Prominent bitcoin trader, investor, and researcher Tuur Demeester stated that the center mass for the bitcoin price would depend on the South Korean bitcoin exchange market in the short-term.
Bitcoin’s center mass for price may be in South Korea now: largest SK exchange has more vol than Bitfinex + Bittrex. Resistance at ₩4.5M: pic.twitter.com/yb71dMMxKc
— Tuur Demeester (@TuurDemeester) September 20, 2017
Earlier this week, South Korean cryptocurrency exchange Bithumb surpassed the trading volume of Bittrex and Bitfinex combined, two of the largest bitcoin and cryptocurrency exchanges in the market. More importantly, the trading volume and market share of the South Korean bitcoin exchange market overtook that of the Chinese bitcoin exchange market, officially becoming the third largest bitcoin market in the world behind Japan and the US.
— Joseph Young (@iamjosephyoung) September 21, 2017
For many years, the South Korean bitcoin exchange market and its trading platforms have demonstrated extreme premium rates in comparison to other major markets such as the US and Japan. The demand toward bitcoin from casual investors, institutional and retail traders have been increasing at an exponential rate, especially due to the weakening of the US dollar and intensifying conflict between North Korea and the US.
Since early 2016, an increasing number of investors in the finance sector have started to embrace and adopt bitcoin as a safe haven asset and digital gold. Many investors have invested in bitcoin to avoid global markets volatility and devaluation of reserve currencies. Because the South Korean bitcoin exchange market have outgrown many major markets and demand from local investors are at all-time high, Demeester explained that in the short-term, the price of bitcoin may depend on the South Korean bitcoin market along with Japan and the US.
Even throughout bitcoin’s latest major price correction caused by the Chinese government’s nationwide ban on bitcoin exchanges, Bithumb, South Korea’s largest exchange, continue to demonstrate premium rates over other markets, securing the ₩4.2 million mark.
At the moment, the bitcoin price is demonstrating extreme volatility. Earlier this week, bitcoin demonstrated early signs of recovery by rebounding beyond the $4,000 mark after the finalization of the closure of leading Chinese bitcoin exchanges including BTCC, OKCoin and Huobi. But, on September 21, the bitcoin price endured yet another major correction, declining to $3,600 and since then, it has been relatively stable in the $3,600 region.
Eventually, as all of the Chinese bitcoin exchange market’s liquidity and traders move to neighboring markets like Japan and South Korea, and the two markets become the epicenter of the Asian bitcoin market, the bitcoin price would likely be able to find stability and recover.
Several key figures and experts within the cryptocurrency sector including Tim Draper, the billionaire early-stage investor who has funded some of the largest bitcoin exchanges in South Korea and Japan, explained that the exit of the Chinese bitcoin market will provide to be a positive event for the bitcoin industry because Japan and South Korea has significantly more efficient and practical regulatory frameworks for both businesses and investors.
Earlier this year, the Japanese and South Korean governments legalized bitcoin as a payment method. South Korea, which has been lagging behind Japan in terms of bitcoin innovation, market structure and trading volume, revealed a bill that would allow bitcoin companies to operate as proper financial service providers and remittance companies.
Son ji-hyoung of the Korea Herald explained:
“Under the bill that aims to revise the Electronic Financial Transactions Act, traders, brokers, or other business entities involved in cryptocurrency transactions would be required to get regulatory approval from the Financial Services Commission. The requirements include the retention of capital of at least 500 million won ($436,300) and data processing facilities.”
Most of China’s trading volumes will highly likely move to Japan and South Korea. Already, the majority of traders in China moved over to the Japanese bitcoin exchange market, allowing Japan to evolve into the largest bitcoin market in the world.
Bitcoin Takes a Breather as Prices Drop Below $5,700
The world’s most talked about digital currency pulled back early Tuesday, a sign that the latest rally is nearing its end.
BTC/USD Price Levels
After a positive start to the week, bitcoin prices have reversed back toward $5,600 on Tuesday. The BTC/USD exchange rate opened up a nearly $200 trading range on Tuesday. At press time, the pair was down 1.3% at $5,653. Bitcoin remains in overbought territory, based on the RSI, with underlying momentum maintained.
Bitcoin’s current price level translates into a market cap of roughly $92.7 billion, according to CoinMarketCap. That nearly triples the Ethereum blockchain, which is currently valued at $31.2 billion. When assessed by market cap, bitcoin and Ethereum combined account for more than two-thirds of the cryptocurrency asset class.
