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Bitcoin Price $12K Breakout Fails — Here’s How Low BTC Can Now Drop

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The price of Bitcoin (BTC) broke through the resistance level of $12,000, which led to a new yearly high for the number-one cryptocurrency by market capitalization. 

However, the breakout was short-lived as the BTC price fell to $11,650 in recent days, marking a drop of almost 10% since the breakout. This drop caused the price of Bitcoin to drop back below the crucial resistance zone of $12,000. This breakdown is causing investors and traders to watch for more downside as several bearish arguments emerge.

Crypto daily market performance. Source: Coin360

Bitcoin breaks back in the range after a failed breakout 

The price of Bitcoin tried to continue the bullish momentum with a breakout past $12,000. However, the breakout failed, as the chart shows.

BTC/USD 4-hour chart

BTC/USD 4-hour chart. Source: TradingView

The 4-hour chart is showing an apparent breakout attempt above $12,000. However, the breakout couldn’t flip the resistance of $12,000 into support, which is a must for continuation. 

As the support/resistance flip failed to succeed, the price of Bitcoin broke back into the range. Such a failed breakout is often classified as a tap in the liquidity pool as well. This means that the price rallies above resistance to tap the liquidity and stop/losses of short positions. 

When those orders are stopped out or hit, the market has the liquidity to go the opposite way. This is often confirmed via weak buying attempts at the previous resistance zone. 

In that regard, the breakout didn’t follow through, which means that support levels of $10,800 and $11,200 are back in play.

CME futures has an open gap at $9,700

BTC/USD CME 1-day chart

BTC/USD CME 1-day chart. Source: TradingView

As the chart shows, an open gap is still found at $9,700. As most gaps get filled, it’s an important level to keep an eye on.

Next to the open gap, there’s also a potential bearish divergence. The bearish divergence is yet to be confirmed, as it’s relying on whether Bitcoin’s price loses the crucial support level at $11,400-11,600.

Once the price of Bitcoin drops below that support level, the bearish divergence is confirmed, and it’s likely to see further correction towards the 100-day and 200-day Moving Averages (MAs). 

These MAs are confluent with the open CME gap at $9,700 and provide multiple arguments for a potential bottom formation on this correction. 

The bullish scenario for Bitcoin

BTC/USD 1-day bullish scenario chart

BTC/USD 1-day bullish scenario chart. Source: TradingView

The bullish scenario is relying on the fact whether the price of Bitcoin can sustain making higher lows. The crucial area for such a higher low is defined in the green zone, which is lying between $11,400-11,600.

As long as the price of Bitcoin holds support in the $11,400-11,600 zone, further upward momentum can be continued. 

However, currently, there are more bearish arguments for the short term than bullish ones. 

The next resistance zone, if $11,400-11,600 holds, is found at $13,000. This resistance zone can also be found using the Fibonacci extension tool. 

The bearish scenario for Bitcoin

The bearish scenario is straightforward and relies heavily on whether the $12,000 area becomes resistance once again. 

BTC/USD 4-hour bearish scenario chart

BTC/USD 4-hour bearish scenario chart. Source: TradingView

The rejection at $12,000 would confirm that the breakout is a deviation above the range and a fakeout. 

In that regard, the fakeout is a deviation above the range high, which mostly leads to a test of the range’s support levels. These support levels are found at $10,800-11,000 and $11,200-11,300. 

However, such a dropdown would not occur immediately as the price of Bitcoin has been consolidating sideways for months since the halving of May 2020. In other words, Bitcoin price can consolidate for weeks before a new drop occurs. 

In the meantime, a new range is being established, which may help muster up strength for further upward momentum. The ultimate low for this correction appears to be the open CME gap at $9,700. If that gap is filled, the sentiment and momentum will most likely hit a quarterly low, causing interest to diminish. 

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.





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Chinese Ride-Hailing Firm Didi Targets $60+ Billion Valuation in IPO

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Going by Didi’s updates prospectus, Morgan Stanley Investment Management Inc has shown interest in acquiring a share of up to $750 million in the IPO.

