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Bitcoin’s 10% Plunge Reveals Underlying Concerns About Currency Split

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Bitcoin’s volatile ride continued Tuesday, with prices dropping to their lowest in five days as concerns over the activation of SegWit2x weighed on investors.

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Bitcoin (BTC/USD) plunged more than 10% on Tuesday, reaching a low near $2470.00, according to Bitstamp. The drop erased most of the progress made last week after developers apparently agreed to avoid a currency split.

Uncertainty Over SegWit2x

Various news sources, including The Wall Street Journal, reported last week that the vast majority of developers signaled support for a new software protocol. This protocol, dubbed BIP91, is intended to resolve differences between the User Activated Fork and SegWit2x.

However, not everyone believes the activation of SegWit2x will go as planned. The main area of contention is the second half of the SegWit2x proposal, which stipulates a 2MB block size that is scheduled for implementation in November.

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Volatility Spreads

Bitcoin’s wild ride took many other cryptocurrencies with it. Ethereum, the world’s No. 2 crypto by market capitalization, briefly fell below $200.00 on Tuesday. Ether prices hovered above $200.00 in Wednesday’s Asian session.

At its lowest on Tuesday, litecoin was down 8%.

Although cryptocurrencies are uncorrelated with any other asset class, they tend to follow bitcoin’s lead. This was apparent in mid-June when bitcoin climbed to record territory before correcting sharply lower over the next four weeks. Overall, volatility has played into the hands of crypto-assets, which are enjoying a monumental bull market marked by record-breaking rallies.

BTC/USD Price Levels

Bitcoin has traded within a $138 range over the past 24 hours, with prices reaching as high as $2,608.96. The BTC/USD exchange rate hovered around $2,530.00 ahead of European trade, according to Bitstamp.

Despite the latest drop, bitcoin is little changed for July and has more than doubled year-to-date. The long-term technical picture supports further, as prices continue to grind above the 200-day moving average.

 

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Bitcoin

Bitcoin Hits $100 Billion as Record Rally Continues

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Bitcoin’s epic rally intensified Friday, as the token reached $6,000 for the first time in its history, bringing the total market value above $100 billion.

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Bitcoin’s Fresh Intraday High

BTC/USD touched an intraday high of $6,064.14, bringing its total market cap to $100.8 billion. That’s roughly $85 billion higher than where the market started in January.

At press time, bitcoin was trading around $5,993, up more than 5% on the day. From a technical perspective, the digital currency is considered overbought. However, the technicals are typically less reliable during extreme price movements like we’ve seen in recent weeks. The world’s leading cryptocurrency has added a staggering 520% this year.

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Bitcoin’s rally didn’t really extend to other cryptocurrencies Friday. Ethereum continued to trade just north of $300, while Ripple (XRP) consolidated a hair below 21 U.S. cents.

The cryptocurrency market’s combined market cap is roughly $173.4 billion, which is roughly $3 billion less than the Monday’s peak.

$10,000 Bitcoin?

Bitcoin could be heading north of $10,000 a unit in the not-too-distant future, according to a survey conducted by CNBC. About 49% of the 23,118 people who voted in the CNBC poll said the digital currency will reach the five-figure threshold.

Roughly 16% of respondents said bitcoin prices are heading to between $6,000 and $8,000. About a third selected the Jamie Dimon option by calling bitcoin a fraud.

Though unscientific, the survey clearly shows that the mainstream is paying attention to the rapid acceleration of cryptocurrency. At least a portion of them will investigate the matter further, and likely conclude that digital assets are a welcome addition to their portfolio.

It’s impossible to associate bitcoin’s success with just one catalyst, but it’s clear that institutional support, the allure of the blockchain and favorable regulation in markets like Japan are feeding the rally. An anticipated November hard fork is also helping to shore up price.s

A Day of Milestones

Bullish sentiment also rubbed off on U.S. stocks Friday, with the Dow Jones Industrial Average extending its rally above 23,000. The blue-chip index climbed tacked on 165 points to close at 23,328.63 after the U.S. Senate passed the 2018 budget by the narrowest of margins.

The S&P 500 and Nasdaq Composite also set fresh all-time highs, with financials and industrials leading the rally.

Featured image courtesy of Shutterstock. 

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Cryptocurrency Analysis: Bitcoin Tests $6000 as Market Settles Down

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Bitcoin is in the center of attention yet again, as the most valuable coin is knocking on the door of the $100 billion level in market capitalization. The coin touched our long-term target at $6000 on several exchanges, but it’s now trading slightly below the historic level.

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While the rest of the market is quiet, BTC is very active, and it could be in for a volatile weekend, as despite the long-term overbought readings, the short-term uptrend is clearly intact. That said, investors should avoid opening new positions here, and consider lowering their exposure further, while traders should only trade with smaller than usual sizes. Support levels are found at $5400, $5000, and near the $4650 level.

BTC/USD, 4-Hour Chart Analysis

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As the rest of the majors are still recovering from the recent correction, the total value of the segment is below its all-time high, with BTC’s dominance now standing at 57%. Most of the largest coins are little changed, with Monero and Liteocin showing considerable strength and IOTA still being the weakest of the majors. With all attention on BTC let’s see how the most traded altcoins look before the weekend.

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Technical Analysis: Coins Recover from Sell-Off as Bulls Remain in Control

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Following yesterday’s brief but deep correction, the major cryptocurrencies seem to be back on the bullish track, as Bitcoin is leading the segment yet again. With the most valuable coin’s dominant currently near 56%, trading in BTC dwarfs the other crypto markets. That said, most of the majors recovered well after yesterday’s rout, while Bitcoin itself reached as high as $5730 today in early trading, only a few percents off its all-time high.

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The short-term setup is encouraging for bulls, as the coin cleared the overbought short-term momentum readings while remaining inside the rising trend. A rally towards the long-term target at $6000 is still likely, despite the stretched long-term picture. Support levels are found near $5400, around the $5000 level and at $4650.

BTC/USD, 4-Hour Chart Analysis

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Ripple settled down somewhat in early trading but it turned volatile again later on, and the coin is still underperforming the broader market, while Ethereum bounced back well above the $300 level, remaining well below its recent highs. The rest of the market is modestly higher today, although NEO and IOTA are slightly lower still showing a negative correlation with the other majors. Let’s see the short-term charts after the short volatile period.

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