US Crypto Investors May Need To Consider Amending Past Tax Returns

Tax law surrounding crypto assets is currently convoluted and confusing, even despite Congress demanding the IRS clarify the law, and the IRS taking steps to provide more clarity to crypto investors in the United States.

However, given some recent comments from an IRS official regarding like-kind exchanges, crypto investors based in the US may want to consider going back and amending their tax returns to ensure they comply with the law.

IRS Clarifies Law Surrounding Like-Kind Exchange

Ever since Facebook unveiled its Libra cryptocurrency, the United States government and its many branches of government office have taken notice of the young, wild-west-like crypto industry, and the assets traded within it.

Related Reading | Confusing U.S. Tax Laws Lead to $5 Billion In Unrealized Crypto Losses 

Concerns over the disruption of the current monetary system, its use for illicit crimes like money laundering or terrorist funding, and more, have caused the US government to crack down on the crypto market.

It’s also caused the IRS to suddenly take more interest in crypto assets, and have updated tax forms to include if a taxpayer owns crypto assets – to ensure they aren’t missed on tax returns. Confusion remains around uncommon aspects of the industry, such as airdrops, but the IRS has finally begun to clarify the law in important areas.

According to a recent statement by IRS Associate Chief Counsel Suzanne Sinno, the office’s policy regarding like-kind exchanges never applied to cryptocurrencies.

Wikipedia says that a “like-kind exchange under United States tax law, also known as a 1031 exchange, is a transaction or series of transactions that allows for the disposal of an asset and the acquisition of another replacement asset without generating a current tax liability from the sale of the first asset.”

Like-kind exchanges that fall under a 1031 exchange include personal property such as vehicles, or even livestock. The law, however, is clear that it doesn’t include stocks, bonds, notes, or “other securities or evidences of indebtedness or interest.”

Crypto Investors Should Speak To a Tax Professional

Cryptocurrencies, according to Sinno, do not fall under the 1031 exchange tax code and would need to be reported on income taxes.

Prior to 2018, the common belief across the cryptocurrency community was that like-kind exchanges didn’t need to be reported, and thus any trades of Bitcoin into another crypto asset like Ripple, for example, did not need to be specifically reported – only when crypto was traded for cash.

The IRS claims it will be focusing its crackdown on individuals who haven’t reported their crypto taxes at all, and not those that have made mistakes in reporting. But because many crypto investors may not have reported like-kind exchanges, it could put them into the former category.

Related Reading | Overwhelming Majority of Bitcoin and Crypto Investors Refuse to Report Taxes 

Crypto investors who failed to report like-kind exchanges prior to 2018 or at all, would be wise to speak to a tax attorney or accountant to understand their risk exposure, and if filing an amended tax return is suggested.

Filing an amended tax return could result in a taxpayer owing back taxes on crypto trades, especially during the 2017 bull run, however, it is likely a small price to pay compared to the fines and potential jail time for failing to properly report income taxes.

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50DMA: Bitcoin Price Facing Dangerous Retest Of Moving Average

The leading crypto asset by market cap, Bitcoin, has had a confusing year thus far. The cryptocurrency started the year at extreme lows but later exploded back up 350% to $14,000, before falling nearly 50% down to $7,300.

The asset’s third-largest 24-hour gain brought the crypto asset back through the 200-day and 50-day moving average, but was rejected above $10,000 and is once again in free-fall mode. The drop has taken Bitcoin back down to the 50DMA, where the asset is currently retesting it as support – something that one crypto analyst says is very dangerous.

Bitcoin Price At An Impasse: Bull or Bear Market Soon To Be Decided

Bitcoin is at a critical junction, and is either correcting from a strong rally before going on a full bull run or is about to enter the next phase of the bear market. The days ahead will determine the trend for the coming months, as the asset inches closer to its halving.

Related Reading | Bitcoin Price: Reclaiming Important Moving Average Could Lead to Retest of Highs 

The price action has been difficult to gauge which side the market is leaning – bullish or bearish. A breakdown from a massive, multi-month symmetrical triangle turned the market bearish, but a powerful news-driven rally following Chinese President Xi Jinping’s nod of support for blockchain technology caused the asset’s price to surge, causing an epic short squeeze and setting a record for the asset’s third largest one day gain.

The explosive move took Bitcoin back above the 200-day moving average, as well as the 50-day moving average – two moving averages that recently death crossed.

But that powerful spike may have only been a bearish retest of former support turned resistance, and Bitcoin is once again falling, breaking back below the 200DMA, and is now facing a “dangerous” retest of the 50DMA.

Danger: 50-Day Moving Average Must Hold as Support

According to a chart shared by one crypto analyst, Bitcoin was above the 50DMA throughout the entire 2019 rally, until it began to correct, and the asset fell below – but traded closely to it. It wasn’t until September when Bakkt launched to much disappointment, where a sell the news event drove the price of Bitcoin down to the low $8,000 range.

Bitcoin is now back in the $8,000 range, where it is retesting the 50DMA as support. If it fails to hold as support and breaks down below it, it could be a long time before the first-ever cryptocurrency resumes its uptrend and gets back above it and the other critical moving average, the 200DMA.

Related Reading | Crypto Market Death Cross Inches Closer, Will The Bear Market Return?

In October, the two moving averages crossed one another, forming what’s called a death cross, signaling to investors and traders that the crypto-asset would likely see continued downside. Analysts argue that the China news-driven rally was really just coincidental timing of a whale taking advantage of an overly bearish market, and causing a violent short squeeze.

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Short Of The Century: $15 Ethereum Possible If Monthly Fails To Close Bullish

Ethereum is among the crypto assets still vastly below its former all-time price, with a long way to go before it recovers the lofty prices set back at the height of the crypto hype bubble.

According to one crypto trader, Ethereum’s downfall may not be complete, and if the current monthly candle cannot close above former support turned resistance, as low as $15 Ethereum may be possible.

Ethereum and Its Fall From Grace

Ethereum is a unique crypto asset that’s not at all similar to Bitcoin or other payment cryptocurrencies. Instead, Ethereum is designed for smart contracts, allowing developers to code on the protocol and create their own decentralized apps, or even other cryptocurrencies as ERC-20 tokens.

Related Reading | 33 Cent Ethereum and $100 EOS, What’s Going On At One Crypto Exchange? 

During Bitcoin’s meteoric rise and the crypto hype bubble, Ethereum went on its own powerful, parabolic rally, driven largely in part by the initial coin offering boom. As the hype surrounding the emerging crypto market spilled into the mainstream public, investors eager to get in on the ground floor of projects promising to be the next Bitcoin were lured into funding ICOs, and loading up on new, unproven crypto assets that lacked utility or use cases.

In the end, the bubble burst, and initial coin offerings began being targeted by the United States Securities and Exchange Commission, and the trend has all but disappeared completely.

The resulting deflating bubble, not only crushed the hopes and dreams of crypto investors who were sold promise that never materialized into anything, but it also sucked the value out of projects with real value, such as Ethereum itself.

The crypto asset’s price tumbled from an all-time high of over $1,400 per ETH, to under $100 as its recent bear market low.

Short of the Century: From $200 to $15 ETH

However, Ethereum’s free-fall may not be over, points out one crypto trader, who says that if Ethereum can’t close a monthly candle above former support turned resistance, the number two crypto asset by market cap could fall to as low as $15 per ETH.

Ethereum was rejected from monthly resistance at $365, causing the crypto asset to fall back below monthly support at $198.

The crypto asset has spent the last few months trying to get above the critical support level, but thus far has failed to hold. If a third consecutive monthly candle closes below the support turned resistance, the next major monthly support level lies all the way down at $15.

Such a fall from current prices would represent a 99% decline and would be crushing for Ethereum investors who have already watched the price decline as much as 86% from its previous all-time high.

Related Reading | Altcoin Analyst Claims Ethereum Is Overpriced Despite 85% Decline From ATH 

If Ethereum does drop to $15, the crypto market would be in dangerous shape. It would also require a 9,500% increase from $15 to return to its previous all-time high.

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Bitcoin Mining Now Consumes A Quarter Percent Of Global Electricity

Bitcoin mining consumes a large amount of energy, and in return for the upfront electricity costs, miners are rewarded with a set amount of BTC for validating each block added to Bitcoin’s blockchain.

As the crypto asset’s network grows in size and scale, the more electricity required to power the operation. Bitcoin as a network has grown to be so large, it now consumes a quarter percent of the global electricity supply.

Bitcoin Mining Requires Up to 0.25% of the World’s Electrical Supply

Bitcoin mining is a complex mathematic process called “proof-of-work.” To ensure legitimacy, each block added to the blockchain must be first validated by this process. As time goes by, the difficulty of mining grows, and it has resulted in the technology required to mine Bitcoin becoming more expensive and powerful.

Related Reading | 50% of Population To Use Bitcoin By 2043 If Crypto Follows Internet Adoption

In the early days of Bitcoin, mining was as simple as using any normal computer’s CPU. Later on, miners turned to GPUs, and eventually, mining difficulty grew so much that specialty computers designed specifically for mining were created.

But as the technology required becomes more powerful, the more electricity is required to power the equipment. And as Bitcoin scales, so does the requirement for more and more energy supply.

It’s now reached the point where Bitcoin is consuming as much as 0.25% of the entire world’s supply of electricity – more than many nations.

This important milestone was shared by Columbia University alum and Managing Partner at Blocktown Capital, James Todaro. The public figure points out the fact that such an achievement solidifies Bitcoin as an important asset and technology that is here to stay, shedding the negative comparisons to things like beanie babies, tulips, or even rat poison.

The usage proves the technology has merit, and in time could grow to be a mainstay among other everyday technologies like computers, refrigerators, and televisions. Televisions, for example, utilize as much as 5% to 8% of the global residential electricity supply, and there’s often more than one per household.

