- 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.
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.
In Siberia, cheap hydropower, cold climate, and abandoned Soviet industrial infrastructure has made the region of Irkutsk an attractive spot for urban explorers and, more importantly, crypto miners.
In the city of Bratsk lies one of the largest hydropower plants in Russia. The massive dam and generator feeds the region’s growing mining farms. Cheap electricity is actively attracting miners from all parts of the world, turning the region into an international mining hub.
In addition to the cheap electricity, the local climate is favorable to miners: the average annual temperature in Bratsk is 28 degrees Celsius or 82.4 ℉. The warm season (meaning when it’s not freezing) lasts four or five months a year and the rest of the time it’s a deep freeze.
Another advantage is the plethora of empty buildings left by the Soviet factories that didn’t survive Russia’s turn to a market economy.
Now some of those buildings, with the electricity already plugged in, have made the leap from the industrial to post-industrial age, becoming homes for mining hardware. In these remote areas, the miners can gobble up hydropower without disturbing the neighbors.
Three companies, Bitriver, Cryptoreactor, and Minery, are the biggest players here offering “mining hotels,” or venues to place ASICs equipped the cooling systems, tech support teams and security guards.
Bitriver boasts 100 megawatt of power available for clients while Cryptoreactor said it had secured 40 megawatts and Minery claims 30 megawatt. The venues are currently hosting machines from the clients in the U.S., Russia, Japan, Korea, Brazil, Lithuania, India, Poland, Spain, China, and other countries.
At one of Minery’s two farms, for example, 26 massive shipping containers host ASICs owned by the miners from the U.S., Russia, Korea, India, Japan and Spain, the firm’s CEO Ilya Bruman said.
Dmitry Ozersky, CEO of Eletro.Farm, a mining company building a large venue in Kazakhstan, believes bitcoin mining farms across Russia now wield a joint capacity of 600 megawatts, accounting for almost 10 percent of the total 7 gigawatts of power supporting the bitcoin network worldwide.
We went on location to see the mines in action and came home with some amazing footage.
Native support for bitcoin cash is coming to HTC’s blockchain phone.
Today, HTC announced its partnership with Bitcoin.com to add bitcoin cash support for its Exodus 1 blockchain phone. The new function will come with Bitcoin.com’s preinstalled wallet and be rolled into the Exodus 1 software update. Bitcoin.com will also sell the Exodus 1 and all future versions.
In a statement, HTC’s chief decentralization officer Phil Chen called the update a natural next step for the phone. “The Zion Vault is happy to support BCH natively in hardware so security goes hand-in-hand in the BCH blockchain as an alternative to dominant payment rails and platforms,” he said.
With the partnership, Zion Vault, the phone’s key management software can now secure BCH transfers by signing off on transactions.
Prior to last February, HTC only accepted major cryptocurrencies bitcoin and ethereum. As of now, the phone is priced at $699.
First announced at Consenses 2018, HTC has regularly updated the Exodus 1 with new blockchain features. An update in May allowed users to directly swap cryptocurrencies within the Zion Vault wallet.
Exodus 1 may soon be replaced by HTC’s second-generation blockchain phone: the newer, cheaper Exodus 1s. Chen has previously told CoinDesk that the $200-$300 phone would ship in the third quarter.
HTC Exodus image courtesy HTC
- With the hash rate or miner’s confidence hitting record highs, bitcoin’s three-day narrowing price range looks set to end with a bullish breakout.
- A range breakout would open the doors to $10,956 – the bearish lower high created on Aug. 20.
- A break below Friday’s low of $10,154 would confirm a range breakdown and could yield a sell-off to $9,855 (Sept. 11 low).
Bitcoin’s latest bout of consolidation may end up with bullish breakout, as a key metric of miner confidence has hit all-time highs.
The top cryptocurrency by market value has clocked lower daily highs and higher daily lows over the last three days and is currently trading at $10,300 on Bitstamp, little changed on a 24-hour basis.
The cryptocurrency has charted the narrowing price range amid a surge in non-price metrics including a rise in the network’s hash rate – a measure of the computing power dedicated to mining bitcoin.
Notably, the two-week average hash rate reached a record high of 85 exahashes per second (EH/s) around 19:00 UTC on Friday. Further, mining difficulty – a measure of how hard it is to create a block of transactions – also jumped to a new all-time high of nearly 12 trillion.
