Massive Bitcoin Price Rally Awaits Shorts Trigger Beyond Fresh 2019 High

While the Bitfinex-Tether scandal, in which the Office of the New York Attorney General alleged Bitfinex of misusing $900 million of Tether’s cash …

By CCN: In the past month, the bitcoin price has climbed 23 percent against the U.S. dollar in major markets, recording nearly a 70 percent year-to-date (YTD) gain.

The bitcoin price is up by more than 23 percent in the past month (source: coinmarketcap.com)

The bitcoin price has almost fully recovered to November 2018 levels as it surged past $6,300 with strong volume and momentum.

Since March, the real volume of bitcoin calculated using the methodology of Bitwise Asset Management has surged by three-fold from $270 million to over $700 million, indicating an increase in interest towards the dominant cryptocurrency.

What Will Trigger a Bitcoin Bull Run?

Last week, global markets analyst Alex Krüger noted that if bitcoin surpasses $6,400, the most traded price of 2018, it would confirm the start to a new bull market.

$BTC now at $5750, the 2018 low prior to the November crash.

– The 2018 bear trend ended once above $4200.

– Above $6400, 2018’s most traded price, it’s a bull market. pic.twitter.com/rIQI8RIPgs

— Alex Krüger (@krugermacro) May 3, 2019

The bitcoin price has surged by nearly 10 percent in the past week and despite various optimistic technical indicators, for the asset to climb above key levels it would need solid catalysts that could act as stimuli for near-term growth.

Some analysts like David Puell, the head of research at Adaptive Capital, have said that shorts of bitcoin are far from being liquidated and squeezed.

A short squeeze could serve as a potential stimulus for the bitcoin price, especially if the volume of shorts increase in upcoming days out of caution from traders that the $6,400 resistance level may be too big for the asset to overcome.

“Price is not only parabolic but vertical now. Shorts are still far from getting fully squeezed. $6.4k may activate longs from late trend traders, setting up the perfect blow-off top. Blue: pullback targets after this potential climactic top from who knows where,” Puell said.

While the Bitfinex-Tether scandal, in which the Office of the New York Attorney General alleged Bitfinex of misusing $900 million of Tether’s cash reserves, led to a substantial increase in the premium of BTC on Bitfinex that may have led the price to climb, the premium of BTC on the exchange has declined in the past few days.

Had the disproportional premium of BTC on Bitfinex continued to exist, it could have largely affected the stability of the crypto market and raised serious concerns on the sustainability of the market’s short-term movement.

Will BTC Continue to Outperform Alternative Crypto Assets?

As explained by Yassine Elmandjra, a crypto asset analyst at ARK Invest, bitcoin has outperformed every top 10 crypto asset in the past month.

“On a day where everything is bleeding red except Bitcoin, let us be reminded that Bitcoin has continued to outperform every coin in the top 10 over the last month. On average, the top 10 coins by market cap are down more than 30% against Bitcoin,” Elmandjra said.

Previously, investors like Multicoin Capital general partner Vinny Lingham said that crypto assets would have to show independent price movements to sustain the momentum of the market.

“Many people believe that the crypto winter is over. Here are some of my unfiltered thoughts on this topic. Charts & technicals aside, I don’t believe this rally is sustainable for one reason: The market has not yet decoupled the various crypto assets from Bitcoin,” Lingham said in April.

The decoupling of crypto assets since last month suggests that the market as a whole is no longer engaging in a downside movement, possibly as the confidence of investors rekindles in the near-term.

It remains to be seen whether BTC could hold its price at important resistance levels even with the ongoing Bitfinex-Tether controversy, a scandal which some have argued has the potential to become the biggest intervention of the crypto market in history.

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Bitcoin enters another parabolic advance as Bitfinex premiums fall to 1.5%

Over the last week, we have seen a Bitfinex premium build and then drop from between 6% to its current 1.5%, meaning the price gap between itself …

Bitcoin has broken out again as it continues along its short-term parabolic advance to fully retrace the November 2018 capitulation event.

One piece of news that is acting as fuel to propel the current trajectory is that non-Tether backed exchanges have now closed the Bitcoin price gap to under $100 between them and Bitfinex, which is currently in the midst of a legal challenge from US authorities.

Bitcoin going parabolic again, after completing 100% up-move from it’s $3,100 (local) bottom from Bitcoin

Not the first Bitcoin correction

Since the project’s inception, price action for Bitcoin has seen 13 separate corrections of over 30% in price (in USD terms). The most recent of which took BTC price from a $20,000 top all the way down over 80% to settle at its most recent low of $3,100 in December 2018.

One common factor through all the ups and downs has been a pattern of higher highs and significantly higher lows for each of its subsequent corrections. Another key factor to note during the history of the now decade-old asset class is a growing list of HODLers.

This large and growing group of believers in an open-finance protocol have been battle-hardened through a cycle of various bull/bear markets to preserve their economic stake in a future ecosystem that they believe to be free, global, and open to all.