In terms of global adoption, it would take Bitcoin until 2043 to be used by as much as 50% of the global population, a feat that the internet is only now achieving, despite widespread use among the mainstream public

Related Reading | Bitcoin Consumes As Much Power As Switzerland, But Impact Remains Negligible

Bitcoin still has a long way to go to ever reach a status like the TV, or the internet, but having grown to consume even a quarter percent of the global electrical supply shows the world that Bitcoin is here to stay, and could someday become an everyday technology just like TVs, the internet, computers, and more.

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

The crypto market first began with the advent of Bitcoin, but in just a decade’s time, thousands upon thousands of alternative crypto assets have been created.

Many of these new-age altcoins have performed well for early investors, but the vast majority of crypto assets outside of the top 40 by market cap have little to no liquidity, making them a very poor investment.

99% of Crypto Assets Are Poor Investments

Bitcoin was the first-ever cryptocurrency, created by the mysterious Satoshi Nakamoto, as a way to free the world from the shackles and pitfalls of modern-day finance, where big banks and governments maintain control over the masses and use the control to push their agendas.

Related Reading | List of Crypto All-Time High Prices Shows How Far Market Must Recover 

With Bitcoin being such a breakthrough in financial technology, many other altcoin assets have since been developed, some attempting to carve out their own niche in the market, while others seek to improve in key areas where Bitcoin struggles – for example, transaction speeds.

The boom in new altcoins really picked up in 2017, during the crypto hype bubble and ICO boom. During that time, thousands of more altcoins were launched on the Ethereum protocol as ERC-20 tokens, with many later moving to their own main net, while others remain on Ethereum even today.

Of the potentially thousands of altcoins on the market, only 4,978 of them are known enough to be listed on cryptocurrency price and exchange data aggregator CoinMarketCap. However, only the top 40 crypto assets listed by volume offer investors enough liquidity to be considered “good investments,” according to crypto analyst Willy Woo.

Liquidity is the most important aspect of any asset, as, without it, orders can be stuck waiting to be filled, slippage can occur, and asset prices can fluctuate wildly during entry or exit, as the analyst points out.

The stablecoin Tether offers traders the most liquidity, followed by Bitcoin Cash, Ethereum, then Litecoin, and EOS. Further down the list lies Bitcoin Cash, XRP, Tron, NEO, and Ethereum Classic, followed by Bitcoin SV, Dash, Qtum, Stellar, and more.

Other stablecoins such as USD Coin and Paxos Standard also make the list of top 40 assets, but the liquidity offered is just a flash in the pan compared to Tether or Bitcoin.

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

Anything below about number 20 on the list only offers negligible liquidity for investors, but beyond the top 40, the analyst says, “doesn’t even register.”

Of course, rare instances could cause any of the assets lower than the top 40 to suddenly fall into favor, growing in liquidity and in value. However, the vast majority of the crypto market, as much as 99% of the market, aren’t good investments at all.

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Bye-Bye Bitcoin? Why the Altcoin Bottom is In

Throughout 2019, Bitcoin has been mostly bullish, rising as much as 350% from trough to peak, all while the altcoin market has continued to bleed out further.

However, according to one expert crypto analyst, long-term charts are suggesting that the total altcoin market has bottomed. Bitcoin dominance charts also back up the theory, indicating that altcoins will not only soon explode in value, but they’ll outperform the leading crypto by market cap in the short term.

Altcoin Bottom Is In, Claims Crypto Analyst

At the start of the year, both Bitcoin and altcoins like Ethereum, Ripple, and Litecoin, appeared to have bottomed out and began a steady ascent higher. But come April 2019, the two crypto asset types diverged, and Bitcoin went on to have a parabolic rally, all while an altcoin apocalypse unfolded across the crypto market.

Related Reading | List of Crypto All-Time High Prices Shows How Far Market Must Recover 

The more Bitcoin rose in value, the more altcoin holders – many of which are still holding bags that are down as much as 99% from their previous all-time high – began selling off alts so they could FOMO buy into Bitcoin and not miss out on what could end up being the greatest bull run in the asset’s history and possibly even the history of finance.

But even Bitcoin’s rally topped out, putting the market in a state of confusion. Now that the first-ever cryptocurrency is once again taking a breather, though, it may be the calm before the storm for altcoins that are likely to have finally bottomed, and about to grow substantially in value, outperforming Bitcoin in the very near future.

The idea comes from crypto analyst Crypto Thies, who has shared a chart focusing on the total crypto market cap – sans Bitcoin – and says that recent Heikin-Ashi candles demonstrate a low-volatility phase near its conclusion.

On the total altcoin market chart, indicators are turning upward, volume is rising, and the most recent green candles, according to the analyst, are like a “taut rope before it snaps.” When it snaps, fireworks are expected.

Bitcoin Dominance Backs Up Alt Bottom Theory

The analyst further backs up this theory that the “alt bottom is in” with a chart depicting Bitcoin dominance. Thies says that BTC dominance is no longer looking as bullish as it once was, and a head and shoulders is forming on the weekly relative strength index.

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Head and shoulders formations typically represent the early signs of a trend reversal, suggesting that altcoins will soon trend higher and outperform Bitcoin for a sustained period, allowing many of the altcoins still in the gutter to make up for lost ground.

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Early Bitcoin Adopter Supports Privacy Altcoin Grin

The crypto market was born from cypherpunks hoping to disrupt the current monopoly over finance, and offer the world additional options that favored privacy and freedom. Bitcoin was the first of its kind, but many altcoin projects have since followed that keep the original goals of cypherpunks strong.

An early Bitcoin adopter, driven by the further pursuit of bringing privacy and freedom to the crypto market, has made a sizeable donation in Bitcoin to the privacy-centric altcoin, Grin.

Early Bitcoin Whale Donates 50 BTC to Privacy Altcoin Project

This week, Grin Product Manager Daniel Lehnberg revealed on the official forums of the Grin altcoin project that they had received a sizable donation originating from an early Bitcoin adopter and cypherpunk, in support of the project.

Grin’s General Fund received a donation of 50 BTC from a donor who wishes to remain anonymous, along with a note from the donor.

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

The donor says that Grin makes them feel like it’s 2009 or 2010 once again, likely referencing when Bitcoin first was released into the wild and hope was still fresh and young. The donor claims their motives are only about pushing the technology and altcoin’s protocol forward and ask the Grin team to put the donation “to good use for the development of GRIN.”

The blockchain data suggests that the account associated with the 50 BTC donation dates back to 2010, suggesting that the donor is among the earliest adopters of Bitcoin and cryptocurrencies, and is assumed to be an early cypherpunk.

Whoever they are, they are supporting Grin financially, and appear to be using their funds to attempt to push crypto as a technology even further through the altcoin. Since they asked to remain anonymous, privacy is clearly a topic of concern for the donor, which could be in part why they selected Grin as a project they’d like to support.

What Exactly Is Grin?

Grin is a relatively new altcoin, first launching in January of this year. Grin is a censorship-resistance, privacy-focused crypto project, that utilizes the mimblewimble blockchain.

Like Bitcoin, no entity controls or owns Grin, and its development is supported by the donations of others like the early Bitcoin whale or through the sales of related merchandise created by the current volunteer dev team.

Related Reading | Will Next Gen Altcoins Boom During Next Crypto Bull Run? 

Grin is a proof-of-work cryptocurrency, with each block reward offering miners 60 Grin for each block validated. There wasn’t an ICO or pre-mine, and instead, the altcoin’s distribution began with the mining of the project’s genesis block much like Bitcoin.

Where it differs from Bitcoin, is in the fact there are no addresses on the Grin blockchain, enabling confidential transactions that obscure ownership and any amounts transferred.

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Road To Riches: The Ups and Downs Of Going All-In On Crypto

The promise of a disruptive, emerging technology that could entirely replace money as we know it, caused a digital age gold rush of investors hoping to strike it rich by buying crypto assets.

One shining example of this was an investor who went on to earn $13 million from an early investment in Ethereum. But although the story had a happy ending, it could have all gone wrong and there were many ups and downs along the way.

Dan Conway Risks it All on Crypto, Turns $300,000 into $13 Million

Dan Conway was a former middle-manager at a multimedia corporation located in San Francisco, who first became interested in cryptocurrencies in mid-2015, just as Bitcoin started to come out of a bear market.

While he had heard about the cryptocurrency earlier, at first he decided that spending “real currency” on “some digital token” was “complete bullshit.” But because Bitcoin had crashed from a high of around $1,200 to $300, Conway had a change of tune and thought about what might happen if the first-ever cryptocurrency rebounded once again.

“What if it goes up again? What if I put everything I had into this? I could get rich and never work another day in corporate America,” Conway thought to himself.

Conway was still leery, his all-in attitude could be viewed as destructive, and his self-proclaimed addictive personality had already brought him plenty of hardships throughout his life.

Related Reading | List of Crypto All-Time High Prices Shows How Far Market Must Recover 

But later, Conway convinced his wife Eileen to allow him to invest a sizable chunk of their life savings into Ethereum, which was only $14 at the time. Conway walked himself to a local Wells Fargo and wired enough funds to Gemini to buy 6,993 ETH.

Following the DAO hack, Ethereum’s price tanked, and Conway’s $100,000 investment quickly became worth less than $40,000, losing 60% of his life savings in what felt like an instant.

Then what Conway did next was an incredible risk, and while it paid off for the early Ethereum adopter, it could have gone terribly wrong.

With Ethereum prices at a then low, Conway borrowed $200,000 against his home’s equity and used it to buy another almost 20,000 Ethereum, taking his buy-in price to just $11.21 per ETH.

After the hack, Ethereum’s price went on a parabolic run fueled largely in part by the ICO boom and crypto hype bubble, and of course, with some help from Bitcoin bringing attention to the young market.

In just four months’ time, that $300,000 investment rocketed to a valuation of over $6 million. Conway recounts how some days he’d check his portfolio tracking app, to see his overall holdings rise or fall by $1 million in a single day.