Hash rate can be considered a barometer of miners’ confidence in the bitcoin price rally. After all, they are more likely to dedicate more resources to the computer intensive process that secures the network and processes transactions if they are bullish on price. Miners would likely scale back operations if a price slide is expected.
Hence, many observers, including the likes of Changpeng Zhao, CEO of Binance, and former Wall Street trader and journalist Max Keiser believe prices follow hash rate.
Zhao tweeted on Friday that, a rising hash rate means “more miners are investing in BTC,” while few other observers stated that sellers should think twice before betting against the most secure blockchain (the higher the hash rate of a cryptocurrency network, the more expensive it is to attack).
It is worth noting, though, that the market is divided on the relationship between price and hash rate.
Some observers believe the hash rate follows price and the metric’s stellar performance represents overtly exuberant miners.
That said, the price is likely to follow the hash rate this time, as over-exuberance is typically observed at market tops or near record highs. As of now, BTC is down almost $10,000 from the record high of $20,000 reached in December 2017.
Further, with the next reward halving (supply cut) due in less than a year, market sentiment is quite bullish. The sustained uptick in miners’ confidence is more likely to draw fresh bids, possibly leading to a positive feedback loop.
Daily and 4-hour charts
Bitcoin has charted (above left) back-to-back inside bar candlestick pattern on the daily chart over the last three days. The first inside bar appeared on Friday as that day’s high and low fell within Thursday’s trading range. The second and the third inside bar candle was created on Saturday and Sunday, respectively.
Inside bars indicate consolidation and lack of volatility, often ending with an explosive move on either side. A break below the first inside bar’s (Friday) low of $10,154 would imply range breakdown and could yield a stronger sell-off to levels below $9,855 (Sept. 11 low).
A break above Friday’s high of $10,458 would imply range breakout and open the doors to $10,956 (July 20 high).
The falling wedge breakout confirmed on the 4-hour chart (above right) last week is still valid. So, the probability of range breakout is high.
Disclosure: The author holds no cryptocurrency assets at the time of writing.
JPMorgan’s blockchain-based payments initiative has added Deutsche Bank as its latest member.
The addition brings the total number of banks signed up for the Interbank Information Network (IIN) to 320, according to a report from the Financial Times on Sunday.
Announced in October 2017, IIN is built on Quorum, the ethereum-based blockchain network developed by the banking giant, and employs a stablecoin dubbed JPM Coin. JPMorgan said at the time that the platform would slash the time and costs required when resolving interbank payments delays.
IIN saw the start of remittance trials with JPMorgan’s client banks in June.
As per the FT report, the bulk of the member banks use JPMorgan to process USD payments. Deutsche Bank, though, ranks number one globally for clearing of euro-denominated payments.
Takis Georgakopoulos, managing director of treasury services at JPMorgan, told the newspaper that, since IIN would have “very big natural limitations” if IIN members were only drawn from the bank’s client pool, the addition of Deutsche Bank “is going to help us drive towards ubiquity.”
IIN brings efficiencies by writing all the data on payments a shared ledger, thus allowing problematic payments to be resolved more quickly and with less manual processes, said Deutsche Bank’s global head of cash management, Ole Matthiessen.
With his bank having recently cut back its investment banking business and now relying more on transaction banking, he said joining IIN is “an important step” that would reduce Deutsche’s costs and also allow it to offer better services to clients.
Matthiessen added that IIN’s plan to have 400 members by the end of 2019 is on track, and that other major banking members are likely to be announced very soon.
Harbor has pivoted from helping companies issue security tokens to helping them tokenize existing securities.
Announced Monday, the startup has created tokens on the ethereum blockchain representing the shares of four real estate funds worth $100 million.
The move is intended to make these private securities easier to trade for the 1,100 investors that hold them, along with 17 broker-dealers and 17 placement agents that work with the funds’ manager, iCap Equity.
“For years, we’ve been looking for ways to create the best investment experience we can and for us that means providing liquidity for them,” said Chris Christensen, CEO of Bellevue, Washington-based iCap.
The news also represents a strategic shift for Harbor, from helping clients raise funds by selling security tokens to providing an infrastructure layer for such instruments.
Harbor “evolved from crowdfunding and tokens to being the Salesforce.com” of the security token industry, said Josh Stein, CEO of San Francisco-based Harbor.
