Bitcoin Network Metrics Flail as Price Drops Under $9,000: Pain to Come?

Sorry bulls, Bitcoin’s on-chain metrics indicate that the next phase of the price bull run isn’t here just yet. A top cryptocurrency analytics firm has found that the activity of the Bitcoin network implies that a bear trend may be forming, which will not bode well for the price of BTC. Ouch…

Related Reading: Bakkt Bitcoin Futures Print Three Consecutive Days of High Volume

Pain for Bitcoin Inbound, Network Activity Predicts

United Kingdom-based crypto fundamentals firm ByteTree recently released its latest “Market Health Update” newsletter. In this latest iteration, it revealed that the network activity of the leading blockchain is a harrowing sight; “Bitcoin Network struggling to retain short term volumes, dropping back to 12 Wks average of $2Bn per day,” they wrote in reference to the chart below.

They went on to state that their proprietary Market Health Signal — which factors in on-chain activity, transactions, fees, etc. to try and determine Bitcoin price trends — remains in “bear made.” ByteTree explained why this is the case when it wrote:

“Long term transaction volumes are steadily declining, velocity remains below the critical 600% level and short term NVT continues to signal caution.”

While many may not see a correlation between on-chain metrics and the performance of the cryptocurrency market, there are connections between these two facets of the industry; individuals like Willy Woo, a partner at Murad Mahmudov’s Adaptive Capital, have found that network metrics can be used to clearly find market macro tops and bottoms.

While ByteTree may be observing bearish trends, things can (and have) changed on a dime. When Bitcoin spiked by 42% in a single trading day late last month, for instance, fees paid by transactors increased by 43 percent, the value of cryptocurrency sent surged by 66 percent, and network velocity hit 747 percent. But, the most important thing with on-chain metrics and network activity is consistency.

Related Reading: Vast Majority of Crypto Assets Lack Enough Liquidity To Make Good Investments

Long-Term Trend Still Favors Bulls

While ByteTree’s metrics suggest pain is inbound for Bitcoin, the long-term trends still seem to be favoring bulls — for whatever that’s worth.

According to a recent analysis by Byzantine General, a popular trader on Twitter, a bear cross of the 50-day exponential moving average and the 200-day exponential moving average was just averted. This implies that Bitcoin remains in a long-term bull trend, as golden and death crosses of these two moving averages have long been indicative of macro trends.

Even the macroeconomic backdrop is supporting Bitcoin (or at least alternative cryptocurrencies) once again. Per previous reports from NewsBTC, Deutsche Bank President Karl von Rohr believes that a recession in Western economies is on the horizon, while central banks are becoming increasingly inefficient in regards to monetary policy.

Also, China seems to have delved back into the blockchain game, with massive state outlet Xinhua recently exposing millions to the Bitcoin game via an in-depth explainer article. Sure, the country isn’t bullish on BTC and its ilk yet, though many say that the blockchain hype will have a positive spill-over effect in the Bitcoin markets.

Related Reading: Par for the Course: Bitcoin Difficulty Drop Actually a Bullish Sign
Featured image from Shutterstock

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China’s Central Bank: We’re Not Launching Our Digital Asset Yet

The launch of Libra by Facebook changed something in the cryptocurrency landscape; after the launch in June, industry actors started to pay China some heed, with reports indicating that the nation was and still is on the verge of launching its own central bank digital asset/currency.

Even high-level Chinese officials indicated that Beijing was about to release a cryptocurrency on the world.

Many took this as fact — the People’s Bank of China (PBoC), the central bank of the country, kept its mouth shut as these reports spread online. Though, in its seeming first communication about its digital currency venture, the PBoC tried to quench the rumors about the project, deeming them inaccurate.

China

Not Ready to Launch Its Crypto Yet

In an official announcement published on Wednesday, the PBoC asserted that the “net news (online news)” that it has issued legal digital currency is categorically false. A rough translation of the statement reads as follows:

“The People’s Bank of China has not issued legal digital currency (DC/EP) and has not authorized any asset trading platform to conduct transactions. The People’s Bank of China has been studying the legal digital currency since 2014 and is still in the process of research and testing.”

The PBoC wasn’t done yet. China’s central bank continued that overseas and local reports that suggest the launch of the “DC/EP” or ” Digital Currency Electronic Payment (DCEP),” as Chinese media has dubbed the project, are “inaccurate.”

This comment was seemingly in reference to a number of reports published by mainstream Western outlets that claim DCEP will launch within the next few months. One such report came from CNBC, which revealed that HCM Capital managing partner Jack Lee believes the PBoC digital currency network could launch within the next two to three months.

Forbes published another such report, asserting in August of this year that “the technology behind the cryptocurrency has been ready since last year and that the cryptocurrency could launch as soon as November 11, China’s busiest shopping day, known as Singles Day.”

Forbes’ source also claimed that “the largest bank in the world, the Industrial and Commercial Bank of China, the Bank of China, the Agricultural Bank of China; two of China’s largest financial technology companies, Alibaba and Tencent; and Union Pay, an association of Chinese banks” would be first to receive and distribute the cryptocurrency.

Singles Day has just passed and the abovementioned companies have yet to comment on cryptocurrency matters, let alone the PBoC’s DCEP venture.

All In on Blockchain

While the Chinese government may not be launching a digital asset yet, there is no doubt that work has begun on national and more regional blockchain projects.

A day or two after President Xi Jinping announced that China will be adopting blockchain as a “core/key” technology, the Standing Committee of the 13th National People’s Congress in China passed a cryptography law. The law clarifies the use of cryptography — the technology underpinning blockchain, which itself underpins Bitcoin — in commercial operations.

In terms of actual projects, a post from the CCP’s propaganda office revealed the launch of “Original Intentions Onchain,” a blockchain solution that allows members of the Communist Party to store written pledges of allegiance to the party on a blockchain.

There have also been reports of municipalities in China investing hundreds of millions of Chinese yuan into blockchain ventures, along with a Huawei representative revealing that the Chinese technology giant is working with agencies in Beijing to transfer data via blockchain.

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Tim Draper: Lightning Network to Bring Bitcoin to $250,000 per BTC

The recent downturn in the Bitcoin market has not stopped prominent investors and commentators from making price predictions.

Most recently, Tim Draper — a prominent venture capitalist that has made early investments in China’s version of Google Baidu, Tesla, Skype, and Bitcoin — has doubled down on his call that the leading cryptocurrency will surmount $250,000 within four years’ time.

Bitcoin Bull Run

Lightning Network to Bring Bitcoin to “The Moon”

During the Malta AI & Blockchain Summit this week, Tim Draper, a well-known Silicon Valley entrepreneur that bought his first Bitcoin over five years ago, dropped in through Skype to talk crypto.

When asked about his long-held $250,000 by 2022/2023 Bitcoin price prediction, he looked to the Lightning Network and other solutions that make paying with cryptocurrency easy:

“It’s because of Lightning Network and OpenNode and maybe others that are allowing us to spend Bitcoin very freely and quickly, so that it’s not just a store of value but it can be used for micropayments; it can be used for retail, it can be used all over.”

He went on to say that Bitcoin payments will “open the floodgates” to this industry, giving BTC the potential to make up 20% of the world’s money in due course.

Not the Only Positive Factor

It isn’t only the Lightning Network that may be a boon to the price of Bitcoin in the years to come. In a previous interview, Draper noted that he believes fiat currencies, which he has also dubbed “political currency,” are “poor” in quality when compared with cryptocurrencies.

He specifically cited the controllability, lack of transparency, and subjectivity to political and social whims of traditional forms of money.

The American investor added that with some of the brightest developers, engineers, and academics working on digital assets, a monumental capital flight from fiat to cryptocurrencies is likely to take place over the coming decades:

“My belief is that over some period of time, the cryptocurrencies will eclipse the fiat currencies. That would be a 1,000 times higher than what we have now.”

There’s also the oft-cited idea that the scarcity of Bitcoin will send the cryptocurrency flying with time. John McAfee, the world-(in)famous cybersecurity guru that became crypto’s loudest spokesperson, has said on the matter of his $1 million price prediction:

“Let’s get real, there are only 21 million bitcoins. Seven million of which have been lost forever, and then, if Satoshi [bitcoin’s anonymous creator] is dead, add a few more million.”

What McAfee is arguing is that with increased demand for Bitcoin, the scarce nature of the cryptocurrency will lead to a large supply-demand imbalance in favor of bulls, pushing prices higher at a rapid pace.

Bringing Bitcoin Mainstream

Draper’s latest remark that the Lightning Network will be what allows Bitcoin to grow to the next level is reminiscent of comments made by his pro-crypto peers in Silicon Valley.

Speaking to crypto exchange SFOX in an interview earlier this year, Samson Mow, the Chief Strategy Officer of Blockstream, noted that the Lightning Network will be the solution to Bitcoin’s “identity crisis”:

“You should be making payments over the Lightning Network because that is instantaneous and almost free. That’s what it was designed for. Everything is designed for a different purpose. Bitcoin was designed for settlement and wealth transfer… Lightning was designed for fast payments and cheap payments.”

Indeed, right now, Bitcoin is effectively unusable as a currency for millions of people across the world, sporting a ten-minute block time, low maximum transition output, and inconsistent fees (although fees may sometimes be under $0.10).

The Lightning Network, should it live up to expectations, will show mainstream consumers the true power of blockchain technologies by offering effectively free, instant, and more private payments around the world.

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Bullish Sentiment Implies Bitcoin Price Needs to See Bigger Flush

If you’ve been on Crypto Twitter at all, you know of the Bitcoin “HODL” meme. For those living under a rock, here’s a quick explainer: HODL, a misspelling of “hold” first found on the (in)famous BitcoinTalk forum, has become a battle cry for diehard BTC investors, who believe it is irrational to sell the asset.

Related Reading: Bitcoin Volume Profile Suggests Rally to Bring Price Past $20,000 is Near

While many take “HODL” and its derivatives as pure jokes, a commentator has suggested that the persistence of Bitcoin-related memes like “HODL” and “number go up” is a sign of remaining market euphoria from 2017’s bubble, and may thus imply that a further flush in the cryptocurrency markets is well on its way.

Bitcoin Still Has Room to Fall… Apparently

Emotions are fickle things, especially in financial markets. Over the course of the past year, the cryptocurrency market has been through a lot, and so have its investors. Though there are some analysts calling for short-term losses, the sentiment in the Bitcoin market is still widely medium to long-term positive, with calls for investors to “stack sats” and “buy every dip” becoming popular trends on industry social media platforms.

While these expectations that Bitcoin will eventually “moon” aren’t bearish in and of themselves per se—they show that there is continual demand for BTC—a commentator going by “kerneltrader” has noted that it may be a sign that cryptocurrencies remain at too high valuations.

They suggested that this is the only bull market in Bitcoin’s history where parabolic gains have been overtly expected, not wished for or joked about. Kernel claimed that this permabull mindset that many in the industry have adopted is a sign of complacency, is a sign that “a bigger flush is needed” to wipe out all the bulls of yesteryear.

As an opinionated aside: November and December of 2018 was, in this writer’s opinion, decisively a capitulation moment for the market. Then, you had prominent cryptocurrency firms dumping their staff as capital runways became short; analysts were calling for sub-$2,000 Bitcoin prices, and mainstream media were claiming that the blockchain gravy train had crashed entirely. If that isn’t a capitulation, I don’t know what is.

