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Bitcoin Just Saw A Key Technical Breakout: Big Reaction From Bulls Likely

Bitcoin started a steady increase and broke the $9,300 resistance against the US Dollar. BTC is currently up close to 3% and it might continue to rise towards the $9,500 resistance.

  • Bitcoin is gaining momentum and it recently broke the $9,300 resistance zone.
  • The price traded to a new weekly high at $9,372 and settled above the 100 hourly simple moving average.
  • There is a short-term ascending channel forming with support near $9,290 on the hourly chart of the BTC/USD pair (data feed from Kraken).
  • The pair remains supported on dips and it could continue to rise towards the $9,500 resistance.

Bitcoin Price Turns Green

Yesterday, we saw a lot of positive signs above $9,100 for bitcoin against the US Dollar. BTC started a steady rise and it surpassed the main $9,250 and $9,300 resistance levels to move into a positive zone.

It even spiked above the $9,300 level and settled above the 100 hourly simple moving average. A new weekly high is formed near $9,372 and the price is currently correcting lower. It declined below the 23.6% Fib retracement level of the recent rise from the $9,178 low to $9,372 high.

It seems like there is a short-term ascending channel forming with support near $9,290 on the hourly chart of the BTC/USD pair. The pair is currently approaching the channel support at $9,290.

Bitcoin Price

Bitcoin price breaks $9,300: Source: TradingView.com

The next major support is near the $9,275 level. It is close to the 50% Fib retracement level of the recent rise from the $9,178 low to $9,372 high. On the upside, the $9,350 and $9,375 levels are short-term hurdles.

If the price gains pace above the $9,375 resistance, it could continue to rise towards the next crucial hurdle near the $9,500 level. Any further gains could open the doors for a larger wave towards the $9,800 level in the coming sessions.

Key Supports in BTC

If bitcoin starts a major downside correction below $9,290 or $9,275, it could find support near the $9,245 level (the recent breakout zone).

The next crucial support is seen near the $9,180 level, below which the price is likely to move back into a bearish zone in the near term. In the mentioned case, it may perhaps revisit the $9,000 level.

Technical indicators:

Hourly MACD – The MACD is slowly moving into the bearish zone.

Hourly RSI (Relative Strength Index) – The RSI for BTC/USD is now correcting lower towards the 50 level.

Major Support Levels – $9,275, followed by $9,180.

Major Resistance Levels – $9,350, $9,375 and $9,500.

Crypto Derivatives Volumes Crash 36% to $393 Billion in June, a Low for 2020

Crypto Derivatives Volumes Crash 36% to $393 Billion in June, a Low for 2020

Crypto derivatives trading volumes plunged 36% to $393 billion in June, the lowest they have reached in 2020, according to a new report by Cryptocompare.

The decline may be the result of a lull in investor interest in the instruments during the month in review.

In May, derivatives – contracts signed by at least two people to buy or sell a digital asset at an agreed price in the future – soared to a record high $602 billion, possibly driven by the hype that accompanied Bitcoin’s third halving in that month.

Total spot volumes fell fastest, however, sliding 49% to $643 billion in June from $1.27 trillion the previous month, said the London-based data analytics firm.

The bulk of spot trading happened on exchanges considered by Cryptocompare as low-tier and unregulated, accounting for $466 billion of the volume while top-tier exchanges traded $177 billion.

“Spot volumes have gradually dwindled throughout the month of June, now representing roughly half of the daily volumes seen in the previous month,” notes the report, published July 6.

In June, derivatives share of the cryptocurrency market rose to 37% compared to 32% in May and 27% in April. Cryptocompare said all crypto derivatives exchanges saw large decreases in trading volume last month.

Bitmex reported the biggest decline of 50% to $51.6 billion while the Chicago Mercantile Exchange (CME), which focuses on institutional investors, posted the least decrease, with trading volume dropping 17% to $6.7 billion.

However, Huobi accounted for the largest trade volume of $122.4 billion, down 38% from a month earlier. Okex and Binance followed with $107 billion and $86 billion worth of trades, respectively. Both the exchanges reported volume decline of over 30%. At Deribit, volumes crashed 43% to $8.8 billion.

