Bitcoin fell by 1.76% on Sunday. Reversing a 0.83% gain from Saturday, Bitcoin ended the day at $3,501.7.
A late in the day rally on Saturday gave Bitcoin a positive end to the day. There was no such luck on Sunday. Bitcoin hit reverse from the start of the day. Falling from an intraday high $3,566.8, Bitcoin fell to a late intraday low $3,470.1.
The reversal saw Bitcoin fall through the first major support level at $3,515 to come within range of the second major support level at $3,465.8. The start of the day high saw Bitcoin fall well short of the first major resistance level at $3,597.2.
For the week, Sunday’s reversal left Bitcoin down 2.65%, Monday through Sunday. As a result, Bitcoin saw its 3rd week in the red out of the last 4.
The bearish sentiment through the week was evident amongst the top 10 cryptocurrencies. Leading the way down was Stellar’s Lumen, which tumbled by 14.53%.
Not too far behind were Tron’s TRX and Bitcoin Cash SV, which ended the week with 12.7% and 10.5% losses.
Bucking the trend through the week was Litecoin and EOS. Litecoin gained 2.65%, in spite of a 3.8% slide on Sunday. EOS gained 0.74%, gains from earlier in the week being wiped out by a 3.5% fall on Sunday.
It’s been an interesting start to the year. While Litecoin has enjoyed 3 consecutive weeks of gains, Ripple’s XRP has fallen for 5 consecutive weeks. While Litecoin lightening will have contributed to the upward momentum, increased adoption in evidence, the upward momentum continues to be attributed to August’s halving event. For Ripple’s XRP, the continued adoption of Ripple Lab’s cross border payment platforms appears to be having limited price impact at best. Even SWIFT’s trial of R3’s platform only provided temporary relief.
It was yet another quiet day on the news front, with the end of week reversal leaving the total cryptomarket cap at $113.86bn. Going into the week, the total market cap had stood at $118.5bn,
At the time of writing, Bitcoin was down 0.14% to $3,497.0. Moves through the early morning saw Bitcoin fall from a morning high $3,508.3 to a low $3,492.3. Bitcoin managed to hold above the first major support level at $3,458.93 while falling short of the first major resistance level at $3,555.63.
For the day ahead
Bitcoin will need to move through the morning high to $3,512.87 to support a recovery of last week’s losses. Support from the broader market would be needed for Bitcoin to breakdown resistance at $3,500 to take a run at the first major resistance level at $3,555.63. Bitcoin will likely fall short of $3,600 levels on the day.
Failure to move through to $3,512 levels could see Bitcoin pullback through the morning low $3,492.3 to bring the first major support level at $3,458.93 into play before any recovery. Bitcoin will likely avoid sub-$3,400 levels in the event of a broad-based crypto sell-off.
Bitcoin gained 0.83% on Saturday. Following on from a 0.88% rise on Friday, Bitcoin ended the day at $3,564.2.
A bearish start to the day saw Bitcoin fall to a morning low $3,502.9 before finding support to move through to a morning high $3,537.8. A lack of a market catalyst through the day saw Bitcoin fall to a late afternoon intraday low $3,498.8.
The pullback saw Bitcoin steer clear of the first major support level at $3,476.87. For the bulls, Bitcoin called on sub-$3,500 support for a 6th consecutive day. In addition, Bitcoin managed to close out at $3,500 levels for a 4th consecutive day.
After a move back through to $3,500 levels, a late in the day rally saw Bitcoin strike an intraday high $3,581 before easing back. The late rally saw Bitcoin break through the first major resistance level at $3,575.87.
Litecoin stole the show on Saturday. A 5.69% rally through the day continued to support the bullish outlook ahead of this August’s halving. For the rest of the top 10, Bitcoin Cash ABC gained 4.51%, with EOS up by 4.45%.
Finally, bucking the trend through the day, Tron’s TRX slipped by 0.76%. A partial reversal to a previous week 23% rally was to be expected. Pressure came from a number of the majors that are in the red for the current week.
As a result of a lack of news to provide direction for the cryptomarket, Bitcoin continues to languish at $3,500 levels. Bitcoin has now failed to break through to $3,600 levels for a 6th consecutive day. Equally significant are more material gains made elsewhere through the start of the year. While Tron may be leading the back, Litecoin could be the February pick.
In contrast, Ripple’s XRP continues to lag the majors. Ripple’s XRP is down by 12.6%, year-to-date. While Litecoin is setting the early pace in February, Ripple’s XRP could be the dark horse should the bulls manage to take back the reins.
At the time of writing, Bitcoin was down 1.13% to $3,524.1. Bitcoin fell from a start of a day morning high $3,566.8 to a morning low $3,523.5 before steadying.
In spite of the pullback, Bitcoin held above the first major support level at $3,515 early on in the day.
For the day ahead
Bitcoin will need to move through to $3,550 levels to support an afternoon recovery. Sentiment across the broader market will need to improve for Bitcoin to take a run at the first major resistance level at $3,597.2. We will expect that Bitcoin will fall short of $3,600 levels in the event of an afternoon recovery.
Failure to move through to $3,550 levels could see Bitcoin fall back deeper into the red. A fall through the morning low $3,523.5 to sub-$5,200 levels will likely bring the first major support level at $3,515 into play before any recovery.
Bitcoin will likely call on sub-$3,500 support levels before any recovery should the bears continue to control the broader market through the day.
Bitcoin rose by 0.88% on Friday, reversing a 0.73% fall from Thursday, to end the day at $3,534.8.
After seeing red for a 6th consecutive month in January, it’s not looking too optimistic for February, with Bitcoin down 1.73% for the current week.
For the bears, the extended bearish trend was formed back at 5th May’s swing hi $9,999 and the trend looks set to continue for some time, with Bitcoin sitting well short of the 23.6% FIB Retracement Level of $4,816. More critically, the 38.2% FIB Retracement level of $5,809 is even more distant, with Bitcoin needing to break through the 38.2% FIB to begin forming a near-term bullish trend.
On the day, it was yet another quiet day on the crypto newswires, which used to drive much of the volatility through last year, leaving Bitcoin and the broader market directionless by historical standards.
Of the top 10 majors, Steller’s Lumen and Ripple’s XRP ended up in the red on the day, the pair bucking the trend from across the broader market, with losses of 0.87% and 1.04% respectively.
On the upside, it was Litecoin and Tron’s TRX that led the way, with gains of 3.58% and 3.55% respectively. While Litecoin and Tron’s TRX enjoyed some sizeable gains on the day, there was little action across the rest of the top 10, which saw modest gains. EOS ended the day with a 1% gain, while Ethereum rose by just 0.09%.
With the lack of any catalysts to provide direction for Bitcoin and the broader market, there’s been a pickup in chatter on halving dates. With halving reducing the number of coins that miners are rewarded with, which in theory leads to fewer coins being sold each day, historical data has provided some evidence of crypto rallies in the run-up to each halving event.
While Bitcoin’s halving is due in May of next year, Litecoin’s is due much sooner and is projected to take place in early August of this year.
Interestingly, Litecoin’s adoption had been attributed to its recent gains, however, history suggests that the upcoming halving could be the primary contributor. If we consider adoption in isolation, Ripple’s XRP should be performing in line with, if not outperforming Litecoin, when considering Ripple Lab’s successes and the latest announcement by SWIFT.
So, if history does repeat itself, however rare in the global financial markets, with demand a key consideration, Litecoin should be on the precipice of a major rally.
The last halving took place in August 2015. In the run-up to the August 2015 halving, Litecoin saw 3 consecutive monthly gains, from May to July. Litecoin rallied by a whopping 226% before hitting reverse in August. For the skeptics, the 3 consecutive monthly gains came off the back of 4 months in the red out of the preceding 5 and August’s reversal was the largest of that year, which does support the theory of halving and price action.
Year-to-date, Litecoin is up 8.7%, outgunning the rest of the majors, with the exception of Tron’s TRX and, while Bitcoin has some way to go before its next halving, Litecoin’s is around the corner. The very fact that investors are aware of the effect of halving on cryptocurrency pricing suggests that a rally is in the making, though that assumption does come with one caveat. If the cryptomarket goes into meltdown, it’s going to need more than a halving to garner investor interest.
