Bitcoin Flashes Signs of Technical Strength as Traders Target $12k+

Bitcoin

Bitcoin Flashes Signs of Technical Strength as Traders Target $12k+


  • Bitcoin is currently lagging behind many of its peers, as the benchmark cryptocurrency is stable within the upper-$11,000 region while Ethereum and other major altcoins rally
  • Analysts are noting that the cryptocurrency is forming underlying strength, however, which may allow it to push higher in the near-term.
  • As such, this current consolidation may be buyers’ way of laying the groundwork for a significant push higher in the near-term
  • One trader is specifically noting that the resistance that has been plaguing BTC is beginning to degrade
  • He believes that this suggests that further upside is imminent

Bitcoin is currently stagnant within the upper-$11,000, with its bout of sideways trading coming about as many other digital assets – like Ethereum – show signs of significant strength.

The resistance at $12,000 that has been insurmountable for the past several weeks has shown few signs of letting up, as buyers have yet to successfully even test this level.

That being said, analysts are noting that the selling pressure here has dissolved significantly in recent times.

As such, the current consolidation phase may be enough to propel it past this level and send the cryptocurrency flying significantly higher in the days and weeks ahead.

Bitcoin Trades Flat Around $11,700 While Ethereum and Other Altcoins Rally 

At the time of writing, Bitcoin is trading up marginally at its current price of $11,715. This is around the price at which it has been trading throughout the past few days.

It is important to note that this marks a full recovery from its recent lows of $11,100 that were set last week after BTC faced a rejection at $11,600.

Buyers’ ability to absorb this selling pressure, defend its key support around $11,000, and push it back up to the upper-$11,000 region points to underlying strength amongst bulls.

Analyst: BTC Selling Pressure is Starting to Degrade 

One analyst explained in a recent tweet that the immense selling pressure between $12,000 and $13,000 that was previously suppressing its price action is beginning to degrade.

He notes that on a higher time frame chart, there isn’t much resistance stopping BTC from climbing past $12,000 and up towards the $13,000 region in the near-term.

“BTC: High time frames on Bitcoin looks good. The weekly candle shows that buyers were interested in sub $11,550. And there isn’t much holding Bitcoin between the current price and $13ks on high time frames. I personally think it’s time BTC makes way for $12k+ again,” he said.

Bitcoin

Image Courtesy of Josh Rager. Chart via TradingView.

If Bitcoin can shatter the intense selling pressure that exists around $12,000, it may soon be able to start the next leg of its uptrend.

Featured image from Unsplash.
Charts and pricing data from TradingView.

Analyst: XRP May Rocket Higher After Tapping These Key Support Levels

XRP has been struggling to garner any momentum in recent weeks, with its price action largely being correlated to that of Bitcoin as of late.

That being said, it has been able to recover all of the losses that came about as a result of its recent plunge down to lows of $0.25 in tandem with BTC’s plunge to lows of $11,100.

The embattled cryptocurrency is now confirming that the mid-$0.28 region is heavy resistance, which could mean that this level will suppress its near-term growth.

One trader is now setting his sights on XRP plunging significantly lower in the near-term, with the price regions around $0.24 and $0.21 both being strong support levels that may slow its descent and help it rally higher in the near-term.

Analysts are noting that weakness seen while looking towards the cryptocurrency’s Bitcoin trading pair may also cause it to see some further near-term downside against USD.

XRP Faces Heavy Resistance as Weakness Against Bitcoin Grows

At the time of writing, XRP is trading down roughly 1% at its current price of $0.28. This is around the price at which it has been trading throughout the past few days, as each attempt to push towards $0.30 has resulted in swift rejections.

One analyst is noting that the signs of weakness XRP has expressed against its USD trading pair may be coming about as a result of weakness against Bitcoin.

He explained that XRP/BTC is now undergoing a bearish retest as it struggles to surmount a crucial resistance level.

“The BTC Pair does look [bad] unless it manages to reclaim .000024 on the daily / weekly. For now the daily looks as though it’s just a bearish retest,” he said while pointing to the below chart.

