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Sunday Devotional: Keep Your #Hodl Hand Strong

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If you bought now, at the all-time highs of Bitcoin and you’re itchy about $5,000 or $10,000, perhaps taking a look at those who’ve been in your shoes before is in order. Or perhaps you don’t have much Bitcoin, but you’ve got a lot of Ethereum and tokens on its blockchain. Even better, perhaps you’re holding a number of one of the alleged Bitcoin long-term contenders, XMR or Dash.

If you look historically at the people who’ve bought during other highs, the ones who got impatient are the ones who lost the most. The ones who quietly held through were rewarded the most richly.

We can take the example of a friend of the publication, who sold Bitcoin very near the ultimate bottom. Strictly speaking he could have had $50 million in Bitcoin assets today if he had instead decided to hold, but things certainly looked bleak for the currency in those days. He was not alone in selling the bottom, nor truly irrational when one considered all the angles. No one ever is. This is what you have to keep in mind: people who were buying at that time were paying the most anyone was willing to pay, and people who were selling were accepting far less than they had seen others sell coins for. But some people were just off the market in those waters. These people played a successful strategy through a long, cold winter.

Some mining outfits are always dumping their coins, no matter the price. Bills have to be paid, after all. So while it may seem that Bitcoin is “stable” at its current prices, we’re just as likely to see turbulence and dips. Unless you’ve some more performative place to put your funds (such as one of the trade recommendations or ICOs reviewed here at Hacked), you’re still probably going to end up with a greater long-term profit by retaining the coins. Especially if you retain them in ways that ensure they truly belong to you, IE, off exchanges during times when you don’t anticipate actually trading them.

There’s nothing wrong with selling the highs and buying the lows, but long-term, some people have done equally as well by doing nothing at all. While this article is meant as a broad overview, one can imagine that some people had to take measures to deal with the old weak hand syndrome. After all, if everyone is panicking and letting you know the building is on fire, it only makes sense to try and escape with everyone else.

But if you believe firmly in the longevity of your asset, sticking it out may become worth it. Increasingly, products will emerge that will allow people to maintain possession of their crypto assets but extract leverage via peer-to-peer and even institutional lending. Such a paradigm will enable the crypto class to enter the business world in unforeseen ways, perhaps in unforeseen numbers.

Buy and hold is a strategy that will work well for so-called “blue chip” cryptos, but it is not future-proof. Aside from security holes that can arise in cryptography from generation to generation, simple innovation can displace something like a cryptocurrency, and network effects can shift current. If one region of the world becomes less friendly, in a regulatory sense, to do business in, then perhaps cryptocurrency will move its volume to another.

Cryptocurrency is by definition censorship resistant, after all, because a design which does not enable its fungibility is essentially the opposite of the “digital cash” paradigm. When such problems arise, those who kept their hold hand strong will still be able to conduct business, and where things are most repressive, in a more catastrophic forecast, still be able to escape troubled waters.

featured image courtesy of Pixabay

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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5 stars on average, based on 2 rated postsP. H. Madore has covered the cryptocurrency beat over the course of hundreds of articles for Hacked's sister site, CryptoCoinsNews, as well as some of her competitors. He is a major contributing developer to the Woodcoin project, and has made technical contributions on a number of other cryptocurrency projects. In spare time, he recently began a more personalized, weekly newsletter at http://ico.phm.link




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2 Comments

2 Comments

  1. mzvyga

    August 28, 2017 at 1:43 am

    Sell Bitcoin! Sell all…

  2. Tarik

    August 28, 2017 at 10:36 am

    Great overview!

    “There’s nothing wrong with selling the highs and buying the lows, but long-term, some people have done equally as well by doing nothing at all. ”
    Very interesting statement and I would love to see numbers about it – are you aware of any?

    Not that I doubt, in fact it makes all sense to me: the times I jumped out for any reason, I often ended by missing some other-moment reward – seems like staying in the game unconditionally is a great strategy indeed! (at least for those “blue-chips”)

    About numbers, I can only talk about my own: I bought few bitcoins and litecoins ~3y ago, and I literaly left it and forgot the crypto world until early this year. What my surprise to find out that my btc got stolen and my ltc actually got multiplied!