Outside of Litecoin’s halving later this year, the only other key drivers, at the time of writing, will be the SEC’s Bitcoin ETF decision and the heavily anticipated rollout of rules and regulations by the G20 in the summer.
Both the SEC decision and the G20’s rules and regs could pour ice on the effects of Litecoin’s halving but, when considering the regulatory oversight already evident in key jurisdictions, a unified set of rules and regulations could ultimately be embraced by the broader market.
While volatility may have fallen off a cliff, it’s unlikely to have gone for good…
At the time of writing, Bitcoin was down 0.27% to $3,525.4, with Bitcoin joining EOS and Tron’s TRX in the red in the early hours.
The bulls will be looking for a weekend rally, which could be on the cards should Bitcoin hold above sub-$3,520 levels through the morning. It’s not the first time that Bitcoin has kicked off the day in the red.
Bitcoin fell by 0.73% on Thursday, partially reversing a 1.48% rise from Wednesday, to end the day at $3,503.8.
For the month of January, Bitcoin fell by 8.58% and for the bears, the monthly loss was a 6th consecutive monthly in the red, with Bitcoin seeing monthly gains in just 3 of the last 13 months.
A bullish start to the day saw Bitcoin rally to an intraday high $3,574.8, breaking through the first major resistance level at $3,569.33 before hitting reverse.
Sliding through to the early evening, Bitcoin fell to an intraday low $3,482.1 before finding support to move back through to $3,500 levels by the day’s end. Bitcoin managed to steer clear of the first major support level at $3,470.53 in spite of the reversal, with sub-$3,500 support continuing to limit the damage.
Elsewhere amongst the top 10 cryptos, there were no buck-trending moves on the day, with Tron seeing the heaviest losses on Thursday, sliding by 7.44% to eat into January’s gains.
The negative sentiment even weighed on Ripple’s XRP that had bounced on Wednesday on news of SWIFT adopting R3’s platform for global payments on a trial basis.
For January, it wasn’t a great month for the majors. Stellar’s Lumen saw the heaviest losses, down by 26.64%. Bitcoin Cash SV and Bitcoin Cash ABC were close behind, the pair down by 25.21% and by 24.03% respectively.
Ethereum managed to hold onto $100 levels, but a 19% slide in the month will leave it on the defensive going into February.
Bucking the trend through the month were Litecoin, which gained 4.9% and Tron’s TRX, which trailblazed its way through January with a 33.3% rally. It could have been a lot more had it not been for Thursday’s sell-off.
On the news front, there was very little driving the cryptomarket through the day, with even the news of VanEck resubmitting its Bitcoin ETF application providing little support. The reason for withdrawing had been the U.S government shutdown, rather than any material issues with the application, so there was very little reason for the market to respond.
At the time of writing, Bitcoin was down by 0.73% to $3,478.2. A bearish start to the day saw Bitcoin slide from a morning high $3,513.4 to a low $3,462.2. The pullback saw Bitcoin call on support at the first major support level at $3,465.67 before steadying, the morning high having come up well short of the first major resistance level at $3,558.37.
For the day ahead, a move back through the morning high $3,513.4 to $3,520 levels would support a run at the first major resistance level at 3,558.37. We can expect Bitcoin to continue to face plenty of resistance at $3,500 to pin Bitcoin back from a breakout to $3,600 levels on the day. For the bulls, a move back through to $3,500 would be needed and sentiment across the broader market will also need to shift to support a recovery.
Failure to move back through the morning high could see Bitcoin fall deeper into the red. A fall through the first major support level at $3,465.67 could see Bitcoin call on support at the second major support level at $3,427.53 before any recovery. We would expect Bitcoin to steer clear of sub-$3,400 levels on the day, barring a crypto meltdown event.
Bitcoin slipped by 0.66% on Tuesday, following on from Monday’s 2.65% slide, to end the day at $3,477.9.
A start of a day move through to an intraday high $3,517.5 failed to draw in sidelined investors, with Bitcoin coming up short of the first major resistance level at $3,584.77 before hitting reverse.
Tracking the broader market through much of the day, Bitcoin fell through the first major support level at $3,432.17 to a mid-morning intraday low $3,422 before finding support.
Bitcoin managed to break back through to $3,500 levels with an afternoon high $3,504.4 before falling back through to $3,400 levels and the lowest end of day price since 16th December’s $3,301.5.
Elsewhere amongst the top 10 cryptos, it wasn’t all doom and gloom, with EOS and Tron managing to buck the trend through the 2nd half of the day. EOS led the way, gaining 1.63% for the day, with Tron’s TRX not far behind, rising by 1.06%, the pair partially recovering from Monday’s sell-off.
EOS managed to knock Bitcoin Cash off the number 4 spot, by market cap, with Tether taking the number 5 spot to leave Bitcoin Cash down at 6. Litecoin and Tron are battling it out for the number 7 spot and if things don’t get better for Bitcoin Cash, it could be facing the prospects of a number 8 spot sooner rather than later.
The bearish trend through the day came as the majors, with the exception of EOS and Tron, failed to break back through to key levels following the morning sell-off. There was no particularly negative news hitting the crypto wires to drive the reversal.
On the news front, a positive for Bitcoin and the broader market should be news of Fidelity looking to launch custody services for Bitcoin, before the end of the first quarter, with services for the broader market to follow. As one of the key issues identified by the SEC, Fidelity is looking to fill a considerable gap in the cryptomarket.
The timing could have been more favorable, with the SEC currently scheduled to announce the outcome to its review of the 8 remaining Bitcoin ETF applications, but following the government shutdown, it wouldn’t be surprising if there was a further delay to the decision. The VanEck withdrawal could have been the right decision should Fidelity deliver on its promise and the markets avoid another high profile theft or fall victim to more price manipulation.
At the time of writing, Bitcoin was up by 0.56% to $3,497.4. Bitcoin managed to avert another crisis by recovering from a start of a day dip to a morning low $3,451.2 to strike a morning high $3,509.4 before easing back. The day’s major support levels were left untested early on, while resistance at $3,500 played a hand in the early hours.
For the day ahead, a hold above $3,470 levels would support another run at $3,500 levels, though sentiment across the broader market would need to materially improve, investors taking a more cautious stance following 3 consecutive days in the red. We would expect Bitcoin to be pinned back from a breakout to $3,600 levels, by the day’s second major resistance level at $3,567.97, any rebound likely to see Bitcoin break through the first major resistance level at $3,522.93 with relative ease.
Failure to hold above $3,470 levels could see Bitcoin return to the red, with a fall through the morning low $3,451.2 bringing the first major support level at $3,427.43 and a visit to $3,300 levels into play before any recovery.
Bitcoin slumped by 2.65% on Monday, following on from a 0.94% fall on Sunday, to end the day at $3,501.9.
A particularly bearish start to the week saw Bitcoin tumble from a start of a day intraday high $3,597.9 to an afternoon intraday low $3,445.3 before steadying.
Tracking the broader market through the day, Bitcoin slid through the first major support level at $3,543.5 and second major support level at $3,489.9 before breaking back through the second major support level late in the day.
A recovery to $3,500 levels by the day’s end was the only positive for the bulls, with another string of tight ranges leaving the bulls to lick their wounds, as investors continue to take a more cautious position ahead of a number of key events anticipated in the first half of the year.
Elsewhere, it was a sea of red across the majors, with even the market favorite Tron taking a tumble through the day. While none of the top 10 got through the day unscathed, a number of the major saw particularly heavy falls at the start to the week.
Bitcoin Cash ABC and SV ended the day with 7.25% and 9.14% losses respectively, with Stellar’s Lumen down by 7.2%. Ripple’s XRP and Litecoin saw more moderate losses of 3.97% and 3.31% respectively, while Bitcoin was the best performer on the day.
Having managed to hover around the $120bn mark, the total crypto market cap slid to $113.12bn, with Bitcoin’s dominance jumping to 53.6%, anything above 52% a bearish signal for Bitcoin and the broader market.