China’s ride-hailing giant Didi Global Inc is expecting that an IPO could value it at over 60 billion. An SEC filing made Thursday shows that the company is going to list its shares on the New York Stock Exchange (NYSE) under the ticker symbol ‘DIDI’.

Didi will offer 288 million American Depository Shares (ADS) or 72 million Class A common stock, valued at $13-$14 each. At the upper end, the company could raise $4.03 billion, making it the biggest US IPO of 2021. It would also be the biggest U.S. share sale done by a Chinese company since 2014.

Moreover, in case of an over-allotment, the company could sell 43.2 million extra shares thereby raising an extra $605M.

Initially, Didi (Xiaoju Kuaizhi Inc.) wanted to list on the Hong Kong Exchanges (HKEX) but turned instead to NYSE. The business sought to mitigate risks for increased regulatory scrutiny in its practices, including using part-time drivers and unlicensed cars.

Already, the State Administration for Market Regulation (SAMR), China’s market regulator, has launched an antitrust probe on Didi. Investigations will determine if Didi has used unfair competitive practices, in addition to transparency in the ride-hailing pricing mechanisms. The probe is the latest, with Alibaba Group (HKG: 9988) and Tencent Holdings Ltd (HKG: 0700) having preceded.

Concerns over more Chinese regulatory crackdown have now cut the company’s IPO valuation by 33%. The drop was also attributed to uncertainty in the company’s growth prospects.

Didi Market Perspective and NYSE IPO

Going by Didi’s updates prospectus, Morgan Stanley Investment Management Inc has shown interest in acquiring a stock of up to $750 million in the IPO. Singapore’s Temasek Holdings Ltd. (SGX: TEKB) would also like to subscribe to $500 million worth of stock. Other giant tech firms in Asia counted as investors are SoftBank Group Corp (TYO: 9984), Alibaba, and Tencent.

Goldman Sachs Group Inc (NYSE: GS), JPMorgan Chase and Co (NYSE: JPM), and Morgan Stanley (NYSE: MS) are the IPO’s lead underwriters. On Thursday, Didi added to this cluster to include Barclays, Citigroup, and BofA Securities, among others.

Founded in 2021, the ride-hailing firm operates in 15 countries internationally, making it one of the top-five private start-ups worldwide. The firm also has over 490 million annual active users globally and it intends to reach 800 million by 2022.

As the company recovered from pandemic-inflicted sales, its Q1 revenue more than doubled year-on-year to reach $6.4 billion. The company also posted a profit for the same period.  Net income was $837 million before shareholder payouts, with a comprehensive net income of $95 million.

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A financial analyst who sees positive income in both directions of the market (bulls & bears). Bitcoin is my crypto safe haven, free from government conspiracies.
Mythology is my mystery!
“You cannot enslave a mind that knows itself. That values itself. That understands itself.”



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Robinhood Delaying Its IPO Plans amid Expansion of Its Crypto Business

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The initial plan of Robinhood was for the IPO to be done in June but the plans stretched to July.

A reliable source has it that In the past, the SEC has been concerned about Robinhood‘s growing business related to cryptocurrencies. While the company may be listed by summer, those plans may as well be achieved later, probably in fall. Robinhood plans to put its house in order and publicize its past financial performances to make way for the public listing. A company’s spokesperson disclosed that a successful Initial Public Offer (IPO) filing was done earlier in the year, March. According to Bloomberg, the initial plan of Robinhood was for the IPO to be done in June but the plans stretched to July.

Robinhood Activities amid Its IPO Plans

Robinhood began trading cryptos two years ago, 2018. Today the company’s portfolio includes Bitcoin, Litecoin, and even meme-based Dogecoin which started as a joke. Besides the mentioned digital coins, clients can get many products on this platform. Robinhood is particularly popular with first time (novice) crypto investors. Robinhood became both popular and controversial during the pandemic and has elected new members to its board. The company is also popular for meme stocks.

The crypto market has been very volatile this year. Bitcoin achieved a high of $64,000 after being backed and endorsed by high-profile investors, notably Elon Musk. However, the rally was short-lived and the prices dipped to as below $30 K in June. Other crypto have been following the same trend increasing uncertainty in the general market.