When time warp? pic.twitter.com/c9wrmgBEST

— Edward Morra (@edwardmorra_btc) May 10, 2019

Bitcoin’s latest parabolic rise is reminiscent of prior bull runs, as they too were filled largely with bad news and anxiety in the early stages of the trajectory.

Over the last week, we have seen a Bitfinex premium build and then drop from between 6% to its current 1.5%, meaning the price gap between itself and its rivals like BitMEX, Coinbase, and Gemini has fallen sharply. To add to this ongoing legal and proof of reserve debacle, the market has also witnessed the first major hack of Binance.

Binance’s hack saw the loss of around 7,000 Bitcoin. However, history shows that any potential re-org debate is a non-starter from the get-go, as the Bitcoin market has once again stood firm to preserve its 10-year immutability claim.



By Nawaz Sulemanji – May 10, 2019

Back in 2017, the main rhetoric prior to the bull run involved fear about how the community and exchanges would deal with a chain split (which eventually took place as the Bitcoin Cash fork) and also a scaling dilemma that was resolved through the UASF and NO2X incidents.

Where next?

Following a break above $6,200, the market will most likely look to wait and see what support may form above this historically relevant support/resistance band. If margin shorts continue to get squeezed at places like Bitfinex, we can expect them to potentially support the current upwards trend in the markets.

If the parabolic advance continues, prior targets look to suggest that a five-figure valuation may not be as crazy as it sounded just a few weeks ago. However, a period of sideways action is more likely, as both bullish and bearish traders may give some short-term gains back to the exchanges that let them play around with high leverage.

For more news, technical analysis, and cryptocurrency guides, click here.

The post Bitcoin enters another parabolic advance as Bitfinex premiums fall to 1.5% appeared first on Coin Rivet.

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Bitfinex Stakeholder Says the Troubled Exchange Has Sold All One Billion LEO IEO Tokens Issued …

Bitfinex is owned by iFinex, which also owns Tether, the company behind tethers, a “stablecoin” cryptocurrency used to swiftly enter and exit trading …

Chinese OTC Bitcoin trader Dong Zhao has once again taken to Chinese mega social platform WeChat to talk up an IEO (initial exchange offering) being issued by Bitfinex, the troubled cryptocurrency exchange in which Zhao reportedly holds equity, Coindeskreports.

Bitfinex is owned by iFinex, which also owns Tether, the company behind tethers, a “stablecoin” cryptocurrency traders use to swiftly enter and exit positions and conduct arbitrage.

Theoretically, in some jurisdictions, trading with tethers, which is purportedly pegged to and backed 1-to-1 by an equivalent number of US dollars held in reserve, can also help crypto traders avoid the taxable event that can be incurred occur when converting crypto profits back into regular dollars.

Whether or not tethers are actually fully-backed has been a matter of controversy for some time.

Lawyer Preston Byrne tweeted a screenshot from one of iFinex’s public statements.

The statement suggests the company is observing its own accounting standards:

Presented without comment pic.twitter.com/F5nXTDWFhE

— Preston Byrne (@prestonjbyrne) May 9, 2019

In June of 2018, University of Texas Finance Professor John Griffin and grad student Amin Shams issued a 60-page document in which they alleged that volumes of tethers were used 2017 to strategically prop up the price of bitcoins

“I’ve looked at a lot of markets,” Griffin told Bloomberg. “If there’s fraud or manipulation in a market it can leave tracks in the data. The tracks in the data here are very consistent with a manipulation hypothesis.”

Over the past two weeks, several enforcement actions have been levied against iFinex.

At the end of April, the Attorney General of New York issued powerful ex parte orders under the Martin Act (which covers securities) compelling iFinex to produce comprehensive financial records and freeze funds.

The orders allege that iFinex covered up the “loss” of $850 USD in funds and then used Tether reserve funds to cover operating expenses.

In documents responding to the orders, iFinex stated that it informed the public and regulators about the use of the funds before it occurred.

The company also claimed the funds were not lost but had rather been “seized” by Panamanian authorities who are now “safeguard(ing)” them.

It turns out the funds were seized from a company called Crypto Capital, which was run by Reginald Fowler. Fowler was arrested last week in Arizona and has been charged with bank fraud, conspiracy and operating an unlicensed money-transmitting business for allegedly providing “shadow banking” to crypto exchanges like Bitfinex. He is facing up to 30 years in prison.

Fowler allegedly processed hundreds of millions of dollars on behalf of crypto exchanges, which have often had trouble maintaining banking because of bank concerns about fund origins and money laundering.

iFinex lawyers have complained in court documents that the freezing of company funds is baseless and has compromised the company’s ability to assure liquidity on its exchanges.

For this reason, iFinex says, it has decided to issue one billion “LEO” tokens in a new instrument being favoured by exchanges called an “initial exchange offering” or IEO.

In an IEO, exchanges sell tokens to private (qualified) investors, partly based on the notion that the token is guaranteed to be listed on that exchange where it may eventually be sold to the public.

This is not the first time iFinex has created a token to assist it with financial problems.

In 2016, Bitfinex was hacked and $65 million USD in bitcoins stolen.

Bitfinex “socialized” the losses across users by docking accounts 35% and marking the void with a token designed to act as an IOU. Users were eventually paid off.