Conway says he felt orgasmic-like euphoria at times when viewing his holdings, comparing it to “a narcotic, shooting up my brain with boosts of dopamine and serotonin.”

But when prices fell, he recalled snapping at his children, donning a hoodie, and suffered from panic attacks. Conway was even fired from his job of over six years.

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

Conway eventually cashed out for a total of $13 million, paid off his home, took a trip to Africa that he and his wife had always dreamt of, and even bought a second home in Ireland.

Conway’s story is uncommon and chalks it all up to a lot of luck. But there’s no denying that Conway took a major gamble on crypto, and while it paid off handsomely, it could have resulted in complete loss of not only his investment, but his home, his job, and possibly his family.

Conway says that while he has returned to normal life since he often lies awake “thinking back on the rush of the market”. He says he misses it “like hell.”

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Bitcoin Market Cycle: Is This Complacency, Or A New Hope?

All markets – such as Bitcoin – are cyclical and go through stages of peak euphoria before a correction brings investors back down to reality. Eventually, anger and depression kick in, and investors begin to fear the worst before the cycle reaches a low and begins to pick up once again and return to the mean.

But where is Bitcoin in its overall market cycle? Was this year’s run-up a disbelief rally before new hope sets in, or has the market on just now reached the complacency stage, and the real carnage is still ahead?

Where Exactly Is Bitcoin In Its Market Cycle?

Bitcoin, the first-ever cryptocurrency, has had a stellar 2019. At the peak of its parabolic run, it reached a price of $14,000 and at the height brought investors who bought the bottom as much as over 350% returns – no other asset compares to Bitcoin’s performance.

Related Reading | List of Crypto All-Time High Prices Shows How Far Market Must Recover 

The powerful rally has crypto investors convinced that the asset is about to embark on its next bull run, but with so much bullish bias in the market, could Bitcoin only now be reaching the complacency stage or a market cycle? If so, it would indicate that the real drop could soon begin, and a new, much deeper bottom could be possible.

This is according to the Wall Street Cheat Sheet’s “psychology of a market cycle” chart, which clearly demonstrates the various stages of a market cycle. According to one analyst, the pattern closely resembles Bitcoin’s price chart when zoomed out.

Following the 2014-2015 bear market, Bitcoin began a meager rally in 2016, bringing early adopters hope once again that the asset could soon be back in bull mode. 2017 later saw optimism turn into belief, thrill, and finally, euphoria as Bitcoin reached its all-time high of $20,000.

After euphoria, investors are typically still bullish, and assume the asset needs to “cool off for the next rally.” Following this, the real collapse begins, ushering in emotional states like anxiety, denial, and panic.

It could be argued that capitulation, anger, and depression kicked in after Bitcoin broke down from $6,000 support in November 2018, which took the price of the asset to the current bear market bottom at $3,150.

Related Reading | Bitcoin Low Timeframe Fractal Matches Weekly Price Action, But Is There More? 

However, Bitcoin investors and supporters remained bullish on the asset the entire time and were using the low prices as an opportunity to buy back in. The fact that sentiment has remained so bullish could suggest that the crypto market – namely Bitcoin – is still in the complacency stage of a market cycle, and what comes next could be the real capitulation that shakes out any remaining bullish investors before the cycle begins again.

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Bitcoin Low Timeframe Fractal Matches Weekly Price Action, But Is There More?

Fractals are repeating patterns that are commonly found all throughout nature but also playing out on the price charts of financial assets like Bitcoin and other cryptocurrencies.

One prominent crypto trader has pointed out that the current price action playing out on lower timeframes appears to be a fractal of weekly price action, but even the weekly price action may be a fractal from the past.

Bitcoin Market Fractal Playing Out Across Multiple Timeframes

Fractals are everywhere. They’re found in the formation of plant leaves, and in the way snowflakes form. They’re also all over Bitcoin charts.

According to a prominent crypto trader, the current price action on lower timeframe Bitcoin charts, appears to near perfectly match up against the price action taking place across weekly timeframes.

After a powerful move up on the news that China would be supporting the blockchain technology Bitcoin is built on, resulting in the asset’s third-largest 24-hour price gain ever, Bitcoin began to consolidate, and finally broke down.

Once the breakdown occurred and the market once again turned bearish, another powerful spike up over the weekend liquidated longs, and the asset has since fallen back down to the $8,700 range where it is currently trading.

Related Reading | Bitcoin Momentum Points To Continued Downtrend Short Term, Medium Term Trending Up 

The entire move appears to closely mimic Bitcoin’s parabolic rally in early April, which took the price of the crypto asset to $14,000 before it was rejected and began consolidating.

Just like the low timeframe movement, Bitcoin price fell from the consolidation trading range, and after setting a local low, spiked back up with strength, but ultimately dropped once again.

But Could the Fractal Match Price Action From Peak of Crypto Bubble?

The fractal itself that’s playing out on lower timeframes, may be a fractal itself. Current price action on weekly timeframes, when viewed on the 3-day timeframe, appears to perfectly match the price action seen in Bitcoin markets back when the crypto asset set its all-time high price back in December 2017.

bitcoin price chart fractal 2017 2019

Both charts depict a descending triangle formation, that broke down into a bear flag. The bear flag itself ended up being a bear trap, with a massive spike in the middle that confirmed the descending triangle’s former support as resistance, before the real fall and downtrend began.

Just as price action played out following the breakdown from all-time high, Bitcoin could fall into a deep downtrend that mimics the 2018 bear market, before finally returning to a bull run.

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After Bitcoin confirmed the descending triangle support as resistance – a price of $13,000 at the time – the crypto asset fell back to local lows around $10,000, and had a substantial drop taking the price of the cryptocurrency to $5,800 in February 2018, shocking fear into the crypto market.

If the same price action plays out, Bitcoin could once again form a V-shaped low around $5,800 if the bear flag Bitcoin has returned to breaks down – just as it did the last time around. Only time will tell if these fractals are indeed valid, but how similar they appear is certainly convincing.

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Stellar Poised For 50% Surge Against Bitcoin Following Supply Burn Spike

The altcoin known as Stellar (XLM) has been among the top ten list of crypto assets by market cap for some time, but has been among the least hyped of the bunch since the bear market first began in 2018.

That all may change, soon, as the crypto asset may be poised for as much as a 50% gain against Bitcoin in the coming days, according to one prominent crypto analyst.

Stellar Launchpad Ready For Over 50% Pump Against Bitcoin

Stellar (XLM) has struggled throughout the bear market to maintain any positive momentum and is one of the few crypto assets that hasn’t yet broken out of downtrend resistance dating back as far as its previous all-time high.

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

At the peak of the crypto hype bubble, Stellar had reached prices of nearly $1 per token, but is currently down over 90% and is trading at just under 8 cents per token.

Things appeared bleaker for Stellar, and was trading at under 5 cents per token in September, but the Stellar Foundation recently burned half of the token supply, causing a massive pump. The Stellar Foundation burned 55 million XLM tokens, resulting in a 25% surge in asset prices.

But the pump may not completely be over, and Stellar instead may be gearing up for another leg up, and one that could result in as much as a 50% gain against Bitcoin in the coming days.

According to prominent crypto analyst DonAlt, Stellar is showing signs that XLM/BTC trading pair is ready for an extremely strong move up, now that resistance has been breached, and could be targeting 1400 sats.

XLM Supply Burn Wasn’t Enough To Restore Bullish Momentum

XLM is currently trading at around 900 sats, and a move to 1400 sats would be a 55% increase from current prices. However, the increase is based on performance against Bitcoin on the XLM/BTC trading pair, and not the US dollar.

On XLM/USD charts, the crypto asset has yet to break out from downtrend resistance and could continue to be locked in a downtrend against the dollar, all while it outperforms Bitcoin. Such a move would suggest Bitcoin could suffer a dangerous drop, causing a divergence in performance next to Stellar.

Stellar is currently the 10th largest cryptocurrency by market cap, right behind Bitcoin for Bitcoin Satoshi Vision, and just ahead of Justin Sun’s Tron cryptocurrency.

Related Reading | Nearly Two Years Later, A Retail Crypto Fund Experiment Is Down 81%

Stellar remains down as much as 90% from its former all-time high price, and for the crypto asset to return to such prices, would require a 1,150% gain. XLM is just one of many altcoins that has underperformed Bitcoin by a large margin in 2019.

Featured image from Shutterstock

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List of Crypto All-Time High Prices Shows How Far Market Must Recover

Bitcoin may be once again ready for a bull run, but the rest of the crypto space has a lot of catching up to do in order to return to peak prices set years ago.

A list circulating social media depicts the most popular cryptocurrencies then and now, and shows just how far the entire crypto market needs to recover in order to return to those prices, and potentially beat them.

Two Years Later: The Crypto Market Is Still 80% Or More Down From All-Time High

In 2017, cryptocurrencies and Bitcoin went from a completely unheard of technology for mainstream common-folk, to the talk of the town.

The allure of rags to riches stories and ballooning asset prices drew in a massive influx of retail investors with little to no previous investment experience, and the end result was them getting stuck holding extremely heavy bags, as early adopters sold off the assets at all-time high prices.

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

Many of the top ten cryptocurrencies by market cap have completely fallen out of favor since, and are down anywhere between 94% to as much as 100% from their all-time high prices. Even the current top ten, comprised of actual crypto assets with real utility, are down anywhere from 82 to 92%, with only one rare altcoin outperforming Bitcoin, which itself is still down 54% from its previous all-time high of $20,000.

According to the list, Binance Coin tops the entire market in terms of performance, down only 48% from the asset’s all-time high. Bitcoin is right behind it, at 54%. At one point, Bitcoin had reclaimed even more lost ground, but a rejection around $14,000 sent the first-ever cryptocurrency back into a downtrend, and it is still struggling to return to the bull run it appeared to be kicking off earlier this year.

