News updates March 29, 2022
1. Why Bitcoin Could See A 2020 Like Rally:
After a rough couple of months, this week started with a strong upward movement from Bitcoin as the coin broke out above the $45,000 level on Monday to $48,215 before fluctuation, thus erasing yearly losses and anticipating a $50,000 target.
Despite the decline over the year, a large amount of the coin was never sold. A scenario that shows how holders strongly believe in the long-term game and remain surprisingly calm over a period of turmoil.
Building Up To A Rally:
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Senior Analyst Dylan LeClair noted that, as Bitcoin is trading at around $48,000, “there has only been one other time that the percentage of supply that hadn’t moved in over a year was at this level,” which was during September 2020.
On the mentioned date Bitcoin recovered from the dramatic crash of march 2020. The strong bounceback saw a 185% hike in the prices, taking to coin to over $10,000. A high number of committed ‘hodlers’ had also kept their BTC dormant despite the extreme swings in prices during the year.
This was followed by a performance that catapulted Bitcoin’s reputation amongst investors as “digital gold”. It closed the year trading at record highs of close to $30,000, outperforming gold with an increase of 416% over the year.
Brett Munster at Blockforce Capital had also noted last week a near-record highs percentage of the total Bitcoin supply that hasn’t moved in over a year, further pointing out that it is growing at a much faster pace than the last time Bitcoin was at these levels.
Bitcoin Derivatives Paint A New Picture:
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Furthermore, Dylan LeClair also noted that BTC derivatives “are still somewhat defensive & nowhere near as risk-on as 2021 despite same price levels.”
Illustrated by the following chart, the analyst showed the movement of BTC derivatives throughout 2021 “when the price was trading at this current level.”
Note that funding rates “represent traders’ sentiments in the perpetual swaps market,” with positive funding rates (over 0) indicating that long position traders are dominant and negative funding rates (under 0) indicating the opposite, CryptoQuant explains.
Compared to previous years, the BTC hourly perpetual funding rates are significantly closer to zero. “Excessive long-biased derivative market speculation is near non-existent currently,” says LeClair.
What the analyst is pointing out means that excessive speculation and leverage drove the market to these price levels in 2021, and “now its basically nowhere to be seen and bitcoin is rallying.” This could imply that the price is now rising because of demand, not market speculation.
Similarly, in the following chart, LeClair displays annualized perpetual future funding rates on a 24-hour Moving Average, while adding that “Traders were paying ~100% annualized to go long BTC early in 2021. A similar but less severe speculative market arose in the fall. Today? Funding has been flat/negative for most all of 2022.”
2. Bitcoin a 'nice buy' at $47K despite macro dangers as key trendline nears — Research:
Data from Bitcoin's Mayer Multiple suggests low risk/return conditions at current levels, but macro conditions still trouble long-term optimism.
Bitcoin (BTC) is attempting to reclaim a key long-term moving average, but the time to buy is before, not after, one metric hints.
In a series of tweets on March 29, on-chain monitoring resource Ecoinometrics eyed a classic entry for BTC/USD as flagged by the Mayer Multiple.
Mayer Multiple nears pivot:
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Bitcoin price strength has endured as the week gets underway, the largest cryptocurrency putting in its highest levels of 2022 overnight.
Some key moving averages have also fallen to bulls, and while the trend is not yet definitive, optimism is increasing that Bitcoin could even challenge November's all-time highs based on that fact.
Next in line, meanwhile, is the 200-day moving average (DMA), currently at $48,300 and just tapped in the past 24 hours. The 200DMA is a key component of the Mayer Multiple metric, which measures spot price ratio to it in order to determine potential profitable market entry points.
A score below 2.4 on the Multiple tends to signal good long-term rewards for investors. Having bottomed in January at around 0.76, its trend has reversed since, and as of Tuesday — almost right at the 200MA — Bitcoin has a Mayer Multiple score of 0.98.
"That's a good time to buy," Ecoinometrics argued in comments, adding that even if a breakout from the 200DMA ends up being a bull trap, losses in such situations have historically been "small."
"So even though the macro backdrop isn't looking good, this is a buy," a further post continued.