Once more, the lack of positive news and possible expectation that the SEC will defer or even support the rejection of the 8 Bitcoin ETF applications from last year weighed on the cryptomarket.
The bulls would have hoped for a bullish start to the year, investors were given the opportunity to dust off a dire 2018. January has been far from bullish, however, with Bitcoin down 8.63% for the current month. While sub-$3,000 levels have been avoided, ripping the plaster off may ultimately be what Bitcoin and the broader market needs before it can settle.
We still support a sub-$3,000 low before any recovery is possible and, for the bulls, of greater concern will be where Bitcoin sits at the time of the SEC’s announcement and, perhaps more importantly, the G20’s rollout of rules and regulations over the summer.
At the time of writing, Bitcoin was down by 0.31% to $3,491.1 at the time of writing, with Bitcoin giving up $3,500 levels early as the broader market saw Sunday’s reversal continue into the early hours.
Bitcoin’s going to need to move back through to a morning high $3,517.5 or face the threat of a pullback to sub-$3,400 levels later in the day. With red across the broader market in the early hours, any hope of even a dead cat bounce looks slim.
Bitcoin fell by 0.94% on Sunday, following a 0.06% rise on Saturday, to end the week up by just 0.31% to $3,597.1.
A relatively choppy day by recent standards saw Bitcoin recover from a start of a day dip to sub-$3,600 levels to strike an early morning intraday high $3,645.7 before being hit by a broad based crypto sell-off.
Coming up short of $3,700 levels and the first major resistance level at $3,713.17, Bitcoin fell through the morning to an early afternoon intraday low $3,541.
The reversal saw Bitcoin fall through the first major support level at $3,586.07 to call on support at the second major support level at $3,540.93 before recovering to $3,600 levels by the late afternoon.
Succumbing to the bearish sentiment through the day, Bitcoin failed to wrap up the day at $3,600 levels for the first time since Monday, the bears managing to reverse the week’s gains.
It could have been far worse had Bitcoin failed to recover from the early afternoon low that had seen Bitcoin fall deep into negative territory for the week.
Elsewhere, it was a mixed bag across the majors. In the red were Stellar’s Lumen, which saw the heaviest losses amongst the top 10, down 8.4% for the week, with Ethereum (-5.19%), Bitcoin Cash SV (-4.2%) and Ripple’s XRP (-3.49%) also seeing heavy losses.
While more moderate losses were seen by Bitcoin Cash ABC, which fell by 1.12%, joining Bitcoin in positive territory for the week were Litecoin, EOS and Tron’s TRX. Litecoin’s gains may have been impressive relative to its peers, up 4.61% for the week, but Tron led the way with a whopping 23% rally, supported by a 1.5% gain on Sunday and 6 days in the green through the week.
Tron’s rally through the week and Stellar Lumen’s reversal saw Tron take the number 8 ranking, by market cap, with very little now separating Tron and Litecoin, which sits behind Tether at number 7.
In spite of the gains seen by Tron and, to a lesser extent, Litecoin, the bearish sentiment was evident across the majors, with Bitcoin at sub-$3,600 levels and Ethereum only just managing to hold onto $110 levels by the week’s end.
There was no major news events to deliver the Sunday moves, with January having failed to deliver for the crypto bulls, Tron’s TRX the only top 10 crypto that has impressed, with Litecoin the only other major to sit in positive territory since the start of the year.
With Bitcoin’s dominance creeping up to 52.8% and the total crypto market cap easing back to $118bn levels, down from a week high $121.7bn reached on Saturday, the bulls will have their work cut out for them as January comes to a close and investors begin to focus on the SEC’s anticipated February decision on the 8 remaining Bitcoin ETF applications that are under review.
The government shutdown is over and the immediate question will be whether the VanEck BTF application will be resubmitted or left on hold until the review of the remaining 8 has been completed.
At the time of writing, Bitcoin was down 0.7% to $3,571.8, with the bears in full control going into the new week. Bitcoin is going to need to make a move early or face the prospects of a return to sub-$3,500 levels to deliver sub-$3,000 level chatter.
Bitcoin slipped by 0.65% on Friday, partially reversing a 0.87% gain from Thursday, to end the day at $3,628.9.
By historical standards, it was another day within tight ranges. A bearish morning saw Bitcoin fall from an early morning intraday high $3,663.5 to a late morning intraday low $3,580 before recovering.
The reversal saw Bitcoin fall through the day’s first major support level at $3,604.33 to call on sub-$3,600 support for a 6th consecutive day.
Recovering through the afternoon, Bitcoin managed to move back through to $3,600 levels to strike an afternoon high $3,634.1 before easing back, the morning intraday high $3,663.5 having fallen short of the first major resistance level at $3,686.23.
For the current week, the day’s loss reduced the week’s gains to just 0.91%, Bitcoin seeing red in 3 of the 5 days in a week that has seen a spread of just $220.
Elsewhere, it was a mixed bag for the top 10 through the week, with Stellar’s Lumen and Ethereum seeing the heaviest losses, Monday through Friday, the pair down by 3.39% and by 2.12% respectively. Ripple’s XRP and Bitcoin Cash SV, were also in the red, the pair down by 0.6% and by 0.42% respectively.
On the up was Tron’s TRX that continued to lead the way for the top 10, rallying by 15.7% through the week, which included a 1.3% slide on Friday.
Litecoin and EOS also saw solid gains, Monday through Friday, the pair up by 6.93% and by 5.04% respectively.
Thanks to a number of the majors, the total crypto market cap avoided heavy losses, with the market cap falling from $119.72bn to $119.64bn, the market managing to recover from a Tuesday low $118.01bn.
On the news front, following news of the VanEck Bitcoin ETF withdrawal, it was all about Davos late in the week, with a number of anti-cryptos talking out against the likes of Bitcoin, whilst acknowledging some of the benefits of Blockchain tech. With the crypto bashing coming from Davos, banking giant JPMorgan also chimed in by announcing that the value of cryptos is unproven. One of the bank’s bearish forecast now sits at $1,260.
Investor resilience has provided much needed support to the likes of Bitcoin, with the particularly bearish forecasts and negative commentary largely falling on deaf ears. If a seasoned analyst made similar claims to one of the FAANGs, the market reaction would be quite different to the crypto market and Bitcoin in particular, which has moved within the tight ranges seen through the week.
The broader market will be in for a rude awakening should sensitivity to analyst commentary begin to kick in.
At the time of writing, Bitcoin was up by just 0.14% to $3,634.0, a morning low $3,625 and high $3,643.1 leaving the major support and resistance levels untested in the early hours.
The Bitcoin bulls will be looking for another weekend rally to reverse some of the January losses further, Bitcoin down 5.31% to the end of Friday. Investors may will be more cautious going into this weekend, following last Sunday’s sell-off, with any pullback to $3,500 levels to question near-term direction.
Bitcoin rose by 1.67% on Tuesday, following a 0.19% fall on Monday, to end the day at $3,639.1.
Off the back of a particularly range bound start to the week, which continued through the early hours of Tuesday, Bitcoin tumbled to a late morning intraday low $3,462. The sell-off saw Bitcoin slide through the first major support level at $3,545.10 and second major support level at $3,501.8 before recovering.
It was Bitcoin’s first visit to sub-$3,500 levels since 17th December and signalled, not only a pickup in cryptomarket volatility, but also a strong level of support for Bitcoin and the broader market, in spite of the return to tight ranges at the start of the year.
The Tuesday morning sell-off saw the total crypto market cap fall to $117.69bn before recovering to $120bn levels, with EOS and Tron’s TRX leading the rebound on Tuesday. EOS bounced back to end the day with a 5.27% gain, with Tron’s TRX enjoying a 2nd solid day, up 4.04% off the back of a 7.9% rally on Monday.
There was little coming from the news wires to deliver the late morning blow to Bitcoin and the broader market, with talk of Bitcoin being oversold at $3,500 levels contributing to the late morning bounce back.