Institutional options volumes on CME hit a record monthly high of 8,444 contracts traded, up 41% since May. The regulated exchange said futures volumes, as measured by the number of contracts, fell 23% to reach 128,258 in June.

Deribit monthly options volumes tanked 17.8% to about $2.5 billion in June, “but this is less of a decrease than seen on other derivatives exchanges that only offer futures products,” Cryptocompare observed.

What do you think about the declining crypto trading volumes in both the derivatives and spot markets? Let us know in the comments section below.

Image Credits: Shutterstock, Pixabay, Wiki Commons

Disclaimer: This article is for informational purposes only. It is not a direct offer or solicitation of an offer to buy or sell, or a recommendation or endorsement of any products, services, or companies. Bitcoin.com does not provide investment, tax, legal, or accounting advice. Neither the company nor the author is responsible, directly or indirectly, for any damage or loss caused or alleged to be caused by or in connection with the use of or reliance on any content, goods or services mentioned in this article.

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Economist Steve Hanke: Bitcoin Is Not a Currency, It’s a “Speculative Asset”

If you have read Satoshi Nakamoto’s original white paper on Bitcoin, the likely takeaway is that BTC is a currency. Take the following excerpt from the conclusion of the white paper.

“We have proposed a system for electronic transactions without relying on trust. We started with the usual framework of coins made from digital signatures, which provides strong control of ownership… We proposed a peer-to-peer network using proof-of-work to record a public history of transactions.”

While Bitcoin becoming a currency may have been the goal of Nakamoto and others, it is a goal that has not widely been accepted.

Economist Rebuts Sentiment That Bitcoin Is a Currency

On July 4th, Steve Hanke, an economist at John Hopkins University and foreign exchange trader, said that he doesn’t think Bitcoin is a currency.

“#Bitcoin is not a currency, it is a speculative asset. In order for a #crypto-“currency” to be an actual currency, it must be tied to gold,” Hanke commented, attaching the image below to his tweet.

Many were quick to rebut Hanke’s sentiment.

Phil Geiger, the director of product marketing at Bitcoin financial services firm Unchained Capital, responded with the image seen below. It shows gold’s price versus Bitcoin.

Image

Gold vs. Bitcoin chart shared by Phil Geiger. Chart from XE.com

Like the U.S. dollar and other assets, gold has depreciated massively against Bitcoin over recent years. One ounce of gold can now buy 0.20 BTC while the exchange rate was once one ounce of gold to over 10 BTC.

BlockTower Capital’s Ari Paul noted that “in 1971, people said the same about fiat… this is a weirdly native take on the future of money.” Paul is referencing the fact that the U.S. dollar is the world’s reserve currency, despite the gold standard being formally abolished in 1971.

And Alex Gladstein, the CSO at the Human Rights Foundation, reminded Hanke that BTC is fundamentally superior to many other money-like assets:

“Did you know that if I send you Bitcoin, no one can stop us? That no govt or corporation or oligarchy can change its rules? That no one can alter its issuance? That if properly used it is incredibly hard to confiscate or to pair addresses with people? Why deny when you can learn?”

Soon to Be a Usable Medium of Exchange

Another reason why many don’t see Bitcoin as a currency is because it is somewhat impractical to spend in one’s day-to-day life. Few vendors accept the cryptocurrency. It can sometimes cost upwards of $10 to send BTC. And transactions can take in excess of 30 minutes.

Entrepreneurs in the space are coming up with ways to combat this.

As reported by NewsBTC previously, developer Jack Mallers launched the “Strike” app into beta just last week. In Mallers’ words, Strike is a service allowing “anyone in the world to interact with the BTC and Lightning Network protocols using only a bank account and/or debit card.”

The Lightning Network is a scaling solution that will make BTC usable in day-to-day transactions, both for owners of BTC and merchants.

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Economist Steve Hanke: Bitcoin Is Not a Currency, It's a "Speculative Asset"

Gavin Wood: ‘Governance is Critical’ for Crypto Ecosystem

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Historically Low Volatility Has Caused Bitcoin’s Liquidity to Slide

Bitcoin’s consolidation channel formed since the start of May has been narrowing ever since it was first established.