On May 1st of this year, Zhao reportedly wrote on WeChat that Bitfinex was ready to create yet another token, the LEO IEO, and on the 8th, the company released the official “LEO” white paper.

Now Dong Zhao has told Coindesk that all the tokens have already been spoken for in the form of hard commitments and soft (from which investors can back out).

Zhao even reportedly claimed on WeChat May 9th that, “…there’s a high possibility Bitfinex will not conduct a public sale,” if all one billion LEOs, sold at $1 USD each, is snapped up privately.

The anonymous critic “Bitfinex’ed” has written many blog posts and tweets alleging fraud at Tether. Bitfinex’ed has also been threatened by the company.

On May 8th, Bitfinex’ed tweeted that iFinex would laud the success of its LEO IEO, but would never prove it:

Bitfinex will announce that the IEO was a resounding amazing brilliant exciting success.

They will never provide proof.

— Bitfinex’ed — full stop. (@Bitfinexed) May 9, 2019

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Crypto Wallet Abra Adds In-App Support for ‘Thousands’ of US Banks

Back in Februry, Abra said its app will utilize the bitcoin blockchain and smart contract technologies to support fractional investments in stocks and …

Cryptocurrency wallet and investment app Abra now allows users to connect accounts from “thousands” of U.S. banks, the firm announced Thursday.

The expanded bank options come courtesy of an integration with Plaid, a fintech service that enables applications to connect with users’ bank accounts using APIs.

Until now, Abra users in the U.S. and EU have had the option to fund their wallets via a bank transfer. With the new feature, they will have banks connected in-app for funding their purchases.

Bill Barhydt, CEO of Abra, said:

“The addition of these new liquidity enhancements in our app gives users more ways to move between crypto and fiat.

“Consumers need to be able to invest their money wherever they choose, regardless of where they bank,” said Plaid’s head of sales, Paul Williamson. With the integration, Abra users who bank with smaller institutions will have more investment options, he said.

In the same announcement, Abra said it has expanded native withdrawal support to all 30 supported cryptocurrencies. Previously, it users could withdraw only bitcoin (BTC), bitcoin cash (BCH), litecoin (LTC) and ether (ETH).

With the extra withdrawal options, users will have more options for storing their holdings, including hardware wallets, the firm said.

Abra is also expecting to expand crypto deposit support “in the near future,” the firm’s VP of product, Willie Wang, said.

Notably, the firm will soon allow global users to buy fractions of traditional investment instruments.

Back in Februry, Abra said its app will utilize the bitcoin blockchain and smart contract technologies to support fractional investments in stocks and exchange-traded funds. The app currently offers investment in 50 fiat currencies and 30 cryptocurrencies.

Abra image via CoinDesk archives

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Signs Of Trust? BitFinex Bitcoin Price Premium Shrinks to 1.5% As BTC Surges to $6300

However, throughout the last month, this difference became more and more visible when looking at Bitcoin price on Bitfinex and on other exchanges.

Historically, there has always been a slight difference in the trading price of Bitcoin on various exchanges. However, throughout the last month, this difference became more and more visible when looking at Bitcoin price on Bitfinex and on other exchanges. Following the latest Bitcoin leg up, nevertheless, this difference is now shrinking away.

Bitfinex Bitcoin Premium Down to About 1.5 Percent

As Cryptopotato reported earlier today, Bitcoin skyrocketed in price, reaching $6,300 throughout the day and is up over $1,000 in the last 7 days alone.

Following the latest surge, we can also see that the premium for buying Bitcoin on popular cryptocurrency exchange Bitfinex is shrinking and is already only around 1.5 percent.

BitFinex Vs. Bitstamp

For comparison, the premium was even high as 6% just two weeks ago after the cryptocurrency exchange was served with a court order from the New York Attorney General, alleging a cover-up of $850 million loss.

As seen on the chart above, after April 26th, there was a serious discrepancy between the price of Bitcoin on Bitfinex and on other major exchanges.

Perhaps one of the best explanations to this was the fact that people were buying Bitcoin as a means of getting out of the exchange following the turmoil after the NYAG court order. In other words, it’s easier for people to buy and withdraw Bitcoin compared to other currencies, hence driving its price higher.

Why Is The Premium Shrinking?

There can’t be a one-off answer to that question and there certainly are numerous reasons for it. First off, it’s only logical that the newfound price volatility which caused Bitcoin to surge over the past few days will eventually even up its cost throughout different exchanges because the increasing demand across the board is weighing in.

BitFinex Reports On Over $400M Gross Profits

On another note, it could also be the fact that people might feel more confident in Bitfinex and don’t urge to leave the exchange. Just yesterday, May 9th, Bloomberg reported that Bitfinex has managed to net a profit of $404 million on their $418.2 million gross profit, which suggests a 97 percent net profit margin, which is somewhat impressive, if true.

In any case, it’s worth noting that Bitcoin is performing splendidly throughout the entire year, almost doubling up in price. This has caused many, including prominent investor Mike Novogratz, to believe that we are already seeing 2019’s bull run.

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