While Tron’s TRX continues to buck the trend across the broader market, trailblazing its way through January, currently up 86%, the broader market looks to have reverted back to trend, a lack of differentiation across the cryptos creeping back into the market.
This could well shift once the Ethereum upgrade takes place in February. When considering a particularly weak start to the year for Ripple’s XRP, down 10.33%, some of the cryptos are certainly due for a bounce back, particularly when considering the successes that certain platforms have had over the last 12-18 months.
At the time of writing, Bitcoin was up 0.32% to $3,650.9, with moves through the early hours seeing Bitcoin fall from a morning high $3,661.1 to a morning low $3,631 .0 before recovering. Another range bound start to the day left the major support and resistance levels untested early on.
For the day ahead, a hold onto $3,600 levels would be needed to support a run at Tuesday’s high $3,682.1 to bring $3,700 levels and the first major resistance level at $3,726.8 into play before any pullback. Having failed to strike $3,700 levels for two consecutive days, support from the broader market would be needed for a break out from $3,600 levels later in the day.
Failure to hold onto $3,600 levels could see Bitcoin call on support at the first major support level at $3,506.7 before recovering, sub-$3,500 levels unlikely to be tested, barring a meltdown event later in the day.
For the crypto bulls, recovering to $3,600 levels on Tuesday was not just a positive for Bitcoin, but the broader market, with Bitcoin likely to take the rest of the majors with it if sub-$3,000 levels were hit.
Volatility appears to be back and we can expect some more choppiness today should the recent trend in volumes across the broader market continue.
Bitcoin fell by 4.7% on Sunday, reversing a 2.36% from Saturday with interest, to end the day at $3,586.1.
The day’s losses wiped out Bitcoin’s gains from the week, which had largely come from a 4.41% rally on Monday, to end the week down by 0.13%.
An early morning intraday high $3,796.9 was the only bullish move of the day, with Bitcoin coming up short of the first major resistance level at $3,871.56 and, more importantly, $3,800 levels before hitting reverse.
Tracking the broader market, Bitcoin slid through the first major support level at $3,644.10 to a mid-day intraday low $3,543.0, calling on support at the second major support level at $3,564.63 before steadying.
Support through the afternoon saw Bitcoin avoid heavier losses whilst failing to recover $3,600 levels, the only positive for the Bitcoin bulls being a move back through the day’s second major support level at $3,543.0.
While there was no particularly negative news to drive Bitcoin and the majors deep into the red, the recently tight ranges and Bitcoin’s failure to push back through to $3,800 levels in the early hours of the day will have contributed to the late morning sell-off.
There’s been a lack of major news to support the broader market, with price support at $3,800 levels waning at the start of the year. A general consensus that the SEC may well hold back on reversing the rejection of 9 Bitcoin ETFs last year contributing to the limited upside that has left Bitcoin with its recent ranges.
For the bears, while a pullback to $3,500 levels to wipe out the week’s gains was a positive, a fall through to $3,300 levels would be needed to bring back chatter of sub-$3,000, Bitcoin having managed to avoid sub-$3,500 levels through the first few weeks of the year.
Elsewhere amongst the top 10, Stellar’s Lumen and EOS saw more than 5% losses, with the broad based sell-off seeing the total crypto market cap slide back to a day low $119.39bn before managing to move back through to $120.21bn at the time of writing.
At the time of writing, Bitcoin was up 0.15% to $3,591.3, a range bound start to the day seeing a morning low $3,586.1 and high $3,597.0 leave the day’s major support and resistance levels untested early on.
For the day ahead, a move through $3,600 to $3,650 would be needed to support a recovery to $3,700 levels to bring the first major resistance level at $3,741 into play before any pullback, chances of a run at $3,800 being limited at best through the day, barring materially positive news hitting the wires.
Failure to move back through to $3,650 levels could see Bitcoin fall back through to sub-$3,500 levels to call on support at the first major support level at $3,487.10. While Bitcoin has enjoyed plenty of support at $3,500 levels in the early part of this year, a broad based crypto sell-off could see Bitcoin call on support at the second major support level at $3,388.1 before any recovery.
While it may ultimately be one of those days in the tight ranges, some downside protection is certainly warranted, with a number of the top 10 majors sitting in the red at the time of writing.
Bitcoin was on the move on Thursday, rising by 1.28% to end the day at $3,722.5, off the back of a 0.56% gain on Wednesday. A 2nd consecutive day in the green was the first for Bitcoin since the first 2-days of the year.
A bearish start to the day saw Bitcoin fall to a late morning intraday low $3,606.2, with support at the first major support level at $3,624.03 kicking in to prevent a return to $3,500 levels on the day.
Tracking the broader market through the afternoon, Bitcoin managed to break through to $3,700 levels and strike a late in the day intraday high $3,725 before easing back. In spite of the afternoon rebound, Bitcoin failed to test the day’s first major resistance level at $3,741.53.
For the Bitcoin bulls, avoiding a return to $3,500 levels was key through the day, though the continuing tight ranges could lead to a sell-off as investors become wary of the lack of return when considering the risks associated owithf being exposed to Bitcoin and the broader market.
Elsewhere in the top 10, EOS and Stellar’s Lumen were amongst the front runners on the day, gaining 3.63% and 3.18% respectively, while Ethereum saw the most modest gain, up by just 0.29% on the day, the hard fork delay giving little incentive for investors to jump back in.
For those that have been keeping a close eye on Tron’s TRX, a 0.84% rise on Thursday was insignificant relative to the gains seen since late November’s swing lo and, with the number 9 spot on the market cap board safe for now, some more positive news is going to be needed to revive the Tron rally.
Thursday’s broad based cryptomarket gains failed to add too much value to the total crypto market cap, which ended the day at $122.57bn.
At the time of writing, Bitcoin was down 0.47% to $3,704.9, with moves through the early morning seeing Bitcoin fall from a start of a day morning high $3,723.9 to a morning low $3,697.0 before recovering to $3,700 levels.
For the day ahead, a hold onto $3,700 levels would support a run at the first major resistance level at $3,762.93, while we can expect Bitcoin to continue to fall short of $3,800 levels in the event of a recovery. The 10th January cryptomarket sell-off was the last time that Bitcoin had managed to touch $3,800 levels and that was while it was on its way down from a morning high $4,143.3 that day.
Failure to hold onto $3,700 levels could signal a possible sell-off, following the recent tight ranges, with the day’s first major support level at $3,644.13 very much in play should sentiment fail to improve through the day.
Whether the bears can deliver sub-$3,600 levels to test the day’s second major support level at $3,565.77 remains to be seen, with red across the board certainly setting the board up nicely for the bears early on in the day.
Across the broader market, Bitcoin ABC SV saw the heaviest losses early on, down 1.25%, with Tron’s TRX and EOS not far behind, with losses of 0.84% and 0.80% respectively.
Bitcoin slid by 3.00% on Sunday, following on from a 0.36% fall on Saturday, to end the week down 13.9% at $3,591, its lowest end of day price since 16th December.
Relatively range bound through the morning, Bitcoin hit a mid-day intraday high $3,729 to come within range of the first major resistance level at $3,735.13 before hitting reverse.
Selling pressure from the broader market ultimately weighed, with Bitcoin sliding to a late afternoon intraday low $3,570.
The reversal saw Bitcoin fall through the first major support level at $3,667.73 and second major support level at $3,633.47 to come within range of the third major support level at $3,566.07.
Finding support at $3,500 levels and the third major support level, Bitcoin managed to avoid heavier losses on the day, while some of the other crypto majors slid deeper in the red on the day.
Looking across at the other members of the top 10, Ethereum was amongst the worst performers of the week, down 25.9%, with Bitcoin Cash ABC and EOS close behind, the pair down by 24.7% and by 22.4% for the week.
Relative to the broader market, Tron was amongst the top performers, losing just 8.63% in the week, with Ripple’s XRP and Stellar’s Lumen also seeing relatively modest losses of 14.6% and 16.2% respectively.
The bearish end to the week left the crypto total market cap down at $117.58bn, with Bitcoin’s dominance creeping up to 52.9%, a bearish signal for the cryptomarket.
