Bitcoin Faces Challenging Market Terrain on 15th Anniversary
In the wake of bitcoin's 15th anniversary, the cryptocurrency behemoth confronts a challenging market terrain, as its price dipped 6.7% to prices between $42,350 to $42,619 amidst swirling rumors of spot bitcoin exchange-traded fund (ETF) rejections.
Bitcoin Price Analysis
The past day saw bitcoin's price range fluctuate between $41,804 and $45,813 with a market capitalization of $832 billion and trading volume of around $35.96 billion. The oscillators and moving averages hint at a diverging sentiment: while the momentum and moving average convergence/divergence (MACD) level indicate bearish action, there's a strong bullish signal from the exponential and simple moving averages, especially over longer periods (50, 100, and 200 days).
A detailed look reveals a neutral stance in the relative strength index (RSI), Stochastic, commodity channel index (CCI), average directional index, and awesome oscillator. Yet, the selling pressure is evident with a negative momentum and MACD Level. The moving averages predominantly show bullish sentiment, especially in longer time frames, suggesting the optimistic undercurrent remains.
Daily Chart Analysis
The daily chart depicts a dramatic narrative – a significant uptrend followed by a precipitous decline, with the recent large daily red candle signifying the strong selling pressure. This was precluded by a consolidation phase, likely an accumulation before a sell-off. The transition from bullish to prominent bearish flags signals a reversal, marking an exit point just before the decline.
4-Hour Chart Analysis
Zooming into the 4-hour chart, the recent price surge followed by a steep downturn is evident. The entry and exit points become clearer with this granularity; an upward trend confirmation was the green light for entry, while an ideal exit was at the peak or as the downturn formed, breaking below the previous low, hinting at a momentum shift.
1-Hour Chart Analysis
The 1-hour chart offers an acute perspective of the rapid price fall, characterized by the day's large dip. This granularity is particularly beneficial for short-term traders seeking quick trades within consolidation phases. The exit strategy aligns with the 4-hour chart, emphasizing the break below the support level from previous areas as the cue to avoid further downturns.
Bull Verdict and Outlook
Despite recent downturns and market volatility, the longer-term moving averages and certain oscillators suggest an underlying bullish sentiment. If the market can leverage this period of consolidation as a springboard, coupled with significant historical support levels holding firm, there's potential for an upward trajectory. As bitcoin celebrates its 15th anniversary, the innovative spirit and growing adoption could catalyze a resurgence, especially if external factors like ETF approvals turn favorable.
Bear Verdict and Outlook
The sharp decline indicated in the daily and shorter-term charts, accompanied by negative momentum and MACD levels, paints a worrisome picture for bitcoin. The selling pressure and break below key psychological and technical support levels suggest a continuation of the bearish trend. If external market forces, such as the potential rejection of spot bitcoin ETFs, materialize negatively, it could further erode investor confidence and lead to a sustained downturn. In this light, the current market conditions might be seen as a precursor to more significant losses, warranting a cautious approach for those looking to preserve capital.
What do you think about bitcoin's market action on Wednesday? Share your thoughts and opinions about this subject in the comments section below.
Frequently Asked Questions
What are the advantages of a IRA with a gold component?
The benefits of a gold IRA are many. It’s an investment vehicle that allows you to diversify your portfolio. You have control over how much money goes into each account.
You can also rollover funds from other retirement accounts to a gold IRA. If you are planning to retire early, this makes it easy to transition.
The best part is that you don’t need special skills to invest in gold IRAs. They’re available at most banks and brokerage firms. You do not need to worry about fees and penalties when you withdraw money.
That said, there are drawbacks too. Gold is historically volatile. Understanding why you invest in gold is crucial. Do you want safety or growth? Do you want to use it as an insurance strategy or for long-term growth? Only then will you be able make informed decisions.
If you plan to keep your gold IRA indefinitely, you’ll probably want to consider buying more than one ounce of gold. You won’t need to buy more than one ounce of gold to cover all your needs. You may need several ounces, depending on what you intend to do with your precious gold.
You don’t have to buy a lot of gold if your goal is to sell it. You can even live with just one ounce. These funds won’t allow you to purchase anything else.
What is a Precious Metal IRA (IRA)?
A precious metal IRA allows for you to diversify your retirement savings in gold, silver, palladium and iridium. These are “precious metals” because they are hard to find, and therefore very valuable. These metals are great investments and can help protect your financial future from economic instability and inflation.
Bullion is often used to refer to precious metals. Bullion is the physical metal.
Bullion can be purchased via a variety of channels including online sellers, large coin dealers, and grocery stores.
An IRA for precious metals allows you to directly invest in bullion instead of purchasing stock shares. You’ll get dividends each year.
Precious metal IRAs have no paperwork or annual fees. You pay only a small percentage of your gains tax. You can also access your funds whenever it suits you.
What does a gold IRA look like?
The Gold Ira Accounts are tax-free investment options for those who want to make investments in precious metals.
You can purchase physical bullion gold coins at any point in time. You don’t have a retirement date to invest in gold.
You can keep gold in an IRA forever. Your gold holdings won’t be subject to taxes when you pass away.
Your gold will be passed on to your heirs, without you having to pay capital gains taxes. And because your gold remains outside of the estate, you aren’t required to include it in your final estate report.
To open a Gold IRA, you’ll need to first set up an Individual Retirement Account (IRA). Once you’ve done so, you’ll be given an IRA custodian. This company acts like a middleman between the IRS and you.
