Technical Analysis: The Bitcoin bull is back!



The Bitcoin Bull Is Back! by tennant.graeme on TradingView.com

What a great week it was for Bitcoin! After a tentative rally from it’s low at the end of last month, followed by some sideways meandering, last weeks price action showed that the Bitcoin Bull still has some bite!

Last week’s analysis highlighted a potential inverse head & shoulders setup with resistance (shaded red) around the 6800 mark. To the delight of Bitcoin bulls, the price smashed through the 6800 resistance to rally approximately 13% to the target price at current levels.

In a bear market, a trader must look to sell the rallies. In a bull market, a trader must look to buy the dips. This completed head & shoulders provides a solid base for what will potentially be the next bull market. As such, we can now view the market with a bullish bias and look to buy with a fair degree of confidence when the market pulls back.

Even more good news for the bulls – we are now looking at an even bigger inverse head & shoulders setup with a neckline at about $7750 USD which itself is a significant resistance zone (shaded pink). Should the price break this resistance zone the target price is just short of $10000 USD which coincides with the next significant resistance zone (shaded orange).

But wait – piling into Bitcoin right now is not necessarily the best move. We are yet to break through a significant resistance level (shaded pink) as well as not just one, but two important, long-term resistance trend-lines (blue lines). Furthermore, on the 4-hour chart there is bearish RSI and OBV divergence (full explanation). As such, if you are wanting to buy (particularly if one is a long-term investor), I would suggest phasing a capital amount into the market rather than buying all at once.

It would appear that the “Bull is Back”, but there can always be a “twist in the tail”. Pick your entries intelligently and make use of stop losses when using leverage or taking large positions.

Look to minimize losses from a potential short-term pull back now because if the price can hold above $6800 USD and then break strongly above $7750 USD, I expect that there will be further opportunities for profitable long trades up to 10000 and maybe even beyond!

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Arthur Hayes of Bitmex expects more volatility in Bitcoin’s future

Arthur Hayes, the CEO of global cryptocurrency trading company Bitmex, recently suggested that Bitcoin’s price could surge to a whopping $50 000 USD by the end of the year and has offered his opinion more on the topic – with a surprising statement.

In an interview on CNBC’s Fast Money, Hayes changed his bullish attitude and claimed that he thinks that the cryptocurrency has not bottomed yet. The bitcoin advocate said that he does not “actually think we’ve seen the worst.” Adding that he “thinks this is a very strong rally on good volume and we definitely could see $8,000, $9,000, and maybe just shy of $10,000 [and] we’ve been here before where we rallied from $5,800 to a high of $9,000 level but didn’t quite crack $10,000. [He thinks] similar action will happen this time and [he] would like to see us test $5,000 to really see if we put a bottom in”.

Despite the cautious view, Hayes still believes that Bitcoin has a $50,000 USD 2018 future and confirmed saying that he thinks “the current rally will top out close to but not greater than $10,000. Then we will fall and test $5,000. If that holds then we can rally to $50,000 by year end.”

The CEO suggested that the current run can be attributed to investors being quieter over the second quarter and that volatility can be expected within the cryptocurrency’s price owing to the funders being “in the Hamptons, or the French Riviera or in Asia at Bali” and “are taking a little bit of a chill time”. Hayes continued to say that when the market will pick up again in the third and fourth quarters of the year, or rather that that” is when the party is going to start again”.

We can only see in time whether the party boat will sink again to $5,000 USD in order to float all the way up the predicted $50,000 USD.

Currently, Bitcoin has seen a 1.61% gain on day-on-day trading and is now sitting at a value of $7,499.87 USD.

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Want to hack Bitcoin or a Bitcoin fork? Here’s how much you’d need

You might have heard of cryptocurrencies experiencing a 51% attack on their networks and be thinking that it’s awful and how could this kind of thing happen on the blockchain?

Well, because it can only happen on the blockchain – and it is rather awful. Essentially in a 51% attack, malicious miners manage to gain control of a cryptocurrency’s blockchain in a very particular manner of hacking. By gaining more than half the hashing power on a cryptocurrency’s blockchain, it means that one can gain tentative authority over the network and can authorize or censor any transaction for as long as they are in control.