Altcoins, however, haven’t fared as well as Bitcoin, with the majority of the alternative crypto assets still down anywhere 80% or higher from their all-time highs.

The second place-crypto by market cap, Ethereum, which topped out at over $1,400 is still down 87%, while the number three crypto-asset, XRP, remains down 92%. Bitcoin Cash, the hard fork that was introduced at the height of the crypto hype bubble, is also down 92%.

Litecoin, which experienced a halving this past year, saw much stronger gains leading up to the event, but a post halving sell-off has taken the asset’s price back to as much as 82% down from its all-time high.

EOS, which wasn’t introduced to the market until after the bubble began to pop, remains down 84%. Stellar and Tron both faired similarly, down a respective 91 and 92% from their former all-time high.

The altcoins that formerly made up the top ten cryptocurrencies by market cap back at the bubble peak, have struggled even harder to return to mean. These assets, such as IOTA, Dash, NEO, and Dash, are all down anywhere from 94 to 96%. Verge and XEM are down 98% and 99%, and BitConnect, a proven scam, has resulted in a total loss.

Related Reading | Nearly Two Years Later, A Retail Crypto Fund Experiment Is Down 81% 

The math is even more damning, as not only is Verge, for example, down 99% from its all-time high, it would require an over 6450% gain to break above its all-time high, suggesting that many investors still holding these heavy bags, may be stuck at a loss forever.

The example also shows that while investing in the crypto market top ten is typically the wisest and least risky of choices, even that doesn’t mean an asset won’t fall out of favor completely and end up down 99% from its highest possible price.

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TGIF: Do Fridays Foretell Future Movements in Bitcoin Price and Other Crypto?

It’s Friday, and Bitcoin price is once again falling, breaking below $9,000 and trading at $8,750 currently.

According to one legendary trader, where an asset closes on a Friday can often predict the future performance of the asset. Is there any truth to the theory that could benefit crypto traders? Recent performance appears to suggest there’s validity to support the idea.

Gann You Beleive It? Fridays May Predict The Future of Bitcoin Price

Investors and traders of crypto assets like Bitcoin, or any financial asset for that matter, often use detailed fundamental and technical analysis to attempt to predict the future performance of the asset they’re interested in.

Related Reading | Gann Theory Suggests Bitcoin Price at “Do or Die” Moment, Important Pivot Ahead 

However, there’s also a smaller subset of analysts that use other alternative and more unorthodox methods to gain an advantage in the market. One such method involves paying close attention to specific dates and points in time as an indicator of future price movements, and where the price of an asset closes on Fridays may be among one of the most useful indicators yet.

William Delbert Gann was a legendary stock market and commodities trader born in the late 1800s, long before computer programs offering technical analysis software or trading bots were ever invented. Instead of relying on adding indicators and buy or sell signals to TradingView charts, Gann would instead use geometrical shapes, math, and even astrology to predict future movements in financial assets.

His beliefs were that all markets were cyclical and that certain planetary alignments would occur on “natural dates” that would ultimately impact market behavior through the emotional state of the market’s participants.

Using these simple yet unorthodox tools, Gann was able to accurately predict the tops and bottoms of markets, and earn himself legendary status as a trader.

Another time-and-date-based theory, and among the key principles of Gann theory, is the idea that if a low is set on a Friday, the asset’s price will trade either much lower the following week. The same is true for highs set on a Friday, where the price of the asset is expected to trade higher the following week.

It sounds both simple and unrealistic, however, the past major moves in Bitcoin markets appear to back up the theory, or at least give it additional credence and validity.

bitcoin price crypto friday wd gann theory

Can Past Performance Be Indicative of Future Results in Crypto?

In the chart above, the last five Fridays in Bitcoin markets can be seen. The first Friday depicted, on October 11, was not the high for the week. However, the following Friday set the low for that week, and as Gann’s principles suggest, the Bitcoin price traded much lower in the days following.

That’s until Chinese President Xi Jinping made a surprise statement in support of blockchain technology, causing a massive surge in Bitcoin price on Friday, October 25. With the high set on a Friday, as Gann’s theory predicted, Bitcoin traded much higher the following week.

The next Friday, November 1, failed to set a low nor a new high for that week, and Bitcoin continued to consolidate. Once again, today, Friday, November 8, Bitcoin has fallen and set a new low for the week, which if Gann’s theory continues to play out, much lower prices would be expected during next week’s trading session.

In addition to date-based predictions, Gann also developed such technical indicators as the Square of Nine, the Hexagon Chart, and the Circle of 360. While his theories may be strange and outside of the norm, they earned the trader an iconic reputation, and his tools are often used even today.

Related Reading | Can Ancient Math Predict the Next Bitcoin Top at $220K? 

The next time as a crypto trader you wake up and think yourself “TGIF,” remember it may be the best day to watch for the perfect entry ahead of the new week of price action.

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Bitcoin Price Breaks Below $9,000, Historic Rally Now In Jeopardy

Two weeks ago, Bitcoin price set a record for its third-largest 24-hour gain in the young asset’s short history, rocketing from $7,400 to $10,500 from low to high.

After weeks of consolidation, the crypto asset has run out of steam and has begun to fall, first breaking below support at $9,000 where it is currently trading. Can bulls push Bitcoin price back above support and make a push higher, or will bears regain control and potentially set a new local low?

Bitcoin Price Finds Itself In Another Descending Triangle, Breakdown Begins

This morning, after weeks of indecision and ping-ponging between a tightening range, the first-ever crypto-asset finally appears to have made a decision on its direction in the short term and has fallen below support at $9,000.

Related Reading | Bitcoin Momentum Points To Continued Downtrend Short Term, Medium Term Trending Up

Once again, Bitcoin may have found itself trading within a descending triangle pattern – a pattern that has repeatedly spelled disaster for the crypto asset throughout the bear market. The pattern, which makes lower highs but similar lows, on lower timeframes finally gave way, and Bitcoin price has started to fall.

If the pattern is indeed a descending triangle, the resulting breakdown could bring the crypto asset back to local lows, or potentially lower, reaching the bottom of a multi-month channel Bitcoin has been trading within.

bitocin price chart

Possible Bull Flag Formations Could Save Crypto Bull Market

All hope isn’t lost for bulls just yet, even despite today’s drop. The powerful rally also could have been the flag pole in a massive bull flag that is forming. Bull flags typically make lower highs and lower lows, before eventually once again taking bears by surprise with a quick break above resistance.

If Bitcoin price can find support at current levels – roughly $8,800 – it could suggest that the pattern is actually a bull flag and not a descending triangle, with a target of over $11,000.

A move toward $11,000 or above would set a new higher high, and would likely restore the confidence of bullish crypto investors and support the theory that Bitcoin’s next bull run is beginning.

bitcoin price chart monthly

If not, the historic rally may be almost entirely erased, and a deeper drop would be likely. However, it still wouldn’t mean that Bitcoin’s chances for a bull market are completely lost, as even a deeper drop into the current multi-month channel would still be within a larger bull flag formation on monthly Bitcoin price charts.

Related Reading | Bitcoin Monthly Close Keeps Bull Flag Formation Intact, Target Over $14,000

The target of the bull flag on the monthly price chart, would be a new all-time high. Once Bitcoin broke above its former all-time high in 2017, the true bull run really began – ultimately making Bitcoin and crypto household names and taking the asset to its all-time high of $20,000.

 

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Nearly Two Years Later, A Retail Crypto Fund Experiment Is Down 81%

Back at the tail end of the crypto hype bubble in 2017, it wasn’t uncommon to find posts throughout the cryptocurrency community that demonstrated what a small investment made in Bitcoin at the beginning of the year would have brought savvy investors for riches.

Just as the bubble began to pop, a Reddit user attempted to replicate such comparisons in a new year and sought to track the performance of a $1,000 investment spread evenly across the top ten cryptocurrencies at the time. The end result even nearly two years later, has been a loss of 81% on the entire investment.

Down 81%: Crypto Bubble Pop Turns $1,000 Investment Into $192

At the start of 2017, Bitcoin hadn’t even broken above $1,000, yet it ended the year reaching a price 20 times that. Many other crypto assets followed a similar trajectory, making many braggart investors wealthy that year.

The discussion of wealth generated through even tiny investments in the asset class spread throughout discussion forums around the web, and subreddits focusing on cryptocurrencies suddenly dominated the list of top threads on the popular social content aggregating website Reddit.

Related Reading | Reddit User Wins Lottery, Buys Bitcoin: Here’s What He Could Earn 

There, on Reddit, one user who saw many threads during the previous year track their road to riches publicly, decided to create a new thread where he would track the progress of a $1,000 investment made at the start of January 2018, across the top ten cryptocurrencies by market cap at that time.

The crypto fund experiment – nearly two full years later, is still down 81% from the initial investment. Sadly, the results of the retail crypto fund are the norm for most investors who bought in just as the bubble was popping.

Bitcoin Saves Portfolio From Added Losses, Nearly Half of Assets Fell Out of Top Ten

Even the actual list of cryptocurrencies invested in demonstrates just how much the emerging crypto market has changed dramatically in just two short years of bear market.

The investor behind the fund notes that a total of 40% of the list of top ten cryptocurrencies are no longer in the top ten, with NEM, Dash, IOTA, and Cardano all falling out of favor for the likes of EOS, Binance Coin, Bitcoin SV, and stablecoin Tether.

Tether’s appearance in the top ten alone is a strong indicator of just how bearish the market turned after the bubble popped, as it’s commonly used as a flight to stability when crypto prices are expected to crash.

“At no point in this experiment has this investment strategy been successful, explained the Redditor, adding that the “initial 2018 Top Ten have under-performed each of the twenty-two months compared to the market overall.”

