Ethereum, Bitcoin Prices Slide as Market Sheds $10 Billion

Ethereum, Bitcoin Prices Slide as Market Sheds $10 Billion

Ethereum, Bitcoin Prices Slide as Market Sheds $10 Billion

The crypto markets took a steep downward turn on Friday, with more than 90 of the top 100 cryptocurrencies posting single-day price declines. The bitcoin price dropped nearly $400 after challenging the $4,000 level earlier in the week, while the ethereum price slipped below $260.

Chart from CoinMarketCap

The total cryptocurrency market cap–the combined value of all cryptocurrencies–dropped more than $10 billion for the day. After beginning the day at about $133 billion, the crypto market cap quickly dropped below the $130 billion threshold, where it languished leading into Friday morning. At present, the total crypto market cap is about $122 billion.

Chart from CoinMarketCap

Bitcoin Price Dips Toward $3,500

Bitcoin was at the head of the retreat, dipping nearly $400 from its Thursday morning mark of $3,900. Market manipulation or not, the bitcoin price has tapered quite a bit since its early-week recovery. In the past day alone, it has dipped 6%, despite the fact that a prominent industry figure said a trusted source had told him that China will not extend its bitcoin crackdown to mining. At present, the bitcoin price is trading at a global average of $3,564, which translates into a $59.1 billion market cap.

Bitcoin Price Chart from CoinMarketCap

Meanwhile, JP Morgan CEO Jamie Dimon has taken another potshot at bitcoin, claiming that it’s “worth nothing” just a week after calling it a fraud.

Ethereum Price Dips Another 6%

The ethereum price mirrored bitcoin’s decline, dipping 6% for the day. After entering the day above $270, the ethereum price struggled to hold above that mark. Ultimately, it dove through the $260 level, too, bringing it to a current price of $257. Ethereum now has a market cap of $24.4 billion.

Ethereum Price Chart from CoinMarketCap

Bitcoin Cash Posts Double-Digit Decline

The bitcoin cash price careened downward on Friday, posting the worst single-day performance of any top 15 coin. Within the past 24 hours, the bitcoin cash price has fallen by more than $50–a 10% drop. At present, bitcoin cash is trading at $407 and has a market cap of just $6.8 billion.

Bitcoin Cash Price Chart from CoinMarketCap

Altcoins Trend Down

The altcoin markets joined in the retreat, with nearly every top 100 cryptocurrency declining for the day. Fourth-ranked Ripple saw its price fall 5% to $0.17, while Dash slid 3% to $337.

Altcoin Price Chart from CoinMarketCap

The litecoin price fell 8% to just under $46. The 6th-ranked coin now sits at just 50% of the $92 record it set on September 2.

Litecoin Price Chart from CoinMarketCap

NEM–whose single-day trading volume is just $3 million–declined 6% to $0.204, while IOTA dropped 5% to $0.484. Monero, whose price approached $150 less than a month ago, is now trading at just $85 following Friday’s 7% skid. Ethereum classic rounds out the top 10 with an 8% decline that forced its market cap below $1 billion.
 

Author: Josiah Wilmoth on 22/09/2017

 

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Prominent Bitcoin Trader – Price is Heading Towards $100,000 in 2018

Prominent Bitcoin Trader - Price is Heading Towards $100,000 in 2018

Prominent Bitcoin Trader – Price is Heading Towards $100,000 in 2018

Earlier this week, prominent bitcoin trader and investor Tone Vays provided technical analysis on bitcoin’s short-term trend, major price correction following the nationwide ban on Chinese bitcoin exchanges, bitcoin’s swift recovery, and the long-term future of bitcoin.

The analysis of Vays demonstrated the potential of bitcoin price to surpass the $100,000 mark by the end of 2018, which would provide bitcoin a multi-trillion dollar market cap. For many years, financial analysts and researchers in both the cryptocurrency and banking sectors such as RT’s Keiser Report host Max Keiser emphasized the possibility of bitcoin to surpass $1 trillion in market cap if and when it succeeds in evolving into an alternative financial network against existing banking systems and financial institutions.

Prominent Bitcoin Trader - Price is Heading Towards $100,000 in 2018

Based on the exponential growth rate of bitcoin regarding userbase, adoption, developer activity, trading volumes and market cap, a long-term price target of $100,000 is possible to achieve, especially if leading institutional and retail investors continue to endorse, embrace and adopt bitcoin. In 2017 alone, $90 billion investment bank Goldman Sachs and Fidelity Investments with $2.13 trillion worth of assets under management expressed their optimism toward bitcoin.