A negative start to the week was a bad omen for Bitcoin and the broader market, Monday’s fall leading on to 6 days in the red for Bitcoin in the week, a 0.05% gain on Friday the highlight of the week for the bulls.
At the time of writing, Bitcoin was up 0.48% to 3,608.4, a positive start to the day seeing Bitcoin rise from a morning low $3,580 to a morning high $3,615.0 before easing back.
While moves through the early morning left the day’s major support and resistance levels untested, a break back through to $3,600 was a positive early on.
For the day ahead, a move through to $3,630 levels would support a run at the first major resistance level at $3,690 to bring $3,700 levels into play before any pullback. Sunday’s high $3,729 and investor wariness will likely pin Bitcoin back from a run at the second major resistance level at $3,780.0.
Failure to move through to $3,630 could see the bears take back control at the start of the week. A fall through the morning low $3,580 will likely bring the first major support level at $3,531.0 into play, with sub-$3,500 support levels in play in the event of a broad based crypto reversal later in the day.
For the Bitcoin bulls, closing out in positive territory at the start of the week will be key. In recent months, a red start to the week has tended to weigh through the week.
Across the broader market, Bitcoin Cash ABC and IOTA bucked the trend early on in the day, the pair down by 0.74% and by 1.27% respectively, while Tron was back on the move, up by 7.35% to lead the top 10 early on in the day.
There was nothing mixed about Thursday, with investors deciding that enough was enough.
Bitcoin slumped by 9.07%, following on from a 0.41% fall on Wednesday, to end the day at $3,712.8 the reversal a 4th consecutive day in the red.
A relatively upbeat start to the day saw Bitcoin move through to a mid-morning intraday high $4,143.3, coming within range of the day’s first major resistance level at $4,164.8 before hitting reverse, a broad based cryptomarket sell-off sending all of the majors deep into the red.
The broad based cryptomarket sell-off mid-morning saw bitcoin tumble to a morning low $3,842.0, Bitcoin sliding through the first major support level at $4,032.07 and second major support level at $3,964.13 before steadying.
A range bound middle part of the day failed to restore investor confidence, with Bitcoin taking another tumble in the late afternoon to an intraday low $3,687.2, sliding through the third major support level at $3,804.33.
Bitcoin’s losses for the day and slide back through to sub-$4,000 levels may seem benign relative to the losses seen across the broader market, but the reality is that Bitcoin simply failed to break out from its recent ranges, with the bulls unable to reverse the extended bearish trend formed back at May’s swing hi $9,999.
Of significance for Bitcoin and the broader market was the lack of clarity on the cause of the mass sell-off, which saw most of the top 10 get smacked with double digit losses in a matter of hours, leading to the total crypto market cap sliding back through to $123bn and for Bitcoin’s dominance to climb back up to 52% levels.
The SEC may be reviewing its decision to decline the 9 bitcoin ETFs from last year but, when considering the need to safeguard institutional money, intraday swings and uncertainty over what is ultimately driving Bitcoin and the broader market should be a major concern.
It’s too early to call Thursday’s dump fraudulent or manipulative and, while a dovish FED has been associated with the slide, the reality is that a slowdown in rate hikes should be supportive of leveraged trading that has supported Bitcoin and the broader cryptomarket.
Crypto of the New Year, Tron, slid back to the number 9 spot to leave Litecoin and Stellar’s Lumen safe for now as investor jumped ship.
What’s next and will we see Bitcoin finally hit sub-$3,000 levels and floor out at $2,500?
The weekend and how the market responds to Thursday’s losses will be key to direction through the remainder of the month. It’s not uncommon enough for Bitcoin to see particularly heavy losses and, while Thursday’s loss was the heaviest since an 11% slide back in late November, even the November slide was met with a 10.9% rebound just a matter of days later.
Whether Bitcoin and the broader market can rebound in the days ahead will ultimately be key in setting the tone ahead of the SEC’s delayed decision on the 9 Bitcoin ETFs.
Looking at the crypto board, Tron saw the lightest losses amongst the top 10, down 8.4% at the time of writing, the trailblazer through the start of the year holding onto a large portion of its 2019 gains.
On the other side of the board, EOS was down 16.8% for the day, IOTA down 16%, with Bitcoin Cash ABC down 15.9%, the rest of the top 10 not far behind with double digit losses that was common across the rest of the top 10 and beyond.
At the time of writing, Bitcoin was up 0.09% to $3,716.1, with a hold onto $3,700 levels through the morning key to avoiding another sell-off later in the day, the bears now likely to be eyeing $3,500 levels in a bid to test sub-$3,000 support levels.
It was another positive day across the broader market, with the majors recovering from a mixed start to the day to close out a 2nd consecutive day in the green and, for the vast majority of the front runners, move into positive territory for the first week of the year.
Bitcoin gained 2.17% on Wednesday, following on from a 3.4% rise on Tuesday, to end the day at $4,048.8.
On the day, a relatively range bound morning saw Bitcoin ease back to a mid-morning intraday low $3,917.9 before finding support from an afternoon broad based crypto rebound, the day’s low steering clear of the first major support level at $3,838.47.
The afternoon rally saw Bitcoin move back through to $4,000 levels for the 1st time this year, Bitcoin breaking through the first major resistance level at $4,037.37 to strike a late in the day intraday high $4,083.5 before easing back.
While the day’s gain may not have been a spectacular one, a return to $4,000 levels on the day was significant, providing support to the broader market, leading to Bitcoin’s dominance falling to 50.9%, its first visit to 50% levels since 24th December.
With Bitcoin’s dominance on the slide, the total crypto market cap has crept up to $134.42bn, the bulls yet again managing to avoid a sub-$100bn test, with Bitcoin avoiding sub-$3,000 levels for now.
Across the broader market, Ethereum looked to cement its return to the number 2 spot by market, cap, rallying by more than 10% on the day, with EOS and Monero’s XMR also seeing notable gains amongst the top 20 on a day when the crypto bears failed to make their mark following the 1st day of the year’s slide.
With the Bitcoin and the broader market moving into positive territory, the story of the week would have to be Ethereum’s revival. Since 14th December’s swing lo $80.6, Ethereum has surged by more than 90% in just over 2-weeks and, while the ICO market remains a ghost town, the Token Taxonomy Act of 2018 could get the much needed support to give the ICO market and Ethereum a boost through the year, Ethereum still likely to find its place in spite of growing competition from altcoins including the likes of EOS and NEO.
At the time of writing, Bitcoin was down 0.69% to $4,021.0, with moves through the early morning seeing Bitcoin fall from a morning high $4,056.6 to a morning low $3,999.1 before recovering to $4,000 levels, the day’s major support and resistance levels left untested early on.
For the day ahead, a hold onto $4,000 levels through the morning would support a move through the morning high $4,056.6 to bring $4,100 level and the first major resistance level at $4,115.57 into play before any pullback, the second major resistance level at $4,182.83 unlikely to be in play later in the day.
Failure to hold onto $4,000 levels could see Bitcoin take a bigger hit later in the day, with the first major support level at $3,949.97 in play through the day and sentiment across the broader market to dictate whether Bitcoin will touch sub-$3,900 levels before any recovery, the second major support level at $3,851.13 there to prevent any heavier losses in the event of a sell-off.
The cryptocurrency industry is packed full of different coins. Seemingly, every day we have a new altcoin bursting onto the scene that could potentially change the crypto landscape. So, knowing how to invest your money can save your nerves and time.
With so many different currencies available for purchase, how can you hope to make the right choice? In reality, there is no right or wrong option in the cryptocurrency market, as it all depends on goals and application areas. Arming yourself with knowledge can allow you to make an informed decision and minimize your investment risk. Let’s look at the pros and cons of various options available, which might help you to decide on whether you should buy Bitcoin or opt for altcoins instead.
Why so many investment opportunities?
Before we examine Bitcoin and altcoins, we can look briefly at why there are so many cryptocurrencies on the market. Bitcoin is hugely successful – no one ever thought it would take off in the way it has. Furthermore, the underlying technology, such as blockchain, has proven relatively easy to recreate.
