Dear Teroxx Community,
This week we saw a crypto-market that saw a consolidation phase. Nearly all digital assets took smaller losses. The bigger picture is still bullish.
As usual, we are also providing detailed videos for those who want to delve deeper into the subject.
Latest crypto news
While MicroStrategy is “too heavily” invested in Bitcoin for the analysts, a “crypto bank” is becoming the new insider tip for investors. Following the announcement of a $1 billion investment in Bitcoin, CitiBank downgraded the stock to “sell”, while analysts at trading website Motley Fool encourage investors to buy the stock of a bank that has one of its focuses on cryptocurrencies. The related report scolds the software maker, even though its share price has now more than tripled since its low for the year of $92. The positive shift towards digital assets becomes clear here.
More and more large companies and investors are buying Bitcoin. Over the course of 2020, many well-known players in the traditional financial industry have invested in Bitcoin (BTC), including the investment guru Paul Tudor Jones and the software manufacturer MicroStrategy. However, they are only the vanguard for a whole flood of money that will soon be flushed into the market-leading cryptocurrency by big investors. At least that is what Tyler and Cameron Winklevoss, the founders and operators of the crypto exchange Gemini, think. “These are the smartest investors, the smartest of the smart are quietly buying Bitcoin right now, so there’s no gateway panic (FOMO) behind this!”
With bond sales amounting to 650 million US dollars, the software manufacturer Micro Strategy underlines its belief in Bitcoin. Yesterday, MicroStrategy disclosed that it had sold $650m of its own corporate bonds, which carry an interest rate of 0.75% and mature in 2025. Interest payments accrue semi-annually, to be settled on 15 June and 15 December. “MicroStrategy intends to invest the net proceeds from the bond sales in Bitcoin, provided the capital generated is not required for other corporate purposes.”
Technical term of the week
Consolidation phase: After strong upswings or downswings, the market often experiences a sideways movement before new volatile oscillations enter the market. These phases often have a lower volume and the investment power stagnates, when immediately upon the successful formation of a support the market strengthens at these levels. Once the consolidation is complete, the market then experiences increased volatility.
This week we saw a digital asset market that failed to make any new moves. After the all-time high was reached, the entire market saw sell-offs. On a weekly basis, the market is thus in the red. The market capitalisation fell by ~2%.
$19,000 could not be held as support, so sell-offs in bitcoin followed down to ~$17,500. This symbolises a dip of over 10%. However, as the market remains very bullish and thus another “higher low” was (higher low) was formed. Based on this support, the market confirmed its bullish tendencies and was able to climb back above $19,000. Thus, the market has almost neutralised on a weekly basis, although the positive trend was supported by the new high support!
Bulish outlook: Stock markets often experience a “year-end rally”. Should this also take place in 2020, digital assets could also benefit and altcoins in particular could experience a push.
Bearish outlook: $17,500 is the “new” and strong support. If this level is lost, the market could experience a small slide. Subsequently, $17,000-$16,500 should hold as support.