The cryptocurrency is now trading sideways between $9,000 and $9,300, facing immense resistance at the upper boundary of this range.

From a fundamental perspective, the benchmark digital asset has been seeing stagnating market health, with this being driven primarily by a sharp decline in its liquidity.

This trend will likely persist in the near-term, as data shows that BTC’s 10-day realized volatility is now at 20%. The last time this metric reached levels this low was just before the massive selloff seen in November of 2018.

A combination of drying liquidity coupled with low volatility may be laying the groundwork for the digital asset to post a massive movement in the weeks ahead.

Bitcoin’s Liquidity Shows Signs of Faltering as Sideways Trading Persists

Bitcoin has been unable to incur any decisive momentum throughout the past several days and weeks, with each attempt at garnering a clear trend being futile.

This past weekend, sellers attempted to push the digital asset down to lows of $8,900. From here, buyers absorbed the selling pressure and quickly led it back into its long-held trading range between $9,000 and $9,300.

Throughout the past 24-hours, buyers have been trying to shatter the massive resistance that sits around $9,300 but have failed to make any meaningful progress.

One byproduct of this trend has been a decline in Bitcoin’s liquidity.

According to a recent report from the analytics platform Glassnode, BTC’s liquidity was the only metric within their Network Index that declined in value over the past week.

They note that both trading and transactional liquidity declined in tandem over the past seven days.

“Liquidity dropped by 6 points over the past week, losing ground in terms of both trading and transaction liquidity as exchange deposits and on-chain transactions decreased.”

Bitcoin

Image Courtesy of Glassnode

They further add that the cryptocurrency remains fundamentally strong, as its network health and investor sentiment have both increased over the same period.

BTC’s Low Volatility Suggests a Massive Movement is Brewing

Bitcoin’s low volatility seems to indicate that a sizeable movement is just around the corner.

According to data from Skew, BTC’s 10-day realized volatility has declined to levels not seen since just before the massive selloff seen in November of 2018.

“Bitcoin ten days realized volatility = 20%. Last time we reached that level, we had the great sell-off of November 2018 shortly after”

Image Courtesy of Skew.

As seen in the below chart, periods of tremendously low volatility like the one seen presently do not tend to last for long, signaling that Bitcoin could be coiling up to make a trend defining movement in the weeks ahead.

Featured image from Shutterstock.

Bitcoin’s “Intrinsic Value” Nears $13k — Here’s Why That’s Big for Bulls

Bitcoin has performed extremely well since March’s lows, rallying over 150% from the $3,700 capitulation bottom. Even after a strong $1,200 retracement from the $10,500 highs, BTC is still one of the best-performing assets of 2020.

Yet a crucial indicator suggests that Bitcoin is still intrinsically undervalued, boding well for the bull case.

A Crucial Bitcoin Indicator Suggests Bitcoin Is Seriously Undervalued

Many analysts, especially those on Wall Street, find it hard to value Bitcoin. The cryptocurrency’s value seems nebulous to most, largely because it doesn’t produce cash flow, offer dividends, and doesn’t have a physical form.

In December 2019, though, digital asset manager and investor Charles Edwards attempted to solve this issue.

He released a Medium article entitled “Bitcoin Energy-Value Equivalence” that tried to create an intrinsic value price model for Bitcoin.

Edwards basically suggested that the energy used by the Bitcoin network can be used to estimate what BTC should cost per unit. The premise is that Bitcoin can be valued like how traditional investors value commodities, though determining their cost of production.

Bitcoin, value, energy

Bitcoin vs. Energy Value model created by digital asset manager Charles Edwards(@caprioleio on Tiwtter).

To display the efficacy of the so-called energy value model, Edwards shared the chart above. The chart shows that Bitcoin’s price has always been somewhat correlated with its energy value, trading both above and below the model.

According to Edwards’ latest look at the data, Bitcoin is now trading around 27% under its energy value.

The investor shared the image below on July 6th, showing that the energy value of Bitcoin is at $12,815 — a new all-time high.

Image

Bitcoin Energy Value analysis by Charles Edwards (@caprioleio on Tiwtter), a digital asset analyst. Chart from TradingView.com

This comes as the seven-day moving average of BItcoin’s hash rate has begun to approach all-time highs.

