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What’s Next For BTC?




In seconds, the Bitcoin price has surged from $6,190 to $6,450, by more than 4 percent, after the dominant cryptocurrency remained in the low $6,100 region for more than 24 hours.

The sudden increase in the price of Bitcoin on September 9 was not expected by the majority of analysts and investors in the cryptocurrency market, primarily due to the sheer magnitude of its drop on September 5

On August 25, on CNBC Crypto Trader, Voorhees said:

“I don’t expect it (bear market) to end soon, although I do think that the rate of collapse has slowed considerably. Generally in these bubbles, after you go through several months of a downtrend you hang out in a range for a while… But I think we are done with a majority of the collapse.”

Investors in the cryptocurrency market, especially those that have allocated a significant portion of their holdings into the market, need to consider the fact that cryptocurrencies as an asset class is still at its infancy.

There exists a limited range of institutional products, publicly tradable instruments, and a lack of liquidity that leaves the market generally vulnerable to extreme daily volatility and manipulation.

Over the past seven months, Bitcoin has shown high volatility in the $6,000 to $10,000 region. In April, June, and August, Bitcoin tanked to $6,000 and recovered to resistance levels found at $10,000, $8,000 and $7,000.

Today, on September 9, the price of Bitcoin surged 4 percent from $6,190 to $6,450 within 30 seconds. The dominant cryptocurrency in the global market is vulnerable to major fluctuations and as such, investors should expect 5 to 20 percent drops or surges in value on a daily basis.

The commentary of Voorhees on the bear market of 2018 is important to acknowledge because it is evident that the cryptocurrency market is still on a clear downtrend. But, given the unpredictability of cryptocurrencies, it is difficult to spot the exact bottom.

A viable opportunity for new investors to come into the market would be in the stabilization and bottoming out process, during which BTC shows high stability in the low $5,000 to $6,000 region.

BTC has not fully recovered from the $6,000 support level which it tested three times in the past six months. A proper recovery from the $6,000 region would lead to the initiation of a mid-term rally.

But, the gap between $6,000 and the monthly peak has decreased every time a correction has occurred since February, suggesting that Bitcoin is gradually bottoming out in the $6,000 region.

The abrupt corrective rally of BTC triggered by a strong oversold condition demonstrated in the low $6,100 range could enable Bitcoin to find stability in mid-$6,000, which would be benficial for the short-term recovery of the market from a major drop on September 5.

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Bitcoin Core Developers Confirm Duplicate Transaction Bug Fix



Bitcoin Core

In release notes for Bitcoin Core version 0.16.3, Wladimir van der Laan confirmed the vulnerability, known as CVE-2018-17144, had received an effective patch. The Bitcoin Core client remains the most popular comprising over 94% of all Bitcoin software implementations today.

“A denial-of-service vulnerability… exploitable by miners has been discovered in Bitcoin Core versions 0.14.0 up to 0.16.2,” he summarized.

“It is recommended to upgrade any of the vulnerable versions to 0.16.3 as soon as possible.”

CVE-2018-17144 could technically have allowed a malicious miner or group of miners to perform duplicate transactions and burn block rewards, forcing nodes off the network in the process.

Cobra, the creator of information resource, said the bug even had the potential to create chaos in a “huge chunk” of the ecosystem.

“A very scary bug in Bitcoin Core has just been fixed which could have crashed a huge chunk of the Bitcoin network if exploited by any rogue miners,” he wrote on Twitter.

Other than the official release notes, developers have yet to publicly explain the origin and circumstances around the offending code. On Github, fellow Core developer Andrew Chow remained brief, telling users only that a “third party” reported the bug.

“The bug was disclosed to other projects simultaneously to it being disclosed to us,” Matt Corallo added.

Bitcoin Core bugs rarely create a sense of urgency within the community, making the discovery of CVE-2018-17144 an unusual exception.

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Bitcoin Hasn’t Funded any Terror Attacks in Europe



Spain remembers terror attacks that killed 16 in Catalonia

Bitcoin and similar digital assets were not used to fund any of the recent terror attacks in Europe, finds a Europol report that paints a clear picture of the contribution of cryptocurrencies to online crime.

The 72-page long study, titled Intenet Organized Threat Assessment 2018, thoroughly touches upon the various modules of online crime, ranging from ransomware attacks to child pornography. The report mentions Bitcoin on 18 pages to discuss its alleged and confirmed use in several illegal operations online, including terrorism.