    Regardless the bad experience with my btc, a simple financial analysis of my gains with ltc and (would be) btc…… I don’t think I could do any better if actually dealing with the market closely!

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Bitcoin

New Bitcoin Core Release Prevents Miner DoS Attack

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The Bitcoin Core development team released an important update yesterday that patches a crucial security vulnerability. Bitcoin is usually known as the most hackproof and secure blockchain, which makes any vulnerability in the network incredibly newsworthy.

Specifically, the patch addresses a potential opening for a denial of service attack within the Bitcoin Core wallet software.

The way the potential exploit could work was by allowing anyone who was capable of mining a sufficient number of proof of work blocks to crash Bitcoin Core nodes running software versions 0.14.0 to 0.16.2.

They made sure to emphasize, however, that stored funds were not at risk. They also warned that derivative software such as Knots are also affected and have their own specific patch for the issue.

That said, the developers made clear that if you only occasionally run Bitcoin Core, it is less urgent to patch, although it would obviously be safest to upgrade as soon as possible.

Upgrading will take between five minutes to half an hour dependent upon the processing power of a given users computer. In addition, users should note that the new wallet will have to redownload the entire blockchain and that downgrading to an older version after the fact is not supported.

The update also fixed a non-insignificant number of minor bugs. I strongly encourage our readers to check out the full instructions on the Github page for Bitcoin Core.

These bugs were:

1. Consensus: 14249 696b936 fixed crash bug with duplicate inputs within a transaction
2. RPC and other APIs: gives an error when an amount is needed but missing
3. Miscellaneous: Invalid flags error should be set to bitcoinconsensus_err
4. Documentation: #13844 11b9dbb correct the help output for -prune

The news could have come at a better time for Bitcoin. There has been mounting uncertainty about whether Bitcoin is trapped in a semi-permanent slump that could continue for years. Those who believe in the untapped power/capabilities of the Bitcoin network continue to wait for solutions like the lightning network to increase the utility of Bitcoin as a true peer to peer electronic cash.

Although this should not concern those who primarily view Bitcoin as a store of value, any whiff of exploits in the network’s inherent security could result in a massive sell-off as core assumptions are demolished. This analyst hopes this is a momentary blip in the promise of Bitcoin. I encourage our readers to reach out to members of the dev team directly for any additional clarifications.

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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4.6 stars on average, based on 17 rated posts




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Bitcoin

Bitcoin’s Third Bear Market Showing Little Sign of Letting Up: Analyst

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Despite several attempts to rationalize bitcoin’s yearlong downturn, the leading digital currency remains locked in a protracted bear market that is showing little signs of letting up, according to veteran analyst Willy Woo. Based on this view, there’s little evidence to suggest that a reversal is imminent.

Bear Market Continues

In a recent tweet, Woo emphasized that bitcoin’s downtrend is likely to continue for longer and that there was no evidence of a reversal anytime soon. This view is reinforced by a historical analysis of bitcoin’s trajectory, which suggests that sideways trading is the best the market can hope for at the moment.

“Bitcoin has seen only 3 bear markets in its history,” Woo said. “We are in the third one now. One signal we can use to determine the end of the bear is for the price to cross above its 200 day moving average.”

Woo’s position isn’t bearish on the value prospects of bitcoin; it merely suggests that the bulls aren’t out of the woods yet.

The view that bitcoin is still in the middle of a downtrend contradicts several leading opinions on the matter. Wall Street crypto analyst Tom Lee has predicted that a return to record highs is possible this year, while billionaire investor Mike Novogratz has said that an exhaustion of the current downtrend will likely generate a bullish reversal in the foreseeable future. Although some of these viewpoints are backed by fundamental research, fear, uncertainty and perhaps manipulation have undermined bitcoin’s revival. This comes despite a wave of positive developments regarding institutional adoption, business innovation and even regulation.

As Hacked recently showed, bitcoin’s latest price collapse appears to have been set in motion by a prominent whale moving hundreds of millions of BTC and BCH to multiple wallets. A large chunk of those assets were then transferred to leading digital currency exchanges where they may have been sold.

BTC/USD Update

Bitcoin is currently trading at $6,331 on Bitfinex, where it is little changed compared with the previous session. Data from CoinMarketCap suggests the BTC price has gained roughly 1% over the past 24 hours on trading volumes of $4.4 billion.