XRP

Image Courtesy of Smokey. Chart via TradingView.

Here are the Crucial USD Support Levels that Analysts are Watching

While speaking about the cryptocurrency’s near-term outlook, one analyst noted that he is expecting XRP to see further downside before it can push past its macro resistance between $0.31 and $0.33.

He is specifically watching the $0.24 and $0.21 levels.

“XRP: Well, we’ve been saying these green zones for weeks now and we’ve got quite close. Patience pays. I think we’ll see some more consolidation before continuation on XRP. But yes, paying some attention.”

 

Image Courtesy of Crypto Michael. Chart via TradingView.

Whether or not XRP fails to break above the resistance that sits just above its current price region should offer significant insights into its near-term outlook.

Featured image from Unsplash.
Charts from TradingView.

Expect market regulation ‘avalanche’ if Biden beats Trump — Mulvaney

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US: IRS Declares Crypto Earned via Microtasking is Taxable Income

US: IRS Declares Crypto Earned via Microtasking is Taxable Income

The U.S. Internal Revenue Service (IRS) continues to keep a keen eye on crypto-transactions.

IRS to Tax Crypto Earned via Microtasks

According to a report by The Block, the U.S. tax watchdog is set to tax cryptocurrencies earned via microtasking jobs. The IRS’s Office of Chief Counsel has published a response to a request on June 29 that seeks clarification from the Small Business/Self Employed Division.

A memo by the IRS published on August 28 notes that cryptocurrency earned from microtasks conducted on crowdsourcing platforms is now considered taxable income. The memo filed earlier asked the question “Is convertible virtual currency received by an individual for performing a microtask through a crowdsourcing or similar platform taxable?”

In response, Ronald Goldstein of the Income Tax and Accounting Division noted:

“Yes, a taxpayer who receives convertible virtual currency in exchange for performing a microtask through a crowdsourcing platform has received consideration in exchange for performing a service, and the convertible virtual currency received is taxable as ordinary income.”

Goldstein added:

“Other examples include an offer of convertible virtual currency in exchange for downloading a particular app from an app store and leaving a positive review including a comment, downloading games and reaching certain milestones, completing online quizzes and surveys, or registering accounts with various online services. These types of microtasks may provide individuals with “rewards” in the form of convertible virtual currency. The value of convertible virtual currency paid in exchange for a single microtask often is a small amount that may be less than $1.”

Further, he added that under Section 61 (a) (1), gross income includes all income from whatever source derived, including compensation for services. Under this section, all gains that are clearly realized and over which a taxpayer has complete dominion, are included in gross income.

Crypto Microtasks Under the Tax Lens

Clearly, the IRS is leaving no stones unturned to ensure all those who hold cryptocurrencies are brought under the taxation lens. The latest decision to tax crypto micro-transactions is an attempt to further tighten the taxation noose around cryptocurrency holders.

Goldstein added:

“A taxpayer who performs a task through a crowdsourcing platform, including a microtask, has performed a service for the party that requested the task with the expectation that he or she will receive compensation. If the taxpayer receives convertible virtual currency for performing the task, regardless of the value and the manner in which it is received, then the taxpayer has been compensated with property.”

Notably, the IRS already considers bitcoin and other cryptocurrencies to be a form of taxable property.

In related news, BTCManager reported that the IRS was asking every U.S. resident if they used cryptocurrencies for any purpose, whatsoever.

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Protection Over Profit: What Early Mining Patterns Suggest About Bitcoin’s Inventor

  • New research from RSK/IOV’s Sergio Demain Lerner reveals that Patoshi, an early Bitcoin miner assumed by many to be Satoshi Nakamoto, mined using an algorithm that was not included in Bitcoin’s first client release.
  • This finding finally explicates why Patoshi’s hashing patterns are so much different than other, early Bitcoin miners, but raises the question: Why did Patoshi give themselves a leg up?
  • If we take for granted that Patoshi is, in fact, Satoshi, then it’s conceivable that Bitcoin’s creator used this advantage to prevent mining attacks on the nascent network.