Related Reading: Canadian Bank Changes Bitcoin Tune, May Launch Cryptocurrency Exchange

But Isn’t a Rally Inbound?

Sure, sentiment analysis may suggest that Bitcoin has yet to complete a brutal capitulation phase, but aren’t the technicals showing that a bull run in the cryptocurrency market is on the horizon, if not already here? Yup, yes they are.

As reported by NewsBTC previously, Bitcoin’s record volume seen in June of this year and the subsequent consolidation phase are indicative of an impending rally.

Digital asset manager Charles Edwards proposed that in previous bull markets, fresh all-time highs in volumes were always followed by consolidation and “huge rallies,” with the growth in volume leading to long-term exponential bull markets that brought Bitcoin to orders of magnitudes higher than it was before the surge.

Also,  popular cryptocurrency trader FilbFilb has noted that by the end of November or start of December, the 50-week and 100-week moving averages will see a “golden cross,” which he claims is far more significant” for the Bitcoin market that other technical crosses.

Related Reading: Bitcoin Fixes This: Top Bank Chief Says Monetary Policy is Failing
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Head of Massive Bank Admits Central Banks are Ineffective: Bitcoin Fixes This

Ever since the Great Recession of 2008, central banks, by traditional standards, have been acting weird. Really weird.

Interest rates fell to their lowest points in literal centuries while central banks began what has been dubbed “quantitative easing” — when a central bank buys large amounts of government bonds or other financial assets in order to inject liquidity directly into the economy.

The reason: central banks want to ensure that a recession on the scale of 2008 doesn’t take place again.

Bitcoin Mining

One prominent Silicon Valley investor, Chamath Palihapitiya (who notably admits that Bitcoin will eclipse $1 million at some point in the future), has even said that the aforementioned measures have allowed central banks to effectively eliminate recessions. He told CNBC earlier this year:

“We have completely taken away the toolkit of how normal economies should work when we started with QE. I mean, the odds that there’s a recession anymore in any Western country of the world is almost next to impossible now.”

Though, one of the most powerful people in finance has recently come out and said that modern monetary policy, especially negative interest rates aren’t working. And Bitcoin may just fix this.

A Flailing Economy

If you look at the stock market, it would seem that the economy is doing better than ever — stocks are trading near or at new all-time highs, eliciting positive quips from fund managers and, of course, President Donald Trump.

But the “economy is in a great state” quips might be misguided, according to the president of the 17th largest bank in the world, Deutsche Bank.

At the “Future of Finance” conference hosted by Bloomberg in Frankfurt, the prominent finance executive, Karl von Rohr, took to the stage. During his speech, he asserted that not everything is sunshine and rainbows. A reminder: this assertion came from the president of a company effectively 100% invested in the success of the traditional economy.

Rohr said that “recession bells are ringing” in major economies — something that said economies’ leaders would likely deny — before adding that central banks’ monetary policy is becoming ineffective:

“With fears of a downturn mounting, we have reached a level where monetary policy is at serious risk of running out of means to cushion a real economic crisis,” he said. Touching specifically on negative interest rates, Rohr continued: “With inflation factored in, the result is a creeping erosion of our European customers’ assets.”

 

Rohr’s comments come shortly after legendary hedge fund manager Ray Dalio said in a jaw-dropping LinkedIn post that he thinks the “world has gone mad and the system is broken.” Like Rohr, Dalio claimed that the monetary policy of today isn’t working, and may be unable to prevent a paradigm shift in the economy.

Is Bitcoin a Solution?

According to another Deutsche Bank executive, Bitcoin is a potential solution to the fact that central banks are not implementing an effective monetary strategy. Per previous reports from Blockonomi, Jim Reid, Head of Global Fundamental Credit Strategy at Deutsche Bank, said that he thinks the leading cryptocurrency may be becoming attractive.

He specifically stated that if central banks are aggressive with their monetary policy, then alternative currencies and investments, like Bitcoin and gold, become somewhat tantalizing.

Reid’s comment makes fundamental sense. When a large portion of sovereign debt bonds carry a negative interest rate, it makes sense for investors to allocate their capital to an asset that produces better yields, like the 0%-yielding Bitcoin or gold. Also, some think that monetary policy will eventually lead to rampant inflation in sovereign currencies, validating the need for something like Bitcoin, which is disinflationary and non-sovereign.

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Bitcoin Bull McAfee: Crypto Companies Shouldn’t Need to Stop Crime

Like a majority of other digital technologies, Bitcoin and cryptocurrencies have been used by criminals for criminal activity. There’s no getting around it or sugarcoating it. It should come as no surprise then that the world’s authorities are forcing digital asset exchanges and service providers to deter crimes on their platforms.

Case in point, director of the Financial Crimes Enforcement Network (FinCEN) Kenneth Blanco has said that cryptocurrency firms are not above anti-money laundering laws.

John McAfee Bitcoin

Firms dealing with digital assets, he remarked, are still subject to the Bank Secrecy Act, “whether you are a stablecoin, centralized, decentralized crypto.”

He asserted that this has to be the case due to the potential that individuals on the other side of cryptocurrency transactions might be “dealing in some kind of illicit activity,” be it “opioids or human smuggling.”

John McAfee — the legendary libertarian-leaning cybersecurity guru that has since become a diehard advocate for cryptocurrency and blockchain — doesn’t agree with this assessment though. The technologist said in a recent interview that cryptocurrency exchanges and their ilk shouldn’t be responsible for actively combating crime.

Crypto Exchanges Not Responsible for Criminal Users

Speaking to Hill.tv in a recent interview, McAfee said that government officials expecting cryptocurrency firms to police criminal activity are being irrational:

“You can’t put that responsibility on me as an entrepreneur… You can’t require me to assist you in preventing what might be a future crime.”

McAfee was making his comments in the context of founding of a new crypto decentralized exchange solution, the fittingly-named McAfee DEX. The businessman has made a number of posts on Twitter over recent weeks calling out the U.S. Securities and Exchange Commission seemingly regarding his new venture, warning of the potential crimes it could perpetuate. McAfee DEX, after all, is seemingly one of the only decentralized exchanges that are almost untouched by regulators.

Backing his assertion further, McAfee claimed that the “societal impact of giving people freedom from an overburden and corrupted government” through cryptocurrencies and blockchain outweighs “what small part criminals are going to play in this technology.”

Whose Job is It?

So, who’s job is it to enforce laws in the ether, the realm of cryptocurrencies?

Well, it seems that it is the mandate of players like the United States’ Internal Revenue Service (IRS) to take action against cryptocurrency criminals, at least for now. Bloomberg last week reported that the IRS has revealed that it has identified  “dozens” of potential criminals that are using cryptocurrencies to perpetrate their crimes.

The tax agency revealed this after a meeting was held between officials from the U.S., U.K., Canada, and the Netherlands — a tax-officiating group known as the Joint Chiefs of Global Tax Enforcement.

At the meeting, the entities shared “data, tools and tax enforcement strategies” in a bid to find those trying to participate in ” mitigate cross-border money-laundering, tax evasion, and cybercrime.” On the matter of why they’re focusing on digital technologies, specifically crypto assets, the Joint Chiefs wrote:

“Data breaches, intrusions, takeovers and compromises are the new tools that criminals use to commit tax crimes.”

It seems that the Federal Bureau of Investigation (FBI) plans on getting more involved too. FBI Director Christopher Wray said that cryptocurrencies pose a “significant” and “bigger and bigger” threat to his agency. Wray specifically made reference to terrorist financing, which some reports have revealed involve Bitcoin, Ethereum, and other cryptocurrencies.

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Central Bank Digital Currency Efforts Explode Ahead of China Crypto Launch

If you told someone on Wall Street or a central bank official ten years ago that there would be sovereign digital currencies, they likely would’ve laughed. But, these digital currencies are becoming reality. And quick.

Crypto

Central Banks Going All-In On Crypto?

On Monday, CoinDesk reported that the Banque de France has just doubled down on its digital asset ambitions. A job opening published in the middle of last month mentioned the central bank’s need for an analyst with experience in crypto-economics, game theory and public or private blockchain.

The report also noted that France’s monetary authority is looking for an individual to research the use of blockchain in traditional banking.

The same CoinDesk released the abovementioned report, the Bank for International Settlements (BIS) revealed that it would be onboarding a key individual: Benoit Coeure, outgoing member of the executive board of the European Central Bank.

Coeure, who previously called Bitcoin an “evil spawn of the financial crisis,’ will be leading the BIS’ Innovation Hub, which is a new branch of the banking entity that has made cryptocurrencies one of its primary focuses.

While the BIS announcement regarding this news made no mention of cryptocurrency, the BIS has supported central bank digital currencies in the past. Agustín Carstens, the head of BIS, said earlier this year:

“Many central banks are working on it; we are working on it, supporting them.”

These latest tidbits of news come just a few weeks after a report revealed that Canada is considering its own cryptocurrency. Per previous reports from this outlet, an internal slide deck presented to Bank of Canada Governor Stephen Poloz revealed a proposed central bank digital currency project. The proposed coin would be widely available,” an eventually mandatory alternative to paper fiat, would be able to collect information about consumers, and would combat the “direct threat” of Bitcoin and other decentralized and “unbacked” money systems.

Response to China

While it may be a coincidence that all this work towards central bank/fiat-backed digital currencies is happening at once, it seems that it’s in response to those that are currently ahead of the game: the Chinese government and the People’s Bank of China.

Just last month, China’s President Xi Jinping told the Chinese people that they should start adopting blockchain as a “core technology” to bolster an array of industries, including healthcare and finance.

Also, the past months have seen reports reveal that China is on the verge of launching a dual-layered digital money system that may have the potential to become the nation’s primary medium of exchange.

It is likely that we’re going to see a sort of “blockchain arms race” take place over the next couple of years, which will see countries and companies all over the globe duke it out for how best to use this technology.

There will likely be a focus on centralized cryptocurrencies due to the value they provide; the aforementioned Bank of Canada slide deck mentioned that banknotes are quickly becoming obsolete and expensive, while decentralized cryptocurrencies have begun to pose a threat to monetary policy.

This impending arms race will be of utmost importance, analysts have asserted, with Anthony Pompliano, formerly of Facebook and currently of cryptocurrency investment firm Morgan Creek Digital asserting that the United States would “gain a [monetary/economic] advantage” and “capture the imagination of hundreds of millions of people” if it launched a digital money system before China did.

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China’s Bitcoin Article May Not be Bullish for Bitcoin; Here’s Why

Yesterday, Bitcoin blew up… in China. As reported by Blockonomi, Xinhua, the leading state-run publication (and the purportedly most-read media outlet) of the People’s Republic of China, released an entire article on Bitcoin.

The article, whose title roughly translates to “Bitcoin: The First Successful Application of Blockchain Technology,” was seen by many on Twitter as a ground-breaking development for the cryptocurrency space; Xinhua’s readership likely ranges in the dozens of millions.

China

Unfortunately, though, the article isn’t as bullish or positive for the cryptocurrency space as the headline implies. Here’s why.

Not Good for Bitcoin?

It’s no secret that China has recently grown to dislike Bitcoin. While the nation’s leader, President Xi Jinping, last month announced that China should formally adopt blockchain technologies, cryptocurrencies remain largely restricted; the bans on Bitcoin trading, cryptocurrency events, ICOs, certain media outlets, the use of WeChat and AliPay to transact money for digital assets, and so on seemingly remain in place.