Due to these factors, many budding entrepreneurs and Bitcoin enthusiasts created their own coins. They saw an opportunity to rival Bitcoin or to create their own legacy. As a result, we now have an abundance of altcoins on the market.
Bitcoin as the cryptocurrency poster child
Bitcoin is the original cryptocurrency. Initially created and released in 2009, it introduced blockchain technology and the proof-of-work principle to the world. Since inception, Bitcoin has grown to become the most prominent cryptocurrency. There are over 17 million coins in circulation valued at over $113 billion. This figure vastlyoutnumbers any other altcoin – the second largest cryptocurrency after Bitcoin is Ethereum and its market cap totals only $21 billion.
Bitcoins are mined, and this mining process is an integral part of the coin’s existence. Miners find new Bitcoins and bring them into circulation for rewards. Furthermore, they are responsible for validating Bitcoin transactions on the ledger.
The main advantage of Bitcoin is its widespread use and acceptance. It is by far the most accepted as an actual form of payment. Many financialinstitutions are backing Bitcoin, and it is certainly the currency that most people have heard of. Moreover, Bitcoin has a vast community of users who are dedicated to its long-term development. Finally, it also has an immense pool of miners who maintain the network and ensure it is secure.
Although Bitcoin undoubtedly has a host of advantages, it has its flaws. The price of Bitcoin has taken a large hit since December 2017 when it rose to stratospheric heights of around $20,000. The price still remains positive, but many analysts wonder if it will ever return to those numbers.
Another major drawback that is becoming increasingly evident is the Bitcoin transaction fees. Bitcoin was meant to have ultra-low transactions fees – this was one of its main selling points. Since miners can choose which transactions to process, they will opt for ones with higher fees.
Finally, many people comment on heavy energy consumption that Bitcoin mining requires – they see this a damage to our environment and would prefer to use a more ‘eco-friendly’ alternative.
Altcoins as alternatives with great potential
Bitcoin is seen as the original cryptocurrency, therefore any new currency has deemed an alternative. There are currently thousands of altcoins available to invest in, and more are developed on a regular basis. Some of them prevail and remain in high demand, for example, Ethereum and XRP; whilst others fizzle out. The following are some of the altcoins and their market cap (as of October 18, 2018):
Ethereum: $21 Billion
XRP: $18 Billion
Bitcoin Cash: $7.7 Billion
EOS: $4.9 Billion
Stellar Lumens: $4.5
Litecoin: $3.1 Billion
Monero: $1.7 Billion
Dash: $1.3 Billion
As you can see, there are many altcoins available, and each offers something slightly different.
One of the main advantages of altcoins is that by their nature they serve as an alternative to Bitcoin. If the almighty Bitcoin crumbles, there are altcoins to fall back on. Furthermore, many altcoins actually have a unique function. For instance, Po.et (POE) is built around a platform where publishers and content creators can easily manage their licensing.
Finally, many altcoins offer different systems and processes to Bitcoin and have a greater scope to evolve in the future. XRP and Ethereum, for example, are two different altcoins that have been widely adopted and used in many industries.
The main disadvantage of altcoins is their relative lack of exposure and acceptance. While Ethereum, XRP, and Bitcoin Cash have great support, others just don’t have the same scope. Moreover, there is a limited number of outlets and ways in which you can use many altcoins as they simply haven’t been adopted to the same degree that Bitcoin has.
Just because Bitcoin is the largest currency in supply and has the best support, it doesn’t necessarily mean that altcoins are worthless. You could consider diversifying your investment portfolio and purchasing some Bitcoin and some of the major altcoins. The main consideration is to minimize your risk and make an informed purchase.
Bitcoin gained 0.43% on Friday, partially reversing Thursday’s 0.76% fall, to end the day at $7,015.8.
The moves through the week, left Bitcoin down 9.4% for the month of August, whilst up 4.74% for the current week, Bitcoin looking to make a 3rd consecutive week of gains that come off the back of a particularly bearish start to the month of August.
A choppy start to the day saw Bitcoin pullback from a morning high $7,019 to an intraday low $6,881.6 before recovering, Bitcoin managing to steer clear of the day’s first major support level at $6,838.4.
Tracking the broader market, an early afternoon recovery saw Bitcoin break back through to $7,000 levels with an intraday high $7,100, Bitcoin testing the day’s first major resistance level at $7,096.3 before falling back to sub-$7,000 levels.
A late recovery supported a move back through to $7,000 levels by the day’s end, the mid-week reversal on news of EU finance ministers planning to discuss cryptocurrencies at the next EU finance meeting leaving Bitcoin struggling at $7,000, having pulled back from the week’s $7,139.4 high struck on Wednesday.
For the Bitcoin bulls, while holding onto $7,000 levels and well above the 23.6% FIB Retracement Level of $6,757 is the positive, a failure to break through to $7,300 levels to attempt a break out from the 38.2% FIB Retracement Level of $7,376 leaves the extended bearish trend, formed at early May’s swing hi $9,999, firmly intact.
On the news wires, there was nothing particularly dire to limit gains on the day, the relative silence providing some degree of support for Bitcoin and the broader market going into the weekend.
At the time of writing, Bitcoin was up 0.65% to $7,060, with Bitcoin moving from a start of a day $7,011.3 low to a morning high $7,067, moves through the early morning leaving the day’s first major support level at $6,898.27 and the day’s first major resistance level at $7,116.67 untested.
For the day ahead, a hold on to $7,000 levels would be needed through the morning to support a break through to $7,100 levels to bring the first major resistance level at $7,116.67 into play, with Bitcoin likely to face more resistance on any run at $7,100 levels, Bitcoin having been unable to hold on to $7,100 levels on Friday.
Failure to hold on to $7,000 levels through the morning and early afternoon could see Bitcoin cough up the morning gains and pullback through to $6,900 to bring the day’s first major support level at $6,878.27 into play.
Moves through the morning will likely be decisive for Bitcoin as investors gauge whether the early gain was just a continuation of Friday afternoon’s recovery or a shift in sentiment following the mid-week reversal.
Elsewhere in the cryptomarket, EOS, DASH and NEO were the front runners amongst the majors, with in excess of 3% gains through the early morning, leading to Bitcoin’s dominance easing back to 52.8% at the time of writing.
Bitcoin fell by 3.08% on Saturday, reversing most of Friday’s 4.06% gain, to end the day at $6,383.3, the day’s losses leaving Bitcoin with just a 1.1% gain for the current week, Monday through Saturday.
A start of a day intraday high $6,619.5 came up short of the first major resistance level at $6,679.4, with Bitcoin and the broader market hitting reverse through the morning, Bitcoin sliding through the day’s first major resistance level at $6,376.5 to a late afternoon intraday low $6,300, before recovering.
Support at $6,300 saw Bitcoin break back through to $6,400 levels and an afternoon high $6,435.9, though with the bears in control the Friday rally was cut short, with investors continuing to lock in profits on any momentum driven rallies, Friday’s moves having come in spite of no positive news hitting the wires to shift sentiment across the cryptomarket.
The reversal seen across the broader market on Saturday led to Bitcoin’s dominance recover to 52% at the time of writing, with Bitcoin’s 3.08% loss considered minor relative to the likes of Cardano’s ADA, DASH and Ripple’s XRP that saw double digit losses on Saturday.
For Bitcoin and the Bitcoin bulls, while the reversal through the early part of the day on Saturday had likely come off the back of some money coming off the table, the continued sell-off through the morning and early afternoon would have been of greater concern.
At the time of writing, Bitcoin was down 0.37% to $6,367.3, with Bitcoin falling from a start of a day morning high $6,395 to a morning low $6,309.3 before recovering, the moves through the early part of the morning leaving the day’s major support and resistance levels left untested.
For the day ahead, a move through to $6,400 levels and $6,434 would support a run at $6,500 levels to bring the first major resistance level at $6,568.53 into play, though for Bitcoin to break through to $6,400 levels, sentiment across the broader market will need to improve, Bitcoin having tracked the broader market in recent weeks as the bears dominate.