When he first presented his research on Satoshi’s alleged treasure trove of untapped Bitcoin in 2013, Sergio Demian Lerner was met with a fair amount of pushback. Opponents felt that attributing some 1 million BTC to its creator would be “prejudicial to the adoption of Bitcoin” and anathema to the “acceptive narrative” of Satoshi as a benevolent creator, Lerner told CoinDesk. 

Lest the image of Bitcoin’s immaculate conception be tarnished, Satoshi’s coins were better left untouched, both literally and empirically through research, the detractors argued.

That didn’t deter Lerner, though, who didn’t buy what he called the “feeble arguments” that these coins were simply lost to the wallet amnesia of early Bitcoin adopters.

So the IOV Head of Innovation and RSK designer has spent the past seven years decrypting the mystery of how many coins Satoshi may have mined and why his mining technique differed from his peers’ methods in Bitcoin’s early days. Lerner’s “weekend project,” as he calls it, has spawned a body of supporting research from anonymous community members, the research team at BitMex, Kim Nilsson and Jameson Lopp, among others. 

Collectively, Lerner et al. have chipped away at the mysteries surrounding the hoard of some 1.1 million BTC mined in the first two years of the network and which remain stashed away, untouched. While most believe the $12.65 billion horde belongs to Bitcoin’s pseudonymous founder, Satoshi Nakamoto, Lerner ascribes it to “Patoshi.” It’s Lerner’s way of signaling that, even with painstaking research, we cannot be 100% sure these coins belong to Satoshi. 

Caveats aside, most researchers assume the Patoshi pattern, as it’s called, represents Satoshi’s mining activity.  And while the total number of coins under Patoshi’s control has been subject to debate over the years as new evidence has come to light, this empirical researcher has led to other, more philosophical findings. 

Principally, Satoshi’s mining activity in the early days was likely motivated more by ideology than by profit. 

The miner’s time machine

“I’m looking for the truth, and with the forensic evidence we have today I’m more convinced than ever that Satoshi cared about the network security much more than becoming bitcoin rich,” Lerner wrote to CoinDesk over email. 

His sentiment speaks to the results of his latest (and potentially final) research regarding the Patoshi pattern. 

Most recently, Lerner decided to do something he originally wrote off: re-mine Bitcoin’s first 18,000 blocks with the hope of churning up new data on how Satoshi mined.

When he originally cooked up the idea in 2014, Lerner “assumed that Patoshi would be using a software to mine Bitcoin similar to the public code in the first Bitcoin release.” But as his (and others’) research colored in the gray area of unknowns surrounding the Patoshi pattern, Lerner learned Patoshi’s mining “software was nothing like the public [software]” other early miners were using.

The degree of difference between Patoshi’s setup and everyone else’s is at the core of Lerner’s recent research. One theory is that Patoshi was using 50 or so CPUs together in a less powerful, proto-form of the pooled mining that dominates Bitcoin’s ASIC-fueled mining landscape today. The other theory, which Lerner’s research corroborates, is that Patoshi was using a hashing technique known as multi-threading.

In Bitcoin mining, multi-threading is a process whereby a miner can search for multiple nonces at the same time (a nonce is the cryptographic number that miners are searching for when mining for a new block). This is accomplished either by using each core processor in a CPU individually to search for a block’s nonce or by processing multiple nonces through a Streaming SIMD Extensions (SSE) instruction, a technique for intensive computer processing. 

Put simply, instead of using the CPU to do one sweep for the nonce, Patoshi used his CPU to conduct multiple sweeps.

Lerner came to this finding by re-mining the Bitcoin blockchain’s first 18,000 blocks. The idea is to re-scan the blockchain to find all of the nonces (solutions) that Patoshi did, while also discovering all of the solutions that they did not find (technical note: it’s possible that each block has more than one solution).

When this process is repeated thoroughly, Lerner explained, it gives you an idea of Patoshi’s own hashing patterns.

“What I did is to uncover all solutions for every block in the first 18K blocks in order to detect the scanning direction of the algorithm Patoshi used,” he explained.