It should maybe come as no surprise then that the aforementioned Xinhua article about Bitcoin wasn’t entirely optimistic. Sure, the piece had some highlights for cryptocurrency bulls — the headline, for one, is a nice touch — it gets a bit more harrowing when you delve into the nitty-gritty of the piece.

Head of Fidelity-affiliated Avon Ventures, a cryptocurrency venture fund, Alex Thorn reminded to his followers that the article, while explaining the ins and outs of Bitcoin quite well, calls the cryptocurrency “highly concentrated/centralized” phenomena, something that is bad for the climate, and is something “most importantly” used for black market transactions.

It also asserted that the cryptocurrency markets are hyper-volatile — a characteristic that pundits like Facebook’s David Marcus say make Bitcoin unviable as a digital currency, despite its youth to, say, the U.S. dollar — and the idea that Bitcoin may be a tulip bubble, something that mainstream economists often claim it is.

Thorn did joke, however, that China “isn’t” bad for the environment, centralized, and a 100% good actor — criticizing the hypocrisy of the nation bashing Bitcoin.

It is important to note that this isn’t the first time that a state-affiliated actor has tried to bash Bitcoin by way of an article. Per previous reports from Blockonomi, the People’s Daily, another state-run outlet (often called a state mouthpiece by Western media), reminded the Chinese that Xi’s support for blockchain does not equate to support for cryptocurrency:

“The rise of blockchain technology was accompanied by that of cryptocurrencies, but innovation in blockchain technology does not mean we should speculate in virtual currencies.”

This article also purportedly called cryptocurrencies a term that directly translates to “air coins,” Chinese slang for “s**tcoins,” according to some involved in China’s cryptocurrency space on Twitter.

“China Coin,” Not Bitcoin

China’s seeming attempts to try and discredit Bitcoin come ahead of the launch of a sovereign cryptocurrency. It isn’t a stretch of the imagination to assume, then, that China is making use of anti-Bitcoin rhetoric to push the viability of a Chinese yuan-backed or -based digital asset.

For those who missed the memo, the People’s Bank of China will soon be launching a cryptocurrency that will act as a medium of exchange for consumers and as a settlement network for corporations and banks. There is no concrete timeline for the project, though officials have said that the cryptocurrency is nearing a prototype phase that can be rolled out to beta/pilot testers.

It still isn’t clear how this new cryptocurrency and respective blockchain will interact with Bitcoin, but as we wrote on Monday, China is likely doing everything in its power to separate the antithetical state-run and decentralized blockchains.

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Former ECB President: Bitcoin Market’s Speculative Nature “Not Healthy”

Bitcoin is under fire once again. This time, the former president of one of the world’s most important monetary authorities — the European Central Bank (ECB)  — has called out the cryptocurrency industry, bashing what he sees as flaws in the digital asset markets.

The flaw in question: the financial speculation side of the Bitcoin industry.

Bitcoin Moon

Bitcoin Speculation Should End, Financial Incumbents Assert

Like it or not, many don’t put money into the cryptocurrency markets to make a statement to central banks and governments or because they think fiat is doomed; people put money in Bitcoin and its ilk to speculate, to hopefully turn a profit by throws craps at the crypto table. Look simply to the frequency of mentions of cryptocurrency in the mainstream media, which is undoubtedly tied to price action.

While there is nothing wrong with this per se, financial incumbents, for some reason, aren’t all too happy with the trend of speculation in cryptocurrency.

Speaking at a conference in Beijing hosted by Chinese media group Caixin, Jean-Claude Trichet, who led the ECB from 2003 to 2011 after heading the Bank of France, said that investing cryptocurrencies is “in many respects pure speculation.” Trichet added that this speculation isn’t healthy, looking to the fact that he sees little fundamental value in Bitcoin — something he called “not real” and noted is sans “the characteristics that a currency must have.”

The former ECB chief is far from the first representative of traditional finance to have pushed such sentiment.

Legendary billionaire investor Warren Buffett told Yahoo! Finance in an interview last year that Bitcoin is anything but an investment, but rather speculation. He said:

If you buy something like bitcoin or some cryptocurrency, you don’t have anything that is producing anything… You’re just hoping the next guy pays more. And you only feel you’ll find the next guy to pay more if he thinks he’s going to find someone that’s going to pay more.

Buffett asserted that real investment is when an investor allocates capital towards something that has inherent value — something that the businessman says Bitcoin is clearly devoid of. While many in the cryptocurrency space would beg to differ, the 89-year-old investor has been touting this line for years. Seeing that he still owns and uses a flip phone, this is unlikely to change any time soon.

The former chief executive of Nasdaq, too, has made this assertion. Speaking with industry outlet The Block last week, Bob Greifeld said that for cryptocurrencies to succeed and reach their maximum potential, the speculation side of the industry will have to go.

This is likely in reference to the oft-cited idea that volatility drives away consumers from adopting this technology. Case in point, Facebook’s blockchain head David Marcus just last week said that the volatility in the markets will stop Bitcoin from becoming a proper digital currency.

A Tall Ask

These pundits of the world of traditional finance are urging for the speculative nature of the cryptocurrency market to end, but this may be a tall ask.

Simply put, Bitcoin price speculation, which is encapsulated by the volatility this market sees on a day-to-day basis, is a byproduct of the size of this asset class compared to its potential impact.

Like the DotCom stocks in the late-1990s and the early-2000s, Bitcoin and other cryptocurrencies are hyper-volatile, being susceptible to parabolic rises and brutal -80% crashes. And until Bitcoin and other cryptocurrencies reach full market saturation, meaning their full potential, this volatility is likely to persist, especially as the world wakes up to the potential that digital assets have to usurp everything.

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Bitcoin Volume Profile Suggests Rally to Bring Price Past $20,000 is Near

In June, Bitcoin (BTC) saw itself go through a spectacular blow-off top. In a few weeks, the cryptocurrency had shot up by 50%, leading to a number of predictions that this market would surpass its all-time high in months.

Related Reading: Why Bitcoin Needs to Flip $9,700 Into Support to Support Bull Case

True to the unpredictable nature of the crypto market, however, this didn’t happen. After tapping $14,000 — a quite important historical level, as this is a key Fibonacci Retracement level of the $20,000 bubble — BTC plunged as volumes spiked. Within a day, the asset had plunged some 20%. And it’s been a vast amount of pain since then.

The blow-off top that was seen in June, though, might be a sign that a long-term Bitcoin bull run is on the horizon. Here’s why.

Bitcoin Preparing for Bull Run

This June, the cryptocurrency market set a new volume record. Although some dispute this fact — the volume records were largely set on exchanges deemed “uncredible” by some — at least the futures side of Bitcoin (the CME and BitMEX) saw monumental trading days, as Bitcoin incurred its largest rally in over a year. Heck, BitMEX alone processed $16 billion worth of leveraged trades in one day alone.

When Bitcoin tumbled after this historical volume spike, analysts thought the nail was in the coffin of bulls. Though, digital asset manager Charles Edwards has proposed that the consolidation after the volume record is actually a positive signal.

In an extensive Twitter thread published on Monday, the analyst noted that in previous bull markets, fresh all-time highs in volumes were always followed by consolidation.

What’s interesting is what came after those consolidation phases. No, in the cases that Edwards pointed out, Bitcoin didn’t tumble. Instead, “huge rallies followed,” with the growth in volume leading to long-term exponential bull markets that brought Bitcoin to orders of magnitudes higher than it was before the surge.

This was the case in at least three scenarios Edwards singled out. So if historical precedent is of any current relevance, Bitcoin might be about to explode higher yet again.

It isn’t only volumes that are signaling that a long-term bull trend is (back) on the table. As reported by NewsBTC previously, popular cryptocurrency trader FilbFilb noted that by the end of November or start of December, the 50-week and 100-week moving averages will see a “golden cross,” which he claims is far more significant” for the Bitcoin market that other technical crosses. As Filb’s chart below depicts, the last time the 50-week crossed above the 100-week, Bitcoin rallied for months straight, surging to fresh highs month in, month out.

To add to that confluence, cryptocurrency markets research firm Delphi Digital found that Bitcoin’s volume profile has shown that a medium-term bottom is likely in. More specifically, the market printed signs of weak volume (capitulation), a short accumulation at the bottoming range, then a surge out of accumulation into a potentially new bull phase.

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Ethereum’s Lubin Hopes China’s Digital Asset Will be Interoperable

Over the past five-odd years, China has been hard at work on a cryptocurrency project.

Though, little is known about this extremely secretive venture, which was only recently properly revealed to the public. It should come as no surprise, then, that the project has been widely speculated on, as there remain questions unanswered.

One such question is whether or not China’s digital asset will be interoperable with public ledgers, namely something like Bitcoin or Ethereum. The obvious answer is no, though some are holding onto the hope that when the nation finally goes live with its cryptocurrency, it will be able to interact with the rest of the blockchain world.

China

Ethereum Co-Founder Wants to Work With China’s Crypto

In an interview with Forbes published on November 9th, Joseph Lubin, a co-founder of Ethereum and the founder of blockchain development studio ConsenSys, made mention of China’s cryptocurrency. Lubin said about the project, which reports have said will act as both a medium of exchange for consumers and as a settlement device for corporations and banks:

“I assume it is going to be exactly what Chinese leadership thinks is most beneficial to Chinese leadership. Hopefully that’s also open and we can interoperate with it, but I don’t know.”

Lubin continued that he wants China to have its own Ethereum experts and projects, as he claims that the nation’s current blockchain ventures are using “weaker technology” than the second-largest cryptocurrency.

A Closed-System Model

While Lubin is hoping public blockchains, namely Ethereum, will interact with China’s planned ledger (and likely ledgers), it seems that the nation will be going for a closed system model — at least to start, according to Blockonomi’s analysis.

As you are likely aware, the nation’s central bank, the People’s Bank of China, did its best to put a stop to cryptocurrency trading in 2018. While this hasn’t been 100% effective — crypto venture capitalist Dovey Wan said last week that Bitcoin liquidity in China’s dark markets is still extremely strong — China’s cryptocurrency market is rather inaccessible for the consumers of China, who cannot sign up to vanilla exchanges anymore.

The PBoC has also declared ICOs a “scam,” drawing attention to the Ponzi schemes of the industry. The seeming reason why China is so against Bitcoin and its ilk: decentralized cryptocurrencies allowed money to leave China, with there being reports of Bitcoin acting as a conduit through which Chinese businessmen could siphon money to places like Canada and Australia.

While this wouldn’t be an issue in other nations — Bitcoin is a legal form of money transfer in much of the western world — China’s intense control on the economy could be weakened by a formal reintroduction of Bitcoin into its digital economy.

Also, to put it simply, China values control and censorship, especially in terms of how companies and citizens interact with the outer world. Bitcoin, Ethereum, and other decentralized blockchains like it are inherently non-sovereign, decentralized, and uncontrollable technology — something antithetical to China’s systems at the moment.

Not Against Bitcoin Per Se

This isn’t to say that China remains entirely against Bitcoin though. On Monday, Xinhua, the Republic’s official state-run publication, posted an article whose title roughly translates “Bitcoin: The First Successful Application of Blockchain Technology.”

While the piece wasn’t all positive, the headline alone may push Chinese investors to take a close look at the cryptocurrency market once again, despite the bans put in place.

