Posted in BİTCOİN PRİCE ANALYSIS

Bitcoin Price Risks Drop to $7.5K After Third Biggest Daily Loss of 2019

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  • BTC looks set to test support near $7,500, having confirmed a bearish reversal with a high-volume triangle breakdown on Tuesday.
  • The cryptocurrency’s violation of the historically strong 55-candle exponential moving average (MA) on the three-day chart also favors a deeper price slide.
  • The outlook would turn bullish if prices quickly rise above Tuesday’s high of $9,782, although that looks unlikely at press time.

Bitcoin fell sharply on Tuesday, confirming a bearish reversal and opening the doors for a test of crucial price support near $7,500.

The leading cryptocurrency by market value ran into selling pressure around $9,700 in the early U.S. trading hours and fell to a 3.5-month low of $7,998 at 19:45 UTC on Bitstamp.

BTC had been on slippery ground following Tuesday’s volatility band breakdown. A widely-followed indicator was also reporting the strongest a bear bias in nine months, as discussed earlier this week.

The price slide was likely exacerbated by a long squeeze, when investors square off (or sell) long positions to cut losses in a falling market, thereby creating further downward pressure on prices.

So, while a price drop was expected, the magnitude of the sell-off has caught many by surprise. The cryptocurrency fell by 11.83 percent on Tuesday – 2019’s third-biggest single-day drop, as per Bitstamp data.

  • BTC has seen double-digit daily losses four times this year.
  • The biggest single-day loss of 2019 witnessed on June 27 marked a healthy correction from a 17-month high of $13,880 reached on the preceding day.

The latest double-digit price slide has taken the cryptocurrency below major support levels. Therefore, a deeper drop toward $7,500 – a level seen a week ahead of Facebook’s launch of Libra – could be seen over the next few days.

As of writing, BTC is changing hands around $8,400 on Bitstamp. It’s worth noting the cryptocurrency is still up about 127 percent on a year-to-date basis.

Daily and monthly charts

Bitcoin dived out a three-month contracting triangle on Tuesday (above left), confirming an end of the bull market, which had started from April’s low near $4,000.

Currently, prices are flirting with the 200-day moving average (MA) support at $8,309. That long-term MA has come into play for the first time since April and will likely be breached, as the post-triangle breakdown price drop looks to have legs – volumes hit three-month highs on Tuesday.

BTC, therefore, risks extending losses to support at $7,500 – lows seen before Libra hype gripped the market in mid-June

Moreover, the triangle breakdown could yield a drop to $4,000 (target as per the measured move method), as tweeted by bitcoin skeptic and CEO of Euro Pacific Capital Peter Schiff. That target looks far-fetched, however.

The monthly chart (above right) is also now teasing a bearish reversal. The cryptocurrency charted inside-bar candlestick patterns in the previous two months, signaling an impending bullish-to-bearish trend change.

The outlook as per the monthly chart would turn bearish only if prices close below $9,049 (first inside bar’s low) on Sept. 30. That looks likely, with prices currently trading at $8,400 and the daily chart reporting a strong bearish setup.

The bearish case would weaken if prices find acceptance above $9,097 – a higher high created on May 30. The outlook would turn bullish if prices bounce from the 200-day MA and chart a quick V-shaped recovery to levels above Tuesday’s high of $9,782. That, however, looks unlikely.

3-day chart

BTC has found acceptance below the 55-candle exponential moving average, which served as a strong base during the 2016-2017 bull market.

Back then, the cryptocurrency charted bullish higher lows along the key EMA and not once did the sellers managed to secure a close below the crucial support.

Hence, the latest close below the 55-candle EMA could be considered a strong bearish development.

Oversold daily RSI

The 14-day relative strength index (RSI) is currently hovering below 23, its lowest level since November 2018. A reading below 30 indicates oversold conditions and suggests scope for a corrective bounce.

That said, indicators can and do remain oversold for a prolonged period in a strong bearish market, especially when a sell-off is preceded by a major bout of consolidation. BTC was trapped in a narrow range for almost three months before breaking lower.

In such situations, seasoned trades consider an oversold reading on the RSI as an indicator of trend strength. So, expecting a notable price bounce on the basis of the oversold reading on the RSI could prove costly.

Disclosure: The author holds no cryptocurrency assets at the time of writing.

Posted in NEWS PRİCE ANALYSIS

As Crypto Markets Go Cold, Who Will Pay for Open-Source Code?

Earlier this year IBM purchased Red Hat, the oft-referred to model for how open source can thrive, for $34 billion.