In August, Fidelity CEO Abigail Johnson stated:

“But I am still a believer – and it’s no accident that I’m one of the few standing before you today from a large financial services firm that hasn’t given up on digital currencies.”

Johnson also revealed that the company has been experimenting with bitcoin through mining the digital currency and by providing a bitcoin investment platform to its clients. Last month, Fidelity partnered with Coinbase to enable Fidelity clients and portfolio managers to access their bitcoin wallets and accounts directly from the main Fidelity investment platform.

Goldman Sachs analysts further emphasized in a note to its clients and investors that bitcoin and the cryptocurrency market can no longer be ignored, even by institutional investors.

“The debate has shifted from the legitimacy of the ‘fiat of the Internet’ to how fast new entrants are raising funds,”

said Goldman Sachs. More to that, Goldman Sachs chief technician Sheba Jafari also offered technical analysis on bitcoin’s mid-term price trend, stating that he strongly believes bitcoin will surpass the $4,800 mark before the end of 2017.

said Goldman Sachs. More to that, Goldman Sachs chief technician Sheba Jafari also offered technical analysis on bitcoin’s mid-term price trend, stating that he strongly believes bitcoin will surpass the $4,800 mark before the end of 2017.

Already, two of the US market’s largest exchanges and bitcoin service providers Coinbase and Gemini have started to develop trading platforms for large-scale institutional investors, focusing on building a more robust and efficient investment channel which can provide sufficient liquidity for retail investors. Gemini entered into a strategic partnership with the Chicago Board Options Exchange (CBOE), the largest options exchange in the US, to serve instituitonal investors.

Gemini CEO Tyler Winklevoss stated:

“Gemini’s key concerns in the cryptocurrency ecosystem have always been security, compliance and regulatory oversight. By working with the team at CBOE, we are helping to make Bitcoin and other cryptocurrencies increasingly accessible to both retail and institutional investors.”

Upon securing a $100 million funding round at a valuation of $1.6 billion, Coinbase CEO Brian Armstrong also promised its users and investors to provide a platform for institutoinal investors in the US and overseas markets.

With an increasing number of instituitonal and retail investors showing interest in bitcoin and global mainstream adoption of bitcoin increasing generally, $100,000 is an achievable long-term target for bitcoin.

 

Author Joseph Young on 21/09/2017

 

Posted by David Ogden Entrepreneur
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Wall Street Journal Argues Bitcoin Is “Probably worth Zero”, Joins Obituary List

Wall Street Journal Argues Bitcoin Is “Probably worth Zero”, Joins Obituary List

Wall Street Journal Argues Bitcoin Is “Probably worth Zero”, Joins Obituary List

One of the Wall Street Journal’s most read articles of the day implies that bitcoin’s volatility reveals that the cryptocurrency is “probably worth zero.” The author of the piece starts by stating that a borderless digital currency out of the government’s reach that allows for semi-anonymous transactions sounds good, but that he’s not really a bitcoin fan because of the small number of transactions it can handle, and the amount of power necessary to maintain the network.

Bitcoin is scalable and can eventually reach and surpass VISA’s volume of, on average, about 2,000 transactions per second (tps). As CCN previously reported, SegWit’s activation on both the litecoin and bitcoin networks enables cross-network transaction swaps between the two cryptocurrencies, facilitating a host of other innovations, making it clear that, in the future, the problems that currently haunt the cryptocurrency won’t be there anymore.

The author then uses Gresham’s law, the principle that “bad money drives out good money” to argue against bitcoin. The article reads:

“Given the choice of spending inflationary government-issued money or something which holds its value, everyone would spend the bad paper stuff and hoard the bitcoin.”

In his argument, he says that no one wants to be the person that once bought two pizzas for 10,000 bitcoins, when the cryptocurrency was nearly worthless. The point being that if no one spends the currency while waiting for it to gain value, it will never really get established as a currency. Then again, no one in Venezuela wanted to see their currency’s value decrease, but the people didn’t have much of a say in that and, as such, were forced to use bitcoin to survive.

Then, unpacking the idea of bitcoin being based on illegal transactions, the author uses math done by Dan Davies, a bank analyst at Frontline Analysts in London, to assume that all drug dealing moves online, so as to get to $571 per bitcoin. The argument adds that drug dealers might put up with bitcoin’s current problems – which I addressed above – as laundering dollars is harder and more expensive than transacting in bitcoin.

