Bitcoin is becoming a hedging instrument even against the rest of the cryptocurrency market.
The largest cryptocurrency profited as much as 6 percent on Friday to close above $8,700. At the same time, other leading cryptocurrencies, such as Ethereum, Litecoin, and EOS, trended in negative territory. The massive contrast between the bitcoin and the rest of the cryptocurrency market indicated a capital flight. Traders suggestively exchanged a bulk of altcoins for bitcoin as a safety measure against the latest Binance announcement.
The Malta-based cryptocurrency exchange, which accounted for the highest global cryptocurrency volume, announced on Friday that it is barring US customers from accessing its services. The announcement indicated that Binance would lose about 15 percent of its net monthly traffic, amounting to over 40 million customers. The firm’s sudden shutting down reportedly prompted the US customers to withdraw a large number of altcoins, which included Binance’s very own native token BNB coin.
Binance Coin (BNB) Dropped Close to 18% on Friday | Image Credits: TradingView.com
The BNB price dropped by as much as 17 percent against the BTC on Friday.
Bitcoin against Altcoin Liquidity Crisis
Alex Krüger, a prominent market analyst, said today that Binance’s issues with its US customers are bullish for bitcoin. He cited Tether, the company behind the controversial stablecoin USDT, to explain the correlation of bitcoin with the rest of the altcoin market. In April 2019, the New York Attorney General’s office on April 25 announced that it had obtained a court order against Tether and its associate firm BitFinex for allegedly hiding $850 million loss from USDT investors.
“Upcoming Binance’s issues with US residents = Bullish for BTC,” wrote Krüger. “This was even clearer than with April’s Tether “FUD.” Speculators are supposed to act on meaningful news, not just theorize about it.”
Upcomimg Binance's issues with US residents = Bullish for $BTC. This was even clearer than with April's Tether "FUD". Speculators are supposed to act on meaningful news, not just theorize about it. https://t.co/7bAfEOiXTW
— Alex Krüger (@krugermacro) June 14, 2019
Also, in October 2018, USDT dropped its dollar-peg to fall to its 18-month low of $0.92. The slide in the stablecoin pushed bitcoin $600 higher on BitFinex.
What’s Now for Bitcoin
The bitcoin market’s intraday arrangements point to a small downside correction, according to its overbought Relative Strength Indicator on Coinbase daily chart. Nevertheless, market analyst Josh Rager suggest that the cryptocurrency has fuel to retest $8,750, given it manages to float above $8,000.
“Break and close above $8,948 is bullish,” he added.
$BTC… 🐂
Nice break up out of that rising wedge, big players painted it perfect on the chart to trap many into shorting followed by liquidations
Would like to see a pullback to $8500s before another retest to break above $8750
Break & close above $8948 is bullish pic.twitter.com/bAlkGNFxz2
— Josh Rager 📈 (@Josh_Rager) June 15, 2019
Pseudonymous analyst BitBit believes bitcoin is due for a much larger upside move than what is suggested by Rager. He measured the cryptocurrency based on monthly performance, stating that it could continue its bull run to touch the five-figure status.
“I’m saying above 10k by the end of the month, might even touch 11k,” said BitBit.
The bitcoin price was trading at $8,645 at the time of this writing.