Bitcoin’s momentum indicators suggest lateral moves are likely to continue in the short-term as neither the RSI nor the MACD is showing signs of breaking out. The leading digital currency slumped at the start of the week after failing to make new highs. The BTC price appears to have formed a double-top above $6,500, which eventually paved the way for a reversal.

At current values, bitcoin is capitalized at $109.6 billion, which represents 55.3% of the entire market.

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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4.6 stars on average, based on 604 rated postsSam Bourgi is Chief Editor to Hacked.com, where he specializes in cryptocurrency, economics and the broader financial markets. Sam has nearly eight years of progressive experience as an analyst, writer and financial market commentator where he has contributed to the world's foremost newscasts.




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Analysis

Crypto Update: Market Remains Weak Despite Ripple’s Surge

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Ripple made headlines today in the cryptocurrency segment, as the third largest coin jumped by more than 15% after trading in a narrow range for several days. Most of the major coins joined the rally, but the gains were muted and the technical setup remained unchanged in most cases, with the long-term outlook still being bearish, while the short-term picture remaining mixed.

Ethereum, which has been in the center of the trends in the segment for weeks rallied back above $200, but stayed below the recent swing high, leaving several questions unanswered concerning the short-term trend. Bitcoin also got stuck near the $6275 level yet again, and the total value of the market is still below the $200 billion mark, with still no clear signs of major capital inflows in the segment.

ETH/USD, 4-Hour Chart Analysis

Ethereum quickly recovered above $200 after dipping below the weekend lows yesterday in late trading, retaining the short-term buy signal in our trend model. That said the coin still needs to show stronger bullish momentum to avoid a resumption of the clearly declining long-term trend. As sustained dip below $200 would still warn of a move to last week’s lows, while a move above $235 would open up the way towards $260 and the confluence resistance near $275.

BTC/USD, 4-Hour Chart Analysis

Bitcoin has been showing weakness in the last couple of days, and although the coin is still on a short-term buy signal, similarly to Ethereum, a quick recovery above $6500 would be needed to avoid a bearish turn.

Traders should hold on to their positions here, but given the still bearish segment-wide trends, we still don’t advise full positions even in the stronger coins. Below $6275, weaker support is found at $6000, close to the key long-term zone near $5850, while resistance is ahead at $6500, $6750, and $7000.

Ripple Needs Follow Through For a Buy Signal

XRP/USDT, 4-Hour Chart Analysis

While today’s spike in Ripple is encouraging, the coin needs to show further signs of strength, as the recent sudden spikes in the majors were quickly sold as the bearish trend remained dominant in the segment.

With that in mind, despite the broken resistance levels, XRP remains on a neutral short-term signal in our trend model, while still being bearish from a long-term perspective. The coin is currently trading right at the $0.32 level, with support found at $0.3130, $0.30 and near $0.30, while strong resistance is ahead at $0.35.

DASH/USD, 4-Hour Chart Analysis

Dash is among the stronger coins from a short-term technical standpoint, trading in a bullish consolidation pattern just below the key $200 level. That said, the coin failed to show strength today amid Ripple’s rally, and that still points to a dominant bearish trend in the segment. With that in mind, traders should wait for further positive signs before entering new positions, especially since a bullish leadership still hasn’t developed.

IOT/USD, 4-Hour Chart Analysis

IOTA is still weaker than average, together with NEO, EOS, and ETC, and the coin is still just above the August lows, clearly being in a broad downtrend, despite holding up above the lower boundary of its short-term range. A test of the lows is likely in the coming weeks, and the coin remains on sell signals on both time-frames, with support found between $0.455 and $0.475, and near $0.405, and with key resistance ahead near $0.57 and $0.64.

Featured image from Shutterstock

Disclaimer:  The analyst owns cryptocurrencies. He holds investment positions in the coins, but doesn’t engage in short-term or day-trading, nor does he hold short positions on any of the coins.

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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4.6 stars on average, based on 348 rated postsTrader and financial analyst, with 10 years of experience in the field. An expert in technical analysis and risk management, but also an avid practitioner of value investment and passive strategies, with a passion towards anything that is connected to the market.




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