Market report

WHEN WILL BITCOIN STOP DRIFTING?

London Block Exchange

23rd January 2017

One thing we are sure about — today will be an important day for bitcoin!

WHEN WILL BITCOIN STOP DRIFTING?

One thing we are sure about — today will be an important day for bitcoin!

If we look at the past daily cryptoasset price alerts, it seems that there may be a reason to be worried. In the good days, like yesterday, the markets have been trading sideways. In the bad, like today, we get 10% dips across the board. What do we make of all this?

Well, if you like a macro view, note that the overall market cap is still up 30x from its level one year ago. If you prefer a short-term view, you’ll be pleased to hear that even on January 17th, when bitcoin hit £6,600 ($9,250), the overall market didn’t dip lower than its level in December.

Nevertheless, here are some further insights. It’s clear bitcoin is in a downtrend since January 6th, the last time it hit £12,000 ($17,000). Some say we are bullish again when we pass above the £9k ($13k) resistance; others say £11k ($15k)!

Support and resistance are concepts that come from forex trading and create a lot of debate. Empirical evidence has been established for technical analysis, but remember the predictions can be correct just because they are self-fulfilling, as this Nature paper concludes.

So, in the less liquid crypto markets, famous for being manipulated by ‘whales’ — traders with very high liquidity that are considered market makers — such support and resistance levels are also zones prone to exploitive plays. Move slowly!

WHEN WILL ALTS STOP DRIFTING?

Crypto markets take a 9% dip cued by bitcoin’s fall to £7k ($10k)

Altcoins are also in a downtrend since January 6th, but theirs isn’t as deep as bitcoin’s — the overall gains for alternative cryptoassets are standing at the same level as they were on December 31st. Regardless, with yesterday’s bitcoin dip, alts also decreased 9%.

One of the best frameworks we have found so far has been to follow ether’s price against bitcoin, as the majority of alternative projects are ERC-20 tokens that work on Ethereum’s decentralized computer — making ether a good proxy for their demand.

In brief, ether — and alts in general — stopped their December and January rise right in the middle of the ether to bitcoin long-term channel, a traditional resistance area. As the relationship between alts and bitcoin becomes murkier, this is a good alternative to follow.

As was the case yesterday, only eight of the top 100 cryptoassets managed to appreciate over the past day. We note that Cindicator has been rising after a Palm Beach Confidential group call two days ago.

EOS is on that list once more with a 2% rise. This is curious as EOS is currently an ERC-20 token redeemable for EOS coins. It is slightly detached from Ethereum, however, as in the long term, EOS coins will power the EOS blockchain — a project that aims to dethrone Ethereum as the go-to platform for dApps!

We’ll aim at covering EOS in more detail within the next few weeks. For now, note that they are running a year long ICO and have raised more than £1.25 billion . In November the price had dropped 90% from July’s launch, but it has now grown 3x since that July level!

WHAT TO LOOK OUT FOR

Filter the noise and stay ahead of the pack

If bitcoin’s price drops below the key support level, you can dream about its future prospects with this tweet that outlines ‘bitcoin’s S curve’ price expectations!

If you got tired of Kraken after last week’s downtime, bitFlyer — a major Japanese exchange — has just launched in Europe! This will tide you over while LBX’s app is being finalised!

If you want to get back into the ICO frenzy, do your own research and don’t fall for scams; from fake LinkedIn profiles to Bitconnect’s comeback, watch out!

WHAT TO READ TODAY

An insight a day could give you more profits to play

Bitcoin’s lighting network, a solution that aims to scale the mother of cryptoassets and solve its fees problem, is growing day by day. Here’s a good overview!

Nassim Taleb, the author behind Antifragile and The Black Swan, wrote a foreword about Bitcoin for a book! Here’s what he thinks about the first organic currency!

Smart contracts are one of Ethereum’s (and, soon, EOS’) most valuable features — but what are smart contracts and when should someone use them?

  • bitcoin
  • support
  • resistance
  • altcoins
  • EOS
  • ERC20
  • Smart Contracts