Should the energy value continue to push higher, BTC is likely to trend towards it considering its historical precedent.

Not the Only Fundamental Trend Supporting the Bull Case

The Bitcoin network’s increase in power consumption isn’t the only fundamental trend supporting bulls.

Bloomberg Intelligence’s Mike McGlone wrote the following in July’s edition of the Bloomberg Crypto Outlook:

“The number of active Bitcoin addresses used, a key signal of the 2018 price decline and 2019 recovery, suggests a value closer to $12,000, based on historical patterns. Reflecting greater adoption, the 30-day average of unique addresses from Coinmetrics has breached last year’s peak.”

The analyst also said that with increasing adoption of Bitcoin via the CME, central bank money printing, and Grayscale’s purchasing of BTC, the cryptocurrency market looks primed to appreciate.

Featured Image from Shutterstock
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Charts from TradingView.com
Bitcoin's Intrinsic Value Hits $13,000 — Here's Why That's Big for Bulls

Developer Reveals Layer-Two Private Messaging and Payment System on Bitcoin Cash

Developer Reveals Layer-Two Private Messaging and Payment System on Bitcoin Cash

On July 4, 2020, the Bitcoin Cash proponent Cain published an interview with the blockchain developer, Shammah Chancellor, about a new project called Stamp Chat. At its basic level, “Stamp is a prototype of a layer-2 private messaging and payment system on Bitcoin Cash. It implements stealth [plus] confidential transactions on top of Bitcoin Cash using layer-2 protocol technologies.”

This week Bitcoin Cash supporters were introduced to a new tool called Stamp, an encrypted message and payment system that leverages the Bitcoin Cash (BCH) chain. The project is being developed by the software programmer Shammah Chancellor, otherwise known as @micropresident.

The project was introduced on Saturday, July 4, 2020, by the Bitcoin Cash proponent Cain (@bchcain) via the read.cash blog. Cain gives a summary of how governments today have the ability to censor our speech online, and our financial lives as well through centralized parties. The BCH enthusiast highlights how our freedom of expression is censored and monitored by the powers that be.

Developer Reveals Layer-Two Private Messaging and Payment System on Bitcoin Cash

“The fact that we are being monitored limits our freedom of thought and our freedom of expression,” Cain’s interview stressed. “You might think twice about entering something into a search engine, or posting something on Facebook or Twitter. This limits our ability to communicate and explore ideas, and this is why I am so excited by Stamp, the new Bitcoin Cash project being developed by Shammah Chancellor, aka @micropresident.”

Cain’s post further added:

Stamp is still in its early stages and only available on testnet, but the interface already looks polished and many features like group chats and nested messages have already been deployed. According to his Github page: “Stamp is a prototype of a layer-2 private messaging and payment system on Bitcoin Cash. It implements stealth [plus] confidential transactions on top of Bitcoin Cash using layer-2 protocol technologies.

Individuals who are interested in Stamp can check out the Github repository and get more familiar with the project. The Github repo’s disclaimer is a touch different and states: “Stamp is in early alpha development stage. There will be multiple breaking changes from now until a stable release. We default to the Bitcoin Cash testnet as to protect against lost funds.”

Those who are interested in testing the Stamp protocol can do so by accessing the cashweb/stamp/releases section and grabbing test coins from faucet.fullstack.cash.

The Stamp developers who contribute to the project also have a Telegram chat channel as well for people who want to learn more about the project. Shammah Chancellor also describes the Stamp project in great detail during his interview with Cain.

“Stamp is the name of the wallet that uses a number of backend protocols,” the developer explained. “These protocols are a suite called ‘Cashweb,’ with the vision being that everything online is powered by Bitcoin Cash. Fundamentally, Cashweb is powered via standard web technologies: Websockets, JWT tokens, HTTP/2. The idea being to make it easy for non-cryptocurrency developers to integrate with.”

“Cashweb is a [three] tier network,” Shammah Chancellor continued. “The first tier being Bitcoin Cash. The second tier is a ‘keyserver’ network, which is used to look up, in a cryptographically secure way, important information about a Bitcoin Cash address. The third tier is a messaging system (called relay servers) which allows wallets to pass, encrypted, structured messages between them.” The developer concluded:

When you add a contact to a Stamp wallet, it reaches out to a keyserver and requests your contact information. This is then verified, and used to determine which relay server they accept messages on. Once your wallet has this information, it can start exchanging structured, encrypted, messages between itself and another user.