Given that various studies already clarified that criminals aren’t using bitcoin that much, the value would be much lower, according to WSJ’s article. As such, the author concludes that bitcoin’s current price, of nearly $4,000, is mostly speculation and that JP Morgan’s Jamie Dimon was right to compare it to the 17th-century Dutch tulip bubble.

Basing the cryptocurrency on illegal activity neglects that hundreds, if not thousands, of legitimate businesses already accept bitcoin, so much so that it’s possible to live on bitcoin. Plus, the cryptocurrency is mostly used for legitimate purposes by those who simply want to be in charge of their own money, not those who have something to hide.

 

Bitcoin as Digital Gold

WSJ’s article goes on to imply that bitcoin’s true believers cling to the idea of it being digital gold that will maintain its value if a government currency collapses, and that this idea is supported by history’s examples of it happening.

The article points out that gold has had thousands of years and a history of being used to back fiat money to support its current position. Bitcoin has had less than a decade to prove its worth and most people just only heard of it. A recent study by YouGov revealed that 34% of Americans never even heard of bitcoin, and that 29% thought the cryptocurrency was just used to purchase illegal goods or services.

Still, bitcoin’s potential to replace gold led to a $5,500 price per coin, switching Thomson Reuters GFMS’ estimate of 2,155 metric tons of gold held in exchange-traded funds to the cryptocurrency. If bitcoin was to completely replace gold coins and bars, given GFMS’ supply estimate of 24,000 metric tons bought for investment in the past half-century, we would get $61,000 per coin.

Finally, the author states that bitcoin’s volatility can somewhat be explained by it either succeeding or failing in completely displacing gold, implying that the cryptocurrency is either extremely precious, or worthless. The article reads:

“Based on the simple choice between total success and failure, we can very roughly say that bitcoin at 70% of the gold ETF-derived price suggests a 70% of displacing so-called paper gold as society’s chosen emergency store of value, and a 6% chance of displacing physical gold. Even digital dreams should accept that is far too high.”

At the end of the day, bitcoin’s value, just like the value of other cryptocurrencies, depends on its users as it is the first free market backed currency, and its growth is consistent with its userbase increase. A quick look at Google Trends shows us that interested in the cryptocurrency is still surging.

At the end of the day WSJ’s article is just one more to add to the bitcoin obituary list.

 

Author: Francisco Memoria on 20/09/2017

Posted By David Ogden Entrepreneur
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Bitcoin Mining Could be China’s Next Target – Why It Does Not Matter

Bitcoin Mining Could be China's Next Target - Why It Does Not Matter

Bitcoin Mining Could be China’s Next Target – Why It Does Not Matter

 

Several sources including the Wall Street Journal have reported that the Chinese government and its regulators may target bitcoin mining operators in the region following the imposition of a nationwide ban on cryptocurrency and bitcoin exchanges.

Experts in the cryptocurrency sector and mining industry including John McAfee strongly believe that the Chinese government will not order a crackdown on bitcoin mining centers and operators. As Cryptocoinsnews previously reported, McAfee revealed that Jihan Wu, the co-founder of Bitmain, the world’s largest bitcoin mining equipment manufacturer that is reportedly valued at billions of dollars, told McAfee in a meeting with Roger Ver that the Chinese government is not planning a ban on mining centers.

But, in a statement, ViaBTC CEO Haipo Yang explained that if the Chinese government decides to ban bitcoin mining centers and operators, it will be the end of the Chinese bitcoin mining industry. Yang wrote:

“Technically, China can’t ban bitcoin traffic, we have our own sync network. But if the Chinese government says mining is illegal, we are fucked.”

As Yang noted, it is possible for the Chinese government to target bitcoin mining operators in many methods. For instance, the Chinese government could decide to nationalize bitcoin mining centers and announce them as the property of the Chinese government.

For the Chinese mining industry, the crackdown on bitcoin mining by the government will lead to financial turmoil. More specifically, companies like Bitmain that recently secured multi-million dollar funding rounds will not be able to serve their biggest markets, which are domestic miners and mining centers.

Earlier today, through its a PBoC-owned financial news publication, PBoC researcher and Central University of Finance and Economics professor Huang Zhen explained that the central bank of China perceives bitcoin as a threat. More importantly, Zhen emphasized that the government plans to release a government-issued national digital currency in the future, as a rival currency to bitcoin.