Derivatives lose their speculative tinge"
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Those macro tensions, which include inflation and central banks' attempts to fight it with monetary policy tightening, remain a key topic of debate this month.
Buy pressure ‘in bull market territory’ — 5 things to know in Bitcoin this week:
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As Cointelegraph reported, multiple analysts have warned that the outlook could still turn firmly against Bitcoin and risk assets more broadly as rates rise and a "stagflationary" environment emerges.
The sense that a sustained rally in BTC cannot possibly form the new paradigm is evident among professional traders, as derivatives markets funding rates remain flat despite weekly gains approaching 20% for BTC/USD.
"Excessive long biased derivative market speculation is near non-existent currently," analyst Dylan LeClair noted in a Twitter thread on the topic Monday.
3. Dubai School Will Accept Tuition Fees Payment in Bitcoin (BTC) and Ethereum (ETH)
Following the growing adoption of cryptocurrencies across various parts of the world, a new school in Dubai has disclosed plans to accept the nascent asset class as a mode of payment for tuition fees.
Local news outlet Zawya reports recently that the new educational institution named Citizens School, which is set to commence operations in September 2022, has announced that parents and guardians can pay tuition fees for their wards in Bitcoin (BTC) as well as Ethereum (ETH).
Notably, the move is the first of its kind in the whole of the Middle East that intends to provide parents with the ability to make school payments using digital currencies.
4. Indian Govt. Charges 11 Crypto Exchanges For Tax Evasion
The Indian government had accused 11 crypto exchanges, including WazirX, CoinDCX, CoinSwitch Kuber, of tax evasion, said Minister of State for Finance Pankaj Chaudhary in a written response to the Parliament on Monday. Moreover, the central government has recovered a total of ₹95.86 crore, which is almost $12.58 million, from 11 crypto exchanges for evading the Goods and Services Tax (GST).
5. Japan to Introduce Legislation Governing Banks and Crypto Exchanges
The Japanese government is pushing for new legislation that will see cryptocurrency trading platforms operating in the country under governance, which same rules apply to banks.
As revealed by Chief Cabinet Secretary Hirokazu Matsuno, the government is planning to revise its foreign exchange, which will also apply to digital assets trading platforms.
6. Mastercard partners with Australia’s BTC Markets for payment options
Australian crypto exchange BTC Markets has partnered with Mastercard to allow its customers to make direct debit, prepaid or credit card payments to purchase cryptocurrencies from the platform.
7. UnionPay Launches Self-service Platform for Merchants to Add Digital Yuan Pay Options
Chinese businesses are finding more uses for the digital yuan – with merchants being offered services that allow them to sign up to receive central bank digital currency (CBDC) payments through third-party operators.
Per an article from China National Radio, the domestic financial behemoth UnionPay will launch a self-service signup platform for merchants who want to use the digital CNY.
UnionPay has become “one of the first third-party payment service institutions” in the land to sign a strategic cooperation agreement with the Digital Currency Research Institute, the CBDC branch of the central People’s Bank of China (PBoC).
8. Vietnamese Government and Central Bank Developing Legal Framework for Crypto
Vietnam is creating a legal framework for cryptocurrency. The country’s deputy prime minister has instructed the Ministries of Finance, Justice, and Information & Communications to work with the central bank, the State Bank of Vietnam, on the framework.
9. Oil-Rich Canadian Province Alberta Aims to Become a North American Crypto Hub
Alberta’s leadership wants to promote innovation in the financial services sector, explore new products and services, and attract investment in emerging technology such as crypto.
10. The International Summit MetaVentures Phuket Will Be Held in Thailand
.MetaVentures is a unique event where you can immerse yourself in the unforgettable atmosphere of Metaverse, Digital Art, and NFTs. It keeps up with the latest developments in the world of digital assets, decentralized finance, DAOs, different types of Blockchains, tokens, and Regulatory Compliance in Southern Asia.
The Metaverse-focused program will bring together international business leaders, government agencies, investors, technical specialists, and developers to discuss the most interesting innovations in the Web3/Metaverse world.