The BTC/USD has registered a five-day gain of 15.%, which is equivalent to $772. The pair’s 52-week range is $627.77 – $5,861.15.
Analysts Struggle to Explain Rally
Analysts and market participants are struggling to explain bitcoin’s latest upsurge. The uptrend seems to have begun around the time of news suggesting Chinese policymakers may soon relax their ban on cryptocurrency. However, this alone doesn’t explain the 18% gain over the past five days.
Another plausible catalyst is the anticipated hard fork of the bitcoin blockchain in November, a plan that would benefit existing holders of the cryptocurrency.
The developers behind the Segwit2x protocol have identified a bitcoin upgrade approximately 90 days after the activation of Segregated Witnesses. The controversial plan, which aims to increase the transaction capacity of the blockchain, will occur at block 494,784.
Bitcoin Gold was also on some traders’ wish list before the blockchain community raised suspicion over the project. Several red flags have been identified by Gert-Jaap Galsbergen, which you can read here.
For now, bitcoin’s bull market appears to be taking a breather. As we’ve seen in recent weeks, it doesn’t take much to stoke investor exuberance in a market that has gained nearly 500% since Jan. 1.
Featured image courtesy of Shutterstock
Technical Analysis: Ripple Breaks Out Amid Ethereum Upgrade
The major cryptocurrencies are on the rise once again today, with Ethereum’s major Byzantium update being in the center of attention. The second largest blockchain network has been updated through a hard fork, as usual, and the successful lock-in led to an initial surge in the price of the ETH token. The digital currency recovered above the $330 level after Sunday’s pull-back, but so far it failed to durably break-out above the prior swing high just above $340.
With the long-term momentum readings still being neutral, the coin could be on the verge of testing the $380 resistance soon, with the all-time high near $400 being the last major technical obstacle. Below $330 further support is found at $300 and $285.
ETH/USD, Daily Chart Analysis
Bitcoin is also on the rise after dipping below $5500 during the weekend, and the most valuable coin is joined in the rally by Ripple, which most likely finished its short-term correction and could be ready for another leg higher. The other majors are also generally higher, with NEO and IOTA being ahead of the pack, while the rest of the market trading near unchanged. As the broad rally seems to be well and alive, let’s see how the short-term charts are shaping up.
Long-Term Cryptocurrency Analysis: Bitcoin Leads the Charge as Ethereum Breaks-Out
The most valuable digital currency shrugged off all the bubble talk and regulatory concerns of the recent period and surged to a new all-time high above $5000, as we expected. The coin almost doubled from the China lows, with a short-term top near the $5900 level but now it is short-term overbought and the long-term picture also looks stretched.
That said, more gains are possible (with the final range-projection target at $7000) as the late-coming bulls pile in, but both investors and traders should reduce their holdings as the price advances as correction risk is rising progressively. Short-term support is near $5450 and the 23.6% Fibonacci extension, with further levels at $5000, $4650, and $4400.
BTC/USD, Daily Chart Analysis
Most of the other majors are also showing bullish signs, and the strength of Ethereum is especially encouraging, while Ripple is working its way through the correction that we have been expecting after its surge. Litecoin and Monero are on the rise too, while Dash is still in correction mode, but it’s edging towards a likely break-out as well. As the divergent nature of the bullish trend is still apparent, let’s see where the daily charts stand this weekend.
- Asian Market Update – Tuesday: Cryptocurrency prices consolidate after strong rally October 17, 2017
- Former Fed Chief Bernanke Backs Blockchain, but Not Bitcoin October 17, 2017
- Bitcoin Takes a Breather as Prices Drop Below $5,700 October 17, 2017
- ICO Analysis: Genesis Vision October 17, 2017
- ICO Analysis: Bloom October 17, 2017
- Daily Analysis: Volatility Near Record Low 30 Years After Black Monday October 16, 2017
- Technical Analysis: Ripple Breaks Out Amid Ethereum Upgrade October 16, 2017
- Jamie Dimon May Hate Bitcoin, but J.P. Morgan Is Embracing Blockchain October 16, 2017
- Ethereum Gets an Upgrade October 16, 2017
- Trade Recommendation: EURJPY October 16, 2017
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