If the intention of the government is to eliminate bitcoin in the Chinese market in order to promote and issue its own digital currency, the Chinese government will likely ban aspect of bitcoin. But, in contrary, if the Chinese government is not ready to release a digital currency of its own, it will re-instate bitcoin trading platforms and prevent from issuing any further restrictions and regulations on bitcoin miners.

“The central bank has set up a research group and a digital money research institute to explore the digitization of sovereign money. After this round of virtual money markets supervision, we expect under the auspices of the Chinese central bank to launch our own sovereign digital currency as soon as possible to help maintain China’s leadership in the development of global digital finance,” Zhen wrote.

Ultimately, even if the Chinese government does ban bitcoin mining centers and operations in China, in the mid-term, it will not pose a major threat to the global bitcoin mining industry primarily due to the emergence of multi-billion dollar Japanese conglomerates that are developing their own ASIC miners and manufacturing independent bitcoin mining equipment to mine the digital currency.

 

Author: Joseph Young on 19/09/2017

 

Posted By David Ogden Entrepreneur.
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Bitcoin Price Technical Analysis for 19th September – Can Bulls Keep It Up

Bitcoin Price Technical Analysis for 09/19/2017 – Can Bulls Keep It Up

Bitcoin Price Technical Analysis for 09/19/2017 – Can Bulls Keep It Up

Bitcoin price seems to have completed a large correction and is ready to resume its long-term uptrend.

 

Bitcoin Price Key Highlights

  • Bitcoin price has bounced off a long-term area of interest after its recent sharp drop, signaling that the uptrend could still resume.
  • Applying the Fib extension tool on this major correction could indicate how high bulls could take bitcoin from here.
  • Technical indicators on the daily time frame also suggest that the long-term climb could carry on.

Bitcoin price seems to have completed a large correction and is ready to resume its long-term uptrend.

 

Technical Indicators Signals

The 100 SMA is above the longer-term 200 SMA on the daily chart, signaling that the path of least resistance is to the upside. The gap is also gradually widening to reflect strengthening bullish momentum. Also, the 100 SMA has recently held as dynamic support as it lined up with the rising trend line connecting the lows since April.

Stochastic has pulled up from the oversold region to show that buyers are regaining control of bitcoin price action. RSI is also turning higher and appears to be heading north so bitcoin could follow suit.

The next potential resistance is at the 38.2% extension just past the $4000 major psychological barrier. The 50% extension is at $4637, the 61.8% extension at the $5000 handle close to the record highs, and the 76.4% extension at $5464. The full extension is around the $6200 level.

Bitcoin 19th September

Market Factors

Chinese regulators have confirmed that they are stepping up their efforts to crack down on the cryptocurrency, following rumors that authorities are already shutting down exchanges in the country. However, investors seem to have moved on from this news as other markets like Japan and South Korea are taking majority of the market share and activity.

Meanwhile, the US dollar is giving up some ground to bitcoin price ahead of the FOMC decision, during which the central bank would likely keep rates on hold and downgrade growth forecasts on account of the recent hurricanes. A press conference will also follow and Yellen’s responses will be scrutinized as traders hunt for clues on December tightening.

Author Sarah Jenn on 4:23 am September 19, 2017

Time to ride the tiger

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$11 Billion – 24-Hour Cryptocurrency Trading Volume Hits New Record

$11 Billion - 24-Hour Cryptocurrency Trading Volume Hits New Record

$11 Billion – 24-Hour Cryptocurrency Trading Volume Hits New Record

Cryptocurrency trading volume reached a new milestone on Friday, crossing $11 billion for the first time amid regulatory uncertainty in China.

Crypto Markets Post Record Volume

According to data obtained from CoinMarketCap, the combined 24-hour trading volume of all cryptocurrencies rose to $11.5 billion shortly after 16:00 UTC. The only other time daily trading volume has surpassed $10 billion was on August 19, when it briefly spiked to $10.5 billion


Cryptocurrency Trading Volume & Market Cap Chart from CoinMarketCap

Bitcoin topped the charts with $4.2 billion in volume, while ethereum and litecoin posted $1.9 billion and $1.5 billion, respectively. In all, 10 different currencies posted volume greater than $100 million.

