The firm said it intended to use the proceeds from the offering “for general corporate purposes, including the acquisition of Bitcoin.”
The same day business intelligence firm MicroStrategy announced it would use $488 million from the proceeds of a private offering sale to buy Bitcoin, the company said it may also sell up to $1 billion of its stock for the same reason.
In a Monday S-3 filing for the U.S. Securities and Exchange Commission, MicroStrategy said it would be launching an “at the market” securities offering which would allow it to sell up to $1 billion of its Class A Common stock over time. The firm said it intended to use the proceeds from the offering “for general corporate purposes, including the acquisition of Bitcoin.”
“Bitcoin does not pay interest or other returns and so ability to generate a return on investment from the net proceeds from this offering will depend on whether there is appreciation in the value of Bitcoin following our purchases of Bitcoin with the net proceeds from this offering,” said the filing. “Future fluctuations in Bitcoin trading prices may result in our converting Bitcoin purchased with the net proceeds from this offering into cash with a value substantially below the net proceeds from this offering.”
According to the SEC filing, MicroStrategy held 92,079 Bitcoin (BTC) — roughly $3.7 billion at the time of publication — as of June 4, with the company saying today it intended to purchase an additional $488 million in the cryptocurrency. The filing shows MicroStrategy purchased its existing holdings at an average BTC price of $24,450, meaning that the company has seen the value of its crypto increase by almost $1.5 billion.
Should the firm use the entirety of the $1 billion proceeds to invest in Bitcoin again, it would add roughly 25,000 coins to its coffers at the current value of $40,150. The price of the crypto asset has risen by more than 8.8% in the last 24 hours.
Bitcoin’s surge above $40,000 and the breakouts from select altcoins may be signals that the bottoming process has begun.
Bitcoin (BTC) has risen above the psychological resistance at $40,000 following a series of positive news flow over the past week. The first bit of bullish news that impacted the price of Bitcoin was a tweet from Tesla CEO Elon Musk who said the carmaker wil accept Bitcoin payments if more than 50% clean energy is used by Bitcoin miners with a “positive future trend.”
Another piece of news that may have boosted the recovery in Bitcoin was Paul Tudor Jones' suggestion that 5% of every investment portfolio have exposure to Bitcoin, which is equal to that of gold, cash and commodities. Jones was al critical of the U.S. Fed’s view that the current rise in inflation numbers is transitory.
The recent bullish news is proof that the current drop has not altered the fundamentals of Bitcoin. Therefore, as the price stabilizes, Bitcoin may again attract institutional investment.
Meanwhile, MicroStrategy has completed its $500 million offering of secured notes, which the company plans to use for buying Bitcoin. After deducting various expenses, the business intelligence firm is left with $488 million that will be used to purchase Bitcoin. This will add to the company’s existing stack of 92,079 Bitcoin.
With demand likely to return, could Bitcoin lead the recovery in the crypto markets? Let’s analyze the charts of the top-10 cryptocurrencies to find out.
Bitcoin turned up on June 13 and soared above the resistance line of the developing descending triangle pattern. This move invalidated the bearish setup, which is a bullish sign. The buyers have continued their purchase today and pushed the price above $40,000.
The 20-day simple moving average ($36,779) has flattened out and the relative strength index (RSI) has risen into the positive territory, indicating that the selling pressure has reduced.
The BTC/USDT pair could now attempt a rally to the 50-day SMA ($44,571), which may act as a stiff resistance. If the price turns down from this resistance but finds support at the 20-day SMA, it will suggest the sentiment has turned bullish.
A breakout of the 50-day SMA will signal a possible change in trend and the pair could then rally to $51,483. This bullish view will be negated if the pair turns down and plummets below the $34,600.36 support. Such a move will suggest that traders are dumping their positions on minor rallies.
Ether (ETH) dropped below the support line of the symmetrical triangle on June 12 but the bears could not sustain the lower levels. This suggests that buyers are accumulating on dips.
The ETH/USDT pair rebounded off the trendline on June 13 and the bulls are now trying to push the price above the 20-day SMA ($2,581). If they succeed, the pair could rally to the resistance line of the triangle.
A breakout and close above the triangle and the 50-day SMA ($2,940) will indicate that the downtrend is over. The pair could then move up to the 78.6% Fibonacci retracement level at $3,806.91.