This often leads to “double-spend” attacks, whereby the hacker will first suspend transactions and then if any transactions were attempted while they had control of the network, they would reverse them and move the funds from the transactions straight into their pocket, meaning that the coins would be double-spent – from the originally intended account to the hacker’s wallet.

It might sound like a great debacle to implement a 51% hack, but it can be startling simple owing to the fact that the hashpower needed to hack can be hired from “cloud mining” firms or mining pools. This means that hackers can pay for control of the majority of the blockchain as much as it might cost for a certain time.

Read here for more details on a 51% attack or double-spend hack.

That cost and that time are exactly what we are going to be exploring – how much you would be spending to execute a 51% hack on a major blockchain. Taking values and data from Crypto51, we can find out a hack costs for the networks of Bitcoin Cash, Bitcoin Bitcoin Private, and Old Mac Bitcoin as a comparative.

Bitcoin

The original and most valuable cryptocurrency has a market cap of $127,446 billion USD and a blockchain length which sees 7,155,287 BTC in circulation at present. With cryptocurrency’s highest trading rate of $6,337,200,000 USD, it is no wonder that this coin would set a hacker back a pretty token.

To execute a 51% attack on Bitcoin‘s blockchain, you would need to squeeze $665.553 USD out of your pockets for some sixty-minutes of hacking fun.

Bitcoin Cash

Bitcoin’s first and most controversial hard fork has been the pot stirrer of hack-related news lately, but not for a different sort of attack.

Bitcoin Cash was born out of a desire to remedy the scalability issues that have arisen on Bitcoin’s network in an attempt to resolve the slow and expensive transactions.

The platform has increased the block size from Bitcoin’s one megabyte to Bitcoin Cash’s eight megabytes in order to handle the huge volumes of traffic that companies (such as PayPal and Visa) can cope with. Effectively, this makes transactions cheaper and more viable for easy payments.

Bitcoin Cash retained Bitcoin’s SHA-256 algorithm and has a current market cap of $14.94 billion USD with 17,243,663 BCH in circulation at present. Bitcoin Cash currently has a trading rate of $862.05 USD, and the cost of attacking the network is significantly less than that of Bitcoin – although it still wouldn’t be considered a thrifty endeavor.

In order to attack a 51% hack on Bitcoin Cash’s blockchain, you would need to spend $64,200 USD (almost one-tenth of Bitcoin’s hacking fee) for an hour of authority.

Bitcoin Private

Bitcoin’s most recent hard fork on the network, Bitcoin Private is a youngling in the world of cryptocurrency having only been released earlier this year in February. The net blockchain came courtesy of a combination of the Bitcoin blockchain and the approach of a token with a focus on privacy, Zclassic.

Where Bitcoin is pseudonymous – with users represented as alphanumeric designations – Bitcoin Private opts for a more private system and the sender, receiver and amount sent in a transaction remain private from the rest of the blockchain.

Instead of taking Bitcoin’s SHA-256 algorithm Bitcoin Private claimed Zclassic’s Equihash system which is ASIC mining resistant.

Bitcoin Private’s current market cap of $169,44 million USD and there are 20,491,129 BTCP in circulation The token currently has a trading rate of $8.15 USD, so it is naturally less expensive to attack the smaller network.

In order to successfully conduct a 51% attack on Bitcoin Private’s blockchain, you would need to fork out a measly $276 USD for an hour in the control seat.

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Brian Kelly denies the death of Bitcoin and gives hope to investors

Following a recent bad run of the markets which are showing bear-like trends at the moment, many investors are wondering whether this spells the end of cryptocurrency. On 23rd June, the original digital currency saw its decline to below the $6,000 USD mark for the first time in over six months. Not only does this impact other cryptocurrencies and investor sentiments, it has had an effect on the attitude of investors who are wondering if the market will ever see an increase again.

Brian Kelly, however, is not wondering and stated on national television last week with optimism that he thinks that Bitcoin is going to survive.