Related Reading | Crypto SIM Hack: Somber Reminder To Never Invest More Than You Can Afford to Lose 

The full $1,000 investment is now worth just $192. Four performers on the list are down over 90% even today, and the entire investment would be even worse off it if weren’t for Bitcoin, which the investor remarks is “still miles ahead of the pack.”

The sad state of this crypto fund experiment is a sore reminder for crypto investors to never invest more than they can comfortably afford to lose.

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Could a Post-Swell Ripple Dump Cause XRP To Drop Another 50%?

This week kicks off the annual Swell event hosted by Ripple, which gathers together the greatest minds and influencers from the crypto and general finance space under one roof to talk about the future of fintech.

Each year, the conference causes a pump leading up to it, but later dumps following Swell in a “buy the rumor, sell the news” type selloff. One crypto analyst believes that if the dump gets severe enough, it could cause another 50% drop in XRP price.

Annual Conference Causes Ripple Price to Swell

Back in 2017, Ripple first began its annual Swell conference where it has hosted big names like former United States President Bill Clinton, former Fed Chairman Dr. Ben Bernanke, and Sir Tim Berners-Lee, regarded as the inventor of the world wide web.

The surge in interest around the company and their native cryptocurrency, XRP, and the expectation of hot industry news breaking during the event, often leads to a pre-event pump, driving up the price of XRP.

Related Reading | Will Upcoming Ripple Conference Cause XRP Price to Swell?

Even this year, Ripple had fallen to a new low of $0.24 cents per XRP token, and as the Swell conference inched closer and closer, the crypto asset rebounded back to $0.30 where it is currently trading.

But now that the event itself is underway, investors may be preparing to “sell the news” and dump any XRP bought in anticipation of a more significant pump. And if the dump gets severe enough, according to one crypto analyst, it could push XRP below current support, resulting in another 50% drop from current levels.

XRP Price At Risk of 50% Drop Following Sell the News Event

With Swell in full effect, the pre-event pump phase has already passed, and the XRP/BTC trading pair failed to gain enough momentum from the event to break through a 600-day long diagonal resistance. The rejection at diagonal resistance has put the crypto asset at risk of a further fall to the next support level.

As one crypto analyst points out, a gap lies below current support and if it fails, XRP could fall from a price of 3100 sats currently, to as low as 1400 sats – the next level of support dating back to late 2017 – just before the asset skyrocketed to its all-time high.

Related Reading | Ripple Whale: It Only Takes $20,000 To Become a XRP One-Percenter 

The fall to that level of support, however, may be the launchpad Ripple needs to take the price of XRP through diagonal resistance and back to prices closer to the all-time high it set back in 2018 – of nearly $4 per token.

Ripple is still currently down over 90% from that all-time high price of $3.82 it set back in January 2018. To return to that number, Ripple would need to have an over 1,100% gain from current prices.

Featured image from Shutterstock

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Bitcoin Momentum Points To Continued Downtrend Short Term, Medium Term Trending Up

Bitcoin yet again finds itself at a critical junction – one that may set the trend ahead for the coming days or weeks, and make the difference between a new bull run or a fall back into a bear market.

A momentum indicator may provide hints as to what Bitcoin may do in the short-, and medium-term, and could help clear up the current confusion across the crypto market.

Bitcoin Trend Indicator Sends Mixed Signals

Price action in Bitcoin markets has been confusing, to say the least. When traders were most bullish and expecting a new all-time high to be set, the crypto asset crashed below $10,000 and fell to the low $7,000 range.

Once there, the market turned bearish, then the first-ever cryptocurrency went on to set its third-largest single-day gain in the asset’s short decade-long history, skyrocketing from $7,400 to $10,500 in a short squeeze of epic proportions.

Related Reading | Bitcoin Monthly Close Keeps Bull Flag Formation Intact, Target Over $14,000 

Since then, though, Bitcoin is once again consolidating at the top of its trading range and could make a push higher. However, a leading momentum indicator for technical analysis – the Gaussian channel – on daily timeframes suggests that Bitcoin isn’t yet ready to break upward out of its recent downtrend, and is still currently red and pointed downwards.

However, on weekly timeframes, the same Gaussian channel appears to contradict the lower timeframe indicator and has started to point upward after turning back to green – signaling a buy on weekly Bitcoin price charts.

Long-term technical analyst Dave the Wave shared a detailed look at the Gaussian channel on the two timeframes and speculates that the indicator is suggesting that the trend in the short-term will be down, while in the medium-term, the trend is pointing up.

The analyst also points out that on weekly timeframes, the Gaussian channel is following logarithmic growth curve and cyclical mean curve on Bitcoin price charts.

The Gaussian channel first began to turn red back in August, at the same time the weekly began to turn green following Bitcoin breaking upward out of its accumulation trading range between $3,000 and $4,000 – where the asset spent the first few months of 2019.

Many call the Gaussian channel a lagging indicator, but such is the case with most long-term trend indicators. However, it doesn’t discount the validity of the indicator, which has thus far been accurate in spotting trend changes in Bitcoin.

Related Reading | Not So Fast Bulls: Latest Bitcoin Pump May Be Wyckoff Distribution Throwback

If the Gaussian channel is once again accurate, Bitcoin would theoretically fall at current levels further into a downtrend, but would soon find the strength to break up once again and continue on its bull run.

Featured image from Shutterstock

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

Bitcoin’s meteoric rise not only made the crypto asset a household name and caused extreme FOMO at the tail end of 2017, it also caused a surge in interest in altcoins from those seeking to find the next Bitcoin.

While a “next Bitcoin” may not exist, many altcoins very well could outshine the first-ever cryptocurrency, and an expert altcoin trader and published author on the subject has shared his list of the top 5 cryptocurrencies that have a strong chance of outperforming Bitcoin in 2020.

Who is Altcoin Trader Nik Patel?

Nik Patel is the author of a top-selling cryptocurrency book titled An Altcoin Trader’s Handbook, and runs an ongoing blog of the same name that provides regular cryptocurrency market updates, with the majority of them focused on more obscure altcoins the analyst expects to grow in value and dominance.

Related Reading | Experienced Altcoin Trader Outlines Expectations For Bitcoin and Alt Bull Cycles

Patel is an expert in the space, having first got into cryptocurrencies in 2013 after stumbling upon the meme-filled Dogecoin subreddit. After he became enamored with the digital asset class, Patel tried his hand at trading altcoins and found much success, earning him a reputation as an authority in the space.

Even today, Patel shares regular updates on altcoins he sees with potential and shares it with the greater crypto community. In his latest report “Coin Trader Nik” highlights the top 5 cryptocurrencies he expects to outperform Bitcoin in the next year.

…And the Top 5 Crypto Set to Outshine Bitcoin Are?

Cryptocurrencies are a speculative market driven by hype. Outside of the top ten cryptocurrencies, which offer true value or utility, most of the top-performing altcoins on the market offer very little value or utility, and instead are driven almost entirely by hype and promise.

That promise of potentially outperforming Bitcoin, is often too enticing an opportunity for crypto investors to pass up, and they load up bags of obscure altcoins hoping for a moonshot.

Nik Patel hopes to take some of the guesswork out of this for crypto investors and has released his list of the top 5 crypto assets he expects to outperform Bitcoin in 2020. The published author uses a combination of fundamental analysis coupled with technical analysis to provide a detailed overview of each asset.

On the list is Komodo (KMD), a scalable, business-friendly blockchain solution; New Kind of Network (NKN), offering decentralized networking; V-ID (VIDT), a blockchain-based solution for file protection and validation; Fantom (FTM), a smart contract focused network that aims to solve scalability issues found in Ethereum and others; and finally, Constellation (DAG), designed to improve data transfer efficiency and monetization.

Related Reading | Altcoin Trader: Alt Market Cap Shows Longest Accumulation Phase Yet

Whether these assets actually go on to outperform Bitcoin is a coin toss, however, given Patel’s experience with analysis of this type and success in the cryptocurrency market, investors may want to dig in further before placing a buy order. Additional information on each altcoin can be found on Patel’s blog, An Altcoin Trader’s Blog.

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

The cryptocurrency market is currently undecided on if Bitcoin is about to embark on its next bull run, or if it’ll fall back further into a bearish trend in the short-term.

The neutral market could finally have its decision, if a “life-changing” golden cross occurs in Bitcoin price charts, according to one crypto trader and analyst.

Golden Cross Forming on Weekly Bitcoin Charts

During the second quarter of 2019, the market was convinced that Bitcoin had begun its next bull run, and would soon reach price projections of $100,000 per BTC and higher in the coming years as the bull market comes to a peak.

Related Reading | Dot Com Vs Crypto Bubble: A Glimpse Into Human Psychology and The Future of Bitcoin?

But a fall from a triangle at the top of the early 2019 rally caused market sentiment to turn bearish, with many fearing that Bitcoin’s bear market isn’t actually over.

However, an important golden cross is close to happening on Bitcoin weekly price charts, and if it occurs, it could “change your life,” according to one crypto trader and analyst.

In a chart shared by the analyst, a black box depicts where the golden cross is about to occur, along with a comparison demonstrating the powerful rise following the last time such a life-changing golden cross played out.

The golden cross is of the 100-week and 50-week moving averages – two important long-term moving averages that often signal to investors that a trend has legs.

Life-Changing Money: 3,900% ROI Following Last Cross on Weekly

The last time a golden cross of the 100-week and 50-week moving averages happened, was back in mid-2016, just before Bitcoin really began to skyrocket and a bubble formed.

Back then the price of Bitcoin was roughly $500 per BTC, and the golden cross kicked off a powerful rally that took the price of the asset to an all-time high price of $20,000 per BTC at its peak.

It’s incredible to think that even a $500 investment could turn into $20,000, but that’s the power of Bitcoin. No other asset has ever performed as strongly and offered such enormous “life-changing” returns for investors. The entire move represents a 3,900% ROI – a number that’s unheard of in other asset classes over an entire lifetime of an investment, let alone the year or two it took Bitcoin to reach such astronomical returns.