Failure to recover from the early loss to move through to $6,400 levels could see Bitcoin take a bigger hit later in the day, with any pullback through to sub-$6,300 levels bringing the first major support level at $6,249.03 into play.
For Bitcoin, while there has been plenty of support at $6,300, the Bitcoin bears will likely be eyeing sub-$6,200 levels to bring $5,000 levels back into play should Bitcoin continue to pullback and slide through the day’s first major support level, any pullback to sub-$6,300 levels a negative signal for the day.
Elsewhere in the cryptomarket, Ripple’s XRP bounced back from early losses, up by 1.09% at the time of writing, with Cardano’s ADA and EOS also bucking the trend, with gains of 0.47% and 0.07% respectively, the rest of the majors sitting in the red through the early morning.
Over the course of 2017, speculation that cryptocurrencies were in a bubble grew as fast as prices rose. Now, with most crypto asset prices down 50 to 70% from their peaks, it appears certain that we were in a bubble.
But, does that mean the bubble has now burst, and has now deflated, or are we still in a bubble? The fact that opinions are divided, means there is opportunity ahead. Asset prices move when large numbers of traders find themselves on the wrong side of the market. So, let’s have a look at how the market is positioned.
Are We in a Cryptocurrency Bubble?
It’s almost certain that by the end of 2017 crypto prices were in a bubble. There is little consensus over the way digital currencies should be valued, but in 2017 very few people were asking about valuations.
Retail investors bought Bitcoin and other digital coins because prices were rising, and prices rose because investors bought them. This created a reflexive feedback loop, and valuations became irrelevant. There was also a large amount of FOMO (fear of missing out), driving prices. Predictions were being made of Bitcoin ultimately reaching prices of $50,000, $100,000 and even $1 million, and speculators were afraid they would miss out on the greatest investment opportunity in history.
This type of mania is characteristic of all bubbles. Two of the most famous bubble in history, the Tulip Bubble in the 16th century, and the Dot-Com Bubble in the late 1990s were very similar. There was no relationship between prices and reality, and markets were driven by emotion more than anything else.
After reaching a peak of close to $20,000, Bitcoin has fallen as much as 70%. Ethereum, the second most valuable cryptocurrency reached close to $1,400 and has since fallen to below $400, a 72% decline. Does this mean they are now fairly priced? No one really knows, but a lot more attention is now being placed on valuation. It turns out that for a cryptocurrency to act as a medium of exchange it doesn’t really need much value.
There are two other big problems for those with much higher price targets. Firstly, one of Bitcoins primary uses cases is as an SOV, or store of value. But that argument falls apart when it falls 70% in 6 months. Secondly, the big value underpins for Bitcoin is the fact that the ultimate number of coins in issue will be limited to 21 million. That may be true, but there is also an unlimited number of other coins that can be introduced.
However, valuation alone is not what drives markets. If investors believe in the future of the asset class, prices may rise regardless of the challenges. The question is, who is going to invest now?
Over the course of 2018, there has been growing speculation that institutional investors are going to begin investing large amounts of capital in the market. This hasn’t happened yet, and it’s difficult to tell if it will – but if it does, prices are sure to rise.
On the other hand, if institutional investors don’t come to the party, it’s very likely that it will turn out prices are still too high for the size of the market. In this case, prices could easily fall another 50%.
It’s likely that a Bitcoin ETF will be approved and launched in the next six months. This will give us a good indication of the institutional demand and will set up the next big move.
The Importance of Having an Open Mind
The world’s best traders are open to all possibilities. Those who only believe an asset will go in one direction will miss out on countless opportunities. Permabulls and permabears require so much evidence to change their minds, that by the time they do they have missed the opportunity.
If your primary means of trading cryptocurrencies is owning the actual asset, you are only in a position to buy them. That immediately puts you at a disadvantage, as you will only be looking for opportunities to go long, and will likely overlook evidence suggesting you should sell, or be short.
If you are in a position to take both long and short positions, you will be able to keep an open mind and trade the most likely direction at any given time. Being able to trade in both directions doubles the amount of opportunity available to you.
How to Short Cryptocurrencies?
So, if you want to short crypto assets, how do you do it? There are really only three options available.
The first is to short sell actual cryptocurrencies. This is very complex and involves borrowing the coins from another investor and then selling them. This is how hedge funds short stocks, bonds, and other assets, but is beyond the reach of most retail traders.
The second is by selling futures. Both the CME and CBOE have liquid futures markets. Trading futures requires opening a trading account with a broker that trades on one of these exchanges, but the catch for retail traders is that the contract size is quite large. On the CME, each contract is equal to one Bitcoin, while the CBOE has a contract size of 5 Bitcoins. At the moment, these future contracts are only available for Bitcoin, which in itself is limiting.
The third option, and by far the easiest, is CFDs. A CFD, or contract for difference, is an agreement between a broker and a client, which is very much like a future. You don’t own the underlying asset, but you are exposed to the price movements of that asset. Like futures, CFDs also allow you to use leverage, and more importantly, you can open long and short positions.
Cryptocurrency CFDs are becoming quite common, and are offered by several FX brokers. One of the most prominent isIMMFX, an online FX broker that offers CFDs on forex, indices, metals and now cryptocurrencies too.
IMMFX offers CFDs on Bitcoin, Ethereum, and Litecoin, the three most popular cryptocurrencies amongst traders. You can open long and short positions on all three currencies, which means you can also trade one against the other. The minimum trade value is also much lower than it is for futures, and you can start with as little as $50 in your account.
It is certainly possible that the market is still in a bubble, though it’s also possible that a new bull trend will begin in the next six months. Rather than speculating on which way the market will move, you can remain open to both possibilities.
If you have a trading account that allows you to take long or short positions as the price action and fundamentals dictate, you will be able to profit in both scenarios.
Bitcoin and other cryptocurrencies allow for the decentralization of the entire financial situation. One of the consequences of that is that you get to be your own bank. Rather than letting a bank look after your money – and charge you a fortune for doing so – you can look after your own crypto assets. But that also means you must take responsibility for the security of your digital currencies.
Unfortunately, there are dishonest people out there doing everything they can to get hold of your wealth. As more people are buying and storing cryptocurrencies, hackers have more incentive to try to hack every device they can to steal those digital assets. They are also becoming more sophisticated over time.
All this means you need to take secure storage of your digital assets seriously. It also means that whatever method of storage you decide on, you need a backup of your wallet, and you need to know how to recover your wallet.
Cryptocurrencies are going to be an increasingly important part of our future, and it’s important to develop a habit of securing your digital assets properly and knowing what to do if a device fails, or if it’s stolen.
To help you navigate the options and some of the confusing jargon that comes with them, we have put this guide together.
First, let’s define some of the key terms you will come across when you buy, sell or store Bitcoin:
Wallet: A wallet is used to store private and public keys. A wallet can be compared to a bank account, a credit card, or even the wallet in your pocket. However, unlike these, a crypto wallet doesn’t actually store your Bitcoin, but rather the keys you use to access your Bitcoin.
Public Key: A public key is like a bank account number. This is the address another sender will use to send Bitcoin to you.
Private Key: A private key is required to access your Bitcoin. In order to send Bitcoin from your wallet, you will require the private and public keys.
Software wallet: A software wallet is a wallet that you download to a PC, notebook, or mobile device.
Popular Bitcoin Software Wallets include:
For Windows: Bitcoin Core, Electrum, ArcBit, Armory
For Android: Bitcoin Wallet, Bither, Edge, Electrum, Airbitz
For iOS: Edge, Green Address, Bither
Hardware wallet: A hardware wallet is a device similar to a USB stick that allows you to store your keys offline.
Popular hardware wallets include: Trezor, Ledger Nano S, KeepKey
Hot wallet: A hot wallet is any wallet that is online. This can be a software wallet on your own devices, or a wallet hosted on an exchange or elsewhere in the cloud.
Cold Wallet: A cold wallet is an offline wallet. Cold storage means either keeping your keys on hardware wallet or printed on a piece of paper, stored in a safety deposit box or hidden somewhere.