In a spot of banter on national television on CNBC, the hosts of Fast Money, Melissa Lee and Dylan Ratigan, attempted to have a “funeral” for Bitcoin before Brian Kelly, the CEO of BKCM, interrupted, expressing that a bright future is still ahead for the cryptocurrency.

Kelly believes that Bitcoin’s decline is going to be followed with a reverse pattern and will be on the rise for Bitcoin’s prices. He also thinks that the new regulations, such as in Japanese exchanges, will bring long-term benefits to cryptocurrencies, despite the current downturned market.

Kelly also gave his confident insight regarding the scene – reminding investors that Bitcoin’s price might be down from its highest peak but is still way up from a year ago, by about 150% more than it was.

This is the third expert we’ve heard convey optimism on the matter, along with Cardano’s Charles Hoskinson and Coinbase’s Brian Armstrong.

Currently, Bitcoin is down by 0.04% day-on-day, and presently trades at $ 6,114.36 USD.

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From ‘God’ to ‘Pizza’ – Three of the weirdest Bitcoin forks yet

The closing months of 2017 – and the opening days of 2018 – yielded something of a ‘silly season’ for Bitcoin forks.

At a time when regulatory pressure disrupted several ongoing ICOs, new projects – both zany and reasonable – took to forking existing projects as a means to guarantee early interest and liquidity.

For every good idea, however, there’s usually a wacky one – and Bitcoin is no exception.  Here, we’ll explore three bizarre Bitcoin forks that either debuted with ludicrously ambitious objectives, dubious ‘charitable’ aims, or those which where simply left behind by larger players.

Bitcoin Pizza

Bitcoiners might enthusiastically share the tale of the purchase that saw one happy customer part with 10k BTC for two pizzas, and now Bitcoin Pizza has picked up the banner.

Having forked on the first of January at block height 501888, Bitcoin holders received BPA tokens on a 1:1 ratio with BTC.

Instead of implementing new blockchain tweaks or long-term strategies, Bitcoin Pizza is unique in that it intended to marry Bitcoin with a directed acyclic graph – the same technology that underpins IOTA and Byteball.

A directed acyclic graph differs from blockchain technology, which underpins most cryptocurrencies. Whereas a blockchain is essentially a cryptographically verifiable list where every new entry references the previous one, directed acyclic graphs use a tree-like structure wherein files can contain sub-folders that continually branch off, so long as they are forward-facing.

With claims that its “DAG supported blockchain would be the most widely used one with the highest market cap”, and a mission to “make Bitcoin great again”, Bitcoin Pizza intended to fork the Bitcoin blockchain, reward its holders with airdropped tokens, and then able its participants to exchange those tokens for the official ‘BPA token’ at a later stage, given that blockchains and directed acyclic graphs are not interoperable.

Bitcoin Pizza has ultimately faded into the ether, and its official website has since been taken offline.

Bitcoin God

Bitcoin might be called the ‘father’ of cryptocurrency, but Bitcoin ‘God’ takes things to a whole new level.

Tipped as “the first charity platform built on a blockchain”, Bitcoin God forked on December 27th of 2017 at block height 501225.

Ironically, Bitcoin God was the result of a lengthy labour, and was actually intended for launch on Christmas Day – December 25th.

Bitcoin God delivered 17 million GOD tokens one a 1:1 ration to BTC holders where, of the remaining four million tokens, 400 thousand would be used as Proof-of-Stake mining rewards while an additional 3.6 million tokens would be airdropped to charities.

In a system where the user is ‘God’, Bitcoin God enables a community of token holders to vote on the ratio and amount of tokens issued to ‘charitable’ causes.

Users wishing to nominate a charity can leave their wallet address on Bitcoin Gold’s social network, whereafter the cryptocurrency’s community will ‘vote to decide on the ratio and amount of airdrops’.

Bitcoin God not only introduces Proof-of-Stake mining and a planned extension to include smart contracts (beyond Bitcoin’s existing Script capabilities) but further plans to implement a larger block size and a zero-knowledge proof in the future.