Related Reading | Make It Or Break It Time For Bitcoin, Rally In Jeopardy If Support Is Lost

If Bitcoin rises another 3,900% from the golden cross that is about to happen, it would take the price of Bitcoin from today’s prices at $9,250 to $370,000 per BTC – and there’s no denying that is life-changing money, especially if an investor holds more than one BTC.

Featured image by Shutterstock

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Reddit User Wins Lottery, Buys Bitcoin: Here’s What He Could Earn

Buying Bitcoin in the first few years after its creation would have been the investment equivalent of winning the lottery.

But what might happen if an actual recent lottery winner invested half of his winnings into Bitcoin, and how much could he potentially earn if Bitcoin reaches its full potential?

Winning The Lottery and Betting It On Bitcoin

The emerging asset class of digital currencies is a speculative, high-risk market. Those interested in investing into crypto or Bitcoin are often told to never invest more than they can afford to lose.

Related Reading | Dot Com Vs Crypto Bubble: A Glimpse Into Human Psychology and The Future of Bitcoin?

But what happens when a millennial male happens to win the lottery, and suddenly finds himself with an excess of money they don’t actually need, and can easily afford to lose? He invested half of it in Bitcoin, of course.

Reddit user /u/Joxnlol recently won half a million dollars on a scratch ticket from the Illinois State lottery this past April and promptly invested half of it in Bitcoin the following month in May.

Given Bitcoin’s penchant for rising a few thousand percent in value during bull runs, then later dropping 90% in value in downtrends, will either make the decision the smartest one the man has ever made or possibly the most foolish – only time will tell.

Depending on when the investment was made in May 2019, the price of Bitcoin was anywhere between $5,000 and $9,000. Assuming the investor bought in around early May, at the recent $14,000 peak, a $250,000 investment in Bitcoin at $5,000 would have netted the bold Reddit user a 180% profit, taking the $250,000 and turning it into $700,000 had he sold the top.

A $250,000 investment in $5,000 Bitcoin would result in holdings of 50 BTC. Bitcoin has been predicted to reach prices ranging from $100,000 per BTC to as much as $1,000,000.

Risk Versus Reward: How Much Could The Reddit User Earn?

If Bitcoin reaches $100,000 per BTC, it would represent a 1,900% increase in the investment and would take the total value to $5,000,000, earning the investor a $4,750,000 profit.

If Bitcoin reaches the highest predicted amount – a prediction that John McAfee is willing to bet his manhood on – it would earn the investor a nearly 20,000% ROI, and take the total value of 50 BTC to over $50,000,000, with a profit of just under.

Of course, these numbers are only possible if Bitcoin reaches such lofty predictions. The other factor is a matter of when this occurs, and if it does at all.

On the flipside, most investors in the first-ever cryptocurrency agree that the asset will reach such incredible values, or fall to zero and disappear from existence – with very few scenarios possible in between. Bitcoin either fulfills its potential and replaces fiat currencies, or it doesn’t.

If Bitcoin does fall to zero, it would represent a total loss for the investor, and he’ll have thrown away $250,000 he had just won via a scratch ticket.

Related Reading | Make It Or Break It Time For Bitcoin, Rally In Jeopardy If Support Is Lost

If you were to win the lottery, would you take the same risk this bold Reddit user did? If you do, just be sure not to tell the world you’ve done so, as the second most important advice crypto investors are given after the “don’t invest more than you can afford to lose” is “never disclose your crypto holdings.”

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Dot Com Vs Crypto Bubble: A Glimpse Into Human Psychology and The Future of Bitcoin?

All financial markets are cyclical, including the cryptocurrency market. The price action of assets like Bitcoin, Ethereum, and even traditional assets like stocks or commodities, are driven by a complex balance of supply and demand, but also the psychology of each market’s participants.

A comparison between the late 1990s and early 2000s dot com era boom and the late 2017 crypto hype bubble show just how similar human psychology playing out in markets can be, and potentially offer a glimpse into Bitcoin’s long-term future.

Market Psychology Compared: Crypto Versus Dot Com Bubble

It’s not uncommon to see today’s crypto market compared to the dot com bubble of the early 2000s. Both were emerging technologies that offered untapped potential and promise and took the entire world by storm.

Related Reading | 50% of Population To Use Bitcoin By 2043 If Crypto Follows Internet Adoption

Investors flocked to budding brands harnessing the power of the new internet technology in droves, driving up the price of stocks like Amazon long before the online bookstore became the wide-ranging digital brand it is today.

In a comparison against Bitcoin, Amazon’s stock performance during the dot com bubble shows a similar market structure – one that is highly driven by speculation and therefore, the emotional and psychological state of investors.

Markets peak around periods of extreme euphoria, and once investors come down to reality form the high they were riding, oftentimes fear, anger, and even depression take over. All this before a long, drawn-out return to mean.

The charts shared demonstrate that human psychology rarely changes, and thus, markets typically behave in similar manners. As is the case with Amazon, so long as the underlying asset still has value, after a long period of consolidation, the asset can go on to rally once again, making the initial peak look like a mere blip on a price chart.

Amazon: A Glimpse Into Bitcoin’s Future?

Very few Bitcoin investors are buying up the scarce digital asset for what it can currently do, and instead, are speculating on its long-term potential to disrupt the financial industry and potentially replace the world’s fiat currency.

The same was true during the early days of the internet, during the dot com boom. Internet companies were a dime a dozen, each offering promise of future breakthroughs in technologies and user experiences.

The majority of the companies, however, died during the collapse after the dot com bubble popped, and from the ashes rose today’s giants like Amazon. But even Amazon was once nothing more than a bookstore, and not the digital powerhouse that it is today.

According to data, if Bitcoin follows the same pace as internet adoption, 50% of the world’s population will be using the cryptocurrency in some way.

Related Reading | Daily Activities Like Grocery Shopping May Hold the Key to Bitcoin Adoption 

At one point, the internet – like Bitcoin – was considered a fad. And although Amazon’s stock price crashed following the bubble pop, it went on to bring even invests who bought the absolute top of the dot com peak over 1669% returns at the recent highs set over the past year.

And just like the dot com bubble, many projects will die along the way, but those that offer real value will eventually grow to become the Amazon’s of the space.

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Altcoin Analyst Claims Ethereum Is Overpriced Despite 85% Decline From ATH

During the initial coin offering boom and the height of the crypto hype bubble in 2017, Ethereum’s price ballooned to as much as $1,400 per ETH at its peak.

Nearly two full years later, and the asset is still 85% down from its previous all-time high price, yet one crypto analyst claims that Ethereum is “overvalued” and looks “weak” on monthly price charts, suggesting another 40% fall could be ahead.

Inflating Ethereum: The ICO Boom, And Resulting Bubble Pop

Ethereum is an altcoin that offers smart contract functionality, giving it unique attributes above and beyond what Bitcoin can offer and giving it added value for developers. It’s earned the crypto asset the number two spot in the list of top cryptocurrencies by market cap, behind only Bitcoin itself.

Throughout 2017 as the crypto landscape heated up, Ethereum became the platform of choice for most developers to launch new altcoins as Ethereum-based ERC-20 tokens, that could either remain on the Ethereum blockchain long term, or later be moved to their own mainnet.

Related Reading | Bull Market Imminent? Why Investors are Stacking Ethereum, XRP, and Litecoin 

Many of today’s top cryptocurrencies were born as ERC-20 tokens, and the demand generated by the ICO boom during 2017 helped bring Ethereum’s price to an all-time high of nearly $1,400. But once the crypto hype bubble popped, and the ICO boom fizzled out due to increasing pressure from financial market regulators, Ethereum’s price plummeted to a low of nearly $80.

Today, Ethereum’s price remains as much as 85% down from the all-time high it set in early 2018, yet one crypto analyst still says the price of the number two cryptocurrency by market cap is too high and is currently “overvalued.”

Ether Is Overvalued, According to Analyst: 40% Retrace Possible

According to full-time crypto trader, analyst, and educator Teddy Cleps, Ethereum’s monthly chart appears to look “weak” after failing to break above diagonal resistance for nearly two full years.

“Key” horizontal support has now flipped to resistance, and the analyst points out that nobody is building anything new and no new ICOs are being launched on the network – a far cry from the activity that drove the asset’s price to its all-time high.

Related Reading | 33 Cent Ethereum and $100 EOS, What’s Going On At One Crypto Exchange?

The combination of factors suggests to the analyst that Ethereum is currently overpriced at $185 per ETH, or 85% down from its all-time high. As a result, the analyst is expecting another 40% “retrace dump” that would take the price of the crypto back down to around just above $100 per coin.

At that price, Ethereum will be down once again over 90% from its all-time high, and could cause further panic in investors who are still holding the asset since the early 2018 top.

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Binance US Reaches 10% of Coinbase Trading Volume in First Month In Crypto Market

Binance exploded onto the scene in late 2017 and quickly captured the lion’s share of the overall crypto market, even despite dominance from platforms like Coinbase. But a recent change in the regulatory climate forced Binance to move US investors off its flagship platform and onto a new US-based exchange.

And just like the original Binance, the new US-based platform is already growing rapidly and has reached 10% of the trading volume Coinbase currently sees in a single day.

Binance US Gains on Coinbase, Captures 10% of Daily Trading Volume

Back in June, Binance revealed that it would soon be shuttering US investors from using its regular trading platform, known for its exotic list of altcoins, and onto a new US-based platform sans many of the altcoins that put the crypto poster child on the map.

Related Reading | Can Coinbase Capitalize On Binance Becoming Less Attractive To US Crypto Investors? 

The following panic in investors led to a mass exodus of altcoins, causing them to bleed out to new lows, while Bitcoin stole whatever interest was left in the crypto market.

But since Binance US opened in late September, the platform is already off to a great start, regularly adding new assets and already capturing 10% of the trading volume that rival Coinbase does.

