Bitcoin’s Nosedive below $45,000 Can Open Way to Continued Correction, Ethereum’s Repeats after Bitcoin

Bitcoin’s Nosedive below $45,000 Can Open Way to Continued Correction, Ethereum’s Repeats after Bitcoin

Bitcoin Sellers Took the Lead, Took BTC/USD below 45,000

BTC/USD started the week at 57,499 near the all-time high at 58,400, based on the CEX.IOpricing. In the first four hours of Monday’s trading session, BTC/USD declined to 56,000, which was an important support level in intraday terms. The level produced some buying pressure for the pair but only for the next four hours, as BTC/USD closed the 4-hour candlestick between 04:00 and 08:00 UTC at 46,479.

That, however, made no lasting influence, and BTC/USD had broken down below 56,000 and dropped below 53,500 by 16:00 UTC. That was a signal for a big sale, as the Bitcoin market had been overheated. In confirmation of that hypothesis, BTC/USD made a huge rollercoaster swing in the interval between 13:00 and 15:00 UTC, falling from 53,677 to 47,400 and bouncing back up. Meanwhile, Glassnode, an on-chain data aggregator reported that high-net-worth Bitcoin holders had sold 140,000 BTC, which was proof of traders’ readiness to sell BTC/USD big time. There was a slight upside recovery to 56,000 at the end of Monday, but with the start of Tuesday’s session the selling went on.

By 09:00 UTC of Tuesday, 23rd February, BTC/USD had already been at 46,500 as per Bitstamp’s exchange rate. Form 09:00 UTC, BTC/USD continued sideways, with high volatility taking place in the price action. The pair was edging sideways within the corridor of 45,000 – 49,000 until 01:00 UTC of Wednesday, 24th February. At that time a rebound above 49,000 started to take place and continued until 05:00 UTC, with 51,000 topped out.

The volatility reduced considerably, as the pair continued edging sideways within the price range of 50,000 – 51,000. At 13:00 – 14:00 UTC, a drawdown to 49,000 happened; afterwards, BTC/USD continued between 48,000 – 50,000 until the end of Wednesday. The sideways fluctuations continued on Thursday, 25th February, until 12:00 UTC. At 12:00 – 14:00 UTC, BTC/USD bounced to 52,000. Afterwards, BTC/USD began another continued downfall, which continued to 45,000 on Friday, 26th February. The falling stopped at 08:00 UTC, as the zone offered a buying opportunity.

Story continues

BTC/USD on a 4-hour-timeframe chart

BTC/USD had bounced to 48,265 by 17:00 UTC and then reversed downwards until 23:00 UTC, almost reaching 45,000, and closed Friday at 45,447. On Saturday, 27th February, BTC/USD the bulls continued supporting the trading pair with buying volumes, and BTC/USD briefly rose to 48,100 between 0200 – 02:45 UTC. The pair continued sideways until 07:00 UTC, once breaking above the 50-period hourly SMA, but was eventually driven down below 47,000 between 08:00 and 09:00 UTC. The upside attempts at the SMA continued unsuccessfully until the end of Saturday. On Sunday, 28th February, selling pressure increased and saw BTC/USD gradually head down to 43,067 at its lowest. The capitalisation below 44,000 on the 4-hour timeframe was an indication of continuing selling bias in the trading pair.

Hope for Bitcoin Bulls

There was some news in the week of 22nd February that kept up Bitcoin bulls’ hopes of an upside recovery. Square, Inc. that had invested $50,000 million in Bitcoin in October 2020 made another Bitcoin purchase worth $170 million on 24th February 2021. Besides that, MicroStrategy – the corporate frontrunner among Bitcoin investors – bought 19,452 more BTC worth $1.026 billion at an average price of $52,765. This new purchase had brought MicroStrategy’s exposure to Bitcoin to 90,531 BTC.

These tendencies clearly showed that high profile investors were happy with the Bitcoin drawdown and were ready to buy the dip. This shows that Bitcoin continues to be looked upon as a solid financial instrument, and every downside correction is going to be met with substantial buying volumes.

Up or Down for BTC/USD in the Near Term?