Long the consultant to enterprises, IBM is going through a transitional period as a business and needs a boost. Red Hat’s open-source software offers IBM the ability to better compete in cloud services offered by Amazon, Microsoft and Google.

Why is this important? Red Hat is one of the most name-checked examples of how open-source software can be successful. It is often used as an example of how championing open source can lead to business success. This is particularly pertinent to the cryptocurrency ecosystem, where open-source ethos rule the technology.

But, something is being lost in this conversation. Namely, open source requires funding for developers to contribute.

Despite what some may think, open source isn’t free. That’s a problematic proposition in the rollercoaster markets that make up open blockchains.

The Volume Issue

Crypto can enable almost ridiculous levels of transparency and control.

Yet in order for it to move forward, incentives must be aligned. Scaling technologies and design experiences must make cryptocurrency easier to use. However, most cryptocurrencies are used primarily for speculation. And the speculative market is in the doldrums, with low levels of volume.

BTC trading volume is at one of the lowest points it has been over the last two years. Source: Bitcoinity

I wrote about this issue years ago, discussing the existential threat facing bitcoin. This was during the 2015-2016 bear market when Bitcoin Core was really the only group working on the protocol. Not long after my piece was published on CoinDesk, an MIT initiative providing $900,000 worth of funding for bitcoin development was announced.

This isn’t to say markets are the single unifying force in crypto, but it’s important to recognize the significance. Augur seems to be an example of this as news comes out about that project seems to affect price. Augur went up as its 2018 launch approached. Yet as volumes hit $1 million and an assassination market developed the price began to decline.

Augur is an interesting project funded directly by crypto via its own token. But Augur depends on other projects to use its network in an open source fashion. When a trader’s market depends on that, it’s an issue.

Veil, which relied on Augur’s protocol, closed up recently. It is an example of this and how the market perspective can impact things. Less trading means less interest in projects like prediction markets.

Zcash and Litecoin

Zcash and Litecoin are experiencing difficulties funding development and other expenses. Both projects have indicated it is the market causing these issues.

The Litecoin Foundation’s finances are in the red. Founder Charlie Lee seemingly is just funding it at this point. Blame for this has been put on crypto’s bear market, which shows projects are more influenced by trading than most in the ecosystem realize.

“The goal, of course, is to get Litecoin Foundation to be self-sustaining from donations, partnerships and merchandise sales,” Lee said. “Until we get to that point, I have and will continue to support the Litecoin Foundation financially as necessary.”

Litecoin isn’t much different than bitcoin, although they did experiment with things like SegWit before BTC implementation. Yet the litecoin community clearly doesn’t see a reason to put forth money to keep the Litecoin Foundation operational.

Zcash can be considered differentiated from both bitcoin and litecoin with increased privacy features. Zcash’s shielding technology is indeed novel, though only a small number of transactions are shielded.

The black line represents unshielded transactions, while the blue line indicates shielded Zcash transactions. Source: Zchain

Is there a community in need of zcash and its privacy protections? Time will tell, although from a trading perspective banks seem to have issues with it. And example of this is when Coinbase UK dropped the asset in Europe likely due to banking pressure.

“I opted for the initial Dev Fund to sunset itself, so that in the future, if Zcash were a success and a community were to grow up to support it, that community would have to collectively decide what to do next,” said Electric Coin Company CEO Zooko Wilcox.

Time will tell how much support Zcash will get.

Where Funding Comes From

“I think things have improved greatly in terms of the breadth of different funders.… We’ve had an explosion in people that want to fund open source work in the space,” Matt Corallo told CoinDesk recently after joining Square Crypto.

If there’s an explosion of funders for open-source crypto, they are keeping it pretty quiet. Coinbase has talked about support for open source, offering $2,500 per month starting in early 2018. However, there hasn’t been any updates since 2018 and the Coinbase Open Source Engineering site no longer works.

Square Crypto is willing to pay its developers salaries in BTC to fund bitcoin development. Jack Dorsey wants to “improve money.” That statement seems to indicate Dorsey’s not really sure what cryptocurrency is. Yes, people did buy $125 million of BTC from the Cash App. But are they using bitcoin for payments?

Why don’t miners help pay for more open source development? Traders? What are the stakeholders providing funding? Square Crypto. Blockstream. Lightning. MIT. The Ethereum Foundation. Who else is putting resources into crypto development?

2019 has been a good year for Gitcoin. Source: Gitcoin

OKCoin just announced a contest where users vote which version of bitcoin (core, cash, SV) to fund development. The exchange is donation up to a whopping 1,000 BTC. Something feels a little bit divisive about a campaign like this, even though the effort is called “Let’s Build Bitcoin Together!”. Sounds more like building very different versions of bitcoin very separately.