The post Ethereum’s Lubin Hopes China’s Digital Asset Will be Interoperable appeared first on Blockonomi.

Why Bitcoin Needs to Flip $9,700 Into Support to Support Bull Case

While Bitcoin (BTC) is around 17% lower than its local top of $10,500 established late in October, many analysts have concluded that the bull case for the cryptocurrency market is brewing once again. In fact, an analyst recently floated a prediction that the BTC price could reach as high as $11,500 in a few weeks’ time, citing a bullish chart pattern that Bitcoin was exhibiting.

It may be too soon for such optimism, though. Teddy, a popular crypto analyst on Twitter, recently noted that Bitcoin needs to clear and reclaim two key resistance levels before he can “get stupid bullish” on the prospects of digital assets.

Related Reading: Ethereum Price Has Potential to Surge Higher as Bitcoin Slows: Analysis

Bitcoin Bulls Needs to Reclaim $9,700

According to a chart posted by Teddy, while the 42% President Xi Jinping-induced surge was undoubtedly bullish, Bitcoin remains between two key levels: a horizontal resistance at $9,700, which BTC has interacted with for the past few months, and a diagonal resistance that originates from the year-to-date BTC price peak of $14,000.

Reclamation of these levels would mean that Bitcoin is cleared for takeoff, so to speak. But will it happen? According to some technical indicators, for sure.

Byzantine General pointed out on Sunday morning that Bitcoin’s reclamation of the Bollinger Band basis line around $8,700 is “bullish,” as it seemingly confirms that the cryptocurrency is ready to leg higher. In fact, he noted that the last time BTC bulls managed to retake control of basis line was prior to the surge from the high-$3,000s to $14,000. 

History repeating would see Bitcoin leg higher in the coming weeks and months, potentially to close near the all-time high in time for the halving.

Related Reading: Stephen Colbert Pokes Fun at Bitcoin in Monologue: Mainstream Gone Wrong?

Not All Sunshine and Rainbows

Sure, the technicals are starting to lean in favor of bulls, but BTC was recently rejected from one key level: as pointed out by cryptocurrency trader Crypto Vulture, Bitcoin’s surge on Sunday was rejected by the 200-day moving average at around $9,200.

The 200-day moving average, for some context, is an oft-cited level that analysts say is indicative of whether or not the asset/chart being analyzed is in a macro bull trend or a macro bear trend. With this in mind, the rejection implies that a long-term bear trend might ensue.

Also, a fractal has suggested an impending move to the low-$7,000s. As reported by NewsBTC previously, Tyler Durden on Twitter posted the chart below, which shows that a Bitcoin price fractal may be playing out. The fractal has four phases: horizontal consolidation marked by one fakeout, a surge above the consolidation phase, a distribution, then a strong drop to fresh lows.

If the fractal plays out in its entirety, BTC could potentially fall as low as $7,100. This would represent a 20-odd percent collapse from the current price point of $8,800.

Related Reading: China’s State Outlet Xinhua Exposes Millions to Bitcoin
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China’s State Outlet Xinhua Exposes Millions to Bitcoin

China doesn’t seem to want the Bitcoin and blockchain gravy down to slow down any time soon. On Sunday afternoon (PST), reports arose on Twitter that Chinese state media had begun to talk up the leading cryptocurrency via an article. While the price of BTC hasn’t reacted to this tidbit of news, this article could have a resounding effect on China’s knowledge of crypto assets in the coming years.

Related Reading: Chinese Bank Invests in Bitcoin Wallet After President Xi’s Remarks: Report

Chinese State Media Talks Up Bitcoin

Monday’s edition of Xinhua — the official state-run publication of the People’s Republic of China — contained an article whose title roughly translates “Bitcoin: The First Successful Application of Blockchain Technology.” While the piece wasn’t all positive, the headline alone may push Chinese investors to take a close look at the cryptocurrency market once again, despite the restrictions put in place.

The full-page article was shared by Matthew Graham of Sino Global Capital. According to Graham’s digital translator, the piece calls Bitcoin a non-tangible currency and a “currency” in quotation marks — whatever that implies. The Xinhua article also mentioned how blockchain technologies work, including the mining process halvings.

There aren’t any concrete statistics about the readership of Xinhua, but it likely ranges in the dozens of millions.

Not the First Time…

This isn’t the first time Chinese media and large corporations/banks have lauded Bitcoin.

Earlier this year, The Bank of China — decisively not to be confused with China’s central bank, the similarly-named People’s Bank of China — was reported to have published an elaborate article about the many facets of Bitcoin.

According to a read and rough translation of the article by Blockstream’s CSO, Samson Mow, the institution — the four biggest state-owned commercial banks in China — mentioned how Bitcoin works, why the price of cryptocurrencies are rising, and why BTC inherently has value.

That was far from the end of it. An infographic contained in the post portrayed key points in the history of the Bitcoin industry; it specifically made mention of the “Bitcoin Pizza Guy” story, Warren Buffett’s scathing remarks about digital assets, the supply limit of BTC, and the price action seen over recent years.

Related Reading: No, China Isn’t Banning Bitcoin Mining: Chinese Crypto Insider

Considering that just a year ago, it was verboten — with reports circulating that cryptocurrencies were somewhat taboo on certain forums — it’s crazy to see how far the Chinese cryptocurrency space has come.

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Bitcoin Price Still in Bull Market as Death Cross is Averted

Over the past few months, analysts have been questioning if Bitcoin (BTC) really is in a bull market. Just two weeks ago, the leading cryptocurrency was down nearly 50% from its year-to-date peak of $14,000 — something that many took as a signal that Bitcoin was back in a bear market phase.

But, a key technical indicator has shown that the crypto market remains in a bullish phase. The thing is, another drop in the BTC price, even to $8,000, could make that indicator flip bearish for the first time since March 2018 — just shy of the $20,000 top of the last bull run.

Related Reading: Ethereum Price Has Potential to Surge Higher as Bitcoin Slows: Analysis

Bitcoin Still in Long-Term Bull Market, Indicator Suggests

If you’ve followed cryptocurrency trading at all, you’ve likely seen the terms “golden cross” and “death/bear cross” incessantly mentioned on Twitter and TradingView. For some reference, golden and death crosses in technical analysis refer to when moving averages (MAs) cross each other to signal a trend; golden crosses see short-term MAs crossing above long-term MAs, and death crosses the other way around.

According to a recent analysis by Byzantine General, a popular trader on Twitter, a bear cross of the 50-day exponential moving average and the 200-day exponential moving average was just averted. This implies that Bitcoin remains in a long-term bull trend, as golden and death crosses of these two moving averages have long been indicative of macro trends.

This isn’t the only indicator implying such. Trader and CoinTelegraph contributor FilbFilb found that by the end of November or start of December, the 50-week and 100-week moving averages will see a “golden cross,” which he claims is far more significant” for the Bitcoin market that other technical crosses.

Related Reading: Bakkt Sets New Volume Record After Bitcoin Price Tanks 6%

To put a cherry on the cryptocurrency cake, Crypto Thies observed that when Bitcoin bottomed at $7,300, it bounced decisively off the 0.618 Fibonacci Retracement of the move from $3,000 to $14,000, which correlates with the two-week volume-weighted moving average. He added that summer 2019’s consolidation was marked by Bitcoin flipping major resistances into support levels, implying that a bullish reversal and subsequent continuation is likely possible in the coming weeks.

Related Reading: Stephen Colbert Pokes Fun at Bitcoin in Monologue: Mainstream Gone Wrong?
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Technicals Lean Bullish as Massive Bitcoin Price Move Brews

Bitcoin (BTC) is about to see a massive bout of volatility, according to a long-term technical indicator. Sure, the leading cryptocurrency spiked by 42% two weeks back, surging from $7,300 to $10,500 seemingly on the news that China’s President was calling for the formal adoption of blockchain technologies. But, something bigger is purportedly brewing.

Related Reading: Despite Price Surge to $9,000, Bitcoin Not Bullish Yet: Analyst

Bitcoin Volatility on Its Way

According to a recent analysis of the one-week BTC chart by trader Mr. Anderson, a massive Bitcoin move is brewing. He noted that while it’s easy to get caught up in the “flashes of volatility” on lower time frames, a key indicator signals an even larger, extended move for the cryptocurrency market.

The indicator in question is the one-week Bollinger Band Width (BBW) indicator — an indicator that shows the width between the highest and lowest Bollinger Bands, which itself is a tool used to determine ranges.

Right now, the indicator has reached 0.42, or really long-term volatility. The last time this indicator interacted with this BBW range was in late-March — just a week before Bitcoin shot from $4,000 to $5,000 in the shocking move that kicked off this year’s micro bull market.

The BBW also was under the 0.40 range just a week or two before Bitcoin crashed in November 2018, when the previous bull run began in October 2016, and a few months prior to Bitcoin breaking past $100 for the first time ever in 2013.

In other words, a long-term Bitcoin price trend is soon to form.

Related Reading: Ethereum Price Has Potential to Surge Higher as Bitcoin Slows: Analysis

Up or Down?

Of course, this may leave you wondering — will Bitcoin continue its bull trend higher or return to a bear market state?

According to the seeming consensus of analysts, a resumption of the bull trend earlier this year is more likely than not. As reported by NewsBTC previously, Trader HornHairs has noted that he “likes the chance we hit $14,000 before $7,000.” He remarked in a recent tweet that with Bitcoin bouncing strong and holding above the one-month bullish breaker, the 0.618 Fibonacci Retracement of the entire cycle, the Point of Control as defined by the volume profile, and the yearly pivot, BTC is leaning rather bullish.

Also, trader and CoinTelegraph contributor FilbFilb found that by the end of November or start of December, the 50-week and 100-week moving averages will see a “golden cross,” which he claims is far more significant” for the Bitcoin market that other technical crosses.

Related Reading: Will Bitcoin Retrace to Low-$7,000s? Price Fractal Says So
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Despite Price Surge to $9,000, Bitcoin Not Bullish Yet: Analyst

Bart Simpson has graced the Bitcoin market once again. Just an hour or two prior to this article’s publishing, BTC suddenly spiked, breaking higher from a consolidation around $8,800 to as high as $9,150 in a few minutes’ time.

As of the time of writing this article, the crypto asset is trading for $9,050 — up nearly 3% in the past 24 hours; altcoins have made similar gains, tracing the market leader. While this slight pump is a move in the right direction for bulls, Bitcoin remains in a precarious territory. Here’s why.

Related Reading: Is Bitcoin Really Doomed? Analysts Skeptical of Bear Bias After $400 Drop

Bitcoin Needs to Reclaim $9,350

Right now, Bitcoin seems to be trying to flip the key $9,000 level into a low time frame support level. While this is important, a leading analyst said that it isn’t the level that would put a nail in the coffin of the bearish narrative.

In a recent tweet, Mayne noted that traders should “be careful getting too bullish into a resistance,” pointing to the fact that BTC remains under the key resistance of $9,085 — a level which the cryptocurrency has interacted with on multiple occasions over the past five months.

He added that this move is liking a short squeeze, quipping that should this be the case, a move to the high-$7,000s or low-$8,000s could take place to act as a “dream swing long entry.”

As to what will make this recent move higher bullish, Mayne explained that reclamation of the $9,350 level on a daily time frame will confirm that the “moon mission is on.”

