After rallying towards $10,000 at the start of the week on the back of post-halving buying, seemingly caused by both retail and institutional players, Bitcoin plunged to $8,800 over the course of two days. Altcoins posted similar losses, with some underperforming the market leader and others outperforming BTC.
Chart (heat map) of the performance of top cryptocurrencies from Coin360. Current as of May 22nd.
The drop coincided with rumors that Satoshi Nakamoto — the founder of the flagship cryptocurrency — was dumping his coins on the open market after a transaction was sent from an address created one month after Bitcoin was launched. This rumor has since been disproven by blockchain data.
In spite of the drop, analysts are still fundamentally long-term bullish on Bitcoin.
As reported by NewsBTC previously, blockchain analytics company Glassnode noted on May 18th that the Puell Multiple — the USD value of BTC issued per day over the one-year moving average of the same metric — reached a crucial level.
Chart of Bitcoin’s Puell Multiple (on a macro scale) from crypto analytics firm Glassnode
As the below chart indicates, whenever the multiple entered the green zone, it found a macro bottom.
This strong precedent suggests that BTC is nearing a post-halving bottom and is about to embark on its fourth long-term rally.
Tuur Demeester — founder of Adamant Capital — echoed the optimism in an interview published this week by Messari, a crypto research firm:
“I think a price target of like $50,000 is not insane at all, especially given just how crazy the money printing is. I would even say between $50,000-$100,000.”
Related Reading: Crypto Tidbits: Bitcoin Halving, Reddit Using Ethereum, JP Morgan Dabbles in Crypto
Bitcoin & Crypto Tidbits
Bitcoin Bulls Roar After “60 Minutes” Segment: Last weekend, the world-famous show “60 Minutes’ on CBS ran a segment in which the Federal Reserve was highlighted. In an interview, the central bank’s chairman, Jerome Powell, said that the trillions of dollars the Federal Reserve has already pumped into the economy is far from the end of the potential stimulus: “There is a lot more we can do. We’re not out of ammunition by a long shot. No, there’s, there’s really no limit to what we can do with these lending programs that we have.” Bitcoin bulls were incredibly pleased by this news.
No, Chinese Isn’t Banning Crypto Mining: Earlier this week, there was an uproar in the community because an image was leaked of a Chinese government transcript indicating that an agency wanted to ban crypto mining. Asian-centric blockchain and fintech news outlet PANews wrote in regards to the image: “The Financial Administrative of the Sichuan province of China has issued a notice to its subordinate offices ordering them to ‘guide [Bitcoin and crypto] mining entities to end their mining activities in an orderly manner’.” While many took this as a sign that the country was banning Bitcoin mining yet again, Chinese crypto insiders confirmed that this is not the case. Matthew Graham of fund Sino Global Capital said:
“China is not banning mining, it’s complicated as usual, messages frequently conflict especially at local or regional level. Actual message is basically ‘don’t use local government support for mining to illegally raise money’. Thank you,” Graham wrote, trying to dissuade the fears of a Chinese crackdown on crypto assets such as Bitcoin.
Iran Pushes a National Crypto Mining Strategy: In a similar vein of news, Iranian President Hassan Rouhani was reported this week to have told the Central Bank of Iran, the Department of Energy and Information, and other ministries that he wants a national cryptocurrency strategy implemented. The strategy will purportedly involve the regulation of private mining operations and the management of cryptocurrency mining revenues. Not much more was explained, but some speculate that this is Iran trying to garner Bitcoin and other cryptocurrencies to bypass international sanctions.
No, Satoshi Nakamoto Isn’t Dumping His Crypto: This week, blockchain analysis firms registered a suspicious transaction: an address created one month after Bitcoin’s birth moved 50 coins. Due to the proximity of the address’ age to the creation of the network, many thought it was Satoshi Nakamoto starting to sell his coins. Yet programmer Jimmy Song noted that this is unlikely the case, pointing to blockchain data indicating that this was just an early miner, not the creator of Bitcoin.
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