In the ethereum and dapp ecosystem, Gitcoin has paid out over $2 million to developers, with ConsenSys apparently leading the way. Maybe other cryptocurrency projects should have a community-based resource like this. Despite low volumes in the trading market, Gitcoin appears to be working.

Developers over Investors

Recently, Binance announced funding for 40 developers to work on open-source projects.

However, the requirements for an “evangelist” to receive funding means building exclusively on the Binance platform. That seems trading related, although with Binance X and Venus, its likely to compete with Facebook’s cryptocurrency project.

Could it be, shocking as it may seem, that Libra, with 28 members, could help move crypto open source forward?

Despite criticism from literally everyone, the project is still expected to become an open network. Endpoint wallets will still need to provide the KYC/AML compliance. Yet there could be a lot of money contributed to open source surrounding the project. This might be true if they follow the Gitcoin playbook.

Markets don’t always go up. Litecoin has had to cut salaries despite Charlie Lee’s salvo. And the Zcash foundation is spending more than it’s bringing in. Ironic for there to be funded bailouts for cryptocurrency development. Or running deficits. In these cases, it’s easy to blame it on the performance of the crypto market. Because one has to wonder: How will open cryptocurrency development do financially in the future if some of these big-name projects can’t find funding?

Market dynamics have never stopped open source outside of crypto.

Look at Red Hat – no market ever stopped it from figuring out open source. It focused on developers, not investors. Crypto projects should pay attention to what has worked in open source over the years. It should not depend on donations correlated with the whims of the market.

Posted in BİTCOİN MARKETS PRİCE ANALYSIS

Bitcoin Dominance Hits 70% as Keiser Warns Altcoins ‘Not Coming Back’

Bitcoin (BTC) now has the highest share of the overall cryptocurrency market since before its record-breaking $20,000 bull run in 2017. 

According to data from major monitoring resource CoinMarketCap, Bitcoin now accounts for 70.5% of the total cryptocurrency market cap as of Sept. 3. 

Bitcoin market cap hits pre-$20K high

That figure has not been seen since March 2017, and comes as BTC/USD makes gains at altcoins’ expense. 

As Cointelegraph reported, continued underperformance in cryptocurrencies other than Bitcoin has triggered warnings from traders and analysts alike. 

Among them are Peter Brandt and RT host Max Keiser, the latter again claiming this week that altcoins would never recover from this downturn. 

“Alts never coming back… Sorry,” he tweeted on Sept. 3, also referencing market cap statistics. Brandt reiterated similar warnings.

“When will altcoin junkies understand that $BTC is the crypto with real and lasting value,” wrote Brandt, who added:

“Altcoins are to Bitcoin what lead is to Gold.”  

Some sources had reported Bitcoin hitting the 70% mark as early as last week.

Market cap readings set highs across the board

Bitcoin itself delivered a sudden return to form late on Monday, having previously dropped to just $9,350. At press time Tuesday, BTC/USD was circling $10,360, bringing 24-hour gains to 6.2%.

Altcoins in the top twenty, however, mostly failed to achieve more than 4%, meaning they, in fact, lost value in Bitcoin terms. 

Some commentators voiced caution about placing faith in Bitcoin’s strength. Market cap, they argued, is a poor measure of performance, as it includes many altcoins which do not even have any trading volume. 

Earlier, Cointelegraph reported on the phenomenon of Realized Market Cap, a metric designed to solve those inconsistencies which has also set new records in recent weeks.

Posted in NEWS PRİCE ANALYSIS

Crypto Futures Exchange Deribit Launching Bulk Derivatives Trading

Deribit claims it’s becoming the first crypto futures and options exchange to provide large-volume trades of bitcoin and ether derivatives.

The move comes via a partnership with institutional messaging service Paradigm, according to a BNN Bloomberg report on Thursday.

Deribit’s CEO, John Jansen, reportedly said the new service will offer block trades with a minimum of 40 bitcoin and 800 ether for options contracts linked to those cryptocurrencies.

Ten top crypto trading firms have already signed up to use the service, with Paradigm founder Anand Gomes naming QCP Capital in the report.

According to its website, Paradigm offers tools allowing over-the-counter traders to automate price negotiation and settlement. Using Paradigm’s messaging service, parties can set up the options trades, which are then then settled and cleared at Deribit. Commonly, traders use Telegram to carry out such negotiations.