$11 Billion - 24-Hour Cryptocurrency Trading Volume Hits New Record
Chart from CoinMarketCap

Bithumb and Bitfinex each handled about $1.5 billion in trades while Chinese bitcoin exchange OKCoin accounted for $750 million. Altogether, at least seven exchanges, including GDAX, Bittrex, Poloniex, and Huobi surpassed the $500 million mark (Volume had tapered off a bit by the time of writing, so it is possible Kraken and Coinone crossed $500 million earlier in the day).

Friday’s trading volume surge was caused by market volatility stemming from China’s crackdown on bitcoin exchanges. Yesterday, the markets crashed following reports that a bitcoin exchange ban was “certain” and BTCC’s subsequent announcement that it would shut down all trading services at the end of September. The markets continued to plunge Friday morning as Huobi and OKCoin were rumored to be meeting with regulators and two smaller exchanges–Yunbi and ViaBTC–also announced September closures.

However, later in the day OKCoin and Huobi issued concurrent statements that suggested they might continue providing cryptocurrency-to-cryptocurrency trading services. Both exchanges announced that they would close CNY trading pairs on October 31, but–unlike BTCC, Yunbi, and ViaBTC–they did not announce the suspension of “all trading.” Moreover, they indicated that they “expect to continue to provide Chinese users with [compliant] digital asset services.”

These announcements led to an immediate rally, and trading volume soared to a record level as the markets climbed back to $120 billion after dipping below $100 billion earlier in the day.

 

Author: Josiah Wilmoth on 15/09/2017

 

Posted by David Ogden Entrepreneur
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Bankers’ mistrust of bitcoin is still the greatest argument for it

Bankers' mistrust of bitcoin is still the greatest argument for it

Bankers’ mistrust of bitcoin is still the greatest argument for it

Earlier on Tuesday, at different conferences around New York, JPMorgan Chase chief executive Jamie Dimon took aim at bitcoin, calling the cryptocurrency “a fraud” and “worse than tulip bulbs.”

This skepticism by one of Wall Street’s titans, and its reflection in many offices and hallways in top financial services companies, is perhaps one of the strongest cases for bitcoin’s lasting importance.

Let’s be clear, Dimon’s firm is one of the chief architects of the global financial crisis that led to the interest in a somewhat arcane cryptocurrency in the first place. There would be no bitcoin without Jamie Dimon — and in some ways he’s right to fear its rise.

As a Vanity Fair piece revealed last week, JPMorgan Chase paid out $13 billion (with a “b”) to the U.S. government because of its role in the financial crisis and the mortgage security fiasco that almost destroyed the U.S. economy.

The story quotes an unfiled complaint that was sealed as part of the settlement with the Department of Justice.

“By this action,” the draft complaint begins, “the United States seeks to recover civil penalties” against JPMorgan Chase and its investment banking arm “for a fraudulent and deceptive scheme to package and sell residential mortgage-backed securities” that the bank “knew contained a material amount of materially defective loans.” As the unfiled complaint continued, “JPMorgan knowingly securitized and sold billions of dollars of mortgage loans that were originated in material violation of underwriting guidelines and law.” (When reached for comments and responses to the various allegations in Wagner’s unfiled brief, a spokesperson for JPMorgan Chase told me, “These allegations have been addressed, resolved, or refuted years ago.”)

Whatever irrational exuberance may be attributed to bitcoin’s current froth, it’s hardly a fraud. What it does is get rid of the need for potentially unscrupulous middlemen who thrive and profit on asymmetric information.

Bitcoin does away with this by presenting an immutable ledger. The value of things are recorded, agreed upon, and irrefutable. Which means that shenanigans of the kind that brought down the housing bubble are less likely to occur.

Perhaps bitcoin itself is overvalued, but it’s not the house of cards that Dimon’s employees blew over in 2008.

While the near sacramental disputes in the cryptocurrency community over bitcoin and bitcoin cash or ethereum vs. ethereum classic do the entire industry no favors, they’re the arguments of individuals who want to untether financial services from the chicanery of misanthropic sociopaths who thrive on their ability to cheat systems.

The favorite refrain of Wall St. may be “it’s only illegal if I get caught”… and while cryptocurrencies are unregulated, they are — for the most part — transparent.
 

Again, the Vanity Fair report is illustrative.