Other traders have been a tad more bullish. Byzantine General pointed out prior to the recent jump higher that the reclamation of the Bollinger Band basis line around $8,700 is “bullish,” as it seemingly confirms that Bitcoin is ready to leg higher. In fact, he noted that the last time BTC bulls managed to retake control of basis line was prior to the surge from the high-$3,000s to $14,000. 

History repeating would see Bitcoin leg higher in the coming weeks and months, potentially to close near $20,000 by the halving.

Related Reading: Crypto Tidbits: Bakkt’s Bitcoin Market Explodes, Huawei CEO Skeptical of Blockchain, FBI Wary of Cryptocurrency
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Ethereum Price Has Potential to Surge Higher as Bitcoin Slows: Analysis

All eyes may be on Bitcoin (BTC), but an analyst is suggesting that it may be time to pay Ethereum (ETH) some heed. The second-largest cryptocurrency has struggled alongside BTC as of late, falling by a similar amount to the market leader.

Like Bitcoin, ETH is stagnating, though technical indicators suggest impending volatility for the asset. And fortunately for bulls, the market’s bias seems to be leaning in the upward direction, not downward.

Related Reading: Stephen Colbert Pokes Fun at Bitcoin in Monologue: Mainstream Gone Wrong?

Ethereum Ready to Break Out? 

Popular technical analyst Crypto Thies recently reminded his followers to keep an eye on ETH. In a post published on Friday night, he noted that with the Directional Movement Index (DMI) and Volume Moving Average at historic supports, volatility may be had.

While Thies did not indicate in which direction he expects for Ethereum to head — he just laid out the facts and let readers decide — there seems to be a bigger presence of bullish technical indicators on the charts he posted: his proprietary Market God signal flashed a one-day buy signal, which is something that has preceded strong surges higher in the past, and flashed a sell signal for the  12-hour Bitcoin dominance chart. This implies ETH will have some strength in the coming weeks.

Related Reading: Crypto Tidbits: Bakkt’s Bitcoin Market Explodes, Huawei CEO Skeptical of Blockchain, FBI Wary of Cryptocurrency

Also, the asset’s fundamentals have remained strong, despite the downturn seen over the past few months. As reported by this outlet previously, Ethereum-based “decentralized finance” has quickly exploded; Defipulse.com reports that there is over $650 million worth of assets locked in that facet of ETH.

There is also a record amount of Ethereum at 2.42 million, or 2.2% of the entire supply locked in DeFi. The site also reports that there is $30 million worth of Dai stored in DeFi which is almost a third of its supply now that it has reached the milestone $100 million.

Dependent on Bitcoin’s Price Action

It is important to note, however, that Ethereum’s price action is mostly predicated on that of Bitcoin, as the leading cryptocurrency determines in which direction the entire market will head. Indeed, if BTC heads higher, so do altcoins; the opposite is also true. So — what’s next for Bitcoin?

According to a number of analyses, some short-term weakness, which will play out for Ethereum too. Per previous reports from NewsBTC, analyst Neko remarked that Bitcoin’s “bullish volume looks extremely weak” and that BTC has broken crucial support at $9,000, implying a drop further. He added that with Mondays typically being “bloody,” a drop to the $8,000 region is entirely possible.

Related Reading: Is Bitcoin Really Doomed? Analysts Skeptical of Bear Bias After $400 Drop
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Will Bitcoin Retrace to Low-$7,000s? Price Fractal Says So

While Bitcoin’s price seemingly moves without rhyme or reason — collapsing by dozens of percent and embarking on face-melting rallies on a whim — the cryptocurrency market is filled to the brim with fractals.

Related Reading: Analyst: Bitcoin Price Likely to Fall to Low-$8,000s as Chart Remains Weak

A brief aside: A fractal, in the context of technical analysis and financial markets anyway, is when an asset’s price action is seen during a different time. This form of analysis isn’t that popular, but it has proven to be somewhat valuable in analyzing Bitcoin.

One recent fractal popularized by a well-known cryptocurrency trader is implying that BTC is going to return to the low-$7,000s in the coming days.

Bitcoin Fractal Implies Retracement to Low-$7,000s

A well-known crypto trader going by “Tyler Durden” on Twitter recently posted the chart below, which shows that a Bitcoin price fractal may be playing out. The fractal has four phases: horizontal consolidation marked by one fakeout, a surge above the consolidation phase, a distribution, then a strong drop to fresh lows.

If the fractal plays out in full, BTC could reach the low-$7,000s again, potentially as low as $7,100. This would represent a 20-odd percent collapse from the current price point of $8,800.

It isn’t only a fractal that is hinting Bitcoin has the potential to visit its lows. As we reported on Saturday, Bloomberg believes that if the GTI Vera Convergence Divergence Indicator flips red, a downtrend could push the cryptocurrency back to $7,300.

Related Reading: Stephen Colbert Pokes Fun at Bitcoin in Monologue: Mainstream Gone Wrong?

Can Bulls Step In?

But again, many believe it is irrational to have such bearish interpretations of the cryptocurrency’s chart at the moment. As reported by NewsBTC earlier, Popular crypto trader Mayne recently noted that the “people waiting for $6,000” are irrational. He quipped that Bitcoin retracing and consolidating after its fourth-biggest bull move in history ($7,300 to $10,500, a 42% gain) is perfectly par for the course, but noted that it’s totally possible we can go lower from $8,800.

The medium-term technicals support this.

Trader and CoinTelegraph contributor FilbFilb found that by the end of November or start of December, the 50-week and 100-week moving averages will see a “golden cross,” which he claims is far more significant” for the Bitcoin market that other technical crosses.

Also, a Bitcoin price model created using Facebook Prophet machine learning found that the leading cryptocurrency is likely to end the year at just over $12,000. What’s notable about this model is that it called the price drop to $8,000 months in advance, and forecasted a ~$7,500 price bottom for BTC.

To put a cherry on the cryptocurrency cake, Crypto Thies observed that when Bitcoin bottomed at $7,300, it bounced decisively off the 0.618 Fibonacci Retracement of the move from $3,000 to $14,000, which correlates with the two-week volume-weighted moving average. He added that summer 2019’s consolidation was marked by Bitcoin flipping major resistances into support levels, implying that a bullish reversal and subsequent continuation is likely possible in the coming weeks.

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Is Bitcoin Really Doomed? Analysts Skeptical of Bear Bias After $400 Drop

As you are likely aware, Bitcoin (BTC) hasn’t done too well over the past two-odd days. Since Friday, the cryptocurrency has shed 6% of its value, tanking from $9,250 to $8,700 in a strong move lower that came after nearly two weeks of bullish consolidation above $9,000.

Despite this relatively mild price action, which wasn’t exactly a move that slaughtered bulls per se, a number of traders have flipped bearish. Bloomberg, for instance, wrote that there is a likelihood that if the bearish pressure persists for a little more, Bitcoin will trend all the way back to $7,300 — back where it was prior to the most recent swing upwards.

This sentiment, according to a number of analysts, is irrational.

Related Reading: Analyst: Bitcoin Price Likely to Fall to Low-$8,000s as Chart Remains Weak

Bears Are Irrational? 

Popular crypto trader Mayne recently noted that the “people waiting for $6,000” are irrational. He quipped that Bitcoin retracing and consolidating after its fourth-biggest bull move in history ($7,300 to $10,500, a 42% gain) is perfectly par for the course, but noted that it’s totally possible we can go lower from $8,800.

Crypto Michael echoed this line. The Amsterdam Stock Exchange trader poked fun at the euphoria that bears have had over the past days, accentuating the irrationality of the claims that a retest of the lows is on its way, especially in the context of the recent 42% gain:

I do remember bears being euphoric with a $1000 dropdown on a daily candle, now they are euphoric with a $300 retrace after one of the most bullish candles in the history of bBTC.

Delphi Digital has corroborated this sentiment with data. Per previous reports from NewsBTC, the prominent cryptocurrency markets research firm found that there is a confluence of evidence suggesting that Bitcoin found a trend bottom at $7,300 two weeks ago.

One of their tidbits of evidence is that Bitcoin’s volume profile, the amount of cryptocurrency that was traded, has printed clear signs that a bottom is in. More specifically, the market printed signs of weak volume (capitulation), a short accumulation at the bottoming range, then a surge out of accumulation into a potentially new bull phase.

They added that they currently see the cryptocurrency market very tied to risk assets, like the S&P 500. With risk assets setting new all-time highs on Friday after a strong jobs report and a potential trade deal, it could be said that BTC will surge higher with the risk assets.

Related Reading: Bloomberg Analyst Explains Why Bitcoin Price is “Caged” by $8,000 to $12,000 Range

Bitcoin’s Long-Term Bull Case Remains

Indeed, the cryptocurrency long-term charts and signals still seem to be implying that medium to long-term upside is highly likely.

As reported by NewsBTC previously, Trader HornHairs has noted that he “likes the chance we hit $14,000 before $7,000.” He remarked in a recent tweet that with Bitcoin bouncing strong and holding above the one-month bullish breaker, the 0.618 Fibonacci Retracement of the entire cycle, the Point of Control as defined by the volume profile, and the yearly pivot, BTC is leaning rather bullish.

Also, trader and CoinTelegraph contributor FilbFilb found that by the end of November or start of December, the 50-week and 100-week moving averages will see a “golden cross,” which he claims is far more significant” for the Bitcoin market that other technical crosses.

Related Reading: Square’s Cash App Sold $150M Worth of Bitcoin in Q3: 250% YoY Growth
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Analyst: Bitcoin Price Likely to Fall to Low-$8,000s as Chart Remains Weak

On Friday, the Bitcoin (BTC) market took a turn for the worst. The leading cryptocurrency, as reported by this outlet, tanked from $9,250 to $8,700 in a number of hours, with bulls running out of steam.

While the bearish pressure has stopped, with Bitcoin finding some support at $8,850 as the short-term downtrend has ended, analysts have asserted that the cryptocurrency market remains on thin ice. They claim that it may only be a matter of time before bears push the crypto to the low-$8,000s, and maybe even lower.

Related Reading: Crypto Tidbits: Bakkt’s Bitcoin Market Explodes, Huawei CEO Skeptical of Blockchain, FBI Wary of Cryptocurrency

Bitcoin May Slip Further, Analysts Warn

Popular Twitter analyst Neko recently observed that Bitcoin’s short-term four-hour candle chart remains rather bearish. In a recent tweet, he remarked that Bitcoin’s “bullish volume looks extremely weak” and that BTC has broken crucial support at $9,000, implying a drop further. He added that with Mondays typically being “bloody,” a drop to the $8,000 region is entirely possible.

Neko isn’t the only analyst expecting more pain to be seen. Bloomberg reported that a strong bearish continuation is likely in the works in an article entitled “Bitcoin’s Break Below $9,000 Risks Erasing Xi-Inspired Rally,” Bloomberg wrote in reference to the chart below:

The GTI Vera Convergence Divergence Indicator shows a narrowing gap between the signal and vera lines, which suggests a trend change may be on the horizon. If this occurs, the largest digital currency could retest the lows seen before its rampant run following comments by China’s President Xi Jinping in October.

GTI indicator shows Bitcoin on the cusp of entering a sell trend

In other words, if a change in bull trend takes place, BTC is likely to fall to $7,300 once again, which is where Bitcoin was trading prior to Chinese leader President Xi lauding blockchain in a political setting.