Initially, the company tried to build tokens backed by real-world assets. It reckoned that if investors were interested in initial coin offerings (ICOs) issued by projects with only a promise, they would “be excited” for backed tokens, Stein said.
However, he added:
“The overlap between investors demanding tokens and investors interested in security tokens was zero. People were buying tokens but they weren’t buying it to invest, they were buying it to speculate.”
Last year, Harbor partnered with DRW Holdings’ real estate wing to facilitate the sale of nearly 1,000 tokenized shares in an apartment building. However, the deal fell apart earlier this year due to issues between the mortgage lender and issuer.
Harbor is providing a user platform for the investors, broker-dealers and advisors, which includes a private marketplace they can use to trade the securities.
Christensen said the funds are “high-yield, [which] usually requires a lockup” under which investors contractually cannot sell their shares for three to five years.
“We just knew if we can provide measured liquidity for them and allow us to continue our business model [but] allow them to … exit as needed, that would be cutting-edge,” he said.
Typically, iCap investors buy securities and commit to the multi-year lockup. However, investors could need their money back before that period ended, Christensen explained. Under its old system, these investors would have to find another investor who would be willing to purchase the securities and commit to the remainder of the lockup period.
The process to find an investor interested in purchasing these securities and then transfer them was time-consuming and costly, but a market already exists: Christensen said his company has previously facilitated $2 million in trades for these funds.
“What Harbor does is they automate this entire process,” he added. “Those who want to come in come in, those who want to exit can do that.”
The 17 broker-dealers that now have access to the platform include Bradley Wealth, an investment advisor.
“It’s never going to be like a public market, but we can take something that’s illiquid or semi-liquid and make it more liquid,” Stein said.
‘Nobody’s marketing it’
iCap operates under Rule 144 of the Securities Exchange Act of 1934, which requires a one-year mandatory lockup period for securities sold, separate from the restrictions the firm imposes, Christensen said.
“Once you’ve held a security for one year, it can be freely tradeable,” he said.
What is interesting, Stein said, is that after this first year ends, non-accredited investors can trade the securities (though iCap approves the platform’s users, so it is not open to the general public).
“I don’t think it’s a goal but what it says to these broker-dealers and RIAs [is] that they have this investment … they can get their non-accredited clients into it,” he said.
He noted that unlike ICOs or other crowdfunding efforts, these fund shares, now represented by ERC-20 tokens on ethereum, are passive instruments.
“It’s not like when you think of ICOs or crowdfunding where somebody’s pushing an investment,” he said. “It democratizes it but nobody’s out there marketing it.”
Nevertheless, Stein said the new strategy is aligned with Harbor’s broader mission, concluding:
“What we’re hoping to do is increase access … in real estate and other [areas], which was kind of the promise of security tokens to begin with. We’re just going about it a different way.”
The head of Facebook’s Calibra – the entity created by Facebook to provide financial services including a digital wallet for the planned Libra cryptocurrency – has spoken out in response to claims from authorities that the project poses a threat to nations’ “monetary sovereignty.”
In a Twitter thread on Monday, David Marcus, who co-created Libra, said he wanted to “debunk” that notion – one most notably promoted by France’s Economy and Finance Minister, Bruno Le Maire.
Le Maire said last Thursday that, with Libra, “The monetary sovereignty of states is under states is under threat,” and further threatened to block the project’s development in the EU.
Marcus said that Libra will be “backed 1:1 by a basket of strong currencies. This means that for any unit of Libra to exist, there must be the equivalent value in its reserve.” As such, Libra will not be creating new money. That function will “strictly remain the province of sovereign nations,” he said.
The Calibra chief further clarified that Libra is being built to be a “better” payment network utilizing national currencies, and “delivering meaningful value to consumers all around the world.”
Marcus welcomed the attention from regulators, however, saying:
“We believe strong regulatory oversight preventing the Libra Association from deviating from its full 1:1 backing commitment is desirable.“
His comments come as a group of 26 central banks – including the European Central Bank, the U.S. Federal Reserve and the Bank of England – meets in Switzerland to grill the Libra Association over the scope and design of the project.
In the thread, Marcus also pledged to continue working with “central banks, regulators, and lawmakers to ensure we address their concerns through Libra’s design and operations.”