In the past, a handful of sympathizing terrorist groups called for Bitcoin donations, including Akhbar al- Muslimin, Dawaalhaq Islamic News Agency, Isdarat. They, however, solicited crypto funds only to finance their online infrastructure and to purchase hosting servers. Nevertheless, one crypto-funded, English-language social media campaign known as Sadaqah reportedly targeted Muslims in the west to recruit them as fighters for the ongoing war in Syria.

“Yet despite the clear potential, none of the attacks carried out on European soil appear to have been funded via cryptocurrencies. The use of cryptocurrencies by terrorist groups has only involved low-level transactions – their main funding still stems from conventional banking and money remittance services,” the report read.

The conclusion points out that the Jihadist networks could be simply experimenting with cryptocurrencies. It goes against the popular notion that suggests Bitcoin’s use in mainstream terrorist activities. There is no direct evidence that connects the two as of now. And it is unlikely of terrorists to opt a currency that is more transparent and hardly anonymous than their regular cash transaction.

The Europol also suggests that the only ways to battle out terrorist finances are 1) to beat their seekers’ online propaganda and recruit operations through closer coordination and information- sharing across law enforcement agencies, and 2) to focus on their ability to carry out cyber-attacks.

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Bitcoin Drop Beneficial in Building Market Foundation



Bitcoin Drop

According to Erik Voorhees, the CEO of popular cryptocurrency trading platform ShapeShift, the bear market of Bitcoin is crucial for building market foundation and infrastructure. He explained:

“Bear markets are for builders. The calm, the quiet, the disillusionment. While the fickle and fair-weather peer around with nervous insecurity, the builders become the market’s foundation, preparing the mortar and stone of tomorrow’s towers.”

Over the past eight years, in 2010, 2012, 2014, 2016, and 2018, Bitcoin recorded five major corrections, with the latest 67 percent drop this year being the smallest correction in terms of percentage loss since 2010.

Last year, throughout November and December, the cryptocurrency market saw unprecedented levels of speculation and interest, as national television networks and mainstream media outlets continued to fuel hype around the emerging asset class.

In some regions like South Korea, the price of Bitcoin surpassed the $20,000 mark, even reaching $24,000 at one point as a result of the so-called “Kimchi Premium.” Investors that have been involved in the market since the early days of Bitcoin were understandably unfazed by the correction, given the four previous 80 percent corrections the dominant cryptocurrency experienced.

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55% of All BTC Is Parked in Whale-Sized Wallets



Whale Sized

If the huge amount of BTC locked in the wallets of long-term investors is anything to by, bitcoin’s nascent adopters are in no hurry to cash out. Many of the coins accrued and stored in the cryptocurrency’s earliest days have yet to move.

Cryptocurrency attracts an eclectic mix of creatures. Bulls and bears notwithstanding, there appears to be a lot of squirrels, each in possession of acorns stashed in the cryptocurrency forest whose seeds are still taking root.

As much as 25% of all BTC is sitting in wallets that were created before the 2017 price peak and have yet to make any outgoing transactions. Diar estimates that a quarter of all BTC is taken up by long-term investments, while the lost and illiquid category (which includes unmined coins) constitutes 30% of the total pie.

Diar’s recent reckoning states that a majority of circulating bitcoins (55%) are sitting in wallets pegged above $1.3M at current prices. In fact, over 87% of bitcoins are tucked inside wallets that hold more than 10 BTC ($60K+). What’s remarkable is that these coins sit in only 0.7% of all bitcoin addresses. Similarly, wallets with over 100 coins ($640K+) that represent 62% of all outstanding bitcoins belong to under 0.1% of all addresses.

Aside from the tranche of coins believed to belong to Satoshi Nakamoto, the remainder would appear to be the property of astute investors who pitched their tents long ago. In addition, 3.8% of the total bitcoin supply resides in five wallets known to be managed by major exchanges. Blockchain analytics firm Chainalysis also indicated in a report in April that as much as one third of the current bitcoin supply is concentrated in the hands of 1,600 individuals.

Incidentally, during the nosedive that bitcoin has taken this year, the hashrate of the network has climbed. The growing hashrate can be taken as a sign of the strengthening security infrastructure, further bolstering bitcoin’s appeal, not least to long-term investors who can take comfort from the fact that the network is safer than ever.