Peter Schiff, a prominent gold bug, has thrown his weight behind this sentiment. After Friday’s drop, Schiff wrote that “it looks like the Bitcoin pump is finally over,” before adding that we should “get ready for the dump.” Schiff didn’t stop there. He later wrote that “Bitcoin is never going to hit $100,000,” seemingly in a bid to quash the hopes and dreams of industry hopefuls.

While Schiff didn’t explain his rationale in this latest tweet, he has been quoted as saying that BTC is an unreliable store of value and an improper investment, especially when pitted against precious metals.

Related Reading: Stephen Colbert Pokes Fun at Bitcoin in Monologue: Mainstream Gone Wrong?
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Crypto Tidbits: Bakkt’s Bitcoin Market Explodes, Huawei CEO Skeptical of Blockchain, FBI Wary of Cryptocurrency

Another week, another round of Crypto Tidbits. Again, Bitcoin (BTC) saw a relatively meek week in terms of price action, or lack thereof; the leading cryptocurrency fell by 5% over the course of the week, but still seems to be stuck in a tight range as a trend fails to be established.

Despite this, the industry continued to chug forward. Bakkt’s Bitcoin volumes have shot through the roof as institutional interest picks up, Huawei’s CEO expressed skepticism towards blockchain technologies, and the FBI revealed that it is wary of the threats posed by cryptocurrencies.

Related Reading: Crypto Tidbits: Bitcoin Stuck In $9,000s, Starbucks Cryptocurrency Payments, Canada’s BTC Fund

Bitcoin & Crypto Tidbits

  • Bakkt’s Bitcoin Volumes Explode to $15 Million: Bakkt Volume Bot, a Twitter account dedicated to publishing data about the exchange’s derivatives market, has reported that Bakkt has seen 1,741 BTC worth of contracts traded on Friday. This is equivalent to around $15.5 million, and importantly marks Bakkt’s largest trading day thus far. This statistic was later corroborated by the exchange itself, who excitedly tweeted near the end of Friday’s trading session:

    “Today we set a new daily record of 1,756 Bakkt Bitcoin Futures contracts traded.”

  • Academics Accuse Bitcoin Whale of Pushing BTC to $20,000: Two skeptical researchers — John Griffin, professor at the University of Texas, and Amin Shams, assistant professor at the Ohio State University — recently revised their paper on Bitcoin from 2018, which stated that trades of the USD-backed stablecoin were responsible for sending BTC higher. The 119-page revised edition has made an additional assertion: that a single entity, a so-called whale (large cryptocurrency holder), was responsible for wresting Bitcoin from $1,000 to $20,000 in 12 months’ time through Tether.
  • Huawei Warns of Quantum Threat to Bitcoin, Crypto, & Blockchain: Earlier this year, Google unveiled that it had achieved quantum supremacy, when a quantum computer accomplishes a task that a traditional supercomputer cannot finish. Many have taken this as a sign that Bitcoin’s SHA-256 algorithm and others like are under threat. In a video published on Wednesday, shared by Chinese crypto venture capitalist Dovey Wan, Huawei CEO Ren Zhengfei said that blockchain and cryptocurrencies are unlikely to have a future, specifically due to the computing power that quantum devices have. According to Wan, Ren even stated that this technological class is “worthless” in the face of quantum computing.
  • Canadian Exchange Millions in Crypto Debt Seized:  Revealed in a press release published on Monday morning, the British Columbia Securities Commission (BCSC) has recently made a move to “protect customers” of Einstein Exchange, a crypto-asset exchange headquartered in Vancouver. The move: to gain an order from the Supreme Court of British Columbia allowing an interim receiver to “preserve and protect any assets of Einstein Exchange.” The Court granted the order to auditing company Grant Thornton Limited, as an official document from November 1st indicates. Grant Thornton Limited now has the authority to take control of Einstein’s assets and properties, along with the ability to enter any of the exchange’s premises if deemed necessary to protect customers.
  • FBI Reveals It Is Worried About Crypto Threat: Federal Bureau of Investigation Director Christopher Wray recently said in a Committee in Washington, D.C. that cryptocurrencies are already a “significant issue” when it comes to law enforcement.
  • Square Reveals Strong Retail Interest in Bitcoin: On Wednesday, Square revealed a statistic pertaining to the cryptocurrency industry: the company’s flagship product, the Cash App, sold $148 million worth of BTC in fiscal Q3 of 2019. Crypto analyst Kevin Rooke pointed out that this is the sixth straight quarter of growth for this facet of Square’s business. Rooke also noted that Bitcoin revenues at Square are now growing by a jaw-dropping 244% year-over-year, despite the fact that BTC remains over 50% below its previous all-time high of $20,000. Square’s report also indicated that first-time Bitcoin buyers are on the rise, which itself is a rather bullish signal. Delphi Digital co-founder Anil Lulla wrote on the significance of this statistic: “Always great to get a pulse on retail interest for BTC via Square’s earnings. My favorite takeaway this quarter: First-time bitcoin buyers have approximately doubled since September.”
  • Stellar Lumens Burns Billions Worth of Crypto: Announced in a blog post published on Monday afternoon, the Stellar Development Foundation (SDF) has made the decision to burn a majority of XLM it has control over. Prior to this move, there were around 105 billion Lumens in existence, approximately 20 billion of which are already out in circulation, being traded on exchanges and used by companies and individuals of the Stellar blockchain, and the rest being held by the SDF. Now, there is a relatively mere ~50 billion in existence, the other 55 billion having been burned by the SDF sending coins to “a Stellar account with no signers.”
  • Libertarian Ron Paul Reveals Public Prefers Bitcoin Over Gold: Former Texan Congressman Ron Paul — one of the most outspoken libertarian politicians — recently conducted the bellow poll, finding that 59% of some 77,350 respondents would prefer HODLing $10,000 worth of Bitcoin over $10,000 worth of gold, Federal Reserve Notes, or 10-year Treasury bonds.

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Stephen Colbert Pokes Fun at Bitcoin in Monologue: Mainstream Gone Wrong?

Bitcoin is going mainstream. Kinda. It’s going mainstream in a weird twisted and sadistic way, anyway.

Related Reading: Bitcoin Price Will Never Hit $100,000? Gold Bug Bashes Bulls

On Thursday night, Stephen Colbert conducted his latest monologue. As normal, the career television host and entertainer weighed in on and poked fun at the state of U.S. politics, addressing a serious matter with some jest. What’s weird, as hinted at earlier, is that Bitcoin and blockchain made a cameo. But not in the way you’d expect.

Colbert Bashes Bitcoin… Kinda

No, Colbert didn’t bring on a cryptocurrency investor as a guest, or laud the benefits of blockchain technologies in a comedic fashion. Colbert joked that Bitcoin as a boring topic, eliciting mild, well, quite rapturous laughter from his studio crowd. He said:

Let’s see, places I’d rather be than a Trump rally off the top of my head: the DMV, the dentist, someone else’s child’s clarinet recital, a Soviet gulag, covered with honey and staked on an anthill, sliding down a 50-foot razor blade into a bathtub of gin, and in conversation with someone that knows a lot about Bitcoin — go on, go on about blockchain.

Of course, this could be seen as bullish, as Bitcoin briefly became the topic of interest for Colbert’s purported 3.1 million active viewers, but the talk show host’s comments didn’t paint this industry in a good light. In fact, it may have made many viewers confirm their suspicions that cryptocurrencies are a sham, are worthless, or something along those lines.

Colbert’s brief but rather negative mention of Bitcoin and blockchain on his show comes shortly after Naomi Scott —a British actress and singer known for her roles in “Aladdin” and “The Martian” — mentioned these subject matters on Jimmy Fallon’s show.

Scott, discussing one of her latest roles, told a brief story about how one of her co-workers was trying to tell her about blockchain for her role, with Fallon interjecting by calling the technology “the Bitcoin thing.” It isn’t clear if the audience gleaned anything about blockchain technologies from that segment (likely not).

Related Reading: Crypto Trader: Bitcoin Closes In On Life-Changing Golden Cross

Mainstream Media Not a Fan… 

It is important to note that this isn’t the first time that a host of a nightly talk show has bashed cryptocurrencies on air. In the middle of 2018, British comedian hosted a 25-minute segment on cryptocurrencies.

Although it could have been seen as a massive adoption event for the industry, a majority of the segment was Oliver bashing cryptocurrencies, especially in regards to how ICOs at the time managed to raise so much money when their blockchains had such little promise. Oliver even took some time to mention Bitcoin scam BitConnect, including the age-old video of Carlos Matos waxing poetic about the benefits of the “investment opportunity,” along with “meme” altcoin Dogecoin, which then had an extremely high valuation nearing $1 billion.

 

Related Reading: TGIF: Do Fridays Foretell Future Movements in Bitcoin Price and Other Crypto?
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Bitcoin Price Will Never Hit $100,000? Gold Bug Bashes Bulls

For the longest time, Bitcoin investors have been shooting for the moon, calling for the BTC price to hit lofty price points, like $50,000 and $100,000. The cryptocurrency has the potential to usurp traditional power schema, after all. But, Peter Schiff, a leading gold investor, doesn’t think such appreciation will take place.

Related Reading: ‘Discount Bitcoin Bandit’ Could Face 10 Years for Cryptocurrency Armed Robberies

Bitcoin Won’t Hit Six Digits, Schiff Declares

The prominent gold bug and libertarian investor remarked in a recent tweet that “Bitcoin is never going to hit $100,000,” seemingly in a bid to quash the hopes and dreams of industry hopefuls.

While Schiff didn’t explain his rationale in this latest tweet, he has been quoted as saying that BTC is an unreliable store of value and an improper investment, especially when pitted against precious metals.

Schiff’s latest quip against Bitcoin comes shortly after he remarked that the cryptocurrency market is ready to fall to pre-2017 levels. As reported by this outlet previously, he opined that the entire Bitcoin market is being manipulated by whales who are ready to dump on the market:

“BTC hodlers won’t sell as they believe they’ll get rich when it moons. Whales get rich by selling now to realize their paper gains before a market crash wipes them out. The whales must make sure the hodlers don’t lose faith and cash out so that they can cash in!”

Related Reading: Bitcoin Flag Technical Pattern Hints at 25% Price Surge to $11,600

PlanB’s Model Begs to Differ

While Schiff believes that Bitcoin will never reach a six-digit price point, one of the most recognizable and accurate price models for the cryptocurrency says otherwise.

PlanB’s stock-to-flow scarcity model for Bitcoin, which uses the cryptocurrency’s stock-to-flow ratio (effectively the inflation rate) and relates it to BTC’s market capitalization.

The linear regression model, which produces a 95% R2 (statistic lingo for extremely accurate), predicts that BTC’s fair value will reach somewhere between $50,000 and $100,000 after May 2020’s halving event. As absurd as this may sound, PlanB’s research has also found that Bitcoin always trends towards the fair value indicated by the model with ample time.

It isn’t only the scarcity of BTC that will be a boon for the cryptocurrency markets. Earlier this year, Anthony Pompliano sat down on CNN to talk crypto. In the interview, Pompliano made the jaw-dropping assertion that Bitcoin will hit $100,000 some time within the next two-odd years.

Although this may seem absolutely absurd, he believes the confluence of the halving and the increased liquidity and inflation risk created by central banks can boost BTC sky-high — even to the moon, so to speak.