If you still don’t understand the nature and existence of Bitcoin God, neither do we.

BitcoinBoy

While its name might invoke the nostalgia of the ’90s and Nintendo’s favored GameBoy, BitcoinBoy has nothing in common with either.

Having forked on December 31st of 2017 at block height 501888, BitcoinBoy introduced “Huge Blocks” (at 8-megabytes), zero-knowledge proofs, and smart contracts. Bitcoin holders received BitcoinBoy coins (BCB) on a 1:1 ratio.

Describing itself as “not just an experiment”, BitcoinBoy debuted with the vision of ‘upgrading’ the Bitcoin network with a  ‘built-in intelligent contract’ to issue assets on the network, and facilitate the establishment of applications.

Over time, however – and save for the introduction of zero-knowledge proofs – BitcoinBoy’s goals have largely been achieved by Bitcoin Cash.

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A Lubin, a Song and a wager in front of hundreds – Consensus 2018 Day One Recap

Joe Lubin and Jimmy Song have a touch of the betting bug

Consensys founder Joe Lubin and Blockchain Capital partner Jimmy Song shook on a deal in sight of a hundred strong audience on a bet regarding blockchain user-ship.

While the specifics of the wager are not yet confirmed, it’s known that the kinks will be ironed out on the Twitter platform. The broad strokes of the deal came out on stage where Lubin took to Song, betting “any amount of bitcoin” that in five year’s time, there will be a to-be-defined number of applications on the blockchain that have achieved a to-be-defined number of users earned.

The current details of how much bitcoin is on the line are unknown. But the important thing is that Song agreed to the wager and Lubin tweeted a cheeky comment following.

Odds in their favor, or something like that.

EU and US Lawmakers play with the ‘Sandbox’ approach for blockchain

Lawmakers at the Consensus 2018 conference contended that “sandboxes” regulation might just be the best tactic for blockchain innovation with a lack of official guidance for developments.

The ‘sandbox approach’ allows the experimentation of operations geared towards innovations such as blockchain technology – so long as it is in a controlled setting with trusted business partners.

David Schweikert, a U.S. House Representative, said that no total clarity regarding regulations currently in place for the U.S. to control cryptocurrencies and blockchain technology and he followed up that this might not be a bad thing, telling the audience:

“One of the greatest concerns now in Congress is crippling innovation with regulation – so the ‘fog’ we are in now may actually be beneficial.”

Is the Clovyr application going to have four-leafed luck?

Clovyr has been revealed at Consensus 2018 as a decentralized app store designed to house selected applications and geared to simplify the developments of enterprise applications.

The project is founded by Amber Baldet and cryptographer Patrick Mylund Nielsen and brings with it a great deal of excitement. Baldet has suggested that there is a possibility for bitcoin-facing apps on the platforms and that there might even be future developments in blockchain integrations to add to the decentralized set.

From here, the Clovyr team intends to release a full tech set of decentralized application designs geared towards privacy protection and Baldet has said that one of the aims is to empower individuals to build and innovate projects themselves.

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Who created Bitcoin? Unpacking the mystery of Satoshi Nakamoto

In 2007, the world entered what has become retroactively titled as ‘The Great Recession’ – where falling housing-related assets contributed to a global financial crisis, which either crippled or toppled many of the world’s largest financial institutions. One year later, in 2008, a paper entitled Bitcoin: A Peer-to-Peer Electronic Cash System was passed around a cryptography mailing list – written by one Satoshi Nakamoto.

In the near-ten years since Bitcoin’s debut on the world stage, pundits around the world have speculated on the identity that underpins the pseudonym ‘Satoshi Nakamoto’ – hinting that one figure (or several) may have authored the white paper that became the genesis of blockchain technology and the wider cryptocurrency ecosystem.

Still, ten years later, nobody has been able to conclusively – nor publicly – prove who Satoshi Nakamoto might be.

Where did the idea of Bitcoin come from?

Bitcoin is not the first attempt at forming a digital currency, but is the most successful.

