Bitcoin Resumes Lateral Trading as Lightning Network Gets New Use Case
Bitcoin continued to trade in a narrow range on Tuesday, reflecting the overall mood of the market following a weekend consolidation. On a fundamental note, a recent breakthrough in Lightning Network capability is generating renewed optimism over bitcoin adoption in commercial and consumer circles.
Bitcoin showed little upside on Tuesday, as prices hovered within an $80 range on Bitfinex. At press time, BTC was trading hands at $6,590, having lost roughly 0.2% on the day. The leading digital currency lacks momentum on the hourly chart, which means short-term traders can expect choppy conditions to persist.
On the daily chart, bitcoin can be seen testing the 50-day moving average, an important indicator of underlying price action. As the following chart demonstrates, BTC has made a series of lower lows going back to mid-August but has maintained a firm price floor near $6,000.
At current values, bitcoin has a total market cap of $113.8 billion. Daily trade volumes have fallen back below $4 billion, according to CoinMarketCap.
Despite failing to make progress in recent days, bitcoin’s overall market share has risen slightly. Bitcoin’s dominance rate – BTC’s share of the overall cryptocurrency market cap – reached a high of 52.2% on Friday. It has since fallen back to around 51.4%. Last week, the dominance rate approached 50%.
The combined value of all crypto assets, including bitcoin, is $221.3 billion.
Lightning Network Use Case
The growth and widespread adoption of Lightning Network could be the next major catalyst to spearhead bitcoin adoption. As Forbes reported on Tuesday, Spanish hardware hacker Ricardo Reis recently demonstrated how Lightning Network can be used to purchase Coca-Cola bottles from a vending machine.
In a 42-second video titled “Coke vending machine that accepts Bitcoin payments through Lightning Network,” Reis demonstrates how easy it is to pay for certain goods using the new infrastructure layer. While the vending machine is certainly modified, it does not diminish the ease of transaction. In the video, Reis purchases Coca-Cola through a built-in QR code facilitated by Lightning Network.
As Hacked reported back in July, the Lightning Network has reached 10,000 channels with a total channel value of 100 bitcoin – a major milestone in the quest for instant transactions. These channels enable two parties to deposit funds and exchange them in real time. The channel can remain open indefinitely to facilitate payments before being added to the blockchain.
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.