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Top Trader Explains Ethereum’s Rally to $1,400 in 2018 Was a “Red Herring” Event

Over recent weeks, the expectations of a parabolic Ethereum rally have become extremely prevalent. Due to a confluence of fundamental and technical trends, analysts left and right are flipping bullish on the second-largest cryptocurrency. Chris Burniske, a partner at Placeholder Capital, for instance, recently postulated that there is a world in which ETH hits $7,500: “If BTC goes > $50,000 in the next cycle, and ETHBTC returns to its former ATH, then expect to see […]

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Over recent weeks, the expectations of a parabolic Ethereum rally have become extremely prevalent.
Due to a confluence of fundamental and technical trends, analysts left and right are flipping bullish on the second-largest cryptocurrency.
Chris Burniske, a partner at Placeholder Capital, for instance, recently postulated that there is a world in which ETH hits $7,500:
“If BTC goes > $50,000 in the next cycle, and ETHBTC returns to its former ATH, then expect to see ETH > $7,500. To the mainstream ETH will be the new kid on the block — expect a frenzy to go with that realization,” Burniske explained, showing how a 3,000% Ethereum rally in the coming years may be feasible.  
But according to a top trader at a prominent cryptocurrency fund, it may be a while before Ethereum establishes a new all-time high.
Ethereum Is Unlikely to Hit a New All-Time High Soon
During 2017 and 2018’s crypto bubble, Ethereum was the cryptocurrency in the spotlight. While it didn’t outperform some altcoins, it was seen as the “next big thing” aside from Bitcoin, rallying from under a dollar to as high as ~$1,400 in just around a year’s time.
ETH had rallied so far and so fast that at one point, some were expecting for Ethereum’s market capitalization to surpass that of Bitcoin in an event branded the “flippening.”
Such a powerful rally is unlikely to happen again, though, commentators have said.
Avi Felman of BlockTower Capital branded the ~$1,400 all-time high as a likely “red herring” event.
The rally to quadruple digits, he explained, was driven by initial coin offerings (ICOs).
The initial coin offerings of 2016-2018 mostly accepted Ethereum — and ETH only. This resulted in a parabolic increase in demand for the cryptocurrency as investors sought opportunities to multiply their holdings.
With Ethereum ICOs now largely a dead trend, the biggest demand source for the cryptocurrency is now gone, limiting upside:
“The ETH all time high price is likely a red herring, and was driven by a very specific dynamic (buy ETH to place in ICOs, no sell pressure because ICO treasuries didn’t think about that). BTC had no such dynamic. When BTC reaches its new ATH hard to see ETH anywhere near its ATH.” The ETH all time high price is likely a red herring, and was driven by a very specific dynamic (buy ETH to place in ICOs, no sell pressure because ICO treasuries didn’t think about that). BTC had no such dynamic. When BTC reaches its new ATH hard to see ETH anywhere near its ATH
— Avi IS RIGHT (@AviFelman) June 15, 2020 Bitcoin Likely to Lead the Crypto Market
Taking a technical and fundamental perspective, it’s hard not to see why Bitcoin won’t be leading the rest of the cryptocurrency market, Ethereum included.
Last month, Josh Olszewicz, a crypto analyst at Brave New Coin, observed that the Bitcoin dominance chart printed a golden cross. A golden cross takes place when a “relatively short-term moving average crosses above a long-term moving average,” and is often followed by a “bullish breakout.” Chart from Josh Olszewicz (@CarpeNoctum on Twitter), a crypto analyst at Brave New Coin. The chart is of Bitcoin’s dominance printing a “golden cross” formation. Chart from TradingView.com
Bitcoin is also the “fastest horse in the race” due to the vast amounts of money being printed by central banks, billionaire hedge fund investor Paul Tudor Jones has said.
Featured Image from Shutterstock Price tags: ethusd Top Trader Explains Ethereum’s Rally to $1,400 in 2018 Was a “Red Herring” Event Source: https://bitcoinist.com/top-trader-explains-ethereums-rally-to-1400-in-2018-was-a-red-herring-event/?utm_source=rss&utm_medium=rss&utm_campaign=top-trader-explains-ethereums-rally-to-1400-in-2018-was-a-red-herring-event

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U.S. DoJ Extradites Key Member of Crypto Ponzi Scheme From Panama

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The U.S. Department of Justice (DoJ) has extradited a principal member of a fraudulent cryptocurrency mining and trading platform from Panama to the United States.

AirBit Club Co-founder to Face Criminal Charges in the U.S.