Diar notes that 42% of bitcoins held in investment wallets (containing 200 BTC+) manifested no outgoing movement during the price peak in December 2017, and 27% of these wallets have added more coins to their stash since. There is evidently a clear path that long-term investors have chosen to walk. Come moon or gutter, peaks or troughs, these early adopters are in it for the long haul.

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Kidnapped South African Tycoon Released for 50 Bitcoins Ransom




A South African businessman whose captors had allegedly demanded bitcoins as ransom has been freed. Liyaqat Parker, a businessman based in Cape Town, South Africa, was released on Monday according to a statement issued by his family. However, the circumstances of his release, including whether the bitcoin ransom was paid, remain unclear as his family declined to divulge further information.

The Cape Town businessman was kidnapped a little over two months ago and his captors reportedly demanded 50 bitcoins before they could release him according to The South African. Parker, who is the proprietor of South Africa’s Foodworld supermarket chain, was accosted at gunpoint by five men as he was driving to his business premises. At the time, however, Parker’s family denied that a ransom demand, in bitcoin or otherwise, had been made.

“The family is waiting for the kidnappers to contact them. They have not received contact from anybody demanding anything,” Walid Brown, a spokesperson for the family said at the time according to The Times. “[There has been] lots of information from people that have tips‚ they’ve had hundreds of calls but no credible information.”

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Bitcoin Charts Suggest New Target for Price Rally



Bitcoin Charts

The corrective rally in bitcoin (BTC) could gather momentum if key resistance above $6,500 is crossed on the back of high volumes, according to technical charts. The leading cryptocurrency witnessed a symmetrical triangle breakout last week, opening doors for a stronger corrective rally towards $6,800–$7,000.

However, despite the bullish setup, BTC was rejected near $6,600 on Friday and spent the weekend trading in a sideways manner in the range of $6,350–$6,550. As a result, the immediate bullish outlook has been neutralized.

Further, trading volumes fell to a two-month low of $3.22 billion on Saturday, putting a question mark on the sustainability of the recovery from the recent lows near $6,100.

That said, the corrective move could resume if the cryptocurrency sees a high volume bullish break from the three-day long narrowing price range.

At press time, BTC is changing hands at $6,490 on Bitfinex – down 0.10 percent on a 24-hour basis.

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This Dormant $720 Million Bitcoin Wallet



Bitcoin Wallet

A $720 million sleeping giant has woken up after four years, with $100 million moved to Bitfinex and Binance over the course of ten days at the end of August. The bitcoin wallet contains 111,114 BTC or 0.52% of the total supply. The sudden movement of these dormant funds could have a disruptive potential in the market price action, particularly if the funds belong to one of the two possible likely candidates suggested by Reddit sleuth u/sick_silk.

The Redditor brought the movement of the funds to the attention of the crypto community by publishing a series of posts tracking each transaction in detail accompanied with graphs representing the activity.

The first post was made on 31 August and suggested that the funds may be connected to the now-defunct dark web market Silk Road which handled the trade of billions of dollars worth of contraband such as recreational and prescription drugs, illegal weapons and pornography, malware, hacking services, guides to various types of criminal activity, and other black market goods and services.

u/Sick_Silk points out:

“It seems that the owner of a huge SilkRoad related wallet is moving funds actively since 3 days, dividing it in chunks of 100 coins by subwallets.

The original wallet owned 111,114.62 BTC / BCH , which is currently valuated ~ $844M (without taking in account other #Bitcoin forks).

Last movements on these subwallets are 4 years and 5 months old (March 9th, 2014).

The chunks have been divided over time to 60,000 coins then to 30,000 / 20,000 / 10,000 / 5,000 / 500 and now 100 coins.”

Sick_Silk connected the original address to the Silk Road via the following bitcointalk thread in which user assortmentofsorts connects the dots to from an address operated by DPR (Dread Pirate Roberts AKA Ross Ulbricht, creator of the Silk Road) to the one in the Reddit post over the course of six traced transactions.

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Dropping Bitcoin Volumes Brings



Dropping Bitcoin

The valuation of the crypto market has dropped from $205 billion to $199 billion, as Bitcoin dropped below the $6,500 mark once again. In the past three hours, the crypto market has rebounded by $2 billion to $201.5 billion, demonstrating some resilience in the $200 billion region.