More specifically, Lerner discovered Patoshi’s mining algorithm typically found higher value nonces rather than lower value nonces. This reveals “the order in which the nonces were tested,” Lerner said, lending credence to the theory that Patoshi was multi-threading to search for multiple nonces simultaneously given the pattern is unique to the blocks Patoshi mined.

“That’s why we know Patoshi used a more powerful system than the rest. Not because he had a super-computer, but because he used his computer better,” he told CoinDesk.

Mining for the common good, not for the goods

Lerner mentions in his research that Patoshi’s mining logic “is the opposite [of] the Satoshi client version 0.1,” the original mining software released with Bitcoin Core 0.1.0. In fact, the multi-threading Patoshi was using wasn’t integrated into Bitcoin’s mining script until 2010, Lerner told CoinDesk.

So, assuming Patoshi is Satoshi, why did Bitcoin’s founder not bake multi-threading into Bitcoin’s initial client release? Looking back to Lerner’s second-most recent findings may help us find the answer.

In June, Lerner pointed out that Patoshi “reduced his hashrate in several steps during the first year” and that it’s likely he turned off his miner for five-minute intervals each time he mined a new block. Patoshi took these measures, Lerner posits, to foster healthy competition and to make sure he didn’t hog all the new blocks. 

Conversely, he may have multi-threaded in the early days to keep the network ticking, picking up the slack when blocks were not being mined on schedule, Lerner told CoinDesk.

“I support Lopp’s thesis that Patoshi cared about the network security much more than the number of bitcoins mined. It seems he turned his miners only when the network wasn’t producing blocks at the expected rate. It was also proven by OrganOfCorti that Patoshi reduced his hashrate on purpose on several occasions to let others mine more blocks, when he thought there was enough diversity of miners. 

“I conclude that the most plausible explanation is that he was protecting the network.”

On Twitter Casa CTO Jameson Lopp pushed back against the notion that Satoshi’s mining advantage was leveraged in self-interest. Quite the contrary, Satoshi’s more sophisticated mining process likely protected the network in the early days when there were so few miners actively participating in block propagation. With so few actors on the network, Satoshi could have been playing watchdog to make sure the network was strong enough to sustain itself before allowing his mining activity to wane.

Lessons learned

Lerner agrees with this explanation, calling his recent research “life changing” for the understanding it has given him of Bitcoin’s founder and its earliest users. 

“The research on how Patoshi proceeded to decentralize Bitcoin taught me a lot about ideals. The first Bitcoiners were believers who cared a lot less about money that we all care now. Most of them mined to help the project see how far it could grow against all odds. Most of them donated bitcoins, received and paid with bitcoin to show its potential and never bother to speculate. Some of them mined just for fun.”

The fun may be done for Lerner, though, who told CoinDesk that his years-long weekend project is drawing to a close with his recent findings. He’ll instead turn his energy toward the work RSK and IOV are conducting in the realm of Bitcoin sidechains.

As for other outstanding mysteries his research didn’t solve – like the double-helix pattern Patoshi’s hashing strategy created from blocks 1400 to 1916 – he’ll leave these to the community of gumshoes who have contributed to the Patoshi research thus far.

Because for Lerner, perhaps the most pressing question – and the one that caused so much pushback when his research began – has been answered: namely, why Satoshi mined so many coins in the early days, and why he had to use techniques that weren’t available to the rest of the fledgling Bitcoin community.

“I think the discovery of the Patoshi pattern led to a more coherent conception of Satoshi as the person or group that was prepared to guard the network against 51% attacks during the first years, focusing on the long-term sustainability of the project and without selfish economic interest nor trading activity.”

A New Attempt to Tokenize Real Estate Projects in Mexico and Canada

MountX Real Estate Capital has licensed transfer agent Vertalo to design and launch tokens for at least 15 digital real estate projects in Mexico and Canada through 2020 and early 2021, the firms announced last week. 

According to a press statement, this is the third of four planned deals by Vertalo’s real estate division (VRE), launched this past June, that focuses on the tokenization of real estate assets. Vertalo is one of the few transfer agents – Securities and Exchange Commission-registered record keepers – in the crypto industry.