According to an announcement by the acting U.S. attorney for the Southern District of New York, Audrey Strauss, U.S. authorities were able to extradite Gutemberg Dos Santos, co-founder of crypto Ponzi scheme AirBit Club.

Dos Santos, who holds dual citizenship from Brazil and the United States, was extradited to the U.S. from Panama on Nov. 23, 2020. According to Strauss, Dos Santos’ repatriation was possible with the help of the Homeland Security Investigations (HSI).

As reported by CryptoPotato back in August, the U.S. authorities arrested five individuals who were involved in the AirBit Club scheme that fleeced unsuspecting victims of $20 million. Operators of the crypto Ponzi scheme ran false advertisements that promised users hyperbolic rewards from Bitcoin trading and mining.

However, the DoJ at the time alleged that the group only sought to live flamboyant lifestyles of victims’ funds. While spending money on luxury homes and cars, they reportedly made more moves to recruit more victims across the U.S and different other countries.

A statement from the DoJ document reads:

“The extradition of Dos Santos reflects the determination of agents from HSI New York’s El Dorado Financial Crimes Task Force to dismantle global criminal organizations, wherever the investigation takes us. Utilizing our broad authorities and network of law enforcement partners, HSI will continue to hunt those who allegedly prey upon innocent citizens for financial gain.”

Also, if Dos Santos is found guilty of the charges levied against him, the AirtBit Club co-founder could face between 20-30 years in prison.

Law Enforcement Fighting Crypto Crimes

Regulatory authorities globally continue to warn investors about fake crypto-related schemes that promise high returns. According to a recent report by CryptoPotato, Chinese authorities confiscated $4 billion worth of crypto tokens from PlusToken scammers.

PlusToken, which is one of the biggest cryptocurrency Ponzi schemes, promised users high returns, similar to other crypto fraudulent projects. The Chinese law enforcement began investigating the project after it shut down in 2019. In July, the police arrested 27 key members of the scam project, along with 82 other members.

Another major fraudulent crypto scheme, OneCoin, reportedly stole $4 billion from investors with its founder Ruja Ignatova also known as “Crypto Queen,” still at large. Meanwhile, Ruja’s brother Konstantin Ignatov has been arrested by the U.S. authorities since 2019 and could face a 90-year prison sentence.

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Source: https://cryptopotato.com/u-s-doj-extradites-key-member-of-crypto-ponzi-scheme-from-panama/

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PlusToken Crypto Scammers Slammed With 11-Year Jail Sentence

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Principal actors in the PlusToken Ponzi scheme have bagged 11-year prison sentences in China. The scheme managed to defraud investors of billions of dollars in various cryptocurrencies.

End of the Road for PlusToken Scammers

According to the South China Morning Post on Dec. 1, principal members of the PlusToken scam project were sentenced to 11 years imprisonment by a Chinese court. The suspects were found guilty of duping investors of $2.25 billion worth of crypto tokens.

As previously reported by CryptoPotato, authorities arrested 27 key members of the crypto Ponzi scheme in July, in addition to apprehending 82 other individuals linked to PlusToken.

Later in November, Chinese law enforcement seized $4 billion worth of crypto from operators of the fraudulent project. According to court documents, the confiscated cryptocurrency tokens included 94, 775 BTC, 79,581 BCH, 833,083 ETH, 74,167 DASH, 1.4 million LTC, 6 billion Doge, 27.6 million EOS, and 213,724 USDT.

The clampdown of the PlusToken scam project is in line with China’s agenda to rid the country of fraudulent schemes. Also, the latest development signals a win for authorities as the PlusToken platform was one of the largest Ponzi schemes in China.

What Happened?

PlusToken, founded by Chen Bo back in 2018, had all the hallmarks of a classic Ponzi scheme, with funds generated from later investors used to benefit early investors. Chen and other operators employed social media and offline activities to get members, who in turn paid for membership fees up to $500 worth of bitcoin and other crypto tokens.

Between 2018-2019, the platform had over 2.5 million members, with rewards based on the number of new recruits that others brought on board. Meanwhile, the total number of funds generated from members was reportedly over $2.2 billion worth of crypto.

Also, court documents alleged that Chen Bo spent some of the funds on extravagant lifestyles, buying expensive cars and properties for himself and his relatives.

In addition to the PlusToken founder and other key members spending time behind bars, the ringleaders were slammed with fines. The PlusToken scammers were fined between 120,00 yuan ($18K) and 6 million yuan ($912,922),

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Source: https://cryptopotato.com/plustoken-crypto-scammers-slammed-with-11-year-jail-sentence/

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The Most Profitable Buy Signal In Bitcoin Is About To Trigger Despite Distance From ATH

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Bitcoin price this week set a new all-time high price record, taking the leading cryptocurrency by market cap to right below $20,000 before a minor pullback began. And while there is always a possibility that the asset could see a stronger correction given how overheated it is and how profitable the year of 2020 has been, one indicator is pointing to significant upside from here instead.

