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Hammer Time: The Bullish Signal That Could Save Bitcoin

Bitcoin price is still struggling to hold onto support at $ 30,000 on high timeframes after smashing through it more than a week ago now.

With buyers stepping in after the plunge, there is a chance for bulls to stop the downside with a bullish reversal candlestick setup. Learn more about the potential setup and find out if it’s “hammer time”.

A Bullish Hammer Could Put A Stop To The Bear Market

You wouldn’t necessarily know it by the ultra bearish sentiment or the recent plunge and resulting panic across the crypto market.

But if you look at medium timeframe price charts, Bitcoin bulls could be preparing out a stop to the bleeding and stage a bullish hammer reversal.

Related Reading | This Expanding Triangle Pattern Could Be The Last Hope For Bitcoin Bulls

Japanese candlesticks are said to be developed by the so-called “God of Markets,” Honma Munehisa. Homna was a rice trader and wrote the first ever book in market psychology.

Candlesticks are comprised of a body and shadow, often called a wick. They are typically depicted as red and green, or white and black (open and closed). Each candle includes information on the open, close, low, and high of the trading session it represents.

How the candle opens, closes, and the highs and lows set during the session will shape the candle, and often provide information about what might be going on in the market — and what might come next.

Could this hammer put a stop to bears? | Source: BTCUSD on TradingView.com The Technicals Supporting A Bitcoin Reversal Setup

On BTCUSD weekly and 2-week timeframe charts, the top cryptocurrency is working on a bullish hammer. A bullish hammer is a characterized as having a long lower wick acting as the handle, a small upper body, and little to no upper shadow.

Although the bullish signal only takes one candlestick to suggest a bottom is in, it is only confirmed with a strong follow through back to the upside.

There are plenty of technicals supporting a reversal | Source: BTCUSD on TradingView.com

Hammers are most effective when they follow a string of at least three down candles, and are supported by bullish technicals.

The bullish hammer is happening at what could be the end of a wave 4 expanding triangle correction, according to Elliott Wave Principle. The MACD is retesting the zero line, much as it did during the wave 1 Black Thursday correction. Each bottom, also coincidentally touched the lower Bollinger Band before reversing to the upside.

Related Reading | Bitcoin Bear Market Comparison Says It Is Almost Time For Bull Season

Will this bullish hammer confirm, and stop the bloodbath from continuing?

Here is a 🧵 on my full Elliott Wave analysis on #Bitcoin and why I don’t believe there is a bear market – and why I expect the last leg up any day now.

— Tony "The Bull" Spilotro (@tonyspilotroBTC) May 15, 2022

Follow @TonySpilotroBTC on Twitter or join the TonyTradesBTC Telegram for exclusive daily market insights and technical analysis education. Please note: Content is educational and should not be considered investment advice.

Featured image from iStockPhoto, Charts from TradingView.com
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Tether Cuts 17% Of Its Commercial Paper Holdings Over Q1 2022

As per the official report published on May 18, Tether, the issuer of the world’s most used stablecoin, USDT, has cut 17% of its commercial paper holdings and increased United States Treasury bills with this reserve amount to back its stablecoin, USDT. Tether made the reduction over Q1 2022 and continues for a further 20% decline since April 1. The firm will highlight this 20% reduction in the Q2 report.

The crypto project took these steps following the USDT stablecoin losing its dollar peg. The stablecoin dropped to 95 cents on May 12. In addition, to assuage users’ fears over the catastrophic effects of the recent bloodbath, Tether noted that its reserves were “fully-backed” in a blog post on Thursday.

Related Reading | TA: Bitcoin Reclaims $ 30K, Why Bulls Face Uphill Task

According to the statement of the stablecoin issuer, it has decreased commercial paper holdings. As a result, the holdings decreased from $ 24 billion to $ 20 billion in the first quarter. As well as, the company increased its investments in the market money funds and U.S. treasury bills during that time. The firm has added 13% to its Treasury Department and lifted the investment amount from $ 35.5 billion to $ 39 billion.

Chief technical officer at Tether, Paolo Ardoino, expressed;

Tether has maintained its stability through multiple black swan events and highly volatile market conditions and, even in its darkest days. Tether has never once failed to honor a redemption request from any of its verified customers.

USDT price is currently below the 1 U.S dollar. | Source: USDT/USD price chart from TradingView.com Tether Affirms It Is “Fully Backed”

He further added;

This latest attestation further highlights that Tether is fully backed. And that the composition of its reserves is strong, conservative, and liquid. 

In February 2021, New York Attorney General alleged the firm had misrepresented the figure of fiat collateral through which stablecoins USDT is backed. The company settled the legal dispute with A.G by paying an $ 18.5 million fine. And since then has been liable to disclose its reserve every quarter per the settlement. As a result, Tether reported its reserve allocation for Q4 2021 last February. According to that report, the company has reduced its commercial paper holdings from $ 30 billion to $ 24 billion, diminished by 20%.

Continued redemptions from USDT would cause forced sales of commercial holdings, possibly leading to spillover in contagion in the traditional financial market, said Nikolaos Panigirtzoglou, an JP Morgan Chase & Co. analyst on Thursday.

Citing the outflows of the Tether, Panigirtzoglou said;

This is not all exiting crypto markets as around $ 5 billion appears to have shifted to USDC and Binance USD.

Related Reading | Bitcoin Selling Pressure Continues As Long-Term Holder SOPR Spikes Up

Tether has a market capitalization of over $ 74 billion at the time of writing. While Tether’s reported assets backing USDT have exceeded $ 82 billion. To assure users that Tether is stable as its name sounds, over the last two weeks of market volatility, Tether highlighted that it would “honor all redemptions from verified customers” for USDT.

Featured image from Pixabay and chart from TradingView.com

 

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