At Dimon’s “insistence,” the unfiled complaint asserts, “JPMorgan formulated an exit strategy to divest itself” of the riskiest pieces of mortgage-backed securities that had been accumulating on its balance sheet. But, Wagner writes in the draft complaint, “despite knowledge at the highest levels that underwriting had deteriorated across the industry and early payment defaults were spiking, JPMorgan continued to purchase and securitize subprime loans without addressing the known breakdown of its due diligence practices and without disclosing its knowledge to investors.” This is pretty much the exact same thing that Goldman Sachs did leading up to the financial crisis, a practice for which the bank was roundly criticized.

Dimon may say that he’s not advising anyone to ‘go short’ on bitcoin, but if Wall Street keeps up its criticism, my advice may be to go long.

 

Author: Jonathan Shieber (@jshieber

 

Posted By David Ogden Entrepreneur
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Bitcoin Finds Bottom at $4,000 as Price Awaits Post-China Breakou

Bitcoin Finds Bottom at $4,000 as Price Awaits Post-China Breakout

The bitcoin-US dollar exchange rate (BTC/USD) may have climbed back above $4,000, but it might be ready to push higher even though China uncertainty reigns supreme.

Following reports the country's regulators may be seeking to shut down domestic bitcoin exchanges, the bitcoin price fell to a low of $3,977 on the CoinDesk Bitcoin Price Index (BPI) this weekend. The rumor comes a week after the People's Bank of China (PBOC) banned initial coin offerings (ICO), suddenly outlawing the practice of creating and selling cryptocurrency to investors to finance startup projects.

The confusion about what might lie ahead cut short bitcoin's ascent on Friday following a repeated technical failure around $4,650 levels, and the subsequent sell-off was exacerbated by the bearish news out of China.

So far, Bloomberg and the Wall street Journal are out with the reports today, suggesting the ban will be limited to exchange-based trading and will not affect over-the-counter transactions.

Further, wires are reporting that the price of bitcoin could drop below $4,000 if China bans trading on continuous order books of the larger exchanges. China's biggest exchanges and traders across the globe are still waiting for official confirmation.

Investors aren't buying it

All in all, it's no wonder the trading is subdued this Monday morning.

However, bitcoin has been successful in defending the psychological support of $4,000 – meaning price action indicates investors do not think China would shut down bitcoin exchanges, or that if they did, it would only have a limited impact.

Furthermore, it appears any ban on exchange-based cryptocurrency trades will not extend to over-the-counter (OTC) transactions, meaning markets could still move.

As per Wall Street Journal, "A ban on crypto exchanges won't mean the end of trading in digital currencies."

No news is good news

It's been 72 hours since the news of a China exchange ban broke out, and we are yet to hear official confirmation or denial. The broader market sentiment remains positive, hence, no news (official confirmation or denial) will be taken as good news.

Thus, investors may start snapping up bitcoins at current levels, although in such a case the digital currency would take a big hit if China, following a prolonged silence, suddenly confirms the ban.

Daily chart

Bears may be salivating at the idea of a big sell-off following the breach of the rising trend line, although, what we have now is a symmetrical triangle pattern.

The symmetrical triangle, which can also be referred to as a coil, usually forms during a trend as a continuation pattern. The pattern contains at least two lower highs and two higher lows. Prices typically breakout in the direction of the prior trend, i.e. in BTC's case, an upside breakout will signal resumption of the rally from the June 16 low of $1,826.

One may feel tempted to bet on the direction of the breakout, however, it may be advisable to stay on the sidelines and only trade the breakout.

One reason is that the 5-day moving average and the 10-DMA moving average are now capping the upside in bitcoin. The 14-day RSI is dangerously close to being bearish.

  • A downside break [an end of the day close below the symmetrical triangle floor] would mean bitcoin has made a near-term top at $5,000. The subsequent move lower could be extended to $3,164 (200-day moving average).

  • A bullish move is seen gathering pace following a break above $4,500. The level marks the confluence of the rising trend line resistance and symmetrical triangle resistance. Fresh record highs could be seen if prices break above $4,500.

 

Author: Sep 11, 2017 at 16:00 UTC by Omkar Godbole

 

Posted By David Ogden Entrepreneur
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Bitcoin Price Sinks Below $4,200 on China Uncertainty

Bitcoin Price Sinks Below $4,200 on China Uncertainty

Bitcoin Price Sinks Below $4,200 on China Uncertainty

Markets for bitcoin and other cryptocurrencies have fallen over the course of the day, following contested reports that regulators in China are looking to shut down the country's exchange ecosystem.