EOS to have its first hard fork on Sept. 23
EOS, the 7th biggest cryptocurrency by market cap, is expected to have its first consensus upgrade on Sept. 23, as EOS block producers (BPs) agreed to activate EOSIO v1.8 on the EOS Mainnet on the date.
According to major EOS BP EOS Nation, the upcoming event is the largest upgrade to the EOS network since it was launched, and the first update to require a hard fork, which is a split of the source blockchain into two separate networks that will have its own transaction history. According to EOS Nation, 29 out of 30 top EOS BPs have committed to upgrading at press time.
As noted by Cointelegraph Analytics, apart from small improvements in security and scalability, EOSIO developer company block.one has reportedly simplified the operation of future hard forks.
Tron to update the Sun Network
According to Cointelegraph Analytics, Tron is soon expected to release an update for the Sun Network that was officially launched on Aug. 11, 2019.
The Sun Network is a sidechain scaling solution that is designed to enhance and ensure a supposedly unlimited scaling capacity of the Tron network. Additionally, the solution will purportedly allow decentralized applications (DApps) to consume less energy and run with higher security and efficiency on Tron.
As noted by Cointelegraph Analytics, resource consumption on the sidechain will be 100 times less, which will purportedly lead to a surging number of DApps.
Big Neo update coming
Neo, the 20th biggest coin by market cap at press time, will have a major upgrade NEO 3.0 in the second quarter of 2020, as previously reported. The upgraded Neo version is expected to be launched as a new blockchain network where users will need to swap their existing Neo tokens for new ones.
According to Neo co-founder and core developer Erik Zhang, the update is necessary because a number of architectural improvements to Neo’s performance are not compatible with its current blockchain.
Cointelegraph Analytics notes that the current version of the Neo blockchain is only receiving bug fixes and has the simplest set of features, while NEO 3.0 upgrade will have a number of improvements.
Those improvements will include cheaper transactions and deployment of smart contracts, faster blockchain powered by a unified transaction model and processing of peer-to-peer protocol, adoption of a file system and identification protocol, and others.
The Bitcoin (BTC) symbol will now appear on the shirt sleeve of Watford Football club players, and the team will also accept the cryptocurrency for merchandise purchases.
The football club announced in a post on its website published on Sept. 12 that the famous Bitcoin “B” logo will be featured on the player’s uniforms as a result of the club’s partnership with Bitcoin betting platform Sportsbet.io.
The team will also accept the leading cryptocurrency as a payment for its merchandise.
A public awareness campaign
According to the official post, the logo’s addition to the uniform is part of a wider campaign aiming to “improve awareness around Bitcoin and educate the public on the benefits of using cryptocurrencies.”
The head of marketing of the team’s main shirt sponsor Sportsbet.io Justin Le Brocque said that the company is giving back to the crypto community:
“The crypto community have been hugely supportive of us since we began, so putting the Bitcoin logo on the sleeve felt like a fun way to give something back while also showing them our support.”
The sponsorship will be crowdfunded and anyone can bid Bitcoin to access a public LED space shown live during matches and exclusive Watford FC merchandise. Le Brocque also added that he hopes the initiative “will create even more buzz around cryptocurrencies.”
As Cointelegraph reported in August, the Dallas Mavericks have become the second NBA team to accept Bitcoin as a means of payment for match tickets and merchandise.
French economy minister Bruno Le Maire said on Sept. 12 that French authorities won’t tax crypto-to-crypto trades, but will tax when cryptocurrencies are sold for fiat currency.
Bloomberg Tax reported on Le Maire’s declarations on Sept. 12. Per the report he noted:
“We believe that the moment the gains are converted into traditional money is the right time to assess tax.”
Easier transaction tracking
The author of the report also explains that such an approach to taxing cryptocurrency trading would help with tracking transactions, which he believes to be a common challenge in crypto-to-crypto trading. Le Maire also reportedly addressed Value-Added Tax (VAT) application to cryptocurrencies.
More precisely, he explained that VAT is to be applied to cryptocurrency transactions only when they are used to acquire an asset or a service. France is reportedly already implementing the new approach to cryptocurrency taxation.
Meanwhile, in Portugal
As Cointelegraph reported at the end of August, Portugal’s Tax Authority has clarified that both cryptocurrency trading and payments in crypto will not be taxed in the country.
Also in August, a tax bill seeking to allow the exclusion of gain or loss on like-kind exchanges of virtual currency has been introduced in the United States House of Representatives.