Real estate tokenization once looked like an extremely popular blockchain use case that promised to disrupt the global real estate market, with crypto firms like AlphaPoint and Harbor launching initiatives to put real estate assets on a blockchain. However, investors didn’t immediately take to the new promise of trading tokenized pieces of properties on a public ledger.

One problem was that issuers had to get tokens out to increase liquidity, while institutions wanted to see liquidity before they changed their operations. Multiple deals have fallen apart as a result, including Harbor’s partnership with the real estate division of Chicago-based DRW Holdings.  

Vertalo co-founder and CEO Dave Hendricks told CoinDesk the 2018 “hype cycle” for real estate tokenization was about two years ahead of the implementation of the technologies needed to make it a reality. 

According to Hendricks, although tokenization of real estate had been possible for three years, the alternative trading systems (ATS) and exchanges that could trade these digital debt instruments had not received regulatory approval

“Another missing piece was the digital transfer agent – like Vertalo – that could manage the shareholder data for proper record keeping purposes,” Hendricks said. 

Now, 2020 has seen a rekindled interest in the sector. In February, commercial real estate platform Red Swan partnered with token platform Polymath to tokenize $2.2 billion in real estate assets. In April, Vertalo signed a deal with trading platform tZERO to tokenize a real estate portfolio worth $300 million.  

VRE’s new partnership with MountX will facilitate direct investments in Class-A residential properties located in Canada. MountX will be conducting multiple issuances: initial deals will only be promoted to Latin American investors, and eventually expand to include U.S. and Canadian markets. According to the statement, through the digital tokens, investors will be able to directly access their equity and asset information. 

“The international aspect of this deal highlights the limitless potential of issuing digital equity of real estate assets,” the statement said.

Traditionally, many real estate offerings are marketed quietly to insiders, but MountX’s work with Vertalo broadens access and improves the chances that a retail investor can invest in or offer their properties on the MountX platform, Alec Beckman, director of business development at Vertalo told CoinDesk.

“Real estate is something that not many people have been able to invest in before. You have to know or get connected with a real estate general partner, or understand how to build a portfolio yourself,” Beckman said.

Currently 99% of private real estate capital is raised under the Reg D exemption, which means it is only available to accredited investors, Beckman said, adding that digital assets will give accredited investors a chance to participate in real estate investment opportunities.

Beckman also said Vertalo is working on a digitization project that would allow overseas and non-accredited investors the opportunity to invest in real estate assets. 

Disclosure

The leader in blockchain news, CoinDesk is a media outlet that strives for the highest journalistic standards and abides by a

strict set of editorial policies

. CoinDesk is an independent operating subsidiary of Digital Currency Group, which invests in cryptocurrencies and blockchain startups.

Chainlink Faces Grim Rejection as Likelihood of Hitting $15.00 Grows

Chainlink faced a grim rejection at just below $18.00 yesterday, which struck a blow to the technical strength that it had been expressing throughout the past few days and weeks.

Because LINK has since reeled below the support it was forming at $17.00, it now appears that the crypto may continue trading within the long-held consolidation range that it has been caught within throughout the past few weeks.

Analysts believe that the crypto may now face some further near-term weakness that sends it reeling down towards $15.00 in the near-term.

This decline would further weaken its market structure and potentially cause it to see significant near-term losses.

That being said, one analyst is noting that his macro bullish outlook on the cryptocurrency remains strong so long as it remains above its crucial high time frame support at roughly $13.00.

This support level has held strong on multiple occasions and was previously a resistance level for Chainlink.

Chainlink Faces Harsh Rejection at $18.00 as Bullish Momentum Falters

At the time of writing, Chainlink is trading down by just under 1% at its current price of $16.40.

This marks a notable decline from daily highs in the upper-$17.00 region that were set around this time yesterday.

Bulls had pushed LINK all the way up to $17.80 before its momentum began faltering. From here, its price plunged to lows of $16.00. It stabilized here and has been consolidating ever since.

