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Bitcoin Price Claws Back Toward $6,500 Ahead of Futures Expiry

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Bitcoin’s price pivoted higher on Wednesday, as calm returned to the market following a rocky start to the week. Although the bulls aren’t out of the woods yet, the quick recovery supports the view that BTC has established a firm price floor.

BTC/USD Update

Bitcoin’s price notched highs of $6,538.20 on Bitfinex and was last seen trading hands at $6,490, having gained 0.7%. The cryptocurrency fluctuated within a $160 range. Daily turnover in BTC amounted to $4.2 billion, according to CoinMarketCap, which is above the minimum threshold typically observed during an uptrend.

Looking at the daily chart, bitcoin is trading just above the 50-day moving average. However, underlying momentum remains weak. Nothing in the technical patterns implies a major breakout in the short term.

At current prices, bitcoin holds 52.4% of the total cryptocurrency market cap. Cryptocurrencies as a whole added more than $8 billion in value on Wednesday with XRP and Stellar XLM leading the recovery.

Bitcoin Futures and Declining Volatility

Although bitcoin remains firmly entrenched in a long-term bear market, the outlook on volatility has improved considerably. As Diar reported last month, bitcoin’s volatility is setting an actual trend downwards for the first time in its history. The launch of bitcoin futures in December has been the key to bitcoin’s stability despite views to the contrary presented by the San Francisco Fed and others.

That being said, bitcoin often experiences dramatic price fluctuations around futures expirations. While this trend is more generally observed for CBOE futures, the CME contracts also influence volatility. As Hacked noted in its weekly forecast, CME’s September futures contract expires on Friday. The next expiry for the CBOE XBT Bitcoin Futures product is Oct. 17.

Volatility – itself a double-edged sword that can be used for explosive growth and equally large declines – says a lot about the trajectory of the cryptocurrency market. An influx of institutional cash by way of hedge funds, ETFs and futures contracts is expected to solve another core issue in the market: liquidity. For many observers, the SEC’s approval of the first bitcoin ETF could be the key to unlock massive order flows from institutions and retail investors. Last week, the SEC delayed a ruling on a highly-touted bitcoin ETF application submitted by VanEck and SolidX and backed by CBOE.

Disclaimer: The author owns bitcoin, Ethereum and other cryptocurrencies. He holds investment positions in the coins, but does not engage in short-term or day-trading.

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Important: Never invest (trade with) money you can't afford to comfortably lose. Always do your own research and due diligence before placing a trade. Read our Terms & Conditions here. Trade recommendations and analysis are written by our analysts which might have different opinions. Read my 6 Golden Steps to Financial Freedom here. Best regards, Jonas Borchgrevink.

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4.7 stars on average, based on 740 rated postsSam Bourgi is Chief Editor to Hacked.com, where he leads content development for one of the world's foremost cryptocurrency resources. Over the past eight years Sam has authored more than 10,000 articles and over 40 whitepapers in the fields of labor market economics, emerging technologies, cryptocurrency and traditional finance. Sam's work has been featured in and cited by some of the world's leading newscasts, including Barron's, CBOE and Forbes. Contact: sam@hacked.com Twitter: @hsbourgi




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Bitcoin

Bitcoin Maintains Range Formation as BTC Dominance Grows

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Bitcoin’s price continues to trade in a narrow range formation as of Friday morning, extending a period of relative calm for the digital currency and potentially weakening the case for an imminent bearish reversal.

Steady Trading

Bitcoin is presently trading at $3,651.98, based on aggregate data provided by CoinMarketCap. That represents a gain of 0.6% over the past 24 hours. Over the past week, BTC has declined by a little more than 1%, though it has maintained a steady trading range north of $3,500 during that period. Prices peaked near the $3,750 range on Monday before the rally lost steam later in the week.

The hourly chart view, based on Bitstamp exchange data, shows weak underlying momentum. This raises doubts about the possibility of a strong weekend bounce back toward Monday highs. That being said, bitcoin’s weekly stretch of relative calm alleviates the risk of an imminent correction back down to December lows.

Interestingly enough, bitcoin’s stable trading range has been accompanied by a noticeable rise in trading volume. Since Sunday, virtual exchange trading has exceeded $5 billion. In the most recent 24-hour cycle, roughly $5.3 billion worth of BTC traded hands.

BitMEX continues to be the largest exchange market for bitcoin trades, though its share has dwindled significantly. As Hacked reported on Tuesday, the exchange is permanently closing U.S. accounts amid growing regulatory scrutiny.