This positive view will invalidate if the pair turns down from the current level or the overhead resistance and breaks below $2,200. That could open the doors for a fall to $2,079 and then $1,728.74.
Binance Coin (BNB) bounced off the trendline on June 13 and the bulls have pushed the price above the 20-day SMA ($364). This suggests that the bulls are defending the trendline aggressively.
If the bulls sustain the price above the 20-day SMA, the BNB/USDT pair may move up to $433. This level may act as a resistance but if the bulls can push the price above it, the ascending triangle pattern will complete.
This bullish setup has a target objective at $609. The gradually rising 20-day SMA and the RSI above 46 suggest the buyers are trying to make a comeback.
However, if the price turns down from the current level and breaks below the trendline, it will suggest that supply exceeds demand. The pair could then drop to $291.06 and then to $211.70.
Cardano (ADA) slipped below the trendline on June 11 but the bears could not sustain the lower levels. This suggests that the bulls are buying on dips. The altcoin rose above the trendline on June 13 and the bulls are currently trying to push the price above the moving averages.
If they manage to do that, the ADA/USDT pair could rise to $1.94 where the bears are likely to pose a stiff challenge. However, a breakout and close above this resistance will suggest the correction is over.
Contrary to this assumption, if the price turns down from the moving averages, the pair could again drop to $1.33. A break below this support will indicate weakness and the pair could then plummet to $1.
Dogecoin (DOGE) is attempting to rebound off the neckline of the head and shoulders pattern. This suggests the bulls are attempting to defend this support. If buyers push the price above the 20-day SMA ($0.34), the altcoin could start its journey to the 50-day SMA ($0.40).
The bears are again likely to mount a stiff resistance at the 50-day SMA. If the price turns down from this resistance, the DOGE/USDT pair could drop to the neckline and remain range-bound for a few days.
The flattening moving averages and the RSI just below 46 points to a range-bound action in the near term. This neutral view will invalidate if buyers push the price above $0.45 or bears sink the pair below the neckline.
XRP has been trading below the 20-day SMA ($0.92) for the past few days but the bears have not been able to sink the price below the $0.75 support. This suggests that bulls are accumulating at lower levels.
The 20-day SMA is flattening out and the RSI is above 44, indicating the bulls are trying to make a comeback. A breakout and close above the 20-day SMA will be the first sign of strength. It will indicate that traders have resumed their purchases.
That could push the price to $1.10 where the bears will try to defend the level aggressively. However, if buyers thrust the price above this level, the XRP/USDT pair could rise to the 50-day SMA ($1.19). This positive view will invalidate if the price turns down and plummets below $0.75.
Polkadot’s (DOT) price action of the past few days has formed a symmetrical triangle pattern, indicating indecision among the bulls and the bears.
The flattish 20-day SMA ($22.98) and the RSI above 48 points to a possible range-bound action in the short term. However, if bulls push the price above the resistance line of the triangle, the DOT/USDT pair may start a relief rally to $31.28 and then to $41.40.
On the contrary, if the price turns down from the resistance line, the bears will make one more attempt to sink the pair below $19.50. If they succeed, the pair could start its journey toward the next critical support at $15.
Uniswap (UNI) is trading between the $21.50 support and the $30 resistance for the past few days. Although the bears pulled the price below $21.50 on June 12 and 13, they could not sustain the lower levels. This suggests that the bulls purchased the dip below $21.50.
The relief rally is likely to face stiff resistance at the downtrend line. This shows that the bears have not thrown in the towel yet. If the price turns down from the current level, the sellers will make another attempt to sink the UNI/USDT pair below the $21.50 to $20.23 support.
If they succeed, the pair could drop to $16.49 and then $13.04. Contrary to this assumption, if the bulls push the price above the downtrend line, the pair may move up to the 20-day SMA ($25.45).
If the price turns down from the 20-day SMA, it will suggest the sentiment remains negative. However, if the bulls push the price above the 20-day SMA, the pair could rise to $30.
Litecoin (LTC) has failed to break above or below the symmetrical triangle as the bulls are buying on dips to the support line and bears are selling at the resistance line. If the price reaches the apex of the triangle without breaking out, the pattern will be invalidated.
The bulls are currently attempting to push the price above the resistance line. If they succeed in sustaining the price above the triangle, it will suggest that buyers are back in the game. That could open the doors for a move to $225 and then to the 50-day SMA ($237).
