After rallying up to $11,000, Bitcoin has once again managed to pull back to the $9,000 range and has left many bullish investors confused. The entire cryptocurrency market came to a halt on Friday, with most coins achieving minor advances after enduring significant retraces over the previous two days.
At the time of writing, Bitcoin is trading at $9,767 with a market cap of $164 billion – a decline of 5.7% in the past 24 hours. The initial bullish rally seemed promising as it broke the macro, descending channel that governed much of the market over the last two months.
The moderate recovery in the last week could potentially be linked to the news that stock trading app Robinhood had begun rolling out its cryptocurrency trading service, which was first announced in January.
Robinhood service is currently only available to a limited number of users in five US states, but the company intends to quickly expand this in the coming months.
Investors are largely bullish on the fact that most of Robinhood’s 4 million registered users will soon have the ability to trade Bitcoin and Ethereum — with more cryptocurrencies likely to follow.
Altcoins, on the other hand, are as usual following Bitcoin’s lead. The Ethereum price dropped to as low as $835 and its market cap is now valued at $81 billion.
One exception out of all the cryptocurrencies that were floating in red was Nano. It is the only coin in the top 30 by market cap to have gained significantly on a day when most cryptocurrencies have fallen by high single-digits. At present, it is trading at $15.73 representing a colossal 50%+ gain in the past 24 hours.
The next support level for Bitcoin is at $9,000 as this marked the breakout of the current, failed rally. From there we will have to reassess the market conditions, but for now, I have very little confidence in a bullish continuation.
Top Stories from the Crypto World
1. Bank of America admits cryptocurrencies are a threat to its business model
A a report filed with the US Securities and Exchange Commission (SEC), listed a range of economic, geopolitical, and operational risks that the Charlotte, NC-based bank faces as it heads into the new fiscal year. For the first time, rising cryptocurrency adoption made the list.
The bank, which recently barred its customers from using credit cards to purchase cryptocurrencies, said that this and other similar policies could cost the firm clients.
“[C]lients may choose to conduct business with other market participants who engage in business or offer products in areas we deem speculative or risky, such as cryptocurrencies,” the bank said in the filing.
2. Bitmain now rivals Nvidia in profits
According to an analyst firm Bernstein. Beijing-based Bitmain took only four years to achieve performance that its larger tech peer took more than two decades to accomplish. The company now generated between $3 billion and $4 billion in operating profits last year.
Considering Nvidia’s role to provide semiconductors to machines used for Bitcoin mining, the combined performance is reflective of a bitcoin mining industry that has shown no signs of slowing down despite China’s best efforts.
Bernstein’s profit estimates for Bitmain are based on a gross margin and operating margin of 75% and 65%, respectively. While Bitmain certainly benefited from last year’s astronomical rise in the bitcoin price, it also takes a very strategic approach. “Bitmain shrewdly adjusts the prices of miners according to bitcoin prices,” according to the Bernstein report.
3. Venezuela’s President orders state-owned companies to accept Petro
After officially launching the oil-backed Petro (PTR), Venezuela’s own cryptocurrency, the country’s leader Nicolás Maduro has ordered state-owned businesses to transact in it when buying and selling products and services.
According to a video posted on Twitter by local television network VTV, the Venezuelan president ordered these businesses to convert a percentage of their sales and purchases into the Petro. He stated (roughly translated):
“[I gave the order to] PDSA, Pequiven, and CVG to, as state-owned companies, realize a percentage of their product sales and purchases, from here on out, on the Petro currency.”