Sometimes in the near future, Gary Gensler, the current SEC chair, is expected to make momentous rulings on digital assets. Robinhood made the application in a “bad year”. The SEC has been busy, thanks to the many IPOs, particularly for Special Acquisition Companies (SPACs) in their in-tray. These delays have however caused an equity backlog in capital markets. As per Bloomberg’s report, SEC staff has however warned lawyers that this time around, it may take well over a month to review SPAC paperwork. Additionally, they can expect another two to three weeks to get feedback on changes and amendments.

What Ails the Cryptocurrency Market

In the recent past, China has intensified its crackdown on crypto, particularly Bitcoin. Following the Chinese government’s decision to launch a Central Bank Digital Currency (CBDC), the digital Yuan, Bitcoin was no more welcome. In fact, all Bitcoin-focused activities were banned.

Last month, the Chinese government denied rumors suggesting that they wanted to ban Bitcoin mining. However, the same authorities reviewed the same matter, but this time said that they wanted Bitcoin miners out ASAP.

The decision was informed by the thinking that Bitcoin and the digital Yuan would not thrive in a common environment. Government authorities believed that when put in the same ecosystem, Bitcoin would outshine the digital Yuan and possibly hinder its growth.

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Patrick is an accounting & economics graduate, a Cryptocurrency enthusiast, and a Blockchain technology fanatic. When not crafting informative pieces on any of the above subjects, he will be researching on how the Blockchain technology can transform the world, particularly the financial space.



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Chinese Electric Car Maker Xpeng to Raise $2B, to List on Hong Kong Exchange

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The increasing level of tension between authorities in China and the United States is forcing the hands of many US-listed Chinese companies to list on the Hong Kong stock exchange as a way of protecting themselves against both governments.

Per a report from CNBC, Guangzhou-based electric car maker Xpeng is on the verge of raising almost $2 billion via its listing on the Hong Kong stock exchange.

According to the report, Tesla‘s rival had said it would be issuing 85 million Class A ordinary shares at a price of 180 Hong Kong dollars ($23.19) each. It was also revealed that the final offer price will then be set on or before the end of June.

Going by this, it means Xpeng would be able to raise 15.3 billion Hong Kong dollars at the maximum offer price, which roughly translates to $1.97 billion, before related costs, such as underwriting fees are removed.

Interestingly, this affirms a previous report where it was indicated that the electric carmaker could be looking to raise new funds for its operations.

Xpeng’s new listing is quite unusual as it is another primary listing. While companies like Alibaba and JD.com have employed secondary listing tactics, as they have a main listing location such as the United States, and they are also selling their shares on another exchange. The carmaker is not towing the same path.

The CNBC report revealed that Xpeng’s new listing in Hong Kong would lead to a “dual-primary listing. That means it will be subject to the rules and oversight of both US and Hong Kong regulators.”

Another interesting aspect of this new listing is that Xpeng could still make more than the projected $2 billion if demand for its stock is high which would lead to the firm and its underwriters issuing more shares that would inadvertently lead to an increase in what the company would get from its listing.

The proceeds of the listing will be channeled towards the development and expansion of the product, “Xpeng said it would use the proceeds from the Hong Kong listing to expand its products and develop more advanced technologies, as well as marketing and expanded manufacturing.”

In recent times, the electric car market in China is growing as startups like Nio, Li Auto, Tesla and a host of others are competing for a share of the market.

Tensions between US and Beijing Pushing the Need for Xpeng Listing in Hong Kong

The increasing level of tension between authorities in China and the United States is forcing the hands of many US-listed Chinese companies to list on the Hong Kong stock exchange as a way of protecting themselves against both governments.

The Securities and Exchange Commission (SEC) has imposed stricter auditing requirements on foreign companies listed in the country. Failure to comply with this policy by these companies could lead to delisting.

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Oluwapelumi is a believer in the transformative power Bitcoin and Blockchain industry holds. He is interested in sharing knowledge and ideas. When he is not writing, he is looking to meet new people and trying out new things.



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