The decline to nearly 43,000 and a stabilisation below 44,000 on the 4-hour timeframe was a signal of continuing bearish bias in BTC/USD, promising lower lows. Still, some bullish momentum remains to be present, and a breakthrough above 48,000 and above the 50-period 4-hour SMA would signal a change of bias and an upside recovery gaining traction. On the contrary, another decline to 43,000 will mean a continuation of bearish price action, with prospects of getting back to testing the 31,000 support level.

Therefore, we shall soon get answers on where BTC/USD will go next. With the pair edging higher towards 48,000 in the morning hours of Monday, the odds for a breakthrough are presently going higher.

1,392 Supports ETH/USD

ETH/USD opened the week of 22nd February at 1,933.4 and headed straight down from the start of the day, briefly getting below the 50-period 4-hour SMA with the lower wick of Monday’s first 4-hour candlestick reaching 1,867.3. The SMA gave ETH/USD some transitory support, but it continued sinking lower until 09:00 UTC on Tuesday, 23rd February, with support being found at 1,440. The trading pair continued sideways until the end of Tuesday, fluctuating within a considerable range of 1,360 and 1,600.

From the start of Wednesday, 24th February, the ETH/USD trading pair headed upwards to reach 1,715 and break above the 50-period hourly SMA. The volatility shrank considerably, as ETH/USD spent most of the time until 18:00 UTC on Thursday, 25th February within the range of 1,586.4 – 1,662, being regularly supported by the 50-period hourly SMA.

ETH/USD, ETH/USD headed down from 18:00 UTC on Thursday through to 08:00 UTC on Friday, 26th February. The pair eventually hit 1,402 at the minimum and continued edging sideways between 1,424.7 and 1,560 until the end of Saturday, 27th February, with the 50-period hourly SMA upkeeping the ETH/USD bearish momentum.

Another downswing took place on Sunday, 28th February, with a minimum at 1,299.6. However, an upside recovery that began at 19:00 UTC and continued through to the end of Sunday, with the 1,392.2 support level letting ETH/USD close the week at 1,417.5 as per the CEX.IO pricing. On top of that, ETH/USD finished Sunday in a hammer candlestick on the daily timeframe, which coupled with the 1,420 support level gives increased potential for a full-fledged upside recovery in the near term.

ETH/USD stabilises at 2018 high, daily timeframe

Grayscale Ethereum Trust Buying the Dip

It became known that the intraday pullback in ETH/USD between Tuesday, 23rd February, and Wednesday, 24th February, from the mid-to-lower 1,400s to above 1,700 coincided with a purchase of 10,000 ETH by Grayscale Ethereum Trust, which brought its Ether exposure to 3.17 ETH.

ETH/USD pulls back from 1,440 to 1,694, hourly timeframe

The bullish market reaction to the purchase clearly shows that big players’ moves have a strong impact on the Ethereum market. And the purchase itself shows that high-profile investors, who constitute most of Grayscale clients, have trust in Ethereum in the long term, which can result in continued market growth for the smart-contract pioneer.

Konstantin Anissimov, Executive Director at CEX.IO

This article was originally posted on FX Empire

More From FXEMPIRE:

Why has Ethereum been outperforming Bitcoin?

Bitcoin may have pulled back 20% in the last few weeks, but that’s after a nearly five-fold sprint over the past year.

If that’s impressive, it’s not quite as spectacular as Ethereum, which is up over 530% over the last year – even after falling 25% from its recent peak of $1 958. This growth is in part thanks to the explosive rise in decentralised finance (DeFi), a subsector of the cryptocurrency industry where entrepreneurs are building automated trading and lending systems atop blockchain networks that don’t require any intermediaries like banks or brokers.

Bitcoin and Ethereum are the two largest cryptocurrencies in terms of total market cap. But when you dive into the details, you’ll find that these two concepts actually serve completely different purposes.

Main takeaways: Bitcoin vs Ethereum

Bitcoin is a cryptocurrency; Ethereum is a platform.

Bitcoin transactions are primarily monetary; Ethereum transactions may be executable instructions.

Bitcoin is primarily a store of value and medium of exchange; Ethereum is not.

What is Bitcoin?

In January 2009, an enigmatic figure named Satoshi Nakamoto executed an idea that he had laid out in a white paper — a peer-to-peer electronic cash system that could operate securely without a central authority.

With bitcoin, the idea of a cryptocurrency, or money without any physical form, was born.

