Bitcoin Pulls Back; Coinbase Eyes New ETF

The price of Bitcoin is pulling back towards $10,000 after hitting $11.5K at the start of this week as the market shows lowered interest in trading. Judging from current indicators, the bullish mood that pushed the price upwards is weakening and bears are increasing in number, driving the price downwards as we speak. How long will this new sentiment last remains to be seen.

According to Investopedia, the end of last week was marked with unusually low transaction volume that hit a 2-year low and likely contributed to the 7% price decline. Namely, on Sunday, Bitcoin saw only 195,500 confirmed transactions taking place during the day, a number that’s only somewhat better than the all-time low of two weeks ago, on February 26th, when only 180,000 confirmed transactions were recorded.

The February numbers show a stark difference between the trading interest during Bitcoin’s peak in December 2017 when the price hit $20,000 and recent months. In fact, according to the investment news portal, those numbers show the lowest transaction volume since March 2016, a time when Bitcoin sold for $415 per coin.

Bitcoin Market is Bearish

During the past 7 days, the price of Bitcoin drew another curve on the price charts, first rising up and then returning back to former levels. The lowest point that Bitcoin’s price reached during this time was last Thursday evening when 1 Bitcoin sold for $10,352.70. The highest price point, on the other hand, was reached this Monday evening when Bitcoin hit a peak of $11,644.60.

Looking at the charts, we can confirm that Bitcoin’s volume was considerably lower throughout this period and mostly circling around $6 billion. Currently, it is at $7.1 billion and rising while the market cap is at $179 billion.

Our technical analysis shows that the market is strongly pro-sell, with 8 out of 12 oscillators and 11 out of 12 moving averages indicating that sellers have the upper hand. The SMA 100 is still over the SMA 200 on this time-frame, though, so the path of less resistance is still upwards. However, with an increase in trading volume and a strongly bearish market, we might be looking at a pullback below $10,200 if the trends don’t change.

Coinbase to Launch Bitcoin ETF?

Coinbase, the number one cryptocurrency exchange for U.S. traders, yesterday announced the launch of the Coinbase Index Fund, thus opening the door for the $1.6 billion cryptocurrency business to enter the asset management sector.  As reported by Fortune, the new Index Fund will be tied to the cryptocurrencies offered on the exchange and will only be available to accredited investors in the U.S. and investors with a net worth of $1 million or an annual income of $200,000.

However, what’s even more interesting to note is that Coinbase is also reportedly planning to open a similar fund that will be available to any investor which will likely be set up as an Exchange Traded Fund (ETF). According to Reuben Bramanathan, product lead of the new Index Fund, Coinbase’s “first priority” is creating “funds that will be available to all retail investors”, which he says are subject to approval from regulators.

Currently, there is no time estimate of when will this retail fund launch or even when the Index Fund will begin trading, although applications are currently available. Coinbase’s retail fund, if realized, will be a breakthrough in cryptocurrency trading because, even though there are several cryptocurrency index funds in existence, none of them are open to retail investors as the SEC (Securities and Exchange Commision) has thus far rejected all existing proposals.

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