Binance US trading volumes have grown to over $15 million on any given day, while Coinbase reaches roughly $150 million in the same timeframe.

Increased Competition Can Be Good For Crypto Investors

In the United States, Coinbase has long enjoyed the leadership role and became a household name during the crypto hype bubble when it topped Apple’s app store list of top finance apps. But Binance gave the platform a real run for their crypto crown, and even surpassed Coinbase to become the market leader.

But the recent move to usher US investors to a new platform put Binance at risk of losing market share to Coinbase, especially in Coinbase’s homeland of the United States. However, Coinbase nearly squandered whatever advantage they may have had by raising fees for traders with the smallest amount of trading activity.

The crypto community was furious and began clamoring for a Coinbase killer. Now that Binance US is picking up steam, its quickly becoming the market’s best chance for such a thing.

Related Reading | Coinbase, Cash App, Remain Top Rated Places To Easily Buy Bitcoin 

But rather than kill Coinbase, the best-case scenario is for the two platforms to continue on harmoniously, competing with one another in such a way that causes both to regularly be upping the ante when it comes to new features and new assets, which will only benefit the greater crypto community of investor and traders that use each exchange.

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Here’s How Crypto Investors Can Improve OPSEC Following BitMEX Email Leak

BitMEX is in hot water with the crypto community after it inadvertently exposed the email contact information of its users publicly, prompting concerns from traders around the globe.

And while the leak could put traders at risk of being hacked, there are a number of techniques that victims of the leak can put into place that will improve their personal security and potentially protect from any intrusion attempts.

What is OPSEC and Why Is It Important To Crypto Investors?

OPSEC stands for operations security and is defined by Wikipedia as the process of identifying and protecting critical information that could be pieced together by “adversaries,” or in the case of BitMEX, cyber criminals, who may be interested in leveraging the leaked email addresses to access user’s funds and empty their accounts.

Related Reading | Disgruntled Crypto Investors Criticize BitMEX As Situation Escalates

The term was coined by a Vietnam era security team under the order of United States Admiral Ulysses Sharp and is commonly used by military entities around the world to this day. But it’s also become widely used to discuss personal data security needs of ordinary individuals – a growing issue in the digital age where sensitive user data is exposed both on purpose via social media, and without consent via hacks or other data breaches.

Crypto investors need to take personal OPSEC even more seriously, as according to a Google security expert claims, cryptocurrency is like catnip for cyber criminals, due to the added layer of anonymity they provide, making tracing their trail of crime all the more difficult.

Impacted By the BitMEX Leak? Here’s What Precautions You Can Take

Since email accounts were involved, the very first step any BitMEX users who were exposed should immediately change their email passwords, enable two-factor authentication on their BitMEX account, and if possible, their email accounts as well.

Many of today’s email services, including Gmail, offer protection behind SMS-based two-factor authentication through Google’s Authenticator app. While SMS is an option and is better than nothing, it still leaves users open to attacks, Taking things a step further, a Google Authenticator app could be installed on a separate phone that isn’t connected to the internet.

In the future, especially if the user is leaving BitMEX for greener pastures, an email account created exclusively for each trading platform registered is a wise idea and can protect a criminal from discovering other personal details about you from gaining access to a main email account. Oftentimes, these emails hold clues that can be pieced together.

For example, an email signature containing a phone number could tip a hacker off and give them information they could use in a SIM-card hack, which is also why SMS-based two-factor authentication may not be enough for crypto investors.

Users are also encouraged to disable any possible API links to other accounts, including Bitcoin.tax and other platforms requiring API read or write access.

Finally, the most important steps any crypto investor can take to protect themselves, is to never invest more than you can afford to lose, never disclose how much crypto you hold, and to ensure cryptocurrencies are stored on a cold storage wallet, offline, and behind a passphrase that is kept separately from the actual wallet itself.

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Bitcoin Monthly Close Keeps Bull Flag Formation Intact, Target Over $14,000

Bitcoin price has had a stellar year, even despite the recent trend turning bearish after a descending triangle pattern broke down.

After three consecutive red monthly candles in a row, October closed green and kept a potential bull flag formation on monthly price charts intact, giving bulls hope that the crypto asset’s 2019 rally isn’t totally finished.

Bitcoin’s Bullish 2019 Remembered

During the first quarter of the year, Bitcoin was trapped inside a tight trading range, where major players began buying the fear of retail crypto investors and accumulating the asset at the lowest possible prices.

Starting in the second quarter, the first-ever crypto asset rocketed up from that trading range, and went on a parabolic rally that didn’t stop until Bitcoin met former bear market resistance at $14,000 where it was rejected.

The powerful ascent to above $10,000 revived interest in the crypto market, especially around Bitcoin, and formed a towering flag pole to what appears to be a bull flag chart pattern.

Related Reading | Make It Or Break It Time For Bitcoin, Rally In Jeopardy If Support Is Lost

Crypto traders often perform technical analysis to better predict price movements and trend changes, and a bull flag is among the most common bullish chart patterns. Bull flags form when bearish investors are overwhelmed by buying, causing the asset to break through resistance, causing a massive surge. The flag itself forms from a string of FOMO buying and a cascade of stop losses being hit.

Bitcoin’s powerful parabolic rally formed a massive bull flag pole, that’s nearly $10,000 long. But after three consecutive red monthly candles in a row – which could be a three black crows reversal – the bull flag formation was put at risk.

However, last night’s daily close was also the close of the October monthly, which was the first green candle since Bitcoin’s short-term downtrend first began. The important close also kept the bull flag formation alive, which could have a target significantly higher if it confirms with an upward breakout.

Monthly Bull Flag Formation Targets Above $14,000

Bull flags targets are measured from the previous breakout of resistance, all the way to the top of the pole. The flag pole on the current monthly bull flag structure was a $6,600 movement.

A breakout from current price levels would put the target of the flag pole at over $14,000 – where the asset last met strong enough resistance to send the price of the asset tumbling back down. A break above the former high would be significant, and the first sign that Bitcoin was returning to a bull market after a short break into a downtrend for reaccumulation.

Related Reading | Crypto Trader: Bitcoin Price May Not Break All-Time High Until 2024 

However, if this bull flag breaks down, Bitcoin’s downtrend will continue and likely pick up in severity, potentially sending the crypto asset back into an extended bear market.

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Disgruntled Crypto Investors Criticize BitMEX As Situation Escalates

Last night, crypto trading platform BitMEX sent around a mass email to its users but failed to hide the recipients of the email, exposing the email addresses of its entire userbase.

With privacy one of the utmost concerns of crypto investors, the entire community is rightfully upset with the notorious margin trading platform and have taken to social media to voice concerns that the market leader is losing its touch.

BitMEX Leaks Email Accounts of Thousands of Crypto Investors

Despite the platform’s “insurance fund” growing rapidly with each surge in volatility that leads to droves of liquidations, BitMEX has not had the best year in 2019.

Related Reading | BitMEX Bitcoin Volume Slumps 33% After CFTC Investigation

The platform’s CEO Arthur Hayes squared off against widely respected economist Nouriel “Dr. Doom” Roubini in what was dubbed “The Tangle in Taipei,” and since then, everything has been downhill. The crypto community was ashamed at how Hayes represented the space, and seemingly making a public fool of Roubini appears to have backfired and caused BitMEX to draw unwanted attention from United States regulators, prompting an investigation from the CFTC.

But this is only the start of the issues, which in the past 24 hours have escalated to DEFCON levels, prompting users to express disgust with the platform publicly via social media.

Putting the privacy of their users – and perhaps the safety and security of their customer’s assets – at risk, the platform last night sent out a mass-email that contained the email addresses of all of the platform’s users for the entire world to see.

Hacker groups on Telegram have already emerged, poking fun at users for using the same email address to register for things like dating sites, or worse. These hackers are just having fun for now, however, things could get a lot more malicious and assets be targeted. All hackers would need now is to crack the password to one of the many email accounts, and hope the one they get through doesn’t have two-factor authentication set up.

Hackers Gain Control of Platform’s Twitter Account, What’s Next?

Pouring salt in the fresh wound, BitMEX’s Twitter account was then hacked, with the hackers leaving a note of their existence, then telling all users to transfer their funds off the platform as soon as possible.

The entire situation is spiraling out of control, and it’s caused some of the industry’s most respected traders to speak out, condemning the once crypto leader, suggesting that a collapse is underway, and a demise is imminent.

Related Reading | Bitcoin Pumps by $800 in 20 Minutes: $150 Million in BitMEX Shorts Liquidated

But as many, more reasonable traders point out, issues have plagued BitMEX for some time, yet traders regularly return there to get rekt. The next time that they do get rekt, it may not be because their account was liquidated due to trade gone wrong, it could be from hackers emptying out accounts that BitMEX itself exposed.

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Make It Or Break It Time For Bitcoin, Rally In Jeopardy If Support Is Lost

Bitcoin markets are on fire once again, following a massive price spike last weekend on the heels of news Chinese President Xi Jinping spoke out in support of the blockchain technology Bitcoin is built on.

The rally, which set a record for the third-largest 24-hour gain in the asset’s 11-year history, is now in jeopardy of being almost completely erased if the crypto asset cannot maintain support at current levels, according to one crypto investor and trader.

Bitcoin Price Resting on “Must Bounce” Level Or At Risk of Further Fall 

All throughout the summer months, Bitcoin price bounced back and forth between peaks and troughs, forming a descending triangle that ultimately broke down. The triangle pattern support at $9,200 eventually gave way, and Bitcoin price dropped to the low $7,000 range.

Related Reading | As Bitcoin Price Drops To $9K, Here Are the Targets Traders Are Watching 

But last weekend’s powerful rally following news that China would support the development of blockchain technology within the country’s borders took Bitcoin price skyrocketing from lows around $7,400 to as high at $10,500 before finding support in the mid-$9,000 range – where Bitcoin previously found support within the triangle.