ETH, the native cryptocurrency of the Ethereum blockchain network, showed strong momentum over the past three days, achieving a monthly high at $227. While other major cryptocurrencies fell by 1 to 4 percent, ETH managed to record a slight 0.5 percent gain.

The crypto market may seem volatile to most investors but given the tendency of cryptocurrencies to increase or decline in value by more than 10 percent on a daily basis, the market has been relatively stable in recent weeks in comparison to the past several months.

In previous reports, noted that the cryptocurrency market is going through a bottoming out process, recovering from its 80 percent correction since February of this year. Bitcoin has been showing stability in the $6,400 to $6,500 range and has rarely dipped below the $6,400 mark.

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Bitcoin Severely Oversold, Various Technical Factors Suggest



Bitcoin Severely

Williams %R, a technical analysis oscillator that demonstrates oversold or overbought conditions of an asset, is demonstrating highly oversold conditions for Bitcoin. As Olga Kharif at Bloomberg reported, the Williams Percent Range (WPR) of Bitcoin is hovering at around -83 percent. In WPR, -80 to -100 percent is considered oversold and -0 to -20 percent is oversold.

Analysts state that the oversold condition of Bitcoin demonstrated by WPR could lead to a short-term corrective rally in the future, which may enable Bitcoin to break out of a major resistance level at $6,900.

Since February, Bitcoin has continued to bounce off of the $6,000 mark, achieving a new monthly high the subsequent month only to fall back to $6,000 to stabilize. A same trend has been demonstrated by the market in the past two weeks, suggesting that a corrective rally is due.

n August, Bitcoin recorded its most stable month since June of last year, remaining in the $6,000 to $6,500 pocket. Fast forward a month, as of September 15, the price of Bitcoin remains at around $6,550.

For an asset to achieve a proper mid-term rally after a 80 percent correction, a stabilization period and bottoming out process is required. In late August, BTC surged by more than 17 percent within a two-week period.

Since Sept. 9, BTC has been climbing gradually from $6,100, despite an influx of positive developments in the cryptocurrency sector including Citigroup, Morgan Stanley, and Goldman Sachs doubling down on their efforts to institutionalize Bitcoin through the launch of crypto custodian solutions.

In the past three corrective rallies, BTC was left vulnerable to 20 to 40 percent falls due to its tendency to initiate large-scale corrective rallies in a short period of time. In April for instance, BTC increased from mid-$6,000 to $10,000 within a three-week period, which ultimately led BTC to record a 50 percent drop the subsequent month, in May.

Stabilization of Bitcoin is important to ensure that the asset is ready to initiate a proper rally by the end of 2018, a period in which experts expect to see a wave of new capital to hit the cryptocurrency market fueled by the entrance of institutional investors.

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European Central Bank: ‘No Plans’ for Digital Currency



European Central Bank

The European Central Bank (ECB) has “no plans” to issue its own digital currency, President Mario Draghi told the European Parliament Wednesday, September 12.

Addressing a query by MEP Jonás Fernández, Draghi said “substantial development” was still needed in the underlying technology behind cryptocurrencies before the Central Bank would consider using them.

“The ECB and the Eurosystem currently have no plans to issue a central bank digital currency,” he summarized:

“Nonetheless, we are carefully analysing the potential consequences of issuing such a currency as a complement to cash.”

Explaining why no plans were afoot at the ECB, Draghi drew attention to those same factors.

“…The technologies which could potentially be used to issue a central bank digital currency […] have not yet been thoroughly tested and require substantial further development before they could be used in a central bank context,” he told Fernández, adding:

“With regard to the central bank administering individual accounts for households and companies, this would imply that the central bank would enter into competition for retail deposits with the banking sector and lead to potentially substantial operational costs and risks.”

He added there was at present “no concrete need” to issue an additional currency within the eurozone, saying demand for cash banknotes “continues to grow” in the EU28.

Draghi continues the wary stance the 28-member bloc has traditionally held on bank-issued cryptocurrency, in contrast to moves by countries such as Russia and China.

Earlier this year, a joint report from the ECB and Bank for International Settlements (BIS) highlighted “side effects” of a potential launch of such a currency, also considering the need for more research beforehand.

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