Amsterdam-based Deribit is not regulated in the Netherlands, since local regulation defines derivatives as cash-settled contracts, BNN Bloomberg says. However, the exchange has the safety net of an insurance fund, should traders default on payments due to issues like bankruptcy.

Back in March, Galaxy Capital-backed institutional trading firm Caspian launched trading in crypto derivatives through an integration with Deribit’s platform.

Trading chart image via Shutterstock

The leader in blockchain news, CoinDesk is a media outlet that strives for the highest journalistic standards and abides by a strict set of editorial policies. CoinDesk is an independent operating subsidiary of Digital Currency Group, which invests in cryptocurrencies and blockchain startups.

Posted in BİTCOİN MARKETS PRİCE ANALYSIS

Bitcoin Selloff Stalls at Historical Price Support Near $10K

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  • Bitcoin’s defense of the 100-day moving average and a bullish divergence of an hourly chart indicator suggest scope for a minor price bounce to $10,300
  • Bitcoin will remain in the hunt for a drop to $9,467 (Aug. 13 low), as long as the rising wedge breakdown seen on the 4-hour chart remains valid.
  • A UTC close above $10,956 would shift risk in favor of a rally to $11,850-$12,000. A weekly close above $12,000 is needed to confirm bullish revival.

Bitcoin (BTC) sellers are again struggling to force a sustained break below a widely-followed support level, but the outlook would turn bullish only above $10,956.

The premier cryptocurrency by market value fell by $600 in the Asian trading hours on Wednesday, confirming a rising wedge breakdown on the intraday charts.

The bearish reversal pattern opened the doors for a retest of the Aug. 15 low of $9,467, as discussedyesterday. So far, however, that target has remained elusive and the dips below the 100-day moving average (MA), currently at $9,900, have been short-lived.

It’s worth noting that the long-term MA worked as strong support earlier this month. The cryptocurrency ran into bids below the 100-day MA on Aug. 15 and closed (UTC) that day with gains above $10,300. The average was again defended on the following day and the subsequent price bounce ended up hitting highs above $10,950 on Aug. 20.

So, if the 100-day MA continues to hold ground over the next few hours, chart-driven buying could lead to a price bounce.

As of writing, BTC is changing hands at $9,970 on Bitstamp, representing a 1.7-percent loss on the day.

Daily and hourly charts

The lower wick attached to today’s candle (above left) represents a failure on the part of the bears to keep the cryptocurrency below the 100-day MA. The average also proved a tough nut to crack on Wednesday.

The repeated defense of the key MA, coupled with the bullish divergence (higher lows) of the hourly chart relative strength index (above right) indicates scope for a rise to $10,300 over the next few hours.

The path of least resistance, however, will remain to the downside as long as prices are held below $10,956 – the bearish lower high created on Aug. 20.

The bulls will likely have a tough time forcing a break above $10,956, as the daily chart indicators are biased bearish. For instance, the RSI is holding below 50 and the moving average convergence divergence (MACD) histogram is printing negative values.

Further, the 5- and 10-week moving averages have produced a bearish crossover, as discussed earlier this week.

The fact that last week’s bounce from the 100-day MA ended up charting a bearish lower high indicates a weakening of bullish sentiment.

4-hour chart

The case for a drop to the Aug. 15 low of $9,467 put forward by the rising wedge breakdown will remain valid as long as prices remain below $10,807 – the high of the candle confirming the breakdown.

Daily line chart

The line chart of daily closing prices helps investors look through the noise created by daily highs and lows.

If prices close above $10,000 today and end up rising above $10,927 (Aug. 16 close) in the next day or two, then a double-bottom bullish breakout would be confirmed. That would open the doors to $11,850.

Weekly chart

BTC has failed at least four times in the last eight weeks to close (Sunday, UTC) above $12,000. So, a weekly close above that level is needed to confirm a complete bullish revival.

Disclosure: The author holds no cryptocurrency assets at the time of writing.

Bitcoin image via Shutterstock; charts by Trading View

The leader in blockchain news, CoinDesk is a media outlet that strives for the highest journalistic standards and abides by a strict set of editorial policies. CoinDesk is an independent operating subsidiary of Digital Currency Group, which invests in cryptocurrencies and blockchain startups.


This article is intended as a news item to inform our readers of various events and developments that affect, or that might in the future affect, the value of the cryptocurrency described above. The information contained herein is not intended to provide, and it does not provide, sufficient information to form the basis for an investment decision, and you should not rely on this information for that purpose. The information presented herein is accurate only as of its date, and it was not prepared by a research analyst or other investment professional. You should seek additional information regarding the merits and risks of investing in any cryptocurrency before deciding to purchase or sell any such instruments.