The leading crypto asset by market cap is currently trading at just above $9,200 after repeated attempts to push the price of the asset lower, however, unless Bitcoin can sustain a bounce higher and confirm the current support as such, crypto analyst and venture capitalist Zhi Ko says that Bitcoin may be in “trouble.”

The analyst expects Bitcoin to make one final attempt at $9,600, fail, and ultimately drop back down to the mid-range of the recent bear flag, which resides in the low $8,000 range.

A fall from current highs back down to lows after such a historic and powerful rally, could deal a fatal blow to crypto bulls whose confidence was only just revived, only to be crushed once again by bears.

Was Last Weekend’s Rally a Bearish Retest Or The Start Of A Rebound?

Such a move would confirm that the recent spike was merely a powerful, but bearish retest of former resistance turned support, which would now be confirmed as such and caused Bitcoin to descend further into a downtrend.

Related Reading | Will Bitcoin Price Benefit From The Halloween Effect?

Clearly, the crypto asset is indeed at a make or break it moment, as the trader suggests, and the days ahead are especially important in determining the trend for the remainder of the calendar year.

On the bright side, assets like stocks and cryptocurrencies typically perform better from November through May than they do in the other half of the year, and with Bitcoin’s halving coming this May 2020, this next six month time period could be among the first-ever cryptocurrency’s most profitable yet.

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Will a Surprise $7K Bitcoin Pump on Halloween Fulfill the Prophecy of Asuka?

The “Prophecy of Asuka” has earned meme-status across the cryptocurrency community, with many calling it a farce, while others put a lot of weight in its validity. After Bitcoin’s recent bearish trend, the crypto community had all but given up on the “prophecy.”

But last weekend’s massive green candle and historic price surge in Bitcoin, has revived hope that the prophecy will continue to ring true. Will another surprise Bitcoin price spike take the asset to $16,000 before Halloween is over, and keep the prophecy going?

The Prophecy of Asuka and the Prediction of $16,000 Bitcoin in October 2019

Bitcoin and other cryptocurrencies are volatile assets, that often rise and fall by a large percentage on any given day. Take last week, for example, Bitcoin set its third-largest 24-hour gain with a spike from $7,400 to $10,500.

Related Reading | Will Bitcoin Price Benefit From The Halloween Effect?

Prior to that, the crypto community had all but given up on the “Prophecy of Asuka,” which claims that Bitcoin price would reach $16,000 in October 2019, after bottoming in December 2018.

The so-called prophecy originates from an anonymous poster on 4Chan, who on January 21, 2019, outlined different price points the asset would reach ranging from Bitcoin’s bear market bottom in December 2018, all the way through November 2020, when the original poster claims the asset would reach a price of $87,000 per BTC.

bitcoin price prophecy of asuka halloween crypto

What gives the outlandish theory more credence, is the fact that the anonymous 4Chan poster was able to accurately call each price level leading up until now.

The prophecy called for $5,300 Bitcoin in April 2019. April was when Bitcoin broke up out of its accumulation range and began its parabolic bull rally. The next major call was for Bitcoin to reach $9,200 in July 2019. While Bitcoin also touched over $12,000 in July, the asset did fall to $9,200 at one point during the month before rallying higher once again.

Everything appeared to be on track, and the 4Chan poster began to look like a real prophet until Bitcoin came crashing down in late September following the disappointing launch of Bakkt – a crypto platform for institutional investors that was said to ignite the next bull market.

The next call the 4Chan poster made, was for $16,000 BTC in October 2019. This would require a $7,000 green candle push from bulls before the close of the day today. While such a move is unlikely, after last week’s historic price surge, it’s difficult to rule out the possibility completely.

There’s also a theory called The Halloween Effect, that claims that assets perform much better starting on Halloween through May. The Halloween Effect could be a trigger to take Bitcoin much higher to close out the month and keep the prophecy intact.

In the off chance this occurs, the next dates and levels to watch in the “Prophecy of Asuka” would be February 2020, when Bitcoin would hit $29,000 per BTC; July 2020, where the asset could reach $56,000; and then November 2020, where the asset assuringly tops out at $87,000 – as no further predictions are made after that.

Related Reading | Bitcoin Trending On Google Next To Call of Duty, Kanye West, and Rudy Giuliani

Is there any validity to the “Prophecy of Asuka” or is this yet another wild theory cooked up by crypto hopefuls wanting to see a new Bitcoin all-time high?

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Will Bitcoin Price Benefit From The Halloween Effect?

There’s a theory, dubbed “The Halloween Effect” that believes that stocks and other assets like Bitcoin perform best starting from October 31 through May, then they do during the other half of the year.

Will Bitcoin price benefit from such effect, or is the idea nothing more than an appropriately spooky superstition for this time of the year?

What is The Halloween Effect?

Investors and traders use a number of tools such as technical and fundamental analysis to attempt to determine the strength or weakness of an asset before setting a buy order. Some analysts use more unorthodox methods, such as dates, cycles, math, and even astrology.

There’s even a common theory that each year, starting in November, assets will perform better and provide greater returns on investment through May, than they will in the other half of the calendar year.

Related Reading | Research Shows That Holidays Cause FOMO Fireworks in Bitcoin Price Charts 

This theory is called The Halloween Effect, The Halloween Indicator, or The Halloween Strategy and suggests that buying an asset to hold throughout the winter months will reward the investor handsomely. The trader or investor is then encouraged to “sell in May and go away” – the other half of the market timing-based strategy.

But does this also hold true for Bitcoin markets? Data from each October 31 through May 1 period dating back to Bitcoin’s last bull market suggests that the theory may prove to be accurate, sans just one period on Bitcoin price charts.

bitcoin price the halloween effect

(Click for full-sized version)

Bitcoin Price Gains On Average Nearly 50% Per Halloween Through May Timeframe

As the bear market came to an end for Bitcoin in 2015, October 31 through May was the kickstart to the bull run crypto investors needed, bringing those who invested in the young, emerging asset over a 41% increase.

During the next Halloween Effect timeframe, running from October 31, 2016, to May 1, 2017, Bitcoin’s bull market was in high gear and brought investors a 117% return on investment. Although, had investors listened and sold in May as they are told, they would have missed out on another 335% increase.

Between October 31, 2017, and May 1, 2018, Bitcoin had set its all-time high of $20,000 and retraced back down to $5,800 at that point, yet on May 1, 2018, Bitcoin had still increased over 52% from the previous Halloween. Sell in May and go away would have worked well in this case, as Bitcoin entered into a deep bear market after this.

Related Reading | Mark Your Crypto Calendars, Here Are Bitcoin Dates To Watch

From October 2018, through May 2019, it was the only decline following Halloween, resulting in a -12.5% drop in value.

This Halloween, Bitcoin is interestingly trading at roughly the same price it was trading at on May 1, 2018. The crypto asset is currently priced at $9,200 per BTC, following the asset’s third-largest single-day gain in its history.

Could the massive pump be investors gearing up for The Halloween Effect? It’s possible – on average, Bitcoin rose nearly 50% from October 31 to May 1 in each year analyzed. With Bitcoin’s halving set to take place in May 2020, the potential for an increase this time around is the greatest its been. And with prices expected to reach $55,000 per BTC by the next halving according to a highly cited stock-to-flow model, it could result in the largest Halloween Effect gain yet in Bitcoin, taking the price to $55,000 as predicted and resulting in a staggering 497% gain from current prices.

Happy Halloween!

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Johannesburg City Infrastructure Locked Down Due to Bitcoin Ransom

Bitcoin and other cryptocurrencies are often requested by hackers after deploying ransomware on unsuspecting user’s computers due to the layer of pseudo-anonymity they provide.

The leading crypto asset by market cap is once again at the center of a major ransomware attack that’s left the South African city of Johannesburg in a state of lockdown.

Hackers Demand 4 Bitcoin In Johannesburg Ransomware Attack

Bitcoin ransom is becoming a growing threat. The crypto asset itself is not responsible for the actions of hackers, however, it is commonly used for illicit crimes such as money laundering, or in this instance, ransomware. Hackers demand Bitcoin from users after remotely installing malware on the computers of individuals, businesses, or even government entities, as a way to hide their true identities and make tracing any transactions all the more difficult.

Related Reading | Panera Bread, Porn, & Bitcoin At Center of Alleged Scandal Involving 86-Year-Old Woman

This is exactly the case in the South African city of Johannesburg, where the city is currently locked out of a number of its computer systems after being hit with a ransomware attack.

According to Johannesburg city council member Funzela Ngobeni, hackers were able to gain control over the city’s computer systems last Thursday, with a deadline of this past Monday to cough up a ransom payment of 4 Bitcoin. At today’s prices, this is less than $40,000 in exchange for the city’s infrastructure.

However, as is often the case, government officials refuse to cooperate with the hackers and instead seek alternatives to regain control of critical computer systems.

“The city will not concede to their demands for bitcoins, and we are confident that we will be able to restore systems to full functionality,” Ngobeni said.

Forensic computer experts were able to restore up to 80% of the system functionality thus far. The ransomware attack affected the city’s billing and payments systems and has made it impossible for citizens to pay their utility bills and the like, prompting officials to recommend any payments be made in cash in person at banks while the issue is being investigated.

The city also suffered a ransomware attack this past July, which left a portion of the city without electricity.

Related Reading | Trump Blasts Bitcoin For Illicit Use As NY College Is Hit With $2M Ransomware 

Bitcoin ransom cases have spiked in recent months, ranging from attacks on government systems such as this instance or the recent situation in Baltimore, Maryland, to kidnappings of wealthy individuals.

Bitcoin and other cryptocurrencies are like catnip for criminals, according to a Google security expert, who says that they are drawn to the added anonymity they offer criminals. The illicit use of crypto assets has become a topic of interest for United States government regulators, stemming from the announcement of Facebook’s Libra cryptocurrency.

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