Your gold IRA Custodian will manage the paperwork and submit all necessary forms to IRS. This includes filing annual reports.
Once you’ve established your gold IRA, you’ll be able to purchase gold bullion coins. Minimum deposit is $1,000 If you make more, however, you will get a higher interest rate.
You’ll have to pay taxes if you take your gold out of your IRA. If you’re withdrawing the entire balance, you’ll owe income taxes plus a 10 percent penalty.
A small percentage may mean that you don’t have to pay taxes. There are exceptions. You’ll owe federal income tax and a 20% penalty if you take out more than 30% of your total IRA assets.
Avoid taking out more that 50% of your total IRA assets each year. Otherwise, you’ll face steep financial consequences.
What are the pros & cons of a Gold IRA?
The main advantage of an Individual Retirement Account (IRA) over a regular savings account is that you don’t have to pay taxes on any interest earned. An IRA is a great way to save money and not have to pay taxes on the interest you earn. However, there are disadvantages to this type investment.
You may lose all your accumulated savings if you take too much out of your IRA. Also, the IRS may not allow you to make withdrawals from your IRA until you’re 59 1/2 years old. A penalty fee will be charged if you decide to withdraw funds.
A disadvantage to managing your IRA is the fact that fees must be paid. Most banks charge 0.5% to 2.0% per annum. Other providers charge monthly management fees ranging from $10 to $50.
Insurance will be required if you would like to keep your cash out of banks. A majority of insurance companies require that you possess a minimum amount gold to be eligible for a claim. It is possible that you will be required to purchase insurance that covers losses of up to $500,000.
If you decide to open a gold IRA, it is important to know how much you can use. Some providers restrict the amount you can own in gold. Others let you pick your weight.
Also, you will need to decide if you want to buy physical gold futures contracts or physical gold. Gold futures contracts are more expensive than physical gold. Futures contracts allow you to buy gold with more flexibility. They enable you to establish a contract with an expiration date.
You also need to decide the type and level of insurance coverage you want. The standard policy does NOT include theft protection and loss due to fire or flood. However, it does cover damage caused by natural disasters. If you live in a high-risk area, you may want to add additional coverage.
You should also consider the cost of storage for your gold. Storage costs will not be covered by insurance. Banks charge between $25 and $40 per month for safekeeping.
A qualified custodian is required to help you open a Gold IRA. A custodian keeps track of your investments and ensures that you comply with federal regulations. Custodians don’t have the right to sell assets. Instead, they must maintain them for as long a time as you request.
Once you’ve chosen the best type of IRA for you, you need to fill in paperwork describing your goals. Your plan should include information about the investments you want to make, such as stocks, bonds, mutual funds, or real estate. Your monthly investment goal should be stated.
After completing the forms, send them along with a check or a small deposit to your chosen provider. Once the company has received your application, they will review it and send you a confirmation email.
If you are thinking of opening a gold IRA for retirement, a financial professional is a great idea. A financial planner is an expert in investing and can help you choose the right type of IRA for you. They can also help reduce your costs by suggesting cheaper options for purchasing insurance.
Statistics
- If you take distributions before hitting 59.5, you’ll owe a 10% penalty on the amount withdrawn. (lendedu.com)
- If you accidentally make an improper transaction, the IRS will disallow it and count it as a withdrawal, so you would owe income tax on the item’s value and, if you are younger than 59 ½, an additional 10% early withdrawal penalty. (forbes.com)
- Instead, the economy improved, stocks rebounded, and gold plunged, losing 28 percent of its value in 2013. (aarp.org)
- You can only purchase gold bars at least 99.5% purity. (forbes.com)
- This is a 15% margin that has shown no stable direction of growth but fluctuates seemingly at random. (smartasset.com)
External Links
investopedia.com
finance.yahoo.com
forbes.com
cftc.gov
How To
Investing In Gold vs. Investing In Stocks
It might seem risky to invest in gold as an investment vehicle these days. This is because many people believe gold is no longer financially profitable. This belief is due to the fact that many people see gold prices dropping because of the global economy. They fear that investing in gold will result in a loss of money. In reality, however, there are still significant benefits that you can get when investing in gold. We’ll be looking at some of these benefits below.
Gold is one of the oldest forms of currency known to man. It has been in use for thousands of year. It was used all around the world as a reserve of value. Even today, countries such as South Africa continue to rely heavily on it as a form of payment for their citizens.
Consider the price per gram when you decide whether you should invest in or not. It is important to determine the price per gram you are willing and able to pay for gold bullion. You can always ask a local jeweler what the current market rate is if you don’t have it.
It is important to remember that even though gold prices have dropped in recent times, the cost of making gold has risen. So, although gold prices have declined in recent years, the cost of producing it has not changed.
You should also consider the amount of your intended purchase when considering whether you should buy or not. If you intend to only purchase enough gold to cover your wedding rings it may be a smart decision to not buy any gold. If you plan to do so as long-term investments, it is worth looking into. If you sell your gold for more than you paid, you can make a profit.
We hope you have gained a better understanding about gold as an investment tool. We strongly recommend that you research all available options before making any decisions. Only then can informed decisions be made.
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By: Jamie Redman
Title: Bitcoin Technical Analysis: BTC 15th Anniversary Celebrations Marred by Market Mayhem
Sourced From: news.bitcoin.com/bitcoin-technical-analysis-btc-15th-anniversary-celebrations-marred-by-market-mayhem/
Published Date: Wed, 03 Jan 2024 14:30:56 +0000