The primary purpose of bitcoin was to establish itself as a viable alternative to traditional fiat currencies backed by countries.

It is primarily a store of value and a medium of exchange.

What is Ethereum?

Ethereum was launched in 2015 and is more than a cryptocurrency.

Actually, Ethereum is not a cryptocurrency at all — Ether (ETH) is its native currency.

The Ethereum blockchain is powered by ETH, which can be used for several purposes, such as to pay for computational services on the blockchain.

Ethereum is the blockchain that Ether is built on, and many people get the two confused. But you don’t call Ether ‘Ethereum’ just like you don’t call Bitcoin ‘blockchain’.

Ethereum is a programming language and a decentralised software platform. Developers build decentralised apps (dApps) and smart contracts on top of the platform.

As the native currency on the Ethereum platform, Ether is used to power the platform, much like oil is used to power the global transportation networks.

Ethereum has pioneered the concept of a blockchain smart contract platform.

Smart contracts are computer programmes that automatically execute the actions necessary to fulfil an agreement between several parties on the internet. They were designed to reduce the need for trusted intermediates between contractors, thus reducing transaction costs while also increasing transaction reliability.

Comparing the two

Bitcoin accounts for about 72% of the total market cap of all cryptocurrencies, and Ethereum 15%. This is really a two-horse race at the moment, though other digital coins such as Cardano and Binance Coin are fast gaining on the market leaders.

Bitcoin was built to do one thing well — provide a way for people to transfer value from one to another without a banking or payment intermediary. Bitcoin is seen as a store of value and if often referred to as digital gold. There are currently 18.6 million bitcoin in issue, and there will only ever be 21 million of these digital coins. This is one key reason behind bitcoin’s remarkable price rise as an asset over the last decade. Institutional interest in bitcoin is growing, spurred by fears that fiat currencies such as the rand and US dollar are subject to continuous inflation of money supply, which devalues their worth.

The case for Ethereum is somewhat different. Unlike bitcoin, Ethereum does not have a hard cap, meaning the number of coins in issue expands every year (there are currently 114.8 million in issue); however, the ETH annual inflation per year will eventually trend to zero as more coins enter circulation.

Ethereum is built on the idea of a general multi-purpose blockchain. As a result, Ethereum is able to do many things well instead of just serve as a payment system. Ether can be used as a digital currency, but that is not its primary purpose. The Ethereum platform was built primarily to monetise operations of Ethereum smart contracts and dApps.

Ethereum does not intend to be a store of value as is the case with bitcoin, but derives its value from an expanding network that allows transactions between parties that do not have to trust or even know each other.

These transactions are known as “smart contracts”. Think of Ethereum as the iOS or Android operating system on your smartphone that allows applications and games to function. Ethereum is the operating system that will allow a similar explosion of decentralised applications to be developed – such as for lending, investing and earning interest, not to mention purchasing insurance and trading between countries.

So Ethereum is both a currency (called Ether) and a network.

Both Bitcoin and Ethereum are decentralised and so are not run or managed by a central authority. They are both built on distributed ledger blockchain.

There’s really no comparison

Researching Bitcoin vs Ethereum leads to a deeper discussion of what blockchain technology can do to improve every aspect of our lives. If you want to know the future of everything from finance to the judiciary to construction, Bitcoin and Ethereum will likely be a big part of it.

The blockchain that makes Bitcoin and Ethereum possible is the most important idea to understand. No longer do we have to rely on giving others our precious data to make transactions — blockchain gives us the power to create a trustless, immutable way to do business.

Bitcoin will likely remain king of the cryptos for the foreseeable future, but attention is shifting to the investment potential of other cryptocurrencies like Ether as other areas of the cryptocurrency ecosystem develops.

How to invest?

If you are working within an established, reputable crypto investing platform like Revix, you can invest in both bitcoin and Ethereum’s Ether token. Revix was launched to make it easy to invest in cryptos like bitcoin and Ethereum and, through its investment platform, to gain exposure to ready-made baskets of cryptocurrencies that they call ‘Bundles’ for as little as R500. Revix charges no sign-up, monthly account or subscription fees, but rather a simple 1% transaction fee for both buys and sells.

