can do will affect the larger macro-economic realities that will result in Bitcoin settling to a base above 200k by the end of this year, but with lots and lots of panicked headlines along the way.

 

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9 minutes ago, donnacha said:

Most people are aware that Bitcoin is heading towards unprecedented gains this year, but some seem to be uncritically swallowing the hype, believing all the magic will happen right away, and are making highly-leveraged bets on that basis.

When my brother got in at 30k I warned him that it would keep swinging up and down like crazy, but that the whole point was that, at key points spread throughout the year, we would see the sort of big run-up we've just experienced and that each time it would then fall back to a higher base level.

Unless you have made bets that it would, we really don't need to see Bitcoin break through 50k this week. We are still only halfway through February, Biden has only been in the White House for a month, still lots of time left for this unique year to unfold.

I don't care if some experienced traders are successfully managing to pick off the small margin gamblers. Nothing they can do will affect the larger macro-economic realities that will result in Bitcoin settling to a base above 200k by the end of this year, but with lots and lots of panicked headlines along the way.

 

Michael Saylor held a big meeting a couple weeks ago for CEOs of big companies porting why they should get into Bitcoin. One of his points was the volatility of BTC. He claimed that if it is around $200,000 most of the volatility will disappear. A few days later Elon Musk bought $1.5billion worth. Along the lines you are saying. Hope you and he are correct.

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Just now, Dazinoz said:

A few days later Elon Musk bought $1.5billion worth. Along the lines you are saying. Hope you and he are correct.


Elon and I have discussed this at length and he concluded that we are both correct, but he was gracious enough to admit that I am, as usual, more correct than him.

 

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4 minutes ago, donnacha said:


Elon and I have discussed this at length and he concluded that we are both correct, but he was gracious enough to admit that I am, as usual, more correct than him.

 

Good to hear.😉

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