Cryptocurrency supporters who are interested in reading the rest of the interview between Cain and Shammah Chancellor can follow this link here that stems from the read.cash blog.

On the Reddit forum r/btc, BCH proponents seemed pleased with the announcement and some people contributed to the development funding. “Looks promising,” an individual wrote on Reddit. “I sent a bit of funding. Good luck with it.”

What do you think about the Stamp project built on the Bitcoin Cash network? Let us know what you think about this subject in the comments section below.

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Image Credits: Shutterstock, Pixabay, Wiki Commons, Stamp, Read.cash, Cain

Disclaimer: This article is for informational purposes only. It is not a direct offer or solicitation of an offer to buy or sell, or a recommendation or endorsement of any products, services, or companies. Bitcoin.com does not provide investment, tax, legal, or accounting advice. Neither the company nor the author is responsible, directly or indirectly, for any damage or loss caused or alleged to be caused by or in connection with the use of or reliance on any content, goods or services mentioned in this article.

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Bitcoin Dominance Took a Big Hit, But Don’t Count on an Altcoin Rally

bitcoin Bitcoin

Bitcoin Dominance Took a Big Hit, But Don’t Count on an Altcoin Rally


Altcoins have actually done rather well against Bitcoin since the start of 2020. This comes in spite of the BTC-centric rhetoric seen on social media.

Yet prominent market participants are not convinced that an “altcoin season” — when cryptocurrencies gain strongly against Bitcoin — will transpire. Some commentators, in fact, are expecting an altcoin “extinction event.”

Bitcoin Dominance Prints Crucial Bear Sign

The past few weeks have seen a number of altcoins rip higher.

Take the example of Vechain (VET), which was up 50% on Sunday. Or take the example of one of DeFi’s poster children, Compound (COMP), which has gained 500% since its June launch. At one point, the altcoin was up over 1,000% from its launch price.

Altcoins outperforming Bitcoin has allowed the BTC dominance metric — the percentage of cryptocurrencies made of up of BTC — fall under a crucial level.

The head of technical analysis at Blockfyre, a crypto research firm, shared the below analysis depicting this. Referencing the chart below of Bitcoin’s dominance metric, the trader wrote:

“We did it fam. 900+ day trendline broken and retested, macro structure favoring alt rallies. The problem after trading a bear market could easily be selling many too early!”

Bitcoin dominance

Bitcoin dominance chart shared by a trader and the head of technical analysis at Blockfyre, Pentoshi (@pentosh1 on Twitter). Chart from TradingView.com

Another trader commented on the chart of BTC dominance: “Breaking down from a multi-month uptrend line (orange) Clean breakdown from here means Altseason continues.”

Despite this outlook, there are many that have said that it may be unwise to bet on a rally in altcoins.

Expect Many Altcoins to Fail, Analysts Say

The prominent Bitcoin trader and whale investor, “Joe007” recently commented that a “s**tcoin mass extinction event will likely precede next Bitcoin rally. Make of it what you will.”

Joe007 is known for his strong takes on subjects in the cryptocurrency space. He has also formed a reputation of being a profitable trader, with Bitfinex data indicating he has publicly made dozens of millions.

This comment has been echoed by Kevin Rose, a general partner at True Ventures. Rose, who led Google Ventures’ investment in Ripple, told TechCrunch the following on his view on the crypto industry:

“The problem is that 99% of the projects out there and a lot of the people who are behind them are just in this for the pure financial gain. And there’s a lot of garbage out there. And that’s unfortunate because it really drags down the high-quality projects, and it muddies the space quite a bit.”

To many in the industry, altcoin projects provide little value over Bitcoin. Prominent Bitcoin investor and proponent Max Keiser said that there is “no coin out there that can do something that Bitcoin doesn’t do already or will be able to do shortly.”

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Price tags: xbtusd, btcusd, btcusdt
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Bitcoin Dominance Took a Big Hit, But Don't Count on an Altcoin Rally