The Top 10 Bundle available through Revix spreads your investment equally over the 10 largest cryptocurrencies – which covers about 85% of the crypto market when measured by market capitalisation – with each having a 10% weighting. By default, you are buying the ten biggest success stories in the crypto space. The weightings are adjusted monthly to ensure no crypto exceeds a 10% weighting, and that can be a major advantage as other constituents of the bundle (like Ether, Chainlink, Cardano and Polkadot) have outperformed bitcoin’s amazing 300%-plus rise last year.

The Smart Contract Bundle tracks those cryptocurrencies that enable smart contract functionality and include several cryptocurrencies that are looking to challenge Ethereum’s smart contract dominance. Smart contracts use the blockchain to allow peer-to-peer transactions without the need for third party verification. This bundle comprises cryptocurrencies that enable developers to build applications on top of their blockchains, much like how developers build mobile apps on top of the Apple mobile iOS operating system. The cryptos in this bundle include Ethereum, Cardano, Tron, Neo, and EOS.

Revix also offers a Payment Bundle, which provides exposure to the largest five payment-focused cryptocurrencies looking to compete with government-issued fiat currencies to make digital payments cheaper, faster and more global. These cryptos include bitcoin (BTC), Ripple (XRP), Litecoin (LTC), Bitcoin Cash (BCH) and Stellar (XLM).

You can also buy and sell USDC (a ‘stablecoin’ fully-backed by the US dollar) and a physical gold-backed token called PAX gold which provides legal ownership of an ounce of gold through Revix’s online platform.

Brought to you by Revix.

For more information, visit Revix.

This article is intended for informational purposes only. The views expressed are not and should not be construed as investment advice or recommendations. This article is not an offer, nor the solicitation of an offer, to buy or sell any of the assets or securities mentioned herein. You should not invest more than you can afford to lose, and before investing please take into consideration your level of experience and investment objectives, and seek independent financial advice if necessary.

USV Leads Round in Matter Labs as Ethereum Scaling Wars Intensify

The team behind Ethereum speed booster zkSync has closed a Series A funding round led by Fred Wilson’s Union Square Ventures (USV) as the race between Ethereum scaling solutions tightens.

Matter Labs, which first released its zero-knowledge rollup (ZK-rollup) product in December 2019, raised an undisclosed sum with limited partners “to preserve the dominance of the community share in the future zkSync network,” Matter Labs CEO Alex Gluchowski told CoinDesk in a Telegram message.

“The crypto community will strongly prefer solutions with the least compromises on security, decentralization and [user experience],” the startup said in a blog post shared in advance with CoinDesk. “This is what makes ZK-rollup tech so important. It relies on pure cryptography rather than game-theoretic mechanisms, and is thus the only scaling approach with no upper bound on the value it can securely handle in L2.”

The round was joined by a host of cryptocurrency projects that are considering adding zkSync, including Coinbase, Aave, Curve Finance, CoinGecko and Balancer, among others. The round also included venture capital firms Placeholder, 1kx and Dragonfly Capital.

Gluchowski said numerous cryptocurrency wallets are in various stages of integrating zkSync, including Argent. Crypto exchange partners are likely to integrate the tech directly as well, he said.

War for L2?

The funding round comes at a time when historic gas fees have plagued the leading blockchain for decentralized applications. For example, a simple transfer on Ethereum cost up to $40 last week. Rollups are considered the prime method addressing this issue – at least in the short term until Ethereum 2.0 is fully developed.

Subscribe to , By signing up, you will receive emails about CoinDesk products and you agree to our terms & conditions and privacy policy

Rollups are off-chain batches of transactions that settle as one transaction on a base layer. They come in two forms: zero-knowledge (ZKR) and Optimistic (ORU). The former rely on a mathematical proof to settle the lump payment without committing fraud. Optimistic rollups rely on a slashable bond and validators who watch for fraud.

A chief distinction between ORU and ZKR has been the latter’s limited interoperability with virtual machines. Yet, Matter Labs has “found a way to make ZK-rollups EVM-compatible in a very efficient way” using another privacy tech called “recursive PLONK,” Gluchowski said. A solution to this issue could make ZK-rollups a more favorable solution for decentralized applications (dapps).

Optimism is the most well known proponent of ORU. The firm also recently closed a round, booking $25 million in a Series B led by Andreessen Horowitz (a16z).