Backup: A backup is a file containing your private and public keys which will allow you to restore your wallet if you lose a device or if your hard drive is damaged.
Which Wallet Is Right for You?
Your choice of wallet comes down to the trade-off between security and convenience. The easiest way to store Bitcoin is on an exchange. However, this is also the least secure method. When your cryptocurrencies are stored on an exchange, you do not have control of your keys. If the exchange is hacked, the hackers can steal the assets belonging to all the exchange’s clients, including yours.
At the other end of the spectrum are hardware wallets and paper wallets. If your assets are stored offline, hackers can’t get hold of them. But this also means you need to take full responsibility for storing your keys where nobody can get them.
If you own very little in the way of Bitcoin, an exchange is probably the way to go. If losing your Bitcoin would be a big problem, a software wallet is a better option. And, if your crypto assets are worth a considerable amount, you’ll want to keep the bulk of those assets offline, either on a hardware wallet, or a securely stored paper wallet.
All the Ways to Back up Your Bitcoin Wallet
One of the disadvantages of decentralized ledgers is that you cannot retrieve a lost password. If you lose the password to the website, or if you forget the PIN code for a bank account, there is always a way to reset that password.
Public keys are like a bank account numbers on a blockchain, and private keys are the passwords to access those accounts. The problem is that if you lose either, there is no one to turn to. If you lose the device that stores those keys, they are gone forever, and so are your Bitcoin. Therefore, you must always back up your wallet.
There are several ways to back up your wallet, the following being the most popular:
Seed phrase: Most wallet software does include a recovery process. The software will generate a seed phrase, which you need to write down and store somewhere safe. If for whatever reason, you lose your wallet, you can use this phrase to recover it.
The words need to be in the exact order they are generated. For most wallets, if you lose your password, it cannot be recovered or reset, however, if you do lose the password, you can recover the wallet using the seed phrase.
Text File: Software wallets have a function that allows you to export your keys. On some wallets, the function is labeled backup wallet, while on others it is labeled export keys. When making backup files, it’s a good idea to disconnect your computer from the internet before doing so.
On the Electrum wallet, the function is under Wallet > Private Keys > Export and looks like this:
Once you click on Export, you will be able to choose between a CSV file or a JSON file, and then choose the drive to send it to.
The file that will be generated is a text file containing all your public and private keys. Remember that once you have that file on your computer, anyone who has access to it has access to all your Bitcoin. As soon as you have created a backup file you should move it somewhere secure, encrypt it (see below), or delete the contents of the file. If you delete the file, go to your Recycle Bin and delete it there too – that’s one of the first places hackers will look for valuable information.
Copy Wallet.dat Files: The other way to make a digital copy of your wallet, is to copy the file the wallet uses to store the keys. Each software wallet stores the file in a slightly different location on your PC, so look at the documentation to find it.
The Electrum wallet stores this file on Windows as follows:
For Apple and Linux operating systems you can search for: ~/.electrum
You will probably have to make sure hidden files are being shown to find it.
Paper Copy: One of the safest ways to store your keys is to make a paper copy. Disconnect your computer from the internet and print out the file. Then cover the paper with foil (so it cannot be viewed against a light source), and seal it in an envelope. This should be hidden somewhere, or stored in a safety deposit box or a safe. Once you have done this, remember to delete the file you printed from your computer
How to Encrypt a Digital File
If anyone can open a digital backup file, they have access to all your keys, and therefore all your Bitcoin. For this reason, it’s a good idea to encrypt the file with a password.
When it comes to encrypting a file, there are several options. Most operating systems have a built-in encryption function that is secure enough for most people’s needs.
If you want to use the best encryption possible you can download encryption software from VeraCrypt, AxCrypt or a similar provider. This software allows you to choose between several methods of encryption. You can usually choose between 128 and 256-bit encryption and you can to use two-factor encryption too.
Where Should You Store Your Backup Files?
If you have made a digital backup file (preferably encrypted) you will need to store it somewhere. There are a couple of options for storing these files. Remember, there is little point keeping this file on the same devices as the device with the original wallet on it.
You could store it on another PC, notebook, or even a mobile phone or tablet. Or you can store it on a USB drive, but not if you are likely to lose the drive. The safest way to store a backup file is on a USB drive in a safety deposit box at a bank, or in a safe.
Digital backup files can also be stored using cloud storage services like Dropbox, One Drive, and others. Some people are skeptical of the level of security offered by the most popular cloud services, so make sure you encrypt files before sending them to the cloud.
Restoring Bitcoin Wallet
Restoring a Bitcoin wallet is easier than it sounds. If you have a seed phrase, you can simply use the ‘Restore’ function. Even if your device is lost or stolen, you can download a new wallet on another device, and restore it using the seed phrase.
Simply look for the ‘Restore’ function in the menu, and follow the instructions.
To restore a wallet using the wallet.dat file, simply replace the default wallet file on your computer with the backup file you made. It’s as simple as that.
If your backup file is a text file, you will need to log into the wallet interface, create a new wallet, and then copy and paste the keys from your backup text file. Again – it’s as simple as that.
Your Last Will and Testament
There’s one last thing to consider. Another challenge that cryptocurrencies have introduced is inheritance. If, or rather when, we die, if no one else has access to our Bitcoin, it’s impossible for them to be passed on to our heirs. Even if you explicitly state in your will that you are leaving your crypto assets to a spouse or child, without access to your keys, they will have no access to your digital assets.
There are several ways to make sure your heirs can access your private and public keys. Here’s a relatively simple solution: Create a simple text file with all your keys on them. Put the file in an encrypted, password-protected file on a USB stick. Use a different password from all your other passwords for this. Then give the USB stick to a family member and ask them to keep it somewhere secure. Finally, include the password for the file in your will, a copy of which is kept with your solicitor. When you die, the password will be given to your family, and they will have access to the file on the USB stick.
There are two important aspects to remember about storing your Bitcoins. Firstly, you and you alone are responsible for making sure your crypto assets are safe and that they can’t be accessed by hackers. And secondly, if you are securing your assets properly, there is no password recovery option – if you lose your wallet or access to it, your Bitcoins are gone forever.
For this reason, it’s is important to have a process to both secure your keys using a wallet AND backup those keys. Even if you don’t yet have a large Bitcoin holding, it’s worth getting into the habit of doing this thoroughly. Cryptocurrencies will play an increasingly large role in our lives in the future, and storing them properly will only become more important with time.
Below you can find an overview of what happened in July in the world of cryptocurrencies – brought to you by SimpleFX CFDs trading platform. Whether you took some time off following the news and you’d like to catch up, or you just want to go over last month’s highlights, this article is for you.
One of the events that attracted a lot of attention was the launch of Augur, a platform for making predictions for real-life events. Its token holders had to actually wait three years since the initial sale for it to go live. Shortly thereafter, the platform even ranked fifth among the most popular ethereum-based dapps, which caused concerns about the network getting clogged. Interesting as it is, there is also a dark side to Augur: some users started posting prediction markets for famous people’s deaths by assassination. Time will tell how the community will react to such posts.
Taking a look at the regulatory climate, if we are wondering where to set up our FinTech business, Malta is definitely the place to watch closely. The country’s parliament passed several progressive laws in June, which create a supportive climate for cryptocurrency and DLT initiatives. One of those already set up there is the world’s first decentralized bank, dubbed the Founders Bank. And although the Malta Financial Services Authority has released a statement that one of the bills has not come into force yet, the outlook is still very promising.
In relation to its March meeting, G20 moved beyond just talking about the need for cryptocurrencies regulation and oversight – but actually not too far beyond. It got the Financial Stability Board, its advisory body to publish a set of metrics against which the digital assets and their implications for financial stability will be measured. It also urged the Financial Action Task Force to present in October how its standards can be used for this sector. With this pace of work, one cannot help but wonder if this area is really their priority.
Also in July, Mastercard was granted a patent for a method to increase the speed of processing crypto transactions. Additional advantages will include increased security and fraud detection. In a similar vein, Barclays filed a patent for a blockchain to transfer funds. Since both are mainstream financial institutions, this could herald an easier interface between the crypto and fiat realm.