Alternatively, if the price turns down from the current level, the bears will make one more attempt to sink the LTC/USDT pair below the support line. If that happens, the pair could drop to $140 and then to $118.03.
Bitcoin Cash (BCH) has been trading inside a descending triangle pattern for the past few days, which will complete on a breakdown and close below $538.11.
If that happens, the BCH/USDT pair could witness aggressive selling and may drop to $400 and then to $370. The gradually downsloping 20-day SMA ($656) and the RSI in the negative territory suggest the path of least resistance is to the downside.
This negative view will invalidate if the bulls propel the price above the downtrend line. Such a move could catch several aggressive bears off guard and may result in a short squeeze, pushing the price to the 50-day SMA ($894).
The views and opinions expressed here are solely those of the author and do not necessarily reflect the views of Cointelegraph. Every investment and trading move involves risk. You should conduct your own research when making a decision.
Bitcoin price is back to around $40,000 but whether or not the bull market is over or not isn’t yet certain. What is certain, according to Paul Tudor Jones, is the cryptocurrency itself. Not the asset or its price, but the underlying ironclad cryptographic code. Here’s why the billionaire investor has allocated as much as […]
Yet while Musk’s tweet may have driven the price of Bitcoin up, some industry experts believe that Bitcoin is not a cryptocurrency that should be leveraged. For example, during an exclusive interview at Bitcoin 2021 in Miami, Caitlin Long, founder and CEO of Avanti Financial, told Cointelegraph that unlike other cryptocurrencies, solvency matters more than leverage and liquidity when it comes to Bitcoin:
“Once you get into Bitcoin and you start losing money, I consider that to be really valuable tuition for really learning what Bitcoin is. We’ve got a lot of new people in this industry now who are going through those lessons, and hopefully folks will learn from them. Especially in this bull market, there’s been so much leverage added to the system. For those of us who’ve been around a long time, we’ve learned these lesson a long time ago – You don’t leverage Bitcoin.”
A regulatory push for Bitcoin and stablecoins
In addition to advising that Bitcoin shouldn’t be leveraged, Long mentioned that there are new regulations for Bitcoin coming out of Washington D.C., something which she believes has been coordinated with other government bodies. “It was Ray Dalio who said that Bitcoin’s biggest threat is success, because that means the regulators are going to be cracking down,” said Long.
Although this may be, Long pointed out that regulations will not ban cryptocurrency or Bitcoin — as long as users comply. She said:
“The punchline is that if you pay your taxes and you get regulated, and you don’t take shortcuts, you’re going to be okay. Those that are trying to commit crimes, or defraud consumers, or not pay taxes, and not comply with the law, then those people are not going to be okay.”
Long also noted that regulations around stablecoins are a priority for lawmakers. In particular, this will ensure that stablecoins don’t infect the U.S. dollar payment system with liquidity risk. To put this into perspective, Long mentioned the accidental hard fork that happened for a few hours in Ethereum (ETH) during November of last year, saying:
“At the time I was thinking what would happen if all the Ethereum ERC20 stablecoins had to be redeemed within the span of minutes because they had to be burned on one fork and reissued on another? That is not a risk that the traditional financial system has been thinking about.”
Traders who are unsure about Bitcoin’s chance of continuation above $40,000 can use a combination of protective put options to generate profit.
Investors tend to define the market as either bullish or bearish, but sometimes the price can remain within a specific range for an extended period.
This type of sideways movement is not necessarily stable because cryptocurrency markets have high volatility that stems from a range of uncertainties and the early adoption cycle.
For example, investors who concluded that the Bitcoin (BTC) bull run was over after the first week of 2021 probably regret that decision.
Starting on Jan. 8, Bitcoin price traded in a descending channel within a $10,000 range. The movement lasted for 26 days until it finally broke out in early February.
In August and September 2020, Bitcoin had two distinct ranging periods. However, it is not possible to consider those movements as a bull market. On the other hand, bears had few reasons to celebrate since the $10,000 bottom was tested multiple times, but the market recovered from it.
Is Bitcoin price in an ascending channel?
Although it seems premature to call it, there is a possibility that Bitcoin has entered a positive range aiming for $40,000 by the end of June.
The present range indicates a $37,000 to $43,000 range for June 25, but with crypto’s extreme volatility, the channel’s support and resistance levels are sometimes drastically tested.