This price model and predictions may seem optimistic, but many people are betting on the fact that BTC will surmount $100,000. Brad Mills, a popular industry commentator, reminded Schiff that a $100,000 BTC will give the cryptocurrency a “$2 trillion market capitalization,” which is “still peanuts when compared to the market cap of gold.”

Related Reading: Gold Plunges After Dow Records New High; Why Bitcoin May Rise
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Bakkt Sets New Volume Record After Bitcoin Price Tanks 6%

Bitcoin (BTC) hasn’t been doing too hot over the past 24 hours. As of the time of writing this piece, the cryptocurrency is down some 5% on the day — falling from yesterday’s peak of $9,250 to $8,700 — having lost the key $9,000 support level after holding strong above it for nearly two weeks’ time.

Despite this decisively bearish price action, which some analysts say is preceding a stronger drop to the low-$8,000s, Bakkt’s Bitcoin futures market has seen a flurry of activity.

Bakkt Volume Bot, a Twitter account dedicated to publishing data about the exchange’s derivatives market, reported an hour ago (6:00 EST) that Bakkt has seen 1,741 BTC worth of contracts traded on Friday. This is equivalent to around $15.5 million, and importantly marks Bakkt’s largest trading day thus far.

This statistic was later corroborated by the exchange itself, who excitedly tweeted near the end of Friday’s trading session:

“Today we set a new daily record of 1,756 Bakkt Bitcoin Futures contracts traded.”

Related Reading: XRP Plunges 6% Despite Network Being “Stronger Than Ever”

Institutions Leaning Long on Bitcoin

Bakkt’s relatively high volumes have come as institutions have started to build long positions of Bitcoin through other regulated contracts.

As reported by NewsBTC previously, Skew Markets found that institutional longs  on the Chicago Mercantile Exchange’s Bitcoin futures market has hit a one-month high, reaching around 1,300 BTC worth of contracts. This is up by over five times from the bottom near 250 BTC seen in late-September.

Skew added that institutions are now net long 880 BTC contracts, compared to 660 BTC the previous week, as short positions have fallen because institutions are likely expecting a breakout in the upward direction.

Institutions, as defined by the CME, are pension funds, endowments, insurance companies, mutual funds and those portfolio/investment managers whose clients are predominantly institutional.

While some argue that institutions know no more about Bitcoin’s directionality than retail investors like you or I, some have argued that this is untrue. As reported by NewsBTC previously, popular crypto trader Romano argued that institutions using the CME “have a good track record for the right directional trade,” having shorted BTC ahead of the Bakkt launch and the subsequent crash.

What’s Next for BTC?

Institutional crypto investors may be leaning long, but what are the charts saying is next for BTC?

According to a Bloomberg columnist, this move, if it continues, will end at $8,000. Su Zhu, the chief executive of Three Arrows Capital, recently released an excerpt of a report from Bloomberg’s “monthly crypto market columnist.”

The excerpt read that “the worst of this year’s Bitcoin price correction… in our view.” The analyst elaborated that they expect for Bitcoin to remain bound to the $8,000 to $12,000 range until year-end; Bloomberg wrote that increasing institutional investment and a “favorable macroeconomic environment” should produce upside potential, but that “hangover selling from 2017’s price surge” should limit the upside, and potentially create some room for downside to the $8,000 region.

Related Reading: Bitcoin Price Breaks Below $9,000, Historic Rally Now In Jeopardy
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Tether Rebuts “Flawed” Assertion That Bitcoin’s 2017 Run Was Manipulation

Over the past few days, Crypto Twitter has been awash with a discussion about one subject: a paper from two American academics that asserted that Bitcoin’s historic rally in 2017 from $1,000 to $20,000 was predicated on manipulation.

The paper, for some reason or another, gained much traction in the mainstream media, with large outlets covering the news in a seeming attempt to show the flaws of the cryptocurrency market.

Many in the crypto community aren’t happy, however, with the publishing of the report even eliciting a response from the company that was accused of being tangentially involved in said manipulation.

Bull Run

What Report?

For some context, two skeptical researchers — John Griffin, professor at the University of Texas, and Amin Shams, assistant professor at the Ohio State University — recently revised their paper on Bitcoin from 2018, which stated that trades of the USD-backed stablecoin were responsible for sending BTC higher.

As reported by Blockonomi previously, the 119-page revised edition has made an additional assertion: that a single entity, a so-called whale (large cryptocurrency holder), was responsible for wresting Bitcoin from $1,000 to $20,000 in 12 months’ time through Tether. Speaking to Bloomberg in an interview, Griffin said:

“Our results suggest instead of thousands of investors moving the price of Bitcoin, it’s just one large one… Years from now, people will be surprised to learn investors handed over billions to people they didn’t know and who faced little oversight.”

Considering that Griffin and Shams made the assertions twice, and the fact that the report will be published in the much-celebrated Journal of Finance, it may be easy to conclude that it’s bonafide. But far from everyone is convinced of the paper’s accuracy.

Tether Isn’t Convinced of Bitcoin Manipulation Claim

In an announcement published to the on-site blogs of both Tether and Bitfinex — the two companies have overlapping management — the companies wrote that Griffin and Shams have “released a weakened yet equally flawed version of their prior article,” seemingly indicating that the paper has a facetious premise. Indeed, an excerpt of the response reads:

“[T]he authors demonstrate a fundamental lack of understanding of the cryptocurrency marketplace and the demand that drives Tether token purchases. To reduce the spike in the bitcoin price in 2017 to such simplistic terms is facile. It is also an insult to the millions of people in our community that believe in the sound principles governing the digital currency economy.”

Backing the meat of their rebuttal, Tether and Bitfinex wrote that the conclusions made — like the one that a single Bitcoin investor pushed the market higher — are effectively “built on a house of cards” that don’t take a “complete dataset” into account. One such dataset that the authors of the paper failed to consider, the companies write, is the “crucial timing of transactions or the flow of capital across different exchanges.”

According to the response, the fact that this data was not considered while the paper was penned means that the authors should’ve been “unable to establish a valid sequence of events through which the alleged manipulation could have happened.”

And it isn’t only Tether and Bitfinex that aren’t convinced. Per previous reports from this outlet, Jeremy Allaire, the chief executive of Circle, which itself is a key player behind one of Tether’s competitors, wrote on Twitter that the ideas proposed by Griffin and Shams are flawed. Allaire cited the fact that the widespread usage of Tether in 2017 is a byproduct of how there are few cryptocurrency markets in Asia, not a sign of manipulation.

Gabor Gurbacs, an executive of VanEck’s digital assets branch, echoed this line. Gurbacs remarked that he thinks the report was authored by “career academics that fail to understand Bitcoin/crypto market structure basics as well as the fundamentals of cause and effect.”

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Bitcoin Not a Viable Currency: Libra Co-Creator Says

One of the most common critiques of Bitcoin is that the cryptocurrency is unusable as a currency. While this isn’t a popular sentiment to float online, this argument recently gained traction with David Marcus, Facebook’s blockchain lead, revealing that he isn’t a fan of Bitcoin as a currency.

Bitcoin

Bitcoin Too Volatile & Slow to be a Currency?

Speaking at the New York Times DealBook Conference this week, Marcus said that he doesn’t “think of Bitcoin as a currency.” On the matter of why, the long-time Bitcoin advocate, who has claimed to have held the cryptocurrency for years now, looked to BTC’s characteristic volatility:

“People don’t use a unit like digital currency of Bitcoin to pay for things just because it’s so volatile.  It’s actually not a great medium of exchange because of it’s volatility.”

To illustrate his point, the Libra co-founder used the specific example of how Bitcoin’s volatility could affect those looking to make international remittances through the cryptocurrency. Seeing that Bitcoin has seen both 42% and -10% days in the past few weeks, his argument seemingly holds its weight.

What’s interesting about Marcus’ comment is that he’s not the first executive ingrained in the industry to have pushed such a thought.

Speaking to me earlier this year, Litecoin creator Charlie Lee opined that for cryptocurrency adoption to take place, volatility will need to be limited:

“Because crypto prices are so volatile, it’s hard for people to actually use it, meaning adoption is hampered. Volatility is kind of a chicken and the egg type scenario. Once there is adoption, volatility will decrease, meaning more adoption. So it’s a slow process for that to work for us to overcome that.”

Twitter’s chief executive, Jack Dorsey, made a very similar argument during an interview this September. The Silicon Valley darling, seen by many in the cryptocurrency space to be the latest “Bitcoin Jesus,” argued that the cryptocurrency isn’t currently functional as a currency because of its volatility, echoing Lee and Marcus:

“The peaks and troughs are like an investment asset and are equivalent to gold. What we need to do is make it more usable and accessible as a currency, but it’s not there yet.”

Samson Mow of Blockstream has expressed a similar sentiment, but for different reasons that just volatility.  He said that at the base layer Bitcoin takes an average of 10 minutes to process transactions, sometimes upwards of three hours. “You don’t design a payment system that takes 10 minutes to settle on average,” Mow said while explaining why this metric is important.

It’s Making Progress

While these industry insiders are short-term bearish on Bitcoin’s prospects to become a usable medium of exchange for netizens, the project is making progress. Blockstream’s Mow remarked that the best solution for Bitcoin’s “identity crisis” of being a digital currency is the Lightning Network:

“You should be making payments over the Lightning Network because that is instantaneous and almost free. That’s what it was designed for. Everything is designed for a different purpose. Bitcoin was designed for settlement and wealth transfer. Litecoin — ah, sorry, Lightning; Charlie’s going to like that one! — Lightning was designed for fast payments and cheap payments.”

Dorsey’s company, Square, is also working on solutions that will aid the adoption of the cryptocurrency. Square’s fittingly named Square Crypto division has just hired Matt Corallo, formerly of Blockstream and Chaincode Labs, and three other developers of blockchains to help bolster the adoption and use cases of Bitcoin.

It isn’t clear exactly what that team is working on, but Dorsey has shown his love for the Lightning Network in the past, lauding the Bitcoin payments solution a number of times on Twitter.

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Gold Plunges After Dow Records New High; Why Bitcoin May Rise

Thursday wasn’t a great day for gold holders. During the day’s trading session, the precious metal cratered by its standards, falling by $23 — a 1.5% downward move — from $1,490 to $1,468 in a relatively spectacular fashion. This drop came a day after the asset shed $30, implying that a downtrend is forming for gold.

Bitcoin, on the other hand, was relatively stagnant, finding itself ranging at $9,200 for the umpteenth day in a row. And the U.S. stock market registered new highs, surging off news of an impending trade deal, relatively strong economic metrics, amongst other positive news.

Related Reading: Published Author and Altcoin Trader Highlights 5 Crypto Set to Outshine Bitcoin

Gold Plunges; Bitcoin to Follow?

If you’ve followed the crypto news cycle at all over the past few months, you know of the narrative that “Bitcoin is digital gold.” Earlier this year, it was all the rage, with charts displaying the eerily correlated performance of the two assets gaining traction on Twitter.

In fact, Quant Fiction, a markets researcher, found that Twitter users identifying as being a “portfolio, fund, asset, or wealth manager”, have published 100% more tweets mentioning both “Bitcoin” and “risk-off”/”safe haven” than at the start of the year.

But, as aforementioned, Bitcoin has seemingly decoupled from gold, remaining effectively flat as the precious metal has seen its “worst week in two years,” according to this Bloomberg article.