CoinDesk's Bitcoin Price Index (BPI) is currently at about $4,184, representing a nearly 10 percent decline since the start of the day's trading. Markets peaked today at $4,698.73, per the BPI, though prices began to tumble around 13:20 UTC.

Additional data from CoinMarketCap reveals that – perhaps unsurprisingly – China's top bitcoin exchanges are reporting some of the steepest price declines. The BTC/CNY market on OKCoin is at $3,650.71, while Huobi and BTCC are reporting prices of $3,657.84 and $3,656.57, respectively, at press time.

Other major bitcoin exchanges, including Bitfinex and Bistamp, are reporting current prices above the $4,100 level, according to data from BitcoinWisdom.

As reported earlier today, Chinese news source Caixin, citing unnamed sources, said that regulators are looking to shut down the exchanges. That decision, the newspaper claimed, has already been made and disseminated to other sources. Yet in the wake of that story, exchanges in China said they haven't receive any notices from the Chinese government, casting doubt on the veracity of the Caixin report.

Amidst the uncertainty, other cryptocurrency markets have seen notable declines as well. Ether prices are down more than 10 percent today, trading at around $295.93. Broad market declines have pushed the collective cryptocurrency market capitalization below $150 billion, after spending several days above the $160 billion level.

 

Sep 8, 2017 at 22:58 UTC by Stan Higgins

 

Posted By David Ogden Entrepreneur

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What you need to know about the latest Bitcoin boom

What you need to know about the latest Bitcoin boom

 

You may have noticed reports about Bitcoin’s value recently – its price is headed into the stratosphere.

The crypto-currency’s recent meteoric price rise over the summer has seen one Bitcoin go from being worth $1,500 in early May to more than $5,000 over the weekend, before dropping to $4,654 at the time of publication.

And that has got all kinds of people interested – people like Andrew Beckwith, a DJ who goes by the name Supersede. “I play restaurants, lounges, nightclubs, corporate events,” he says.

But he also invests. Beckwith has just taken his first step into the world of crypto-currencies, having converted $100 into Bitcoin.

“I don’t know how far it’s going to grow,” he explains, “but if something is growing at hundreds of per cent, that’s a pretty valuable return.”

Bitcoin is notorious for its volatility, but the recent peaks are unprecedented. In late 2013 its value jumped from around $100 to $1,000 – a bigger percentage increase – but it is worth more than four times that today.

“Recently there’s been a lot more talk in the media and others have been investing,” explains Kiran Varughese, another amateur investor, who works for an elevator company in Dubai.


The notoriously volatile crypto-currency has been making headlines with its skyrocketing value, but some believe it’s a bubble driven by speculation (Credit: Getty Images)

A friend’s experiments with Bitcoin piqued his curiosity so he clubbed together with another pal to invest $1,000 in August. If they lose it, he says they won’t be too worried – the potential for a big return within the next few years is too tantalising for Varughese to resist.

But are investors like Varughese and Beckwith taking too much of a risk by buying into Bitcoin, and other crypto-currencies like Ethereum, Litecoin or Dash? Is there something about these digital currencies that underpins their soaring prices or are they simply subject to whims in the market that can make fortunes but also devastate them?

While the market capitalisation of all crypto-currencies now stands at $150 billion, they still occupy a strange space in the world of finance.

“Every year Bitcoin continues to exist is something to take note of,” says Garrick Hileman, a research fellow at the Cambridge Centre for Alternative Finance at the University of Cambridge. “It’s a significant achievement for Bitcoin to have survived the many setbacks and challenges that it has faced.”

One of these challenges occurred recently when Bitcoin split in two. It happened after the Bitcoin community became divided over how to allow more transactions to be processed with the currency. Because Bitcoin has no over-arching authority that controls it, any decision to alter the system that underpins it needed to gather enough support from Bitcoin users to go ahead. The system itself is called the blockchain – a huge digital ledger that records every single Bitcoin transaction in history.


Mining Bitcoin takes time and computer processing power, so it’s often done in massive farms such as this converted warehouse in Moscow, Russia (Credit: Getty Images)

As computers on the Bitcoin network verify transactions, “blocks” of data are added to the ledger, storing this information. Computers that do this work receive a small sum of bitcoins as a reward – this is the process known as mining. Every single computer on the network has a copy of the blockchain and their copy of it is constantly updated.

