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Bitcoin: After one hell of a week, all’s well that ends well?

Photo of: Joseph Stone
by Joseph Stone

After seven weeks of sharp increases in a row, yesterday saw the first price correction in the cryptocurrencies market. Like Bitcoin, it was a heavy one, with the price going from a high of $18,900 to a low of $16,200 for the day. While this certainly threw a cold shower on some holders who were rejoicing at the incredible surge in the fall, such corrections are still the norm rather than the exception for crypto. In fact, the price has rebounded to the desired level of the 30-day moving average. The latter has not been broken down since October 3. In short, the bullish picture remains intact so far.

This fall is certainly not unrelated to the observed movement of large portfolios depositing their digital assets on exchanges. As mentioned by Ki Young Ju, CEO of CryptoQuant, the “All Exchange Inflows Mean” indicator has reached a critical level. Historically, this has led to short-term corrections at the BTC. It remains to be seen whether the BTC is now behind us or whether this downward pressure will continue in the short term.

Nevertheless, the fundamental reality is that the supply of Bitcoin is thin. According to Pantera Capital, the arrival of PayPal in the market is the main cause. In a recently published report, the investment firm says that a shortage of bitcoin is at the heart of the recent price spike and that the majority of newly created BTCs are automatically purchased by PayPal.

PayPal’s new encryption service “is already having a huge impact,” says Pantera, adding that the payment merchant is capturing about 70 percent of all new BTCs in circulation.

Citing itBit data, Pantera said :

“When PayPal went live, the volume started exploding. The increase in volume means that within four weeks of going live, PayPal is already buying almost 70% of the new bitcoin supply”.

According to Pantera, the data suggests that PayPal and Cash App combined buy all of the newly issued Bitcoins.

Chinese authorities seized the colossal sum of $4 billion in Bitcoin this week. They are now in possession of 194,774 BTCs related to a Ponzi scheme that affected more than 2 million people. They seized 830,000 ETH, 1.4 million LTC, 27 million EOS, 74,000 DASH, 487 million XRP, 6 trillion DOGE, 79,000 BCH, and 213,000 USDT. This is one percent of the total bitcoin supply.

The Libra cryptocurrency project by Facebook seemed to be practically nipped in the bud with all its significant partners having left the ship even before the project was deployed. Nevertheless, it seems that a limited version will finally be introduced early next year. Let’s recall that the American authorities have strongly tried to stop the project, claiming that it could strongly harm the national monetary balance. It is in Switzerland that the crypto will finally be launched.

The ETH 2.0 deposit contract made it possible to gather the 524,288 ETH required to launch phase 0 of the project’s transition to a Proof of Stake network. As a result, the chain can now be launched in early December and, although this phase has little effect on the protocol today, it nevertheless represents a key phase in the development of the project.

The week was finally marked by the suspension of margin exchanges on the giant Coinbase. This decision follows new rules imposed by the CFTC. If new margin trading is suspended as of Wednesday, Coinbase willfully discontinues the margin trading function next month, once existing positions have expired.