Bitcoin Dominance Rises

At nearly $64 billion, bitcoin is easily the world’s largest cryptocurrency by market capitalization. Its share of the overall market has increased slightly since the beginning of the year as altcoins and tokens struggle to emerge from its strong gravitational pull. At the time of writing, bitcoin’s dominance rate was 52.4%.

The following chart highlights bitcoin’s share of the overall crypto market during the last 12 months. As you can see, BTC accounts for a bigger slice during bearish trends.

During bear-market trends, altcoins and tokens tend to mirror bitcoin’s trajectory. Although there are notable exceptions, particularly for coins like XRP and recently, Ethereum, the market is strongly correlated with BTC during periods of instability.

For bitcoin at least, the volatility regime has declined significantly over the past month. On Thursday, bitcoin’s 30-day volatility index fell to 4.17%, the lowest since Nov. 23. The volatility tracker from bitvol.info measures the extent to which the asset’s price varies over time.

Disclaimer: The author owns Bitcoin, Ethereum and other cryptocurrencies. He holds investment positions in the coins, but does not engage in short-term or day-trading.

Featured image courtesy of Shutterstock.

Important: Never invest (trade with) money you can't afford to comfortably lose. Always do your own research and due diligence before placing a trade. Read our Terms & Conditions here. Trade recommendations and analysis are written by our analysts which might have different opinions. Read my 6 Golden Steps to Financial Freedom here. Best regards, Jonas Borchgrevink.

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4.7 stars on average, based on 740 rated postsSam Bourgi is Chief Editor to Hacked.com, where he leads content development for one of the world's foremost cryptocurrency resources. Over the past eight years Sam has authored more than 10,000 articles and over 40 whitepapers in the fields of labor market economics, emerging technologies, cryptocurrency and traditional finance. Sam's work has been featured in and cited by some of the world's leading newscasts, including Barron's, CBOE and Forbes. Contact: sam@hacked.com Twitter: @hsbourgi




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MIT and Stanford Professors are Creating the Answer to Bitcoin’s Scalability Issues

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Researchers from America’s most prestigious universities are coming together to create a new cryptocurrency that will overcome bitcoin’s greatest technical challenge: scalability. Although academics have a poor track record of solving real world problems, the researchers have teamed up with Pantera Capital to develop a cryptocurrency that could serve as a viable payment network in the future.

Academics Designing ‘Better Bitcoin’

According to Bloomberg, professors from seven U.S. universities have joined hands to create a new cryptocurrency capable of achieving faster processing speeds without sacrificing decentralization – a core tenant of the blockchain revolution. The so-called Unit-e cryptocurrency is the first project to be carried out by Distributed Technology Research, the non-profit group uniting the academics.

Among the schools represented are the Massachusetts Institute of Technology, Stanford University and University of California. They are joined by hedge fund Pantera Capital, which has an impressive track record in generating stellar crypto market investments. Read: How Pantera Capital Engineered a 10,000% Return Investing in Cryptocurrency.

Although several initiatives are underway to boost bitcoin’s transaction speed and scalability, the researchers say the cryptocurrency’s design has inbuilt restrictions that impede on its usefulness as an everyday payment system. The goal of Unit-e is simple but highly ambitious – namely, use blockchain technology to develop a cryptocurrency that can process transactions faster than Visa.

Unit-e is scheduled to go live in the second half of 2019. When released, it will process as many as 10,000 transactions per second, according to DTR. By comparison, Visa processes roughly 1,700 transactions per second.

The Bitcoin Scalability Debate

The issue of scalability is one of the biggest impediments facing bitcoin, so much so that dozens of alternative cryptocurrencies have been designed specifically to address this problem. Some proponents of the original cryptocurrency believe the debate over scalability could be put to rest once Lightning Network achieves full potential. The highly-touted bitcoin scaling solution has seen notable improvements in recent months, including a double-digit percentage gain in processing capacity.

As of Thursday, Lightning Network’s capacity has increased to 529.21 BTC, which is equivalent to just over $1.9 million at today’s prices, according to 1ML. That represents a gain of more than 3% since the last time we covered Lightning Network’s processing power on Dec. 26. At the time, the network saw a 13% surge in processing capability.

Lightning Network has achieved 20,586 channels, an increase of 31.8%. The number of nodes is up nearly 20% to 5,472.

At the core of Lightning Network is the desire to boost bitcoin’s transaction speed while lowering the cost of payments. This is done by creating a second-layer scaling solution that operates as a bidirectional payment channel. Basically, this creates a ‘running’ tab between two accounts, which eliminates the need to record every transaction on the blockchain.

