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These Two On-Chain Signals Precede Bitcoin Falls, Suggests Analyst

An analyst has suggested that two on-chain signals may be used to predict Bitcoin falls as they seem to have historically preceded drops in the crypto’s price.

Bitcoin Selling Of 7yrs-10yrs Old Coins Spiked Up Recently

As pointed out by an analyst in a CryptoQuant post, BTC dumping of coins aged between 7 years to 10 years and ETH dominance rising up can be two signs to look for before falls in the coin’s value.

The first indicator of relevance here is the “Spent Output Age Bands,” which checks for on-chain movement of coins and tells us which age groups were responsible for them.

The different “coin age groups” in the market include coins based on the total amount of time they were sitting idle for before being moved or sold.

The group in question here is the “7 years to 10 years old” cohort. The Spent Output chart for this group, therefore, shows how many coins were moved that were previously sitting idle for periods in this range. Here is the graph for it:

The value of the metric seems to have spiked up in recent days | Source: CryptoQuant

As you can see in the chart, the quant has marked the relevant points of trend for this Bitcoin indicator as well as the corresponding BTC price.

The analyst explains that whenever the spending of the 7 years to 10 years age band exceeds 5000, BTC usually observes a downtrend in its value.

Out of the 7 times the signal was seen during the last few years, only once did the price not register a plunge down.

Ethereum Dominance Was Also Elevated In Recent Weeks

The other indicator that the analyst believes to be of note is the “ETH dominance,” which is a measure of the total crypto market cap percentage share for Ethereum.

The below chart shows the trend in this metric over the last few years.

Looks like the value of the metric has been high recently | Source: CryptoQuant

It seems the Ethereum dominance exceeding the 20% mark has also been a bearish sign for Bitcoin during this period.

In conclusion, the analyst suggests that proper use of these two indicators in conjunction may help investors prepare for downtrends in the future.

At the time of writing, Bitcoin’s price floats around $18.7k, down 16% in the last seven days. Over the last month, the crypto has lost 18% in value.

The below chart shows the trend in the price of the coin over the last five days.

BTC’s value has plunged down over the last day | Source: BTCUSD on TradingView
Featured image from Bastian Riccardi on Unsplash.com, charts from TradingView.com, CryptoQuant.com

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Coinbase Drops XRP & Other Tokens, Cites Low Activity

As the FTX saga continues, all eyes are on crypto exchanges: Coinbase, Crypto.com, Binance and the like all have hefty sets of eyes on their next moves.

There is plenty to be said for the state of crypto exchanges today, but Coinbase’s announcement of the delisting of several tokens: BCH, ETC, XLM, and XRP. Let’s dive into the state of crypto exchanges currently, and more on Coinbase’s latest announcement.

Exchange: Status Check

While Binance CEO Changpeng ‘CZ’ Zhao has seized the spotlight as crypto’s ‘main character’ lately, Crypto.com’s leadership team – spearheaded by CEO Kris Marszalek – has largely been on the defensive, while Coinbase has been treading their steady positioning. Plenty of other major headlining exchanges have followed suit with Coinbase. Many have sought to maintain posture and look to keep ‘business as usual’ to weather the storm.

Nonetheless, the spotlight is on. As more threads unravel around the FTX saga, consumer trust is impacted in immeasurable ways; one consistent thread is that all exchanges, the aforementioned 3 and beyond, have faced pressures to increase transparency around reserves.

That could lead to exchanges at large preparing for increased regulatory oversight, particularly with the U.S. Senate hearing regarding FTX less than 48 hours away.

XRP is frequently a top 10 token in biggest market cap in crypto; however, Coinbase has elected to no longer support trading of the token, citing “low activity.” | Source: XRP-USD on TradingView.com

Coinbase’s Delisting

We haven’t seen a delisting from Coinbase in recent memory. In a tweet announcement earlier on Tuesday, Coinbase announced the token delisting:

1/3: After careful evaluation, we will be removing support for several networks with low activity on Coinbase Wallet starting in January 2023—including BCH, ETC, XLM & XRP. These routine evaluations allow us to continue investing in new features that make web3 more accessible.

— Coinbase Wallet (@CoinbaseWallet) November 29, 2022

 

Coinbase, once notorious for being too lenient on their coin adoption policy, is tightening the belt and cutting the fat. The move may surprise those that pay attentive to tokens not named Bitcoin and Ethereum. XRP is generally seen as a low-cost token that is easy for cross-exchange swaps with it’s low fees. Similar sentiment is often shared with fellow delisted token Stellar (XLM), and both tokens typically sit in the top 25-50 in terms of biggest tokens by market cap – making them surprising cuts considering some of the more fringe, lesser-known tokens that Coinbase has listed previously.

The final two tokens, Bitcoin Cash (BCH) and Ethereum Classic (ETC) are both the result of forks and will be recognizable to more legacy crypto users who can recall when these tokens came into existence as early ‘forked coins’. Their stagnant performance and slow retraction of relevance has led to an unsurprising result with this announcement.

Users impacted should refer to Coinbase’s blog post on the matter for more details.

Featured image from Coinbase.com/press, Charts from TradingView.com
The writer of this content is not associated or affiliated with any of the parties mentioned in this article. This is not financial advice.
This op-ed represents the views of the author, and may not necessarily reflect the views of Bitcoinist. Bitcoinist is an advocate of creative and financial freedom alike.