On the other hand, there are also fears that U.S. Treasury Secretary Janet Yellen’s remarks about digital assets being used for money laundering and illicit payments standing as a threat to Bitcoin price. Furthermore, Gary Gensler, the U.S. Securities and Exchange Commission chair, recently expressed concerns about the absence of regulation on crypto exchanges.
Smart traders take less risk on range trading moves
For options traders, the best option sometimes is to bet on maintaining the current range, especially for short-term periods. That’s where the Christmas tree spread with puts strategy enters into play.
Instead of betting on a bull or bear market, this option strategy uses protective put options to benefit traders with a neutral stance. The investor will profit if Bitcoin remains between $37,170 and $44,000 on June 25. Therefore, it offers protection both from an 8.5% move in either direction.
To achieve this, one needs to buy 2 BTC worth of the $36,000 put, sell 3.33 BTC worth of the $40,000 put in addition to buying 1.33 BTC of the $46,000 put. Each contract is maturing on June 25.
The Christmas tree spread with puts is a low-risk strategy
With less than 11 days left before the June 25 expiry, it is reasonable to assume that there is a good probability that the market stays within this range. However, this strategy offers a 0.062 BTC ($2,515 at $40,570) maximum loss in case of a surprise move.
Profit-wise, the strategy can yield a 0.1375 BTC ($5,500) gain at $40,000.
Therefore, it seems like a smart choice for an investor that expects the current uptick in bullish momentum to continue. It is worth noting that most derivative exchanges offer options trading from as little as 0.10 BTC.
The views and opinions expressed here are solely those of the author and do not necessarily reflect the views of Cointelegraph.com. Every investment and trading move involves risk, you should conduct your own research when making a decision.
Bitcoin price has jumped over 12% to hit a two-week high of $39,847 on US-based crypto exchange Coinbase. The cryptocurrency’s upside towards the recently elusive $40,000 comes as the market continues to react positively to news.
Buyers are looking to hold the gains above support as shown in morning deals on Monday. Bitcoin currently trades at $39,286 on Coinbase.
Bitcoin price broke major resistance at $37k
After finding it difficult to break above $37k due to FUD related to a heightened crackdown on mining in China, BTC added more than $3,400 to its daily candle on Sunday to trade at the highest price level since 26 May.
While the broader recovery could align with other factors across the market, BTC’s value soared just after Tesla CEO Elon Musk revealed that the electric car maker was ready to resume Bitcoin transactions. It follows negative comments from Musk regarding Bitcoin’s energy consumption and impact on the environment.
“When there’s confirmation of reasonable (~50%) clean energy usage by miners with positive future trend, Tesla will resume allowing Bitcoin transactions,” the Tesla chief said.
Bitcoin price jumped nearly 10% following Musk’s tweet and traded higher to establish support above the 20-day simple moving average line ($36,756).
Bitcoin’s upside also comes after miners indicated support for the Taproot upgrade slated for November 2021. The upgrade seeks to revamp the network’s privacy and scripting capabilities.
From a technical point of view, analyst Rekt Capital says the upside might have helped push a potential death cross by a couple of weeks.
The death cross happens when the 50-day moving average cuts below the 200-day moving average. It is a bearish signal that usually suggests further price correction, and as seen on the price chart above, BTC/USD was likely to make the cross if the 50 DMA continued to slope towards increasing 200 DMA.
“Fantastic upside movement from #BTC lately. The $BTC breakout has pushed back the potential Death Cross by two weeks. Price increases from here would further postpone it,” the analyst pointed out.
“And if $BTC is able to rally above $55K-$60K soon, then BTC could avoid the cross altogether.”
Bitcoin is correcting gradually, and the market is rightfully excited. At report time, Bitcoin has raked in over 12% in daily gains, sending prices up to $40,641 while simultaneously clearing weekly losses, which at the peak of the bear market was all the way down to -30%. The last week saw Bitcoin accumulate enough to […]
The analysis of the market of cryptocurrency, which was performed by JPMorgan, undoubtedly highlighted the distinction between the spot prices of Bitcoin (BTC) and the futures prices of BTC. Analysts of JPMorgan stated that the market of Bitcoin has reverted to backwardation…
Grayscale Bitcoin Trust will be opening on July 19. As such, sellers will be booted from the market, paving way for both fluctuation in prices and bullish tendency. Institutional Bitcoin (BTC) financial backers are at the center of attention as an impending major cashout date instigates talks in some quarters about a new price fluctuation. …