CyberCash, E-Gold, NetCash and other digital currency projects have all came before Bitcoin – however, all of these systems supported a centralized authority and were mostly written off as scams.

In the early 90s, an online collective of enthusiasts called the ‘cypherpunks’ met to discuss topics including mathematics, cryptography, computer programming, politics, and philosophy.

The cypherpunks‘ philosophy dictated that the world may be both functional with little-to-no government intervention, and instead informed the view that online privacy and cryptography may underpin trust in relationships between parties.

Bitcoin, as a currency, has often been labeled as a product of libertarian beliefs thanks to the fact that it is capable of operating outside of the ambit of governments and regulators.

Indeed, Bitcoin uses cryptography and mathematical proof to create a decentralized currency system where there is no central authority – a system aligned with the cypherpunks’ beliefs.

Who could Satoshi Nakamoto be?

Though no party has ever successfully uncovered the identity of Satoshi Nakamoto, several popular theories have prevailed that have linked figures involved in cryptography, mathematics, and computer programming with the Bitcoin white paper.

Nick Szabo

While Nick Szabo may or may not be Satoshi Nakamoto, the decentralized currency enthusiast is frequently thought to have been a helping hand in the creation of Bitcoin thanks to his prior involvement in developing ‘Bit Gold‘ – a digital currency that predates Bitcoin.

Notably, Bit Gold is thought to have been one of the earliest conceptual predecessors to Bitcoin, given the fact that network participants would leverage computing power to solve cryptographic puzzles where each puzzle solution would become part of the next challenge.

Szabo has frequently denied his involvement in developing Bitcoin, and has subsequently denied that he is Satoshi Nakamoto.

dorian prentice satoshi nakamoto

Dorian Prentice Satoshi Nakamoto

A curious case of ‘if the shoe fits’,  Californian resident Dorian Prentice Satoshi Nakamoto has been thought to have been the author behind the Bitcoin white paper.

Dorian Prentice Satoshi Nakamoto,  trained as a physicist at Cal Poly University, was first tipped as the author of Bitcoin’s white paper by Newsweek in 2014. Citing his scholarly background and libertarian ideology, journalist Leah McGrath Goodman contacted the academic to discuss his involvement in Bitcoin – to which Prentice responded “I am no longer involved in that and I cannot discuss it. It’s been turned over to other people. They are in charge of it now. I no longer have any connection.”

Dorian Prentice Satoshi Nakamoto later retracted his claims, elaborating that he had misunderstood the interview question to pertain to his work as a military contractor. In the years since, the academic has continually refuted notions that he wrote the Bitcoin white paper.

hal finney

Hal Finney

Born in May of 1956, Hal Finney was a cryptographer and computer scientist who was an early cypherpunk who was active on online forums and published several remailers.

Finney, notably, was the first Bitcoin recipient – having received a payment directly from Satoshi Nakamoto.

Given his involvement in the cypherpunks’ activities, his libertarian views, computer programming background and association with Satoshi Nakamoto, online spectators have frequently commented that Finney may well have been the anonymous Bitcoin author himself.

Finney, who was diagnosed with amyotrophic lateral sclerosis (ALS), ultimately passed away in 2014. Throughout the course of his later life, the computer scientist ardently refuted notions that he was, in fact, Satoshi Nakamoto.

Finney’s work has ultimately led others to believe that his connections to Dorian Prentice Satoshi Nakamoto (who he lived just streets away from) and his correspondence with Nick Szabo may indicate a wider involvement with Bitcoin than first assumed.

craig wright

Craig Wright

Born in October of 1970, Craig Wright is an Australian computer scientist. Though the subject of criticism, Wright has previously claimed to have been a part of the development team that created Bitcoin.

Notably, online media have often posited that Wright is Satoshi Nakamoto himself – a claim which the academic has done little to dispute.

In November of 2015, an anonymous source contacted popular technology news outlet Gizmodo claiming that Wright was Nakamoto, and that the email author had worked for him.

News publication Wired later published a story claiming that Wright was the hand behind the Bitcoin white paper, leading Australian authorities to