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Elon Musk Implores Fed to Cut Interest Rates or Risk Economy Tumbling into ‘Severe’ Recession

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Elon Musk Implores Fed to Cut Interest Rates or Risk Economy Tumbling into ‘Severe’ Recession

Elon Musk believes that the Federal Reserve must cut interest rates immediately or risk incurring a severe recession. The outspoken Tesla CEO made his opinion known in an early tweet Wednesday, which read:

“Trend is concerning. Fed needs to cut interest rates immediately. They are massively amplifying the probability of a severe recession.”

According to Musk, the Fed’s attempt to rein in runaway inflation could worsen the economic situation. As it stands, the prices have skyrocketed, and several households across the US are feeling the crunch. Energy prices are hovering at record-high levels, and the tech space and crypto industry are wallowing in significant devaluation.

Musk has warned of an impending recession before. On October 24th, the brash billionaire estimated a global recession could last until the spring of 2024. Although Musk admitted he was “just guessing,” his prediction came amid other gloomy economic forecasts from several business leaders. Some of these leaders were Amazon CEO Jeff BezosJP Morgan CEO Jamie Dimon, and Goldman Sachs CEO David Solomon.

Latest Elon Musk Recession Warning Sparks Twitter Debate

The latest remarks by Elon Musk on a likely recession comes in an exchange with Tesmanian co-founder Vincent Yu. Like Musk, the Tesmanian co-founder had earlier expressed concern about the economy’s health and forewarned a recession next year. The Twitter exchange between Musk and Yu sparked participation from several other users who also chimed in. While a few seemed to side with the Fed’s position on interest rates, others frowned on hiking rates to stem inflation. Furthermore, a small number of Twitter users expressed ambivalence at the Fed’s stance. For example, a user with the handle @CricketSurfing stated:

“I don’t know where the sweet spot is in terms of interest rates, but the goal should be to allow the M2 money supply to grow at about the rate of GDP. Right now, the Fed is *shrinking* M2. They have slammed on the brakes, when they should have eased off the accelerator.”

Sven Henrich Also Chimes In

Also notable in the thread on interest rates is input from NorthmanTrader founder Sven Henrich. According to Henrich, the Fed’s actions on perceived inflationary pressure were overdue. As a result, the US apex bank has tried to make up for its decisive delay amid the aggressive tightening of a record-high debt construct. However, Henrich lamented that the Fed is implementing its strategy without “accounting for the lag effects of these rate hikes”. The NorthmanTrader concluded by predicting that the Fed would realize the extent of the damage of its decision too late.

Like Yu, Henrich’s assessment of the Fed decision drew an affirmative response from Musk.

Henrich also slammed the Fed further by stating that the central bank continues to project positive GDP growth for 2023. He reasoned that such misplaced optimism comes amid the obvious signs but does not appear surprised by this. According to Henrich, the Fed displayed the same misplaced GDP optimism in 2008 en route to the economic meltdown of ’09. Henrich concludes his criticism of the Fed by saying:

“As always, they will panic cut rates once the recession impact is here & then blame unforeseen factors.”

Read more business news on Coinspeaker.

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Elon Musk Implores Fed to Cut Interest Rates or Risk Economy Tumbling into ‘Severe’ Recession

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Bitcoin Bearish Signal: NVT Golden Cross Enters Sell Zone

On-chain data shows the Bitcoin NVT golden cross has now entered into the “sell” zone, something that could be bearish for the price of the crypto.

Bitcoin NVT Golden Cross Surges, Now Has A Value Of 2.44

As pointed out by an analyst in a CryptoQuant post, this sell signal might lead to BTC’s price dropping in the next ten days.

The “Network Value to Transactions ratio” (NVT ratio) is an indicator that’s defined as the market cap divided by the transacted volume in a specific period.

What this metric tells us is how the value of Bitcoin currently compares with the investors’ ability to transact coins, and thus if the crypto is undervalued or overvalued right now.

One application of this ratio is through the NVT golden cross, which compares the short-term (10-day moving average) and the long-term (30-day moving average) trends in NVT to indicate tops and bottoms in the crypto’s price.

Historically, the metric’s value being higher than 2.2 has usually been a signal to sell, while it being less than -1.6 has been a bullish sign.

Now, here is a chart that shows the trend in the Bitcoin NVT golden cross over the last year:

The value of the metric seems to have sharply gone up in recent days | Source: CryptoQuant

As you can see in the above graph, the Bitcoin NVT golden cross has observed some sharp uptrend recently.

The indicator now has a value of 2.44, meaning it has exceeded the 2.20 level that has historically implied sell signals.

During late May, the metric saw a similar surge and rose to a peak value of 2.77. When the following month rolled around, BTC went through a huge crash from $30k to $20k.

Since the crypto is once again overpriced according to the NVT golden cross, it’s possible the coin may go through more drawdown in the coming days.

However, as the metric’s value is still lower than what it was at the high preceding the June crash, there might be potential for it to rise further, before the actual sell signal is in.

BTC Price

At the time of writing, Bitcoin’s price floats around $16.8k, up 2% in the last seven days. Over the past month, the crypto has lost 19% in value.

Below is a chart that shows the trend in the price of the coin over the last five days.

Looks like the value of the crypto has shot up during the last couple of days | Source: BTCUSD on TradingView
Featured image from Mark Basarab on Unsplash.com, charts from TradingView.com, CryptoQuant.com

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