Lightning Network has its fair share of detractors who claim the protocol promotes centralization and suffers from inefficiencies that could allow hackers to target channels holding a high volume of bitcoin. Bitcoin advocate Andreas Antonopoulos addressed some of these concerns in a YouTube Q&A last February. Click here for more.

Disclaimer: The author owns bitcoin, Ethereum and other cryptocurrencies. He holds investment positions in the coins, but does not engage in short-term or day-trading.

Featured image courtesy of Shutterstock.

Important: Never invest (trade with) money you can't afford to comfortably lose. Always do your own research and due diligence before placing a trade. Read our Terms & Conditions here. Trade recommendations and analysis are written by our analysts which might have different opinions. Read my 6 Golden Steps to Financial Freedom here. Best regards, Jonas Borchgrevink.

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4.7 stars on average, based on 740 rated postsSam Bourgi is Chief Editor to Hacked.com, where he leads content development for one of the world's foremost cryptocurrency resources. Over the past eight years Sam has authored more than 10,000 articles and over 40 whitepapers in the fields of labor market economics, emerging technologies, cryptocurrency and traditional finance. Sam's work has been featured in and cited by some of the world's leading newscasts, including Barron's, CBOE and Forbes. Contact: sam@hacked.com Twitter: @hsbourgi




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Bitcoin Price Clings to $3,600 as the Search for a Bottom Continues

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Bitcoin’s price continued to drift sideways on Thursday, as a lack of trading catalysts kept markets subdued following an active start to the week.

Stuck in a Range

After breaking out to the upside at the start of the week, bitcoin has managed to trade within a narrow range over the past 48 hours. The leading digital currency by market cap is currently valued at $3,628.23, down 1.3% from the previous day. Trading volumes remain elevated near $5.2 billion despite a sharp drop off in volatility.

Bitcoin’s 30-day volatility index, courtesy of bitvol.info, declined to 4.25% on Wednesday. Volatility has been in firm retreat since December, when it peaked at nine-month highs.

That being said, bitcoin’s narrow trading range reflects a lack of direction in the market as opposed to newfound stability. A failure to break above $3,700 in the short term could put BTC on the backfoot and vulnerable to fresh waves of selling. This is fairly consistent with the trading patterns we’ve observed since the onset of the bear market last year.

At current values, bitcoin has an overall market capitalization of $63.4 billion. Its dominance rate has strengthened to 52.4%, which reflects broad pressures on altcoins and tokens.

Read: Bitcoin’s Year of Accumulation

Search for a Bottom Continues

Although some analysts have already called bitcoin’s bottom, others are convinced that new lows are likely before the market makes a definitive turn. Jani Ziedans, an analyst at Cracked Market, believes bitcoin is demonstrating a lethargic base, which signals weak underlying demand. This continues to be the case insofar as bitcoin struggles in the mid-$3,000 range.

Morgan Creek Digital’s Anthony Pompliano has also stated that bitcoin will probably fall below $3,000 before the bottoming process finally concludes. This comes despite a more than 30% bounce from the December low near $3,100. Read more: Crypto Markets Search for Catalysts as Bitcoin Lightning Network Sees a Surge in Capacity.

Nevertheless, 2019 looks to be a year of accumulation for bitcoin as prices consolidate in the $2,000-$4,000 range. The anticipated influx of institutional investors, combined with the sharp rise in circulation on virtual exchanges, means trading in BTC is likely to grow as the year progresses. According to analyst Willy Woo, these and other factors may put bitcoin on the path to recovery by the third quarter.

Disclaimer: The author owns bitcoin, Ethereum and other cryptocurrencies. He holds investment positions in the coins, but does not engage in short-term or day-trading.

Featured image courtesy of Shutterstock.

Important: Never invest (trade with) money you can't afford to comfortably lose. Always do your own research and due diligence before placing a trade. Read our Terms & Conditions here. Trade recommendations and analysis are written by our analysts which might have different opinions. Read my 6 Golden Steps to Financial Freedom here. Best regards, Jonas Borchgrevink.

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4.7 stars on average, based on 740 rated postsSam Bourgi is Chief Editor to Hacked.com, where he leads content development for one of the world's foremost cryptocurrency resources. Over the past eight years Sam has authored more than 10,000 articles and over 40 whitepapers in the fields of labor market economics, emerging technologies, cryptocurrency and traditional finance. Sam's work has been featured in and cited by some of the world's leading newscasts, including Barron's, CBOE and Forbes. Contact: sam@hacked.com Twitter: @hsbourgi




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