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- Bitcoin to $85K soon?
Bitcoin to $85K soon?
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Analyst claims Bitcoin falling below $85K could trigger a ‘bear market’
Key points:
Bitcoin has remained above its 50-day and 100-day MAs, reinforcing a short-term bullish bias.
Drop below $85K could lead to panic sell-offs by short-term holders (STH).
News - Market analysts have mixed short-term outlooks for Bitcoin after its latest price correction from nearly $109K to a low of $92K. Some are projecting that BTC could stay within the $90K - $100K range. On the contrary, others have warned of a potential long-term decline if BTC slips below $85K.
Long-term projections - At the time of writing, BTC was valued at $95K and was above its key 50-day and 200-day Moving Averages (MAs). Additionally, the price was above the STH (Short-term Holder) realized price of $85.2K.
This suggested that users who have held BTC for 5 months or below, acquired it at an average price of $85.2K and were still in profit. Overall, this can be deemed bullish for BTC’s price if it’s above these levels.
BTC could stay within the $90K-$100K range, reinforcing bullish bias on higher timeframe charts. However, a drop below $85K would invalidate this positive projection.
Pseudonymous Glassnode analyst, CryptoVizart, also cautioned that a slip below $85K, which doubled as STH realized price, could trigger an extended market crash. It could make STHs panic sell at a loss and drag BTC lower.
“Historically, a sharp break below this level, if followed by price stabilizing under, has triggered STH capitulation. Such capitulation is often the catalyst for turning a correction into a crash, potentially transitioning into a mid-to-long-term bear market.”
In short, despite a bullish outlook, an extended BTC correction below $85K could be catastrophic for the cryptocurrency based on historical trends and technical chart patterns.
Solana’s TVL hits yearly highs - Will it aid SOL’s recovery?
Key points:
Solana’s TVL hit 2024 record highs of 46.25 million SOL, indicating greater network activity and trust.
SOL’s price stabilized above $175 and the 200-day Moving Average.
News - Solana’s TVL (total value locked) hit a record yearly high of 46.25 million SOL, according to DeFiLlama’s data. This seemed contrary to the altcoin’s bearish sentiment on the price charts lately, raising hopes of a potential catalyst for SOL’s price recovery.
Solana’s network growth - Solana’s TVL, which tracks locked assets across the chain’s DeFi ecosystem, hit a 2024 record high of over 46M SOL. This highlighted greater network activity and users’ trust in the chain when gauged in SOL terms.
However, on the price charts, SOL has been on a free fall since late November. In fact, it declined from an all-time high of $264, just to stabilize near $175 at press time.
A hike in network activity is always viewed as a long-term positive outlook for the chain and, by extension, for its native token - SOL. In fact, some pundits believe that SOL may be way too oversold and it could be due for a recovery soon.
All the good signs - Solana’s technical indicators also pointed towards a likely recovery. Its most recent pullback hit the golden ratio of 61.8% Fib level ($715), when measured from its September lows and November highs. In most cases, trend reversal happens at the golden ratio level.
Besides, the $175-level coincided with the 200-day EMA (Moving Average) - A level that has prevented previous SOL dumps throughout 2024. If the trend repeats itself, SOL could bottom out above $175.
However, an extended BTC correction below $90K could drag SOL lower and invalidate this projection.
Crypto ads targeting UK will need an FCA license from 2025
Key points:
Crypto advertisers targeting UK users will need a license from the FCA, and be certified by Google.
Policy changes will take effect from 15 January 2025.
News - Crypto advertisers targeting the UK (United Kingdom) must be registered by the financial regulator, FCA (Financial Conduct Authority). Additionally, the advertisers must be certified by Google in a policy change that will be effective from next month.
New rules for new asset classes - In a move aimed at protecting local crypto users, UK’s financial regulator will need all advertisers to have a license.
The update by search engine giant Google added that exchanges and cryptocurrency wallets (both software and hardware) must register with the regulator, before placing ads on its platform.
Google also emphasized that advertisers must comply with extra local laws.
“As a reminder, we expect all advertisers to comply with the local laws for any area that their ads target. This policy will apply globally to all accounts that advertise these financial product.”
Violation of the aforementioned policy, scheduled to be effective from 15 January 2025, will lead to account suspension after a 7-day warning.
A wider regulatory trend - Interestingly, the update came a week after the FCA warned and flagged Retardio, a Solana-based memecoin and NFT project. The regulator claimed that users may fail to get full compensation if the firm goes out of business since it was not registered.
Nigeria is also following the lead of the UK’s strict crypto marketing and promotion policy. Nigeria’s regulator, the Securities and Exchange Commission (SEC), now requires digital asset providers and social media influencers to get approval, before promoting products.