One analyst explained that he is now looking towards the key support levels it has throughout the $15.00 region, as a defense of these levels is vital in order for it to maintain its mid-term strength.

“Short term levels that are must-hold zones and/or interesting levels to buy the dip if you want to trade LINK. Couldn’t break through $17.25-17.75 resistance zone,” he explained.

Chainlink LINK

Image Courtesy of Crypto Michael. Chart via TradingView.

Here’s the Critical High Time Frame Support that LINK Must Defend 

Another analyst explained that the $13.00 region is a critical support for Chainlink, as this level has held strong on multiple occasions in recent weeks.

He notes that a continued bout of trading above this level is bullish for LINK.

“As long as there are no signs of a blow-off top, I assume that LINK will keep on going up like it does since its inception. That’s the analysis, you don’t just fade the strongest coin in crypto.”

Image Courtesy of Cryptorangutang. Chart via TradingView.

Because Chainlink is not strongly correlated to Bitcoin and the rest of the market, its reaction to these levels could be the sole factor that determines its near-term outlook.

Featured image from Unsplash.
Charts from TradingView.

Defi Platform Uniswap Outpaces Coinbase Pro in Global Trade Volume

Defi Platform Uniswap Outpaces Coinbase Pro in Global Trade Volume

The decentralized exchange (dex) Uniswap has seen a massive amount of trade volume during the last seven days. Following Uniswap’s rapid increase in global trade volumes, the platform’s founder Hayden Adams celebrated the dex outpacing the centralized exchange Coinbase’s volumes this past weekend.

News.Bitcoin.com recently reported on the decentralized finance (defi) economy’s total value locked (TVL) assets nearing $8 billion in value. While a mad rush toward defi coins and applications has been taking place during the last few months, dex trade volumes have been soaring.

Data from Dune Analytics shows that close to $11 billion has been swapped on dex platforms like Uniswap, Curve, Balancer, and 0x. But Uniswap is commanding most of the trade volume and on Monday the exchange captures 62.8% of all dex swaps.

Defi Platform Uniswap Outpaces Coinbase Pro in Global Trade Volume

This past weekend Hayden Adams, the creator of Uniswap, tweeted about the massive trade volumes that have been settled on the platform in recent days. “Wow, Uniswap Protocol 24-hour trading volume is higher than Coinbase for the first time ever,” Adams said. “Hard to express with how crazy this is,” the Uniswap founder added.

Defi proponents congratulated Adams and said: “Huge congrats to Uniswap team – When NYSE flippening?”

On Monday, August 31, Uniswap is still capturing significant trade volumes with $537 million swapped during the last 24 hours. Uniswap captured over $2 billion in global trade volume during the last seven days.

Defi Platform Uniswap Outpaces Coinbase Pro in Global Trade Volume

The number of Uniswap traders (unique addresses that traded, maker and taker) on Monday is roughly 78,027. The two dex applications that trail behind Uniswap include Curve and Balancer respectively.

Curve captured 16.6% of Monday’s dex trade volume with $71 million in global swaps. Balancer has 8.71% of today’s global dex trade volume and has seen $66 million in trades. Most of the other dex platforms behind Uniswap, Curve, and Balancer only represent 1-3.38% of the dex swaps on August 31.

These smaller dex platforms in terms of trade volume include 0x, Kyber, Dydx, Idex, and Synthetix.

Uniswap is essentially two smart contracts on Ethereum and an open-source market that allows for onchain market maker swaps. Uniswap allows traders to utilize lists of ERC20 token pairs that they can swap for in a noncustodial manner.

The platform supports coins like ETH, MANA, BAT, WBTC, YFI, DAI, KNC, LEND, MKR, USDT, USDC, and more. The aggregate of all the dex platforms has seen $22.7 billion swapped in the last 12 months and a 107% increase in 30 days.

Much of these trades are taking place on Uniswap and this trend doesn’t seem to be abating anytime soon.

What do you think about Uniswap’s massive volume in recent days? Let us know what you think about this subject in the comments section below.

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Image Credits: Shutterstock, Pixabay, Wiki Commons, Dune Analytics,

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