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Ethereum Sees “Underlying Issues” Arise as Analysts Grow Concerned
Ethereum has been able to climb all the back up to its local highs of 0 as its upwards momentum continues to build. This movement has come about after Bitcoin was able to gain a solid foothold above ,500.
Today’s upswing has marked an extension of the rally that Ethereum has been caught within in the time following its decline to the sub-0 region in mid-March.
Analysts are growing concerned about the strength of its recent uptrend, however, as it has failed to retest its previous resistance levels as support – meaning that it may be positioned to revisit these levels in the near-term.
Ethereum Reaches Local Highs as It Approaches a Major Supply Zone
At the time of writing, Ethereum is trading up just under 1% at its current price of 9.40, marking a notable climb from its daily lows of 4 that were set during a fleeting dip late yesterday.
The cryptocurrency is now engaged in a bout of consolidation just below its current resistance at 0. This level happens to be where it rallied to last Saturday before facing a firm rejection here.
One popular pseudonymous Ethereum-focused analyst on Twitter recently offered a chart showing that the crypto’s major supply zone exists just below 0 – meaning that this could be the level it rallies to before facing a potentially grueling selloff.
“Tiredness developing on ETH approaching the major supply. Timing will be important but the underlying issue is beginning to show itself,” he explained, pointing to the chart seen below.
Image Courtesy of Cold Blooded Shiller
If Ethereum is unable to garner enough buying pressure to surmount this level, it could be a dire sign that uncovers some underlying weakness amongst its buyers.
ETH’s Failure to Confirm Previous Resistance Levels as Support is a Grim Sign
In addition to facing a heavy overhead supply zone that could hamper its price action, the cryptocurrency has also failed to confirm its previous resistance levels as support throughout the course of its recent uptrend.
This has led another popular crypto trader to note that it does seem likely that its previously intense resistance levels will be retested in the near-term.
“Incredibly strong recovery here, nearly 30% from the local bottom. – However, genuinely concerned about those resistance levels that were never tested as support – rules are rules, gaps eventually always get closed,” he said.
Image Courtesy of Teddy
Unless Bitcoin continues pushing higher and allows Ethereum to shatter its overhead supply zone, it is possible that this will be enough to spark the decline that lead ETH to retest these previous resistance levels in the days and weeks ahead.
Featured image from Unsplash.
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Narratives Arise After Bitcoin’s Surge, But Here’s the Real Reason Behind the Move
After hovering below its previous support at ,000 for several hours yesterday, Bitcoin’s bulls were able to generate significant momentum that has allowed BTC to reclaim its position within the ,000 region, and it appears that this upwards momentum is growing.
This move coincided closely with news regarding a US airstrike on a top Iranian military official, which led both crude oil and gold to surge. Many investors have claimed that BTC’s surge was rooted in this news, although it appears that there is another more technical factor behind this movement.
Narratives Abound as Analysts Attempt to Explained What Caused the Ongoing Bitcoin Rally
At the time of writing, Bitcoin is trading up roughly 5% at its current price of ,400, which marks a notable climb from its daily lows of ,800 that were set at the bottom of yesterday’s sell off.
It is important to note that Bitcoin’s sharp surge from these lows did come about shortly after news broke regarding the successful airstrike on one of Iran’s top military officials, although it still remains unclear as to whether or not the two events are truly related.
Scott Melker, a popular cryptocurrency analyst on Twitter, explained in a tweet that he highly doubts that the latest Bitcoin rally is related to growing tensions between the US and Iran, explaining that a narrative is not needed to explain every single 0 movement.
“I seriously doubt Iranians are running home to buy $BTC because of this incident. The notion is somewhat absurd, to be honest. You don’t need a narrative for every 0 move,” he explained.
I seriously doubt Iranians are running home to buy $BTC because of this incident. The notion is somewhat absurd, to be honest. You don’t need a narrative for every 0 move.
— The Wolf Of All Streets (@scottmelker) January 3, 2020
Here’s the Real Reason Behind BTC’s Current Rally
If Bitcoin did consistently perform well during times of heightened tensions between countries, it would confirm that the cryptocurrency has become a safe haven asset.
In spite of this, last night’s rally appears to be caused by a highly orchestrated short squeeze that was triggered by negative funding.
“Orchestrated short squeeze. 25x shorts liq’d off mid range zone and s/r zone. Price retraced with an overshoot of the mid range and 7250 s/r. The first sight of negative funding triggered the hunters. The game continues but the real buyers aren’t present,” CryptoISO, another popular cryptocurrency analyst on Twitter, explained in a recent tweet.
Orchestrated short squeeze.
25x shorts liq’d off mid range zone and s/r zone.
Price retraced with an overshoot of the mid range and 7250 s/r.
The first sight of negative funding triggered the hunters.
The game continues but the real buyers aren’t present.
— CryptoISO (@crypto_iso) January 3, 2020
If this Bitcoin movement is truly just a short squeeze, it will likely be fleeting and followed by further downside, but the possibility remains that this movement will lead some sellers to flip to buyers, thus further perpetuating this movement.
Featured image from Shutterstock. The post appeared first on NewsBTC.
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