US Bitcoin reserve could cut national debt by 35% - VanEck
Key points:
VanEck estimated that a US BTC reserve could reduce national debt by 35% in 24 years.
According to MicroStrategy’s Saylor, such a reserve could earn $16-$81 trillion in revenue.
News - A Bitcoin reserve for the United States could reduce 35% of the national debt by 2049, according to VanEck. In fact, the asset manager estimated that BTC could hit $42.3 million per coin by 2049, making it possible for the country to offset part of its projected $120 trillion debt.
VanEck’s outlook - According to VanEck analysts - Mathew Siggel and Nathan Frankovitz - US debt could jump to $119.3 trillion by 2049 from its current figures of $35 trillion. Over the same period, the analysts projected that BTC could surge to $42.3 million per coin, starting with a $200K price target from 2025.
What will be the catalyst for such a massive price target? According to Siggel, several countries, led by BRICS, will jump on the BTC reserve trend. Others, including cities, will join the race and increase the asset’s value.
In fact, Siggel recently predicted that BTC will ultimately become the global settlement currency. He stated,
“It’s very possible Bitcoin will be widely used as a settlement currency for global trade by countries who wanted to avoid the parabolic increase in USD sanctions that have been imposed.”
Saylor pitches in - MicroStrategy’s Michael Saylor, pioneer of BTC corporate strategy, has also championed the US BTC reserve as part of his latest policy proposal dubbed Digital Asset Framework.
In the proposal, Saylor claimed that the US Treasury could earn $16-$81 trillion from the reserve. According to the exec, this revenue could help ‘neutralize’ fiscal debt.
“A strategic digital asset policy can strengthen the US dollar, neutralize the national debt, and position America as the global leader in the 21st-century digital economy.”
More stories from the crypto ecosystem
Did you know?
Despite its remarkable mindshare and great airdrop execution, the viral DEX and blockchain Hyperliquid [HYPE] only has 4 validators, raising centralization risks and concerns. Others have warned that North Korean hackers can easily drain funds from the chain if it doesn’t add more validators.
Crypto will be the only market open this week, as traditional markets close for the Christmas and New Year holidays. Historically, BTC has seen Santa Claus rallies, which extend to the rest of Q4. BTC's strongest performances always happen in Q4. However, Coinglass revealed that Q4 2024 is currently at 51%, below 2023’s 56%.
The crypto industry saw massive institutionalization in 2024, starting with separate Spot BTC and ETH ETFs. Last week, it picked pace with new combined BTC and ETH ETFs approvals for Hashdex and Franklin Templeton, with the market eyeing even more altcoin ETFs in 2025.
Top 3 coins of the day
Algorand (ALGO)
Key points:
ALGO was back above its March highs of $0.33 at press time.
RSI on the 12-hour chart fell to a monthly low after ALGO erased post-election gains.
What you should know:
Algorand [ALGO] bulls were able to defend the 100-day Moving Average and push the price above its March highs of $0.33. The altcoin saw a nearly 30% pump over the weekend, making it one of the best-performing assets over the period. However, BTC’s recent attempt at reclaiming $100K faced rejection and delayed ALGO’s breakout prospects.
With the RSI toiling below the 50-level at press time, the muted demand could further constrict ALGO within its descending channel. If ALGO slips below its March highs again, more losses could be likely.
Aave (AAVE)
Key points:
AAVE was up 9% in 24 hours and among the market’s best daily performers.
Despite AAVE's short-term bullish outlook, the CMF was still negative at press time.
What you should know:
AAVE recovered by nearly 20% from the lows of $270 after dumping 32% in the past week. In the last 24 hours, it rallied 9% and was among the top daily performers on CoinMarketCap. Interestingly, AAVE stayed above the short-term and long-term price trends of 50-day and 100-day Moving Averages. This reinforced its bullish outlook in the short term. The altcoin could eye $400 if it defends the new support at $335. However, the neutral RSI and below-average reading on CMF suggested stagnant demand and muted capital inflows. AAVE could face some risks if these technical indicators remain at these levels or drop lower.
Hyperliquid (HYPE)
Key points:
HYPE maintained its short-term channel, but was retesting the range-low ($27) at press time.
Rising sell volume could trigger a bearish breakout towards $24.
What you should know:
HYPE, the native token of the Hyperliquid DEX, has enjoyed massive pump and mindshare given its ‘no-VC’ ties vibe and great user interface. At press time, it still held firm on its short-term ascending channel, reinforcing its bullish outlook. However, as seen by the drop of the RSI below the neutral level, the rising sell pressure pushed HYPE to the range-lows at $27. A breach below the channel lows could drag HYPE to $24. The flat reading on the CMF underscored the weak capital inflows that could further dent market sentiment. Especially if BTC fails to reclaim $100K.
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