But until recently, Bitcoin blocks were limited in size to a megabyte every 10 minutes, meaning that the rate at which the blockchain could grow was capped. In early August, a new version of the crypto-currency – Bitcoin Cash – was mined for the first time. Its blocks can be up to eight megabytes in size.

Some believe the smooth transition through this “fork” without any technical disasters has contributed to renewed confidence in Bitcoin, in turn helping to pump the price up. One “coin” of Bitcoin Cash is worth less, around $630 today, but that’s up $200 since its inception a month ago.

Another fork to upgrade the block size further is expected in November and if successful, it might have a similar impact on Bitcoin’s buoyant price.

But “currencies” like Bitcoin aren’t really playing the role of a traditional currency at the moment, says Vili Lehdonvirta, an economic sociologist at the Oxford Internet Institute, which is part of the University of Oxford.

“When I called up a restaurant in Helsinki earlier this year to ask if they accept Bitcoin, the response was that they tried it a few years ago, nobody ever used it, and thus they no longer accept it,” he explains.


Most retailers don’t accept the crypto-currency (Credit: Getty Images)

BBC Capital contacted 10 businesses in London that have advertised an ability to accept Bitcoin in the past. Four of them said they had stopped accepting and two that did accept them reported hardly ever processing such payments.

Instead, it appears many people are simply speculating on Bitcoin – investing in what is a relatively high-risk asset in the hope of a short-term gain in profit. But lucrative outcomes are by no means guaranteed – and many still think that Bitcoin is just a bubble.

In the short-term there may be various reasons why people are buying in while the price is buoyant. Some may like investing in a currency unconnected to nation states, suggests Hileman. It could be seen as good insulation against uncertain political developments that can cause traditional currencies to plummet dramatically – as happened to the British pound in the aftermath of the Brexit vote. Volatile international disputes, such as those involving North Korea, could be driving people to put their money elsewhere.


The pound dropped sharply after Brexit – since Bitcoin is not tied to any one nation-state, it’s less affected by large political events (Credit: Getty Images)

“If you’re in South Korea and you’re concerned about a geopolitical event, do you trade in the US dollar?” asks Hileman. “Maybe that’s not a great idea because the US will be involved, as will China and Japan, so it’s not surprising to see people look for alternative currencies,” he says.

Applied cryptography consultant and Bitcoin-watcher Peter Todd says some are also attracted by Bitcoin’s independence for broader political reasons, too.

In an uncertain world, people’s financial freedom is sometimes limited by their governments. Take India, which recently tried to curb public investments in gold as this was harming the nation’s economy. Bitcoin is a global entity, no one government can fiddle with it – although there are countries where trading it is illegal.

Still, crypto-currencies remain associated with plenty of risks that go beyond their volatility. Many people store their bitcoins in online exchanges and should these be hacked or go bust, which has happened more than once, then the money is often lost forever.

With all the technical ups and downs of crypto-currencies – their changes and potential to split into new currencies for example – there is also a significant degree of complexity that can leave less informed investors bewildered.


MtGox, a Bitcoin exchange based in Tokyo, collapsed after losing nearly $500m in Bitcoin to what it says was a hack attack (Credit: Getty Images)

A new area of excitement, known as initial coin offerings (ICOs), are also beginning to worry some experts. ICOs allow owners of crypto-currencies to invest in fledgling companies, with many using Ethereum as their digital coin of choice. However, ICOs have already been associated with a number of scams and hacks, and China just banned them, calling ICOs 'illegal fundraising'.

“I think the main thing we’re seeing in ICOs is straight-up fraud,” says Todd. He is concerned about efforts by regulators to clamp down on this because such an approach could backfire and encourage scammers to become more sophisticated.

“It’s when things look legit that they get dangerous,” he says, pointing out that a few years ago Bitcoin and other digital tokens had more of a “Wild West” feel to them, which perhaps meant people were less likely to be duped since scams were crude and easy to spot. As more and more investors get involved in crypto-currencies, scams can get slicker and the natural wariness that can keep people cautious may also diminish.

Bitcoin and other crypto-currencies are gradually cementing their stated position – providing a radical new alternative to the investment options that existed before them. But there is no certainty as to how this massive experiment will play out. Though when did that ever stop hopeful investors taking a punt?

 

By Chris Baraniuk
7 September 2017

This story was produced under the BBC's guidelines for financial journalism. A full version of those guidelines can be found at bbc.co.uk/guidelines.

 

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