In fact, the cryptocurrency’s most profitable buy signal ever is about to trigger. And if Bitcoin really has begun a new bull market, then anywhere between 2,000% to over 5,000% returns historically have been possible. Will this signal lead to yet another multi-thousand percent bull run? Or will miner capitulation kick into overdrive ahead of the signal confirming?

Bitcoin Hash Ribbons Ready To Signal Buy Despite Consolidation Around All-Time High

Bitcoin was the first-ever cryptocurrency, and with it birthed an entire industry and asset class, and possibly the greatest technological revolution since the computer or the internet. It has taken years of steady development and adoption for the world to begin to understand how it works.

RELATED READING | FOMO BEGINS: BITCOIN ADOPTION EXPLODES TO HIGHEST LEVEL SINCE PREVIOUS PARABOLIC PEAK

Analysts face the challenges of performing technical analysis on a chart with little price history and has risen from worthless to $20,000 in the span of a decade. Low supply, high volatility, and generally low liquidity compared to other cause indicators and chart patterns to give false signals, or not behave as anticipated.

Fundamental analysis is even more challenging, as there are no company profit margins to review, and the asset is primarily speculative. The crypto industry’s best analysts have developed a new set of fundamental tools that pay added attention to the significance of miners and their contributions to the overall cryptocurrency economics.

bitcoin hash ribbons profitable buy signal

The hash ribbons could signal "buy" as early as this week, according to the tool's creator | Source: BTCUSD on TradingView.com

One such analyst is Charles Edwards, who has developed a tool called the Hash Ribbons that have also been referred to as the crypto asset’s most profitable buy signal. According to Edwards, that buy signal is set to return as early as this week, even with the leading cryptocurrency by market cap trading around its former all-time high.

bitcoin hash ribbons profitable buy signal

2019 and 2020 buy signals were just the appetizers before the main course | Source: BTCUSD on TradingView.com

Recapping The Performance Of The Cryptocurrency’s Most Profitable Signal Ever

The Hash Ribbons are essentially a pair of moving averages of the Bitcoin network Hash Rate and Mining Difficulty, that can signal when miners are “capitulating” or unable to sustain their operations profitably.

When these miners are shaken out, the theory is there is even less sell pressure on the market and only the strongest miners are left to hold until the next peak. Given where Bitcoin is in its current cycle and in relation to its all-time high, the “capitulation” could simply be some profit-taking, which is prompting the consolidation around current levels.

When the buy signal arrives saying capitulation has ended, magic happens. In the chart above showing the performance of the Hash Ribbons from Bitcoin’s 2018 bear market bottom, the results are astonishing.

The tool accurately triggered a buy signal ahead of a 289% rally, a 46% rally, a 38% rally, and the current 116% rally in the top cryptocurrency. But those are bear market results, and the final buy signal leading to the bull market is the one to really watch, and what gives the Hash Ribbons the reputation as the most profitable buy signal in the asset’s history.

bitcoin hash ribbons profitable buy signal

2019 and 2020 buy signals were just the appetizers before the main course | Source: BTCUSD on TradingView.com

The chart above shows the type of power that the buy signal is capable of on a grand scale. The final buy signal before the bull breakout in 2013, was followed with a 5800% climb.

After Bitcoin’s halving in 2016, the buy signal took the asset to $20,000 and made it a household name, with a staggering 3300% surge. Given the law of diminishing returns over time, and the fact that from the first peak to the second peak, ROI dropped by 60%, another 60% reduction in returns would still put the target for the next peak at around $400,000 or over 2000% ROI from current levels.

RELATED READING | BLOOMBERG ANALYST: BITCOIN IS “TINY” NOW, BUT “PRICE DISCOVERY STAGE” IS HERE

Taking the average timeframe between each final buy signal and the next major peak, the median is roughly a full year difference, projecting the next bull market top to be in around November 2021.

Only time will tell if the buy trigger was again valid and if the data continues to prove that the indicator is the most profitable one to watch.

Featured image from Deposit Photos, Charts from TradingView.com

Source: https://bitcoinist.com/the-most-profitable-buy-signal-in-bitcoin-is-about-to-trigger-despite-distance-from-ath/?utm_source=rss&utm_medium=rss&utm_campaign=the-most-profitable-buy-signal-in-bitcoin-is-about-to-trigger-despite-distance-from-ath

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