So, the question remains: where does Bitcoin go from here, especially considering the backdrop of fresh all-time highs for U.S. equities and a tumbling gold? According to analysts, up and up.

Related Reading: Central Bank Survey: Canadian Crypto Awareness and Ownership Increasing

Need for Alternative Assets Growing

While those that put their belief in the “Bitcoin is a safe haven” narrative would have you believe the cryptocurrency will follow gold, a Bloomberg analyst recently wrote that the macroeconomic backdrop is proving a need for quasi-currencies, like BTC.  Per previous reports from NewsBTC, an excerpt from the latest update from Bloomberg’s “monthly crypto market columnist” reads:

” Bitcoin’s maturation towards a digital version of gold, plus increasing institutional interest and a favorable macroeconomic environment for independent quasi-currencies, should keep a bid below the market.”

Indeed, Ray Dalio, the co-founder of Bridgewater Associates, recently wrote that he thinks the world’s economy is rife with holes. These include but aren’t limited to extremely low, and even negative interest rates for the creditworthy, large government deficits that he believes are almost certain to “increase substantially,” the impending collapse of “sound finance” in “reserve currency countries and their currencies,” massive liabilities in pensions, and a growing wealth gap.

Bitcoin, according to a number of industry executives is a solution to this problem. The libertarian chief executive of ShapeShift, Erik Voorhees, wrote that Dalio’s comments only show the need for something like Bitcoin.

Risk-on Market Good For Bitcoin

Other analysts have taken the approach that the strong performance in the Dow Jones and the S&P 500 will be a boon for Bitcoin. Fundstrat’s Tom Lee, for instance, wrote on Twitter earlier this year that he expects for BTC to start performing well when the S&P 500 begins to surge.

Related Reading: Bitcoin is Transforming Geopolitics like Gunpowder Did, Says Crypto Commentator
Featured Image from Shutterstock. Charts from Tradingview.com

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Bitcoin Flag Technical Pattern Hints at 25% Price Surge to $11,600

Bitcoin (BTC) has found itself in the midst of a heavy lull; as of the time of writing this, the leading cryptocurrency is down 1% in the past 24 hours. This effective non-action has been persisting for days, with the BTC price having been stuck between $9,000 and $9,400 for the past two weeks.

While this lethargic price action has made some analysts suggest that a price drop is right on the horizon, Bitcoin may be coiling up for another leg upward. In fact, a leading analyst has shown that the cryptocurrency’s recent price action has validated a bullish chart pattern which implies another surge to the upside.

Related Reading: Central Bank Survey: Canadian Crypto Awareness and Ownership Increasing

Why Bitcoin Could Quickly Hit $11,600

Josh Olszewicz, Brave New Coin crypto analyst, recently posted a short but sweet analyst. As can be seen below, the popular trader noted that Bitcoin’s current chart is looking like a “High and Tight Flag,” which is a textbook chart pattern popularized by technical analysis guru Thomas Bulkowski. This specific technical flag is marked by a dramatic uptrend leading into the flag, a period of consolidation, then a move out of that flag and to the upside.

Olszewicz noted that if the pattern plays out in full, Bitcoin could reach as high as $11,600 — 25% higher than the current price of $9,200 — in the coming weeks.

Olszewicz’s chart implies a fast and hard move up to $11,500, which many would say is improbable, but such a move really wouldn’t be that crazy.

As readers likely remember, the end of October saw Bitcoin shoot higher by 42% in a single day, the biggest surge of its kind since 2011 and the fourth-largest price gain in BTC’s short history. Of course, two vertical moves are unlikely in such short succession, but the last move shows that it isn’t impossible.

Related Reading: Square’s Cash App Sold $150M Worth of Bitcoin in Q3: 250% YoY Growth

What Side are the Technicals On?

With this in mind, do other technical factors support the idea that Bitcoin will soon hit $11,600?

Yes, according to a number of analysts. First off, Bitcoin recently filled a bearish CME price gap that existed in the high-$8,000s.

Per previous reports from NewsBTC, analysts think that this fill imbues BTC with the ability to mount higher from here. Popular technical analyst “Escobar,” for instance, argued earlier this month that before Bitcoin can continue its bullish advances, it will need to fill the gap. Prominent on-chain analyst Willy Woo echoed this sentiment, writing in response to a question about the gap:

“BTC has a tendency to fill volume profile gaps and especially gaps in the CME. We still have time to burn before the rocket ship takes off, so a high chance to do that while the price wanders sideways in consolidation.”

To add to the bullish confluence of analyses, a Bitcoin price model created using Facebook Prophet machine learning found that the leading cryptocurrency is likely to end the year at just over $12,000. What’s notable about this model is that it called the price drop to $8,000 months in advance, and forecasted a ~$7,500 price bottom for BTC.

And, to put a cherry on the cryptocurrency cake, the cryptocurrency closed the month of October strong, with Bitcoin holding above the one-month bullish breaker, the 0.618 Fibonacci Retracement of the entire cycle, the Point of Control as defined by the volume profile, and the yearly pivot.

Related Reading: Bloomberg Analyst Explains Why Bitcoin Price is “Caged” by $8,000 to $12,000 Range
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“Co-Founder of Bitcoin” returns to Twitter, calls critics blind

After disappearing off the face of the Internet, Jörg Molt—the latest individual to have claimed to have been involved in the creation of Bitcoin—is back on Twitter. And he’s back with a vengeance, calling out his critics in a tweet that wasn’t received all too well.

What’s up with Jörg Molt?

Last week, the title of Satoshi Nakamoto came under contention again. At a blockchain event in Las Vegas, cryptocurrency commentator Ken Bosak accosted Jörg Molt, an entrepreneur that had claimed to own 250,000 coins and to have co-founded Bitcoin. In a spectacular fashion, Bosak confronted Molt, asserting that he is a “scammer” in the networking halls of the event.

Molt was quick to field some backlash. Prominent Bitcoin educator and technologist Andreas Antonopoulos, for instance, wrote on Twitter:

“I have heard from others that he claims to be the founder of Bitcoin and has thousands of BTC. A LIE.”

Antonopoulos’ quip was just a microcosm of what the internet had to offer Molt, however, with hundreds from all over the industry trying to actively discredit the individual, whose Twitter biography used to read “co-founder of BitCoin.”

“Co-founder of Bitcoin” feigns ignorance, say he isn’t Satoshi

So, Molt decided to take a few days off, deactivating his Twitter account in a seeming bid to get away from it all. But, as mentioned earlier, he has since come back. In his first tweet since deactivating his account, Molt wrote:

“I never claimed to be Satoshi Nakamoto maybe people are too stoned or simple blind [sic] — help them please.”

The replies to that tweet weren’t all too friendly, with many asserting that unless Molt proves he has access to addresses associated with Bitcoin’s earliest adopters, they would be hard-pressed to believe him.

But still, Molt seems to be sticking to his claim, having shared the link of an hour-long YouTube video published on Nov. 5, in which he participated in an interview for the “Wild West Crypto Show” to clear up the air about his claim to be a co-founder of Bitcoin.

The interviewers asserted that they saw proof of Molt’s “well over 250,000 BTC,” and even went as far as to show video of Molt showing a Blockchain.com wallet address with “$3,064,650,240” worth of BTC in it. But Molt added that it doesn’t matter if someone owns one coin or 250,000; it’s the commitment to the cause that counts—whatever that means anyway.

Jorg Molt's Bitcoin Wallet
Source: YouTube

Despite this interview and his assertion that his critics are “stoned,” many remain skeptical of Molt, with Antonopoulos going as far as to double down on his distaste for this latest individual to have claimed to be a Bitcoin co-founder. Antonopoulos tweeted:

“Some time after this message below, @joerg_molt made his account private, to prevent people from reading/replying his tweets. I’m guessing he will make it public and resume his lies once the attention on him goes away. Make sure it doesn’t!”

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Square’s Q3 Financial Report: Retail Interest For Bitcoin Still High

Earlier this year, Blockonomi reported that an array of data indicated Bitcoin’s rally from $3,150 to $14,000 was a move catalyzed by institutions.

Case in point, cryptocurrency analytics firm TokenAnalyst found that the number of unique addresses sending Bitcoin to Bitfinex hit a two-year low, implying a ” lack of retail interest in general currently in crypto.”

Another analytics upstart, The TIE, backed up this sentiment, writing that the relatively low social media mentions of cryptocurrency make them believe it was institutions that pushed Bitcoin higher throughout the first half of 2019.

Bitcoin

However, fintech giant Square’s latest earnings report has shown that retail investors — like you or I — remain enthralled with the cryptocurrency space, despite what the above statistics may suggest.

Retail Still Wants Bitcoin

On Wednesday, Square revealed a statistic pertaining to the cryptocurrency industry: the company’s flagship product, the Cash App, sold $148 million worth of BTC in fiscal Q3 of 2019.

Crypto analyst Kevin Rooke pointed out that this is the sixth straight quarter of growth for this facet of Square’s business. Rooke also noted that Bitcoin revenues at Square are now growing by a jaw-dropping 244% year-over-year, despite the fact that BTC remains over 50% below its previous all-time high of $20,000.

While $150 million worth of Bitcoin buying volume isn’t a lot per se, especially considering bonafide exchanges process around $1 billion in total volumes per day, Square’s report indicated that first-time Bitcoin buyers are on the rise, which itself is a rather bullish signal.

Delphi Digital co-founder Anil Lulla wrote on the significance of this statistic: “Always great to get a pulse on retail interest for BTC via Square’s earnings. My favorite takeaway this quarter: First-time bitcoin buyers have approximately doubled since September.”

Of course, Square’s clientele is based in the Western world, but a growing demand for Bitcoin in a place like the U.S. may go to show that the world is starting to crave cryptocurrencies once again, having widely shaken off the last crash.

Square’s report corroborates sentiment online that Bitcoin is becoming a more and more tantalizing investment. Former Texan Congressman Ron Paul — one of the most outspoken libertarian politicians — recently conducted the bellow poll, finding that 59% of some 77,350 respondents would prefer HODLing $10,000 worth of Bitcoin over $10,000 worth of gold, Federal Reserve Notes, or 10-year Treasury bonds.

Bullish Demand Shock

Again, $150 million in BTC may not sound like a lot of Bitcoin, but analysts have found that Square’s sale of the cryptocurrency should have had a rather significant bullish demand shock on the Bitcoin market.

After running the numbers — factoring in the average cost of BTC in Q3, the number of coins mined, and the value of the coins produced in Q3 — Friar Hass found that Cash App users absorbed a jaw-dropping 8.7% of all supply mined in Q3.

On the matter of this statistic, macro analyst Alex Krüger remarked that it is “excellent news.” Indeed, as Bitcoin is a currently inflationary asset, having a nearly 4% annual inflation rate, buyers that absorb the inflation as an investment should help push prices higher with time.

Krüger’s quip came shortly after he remarked in an extensive thread on Bitcoin narratives that he thinks that BTC is a demand-driven asset, adding that demand shocks—things like the launch of exchange-traded funds, regulations, and capital controls—are key for traders to keep an eye on.

With so much success in the cryptocurrency space thus far, it should come as no surprise that Square is building out its own team for the industry, Square Crypto, having recently hired a number of blockchain developers to make Bitcoin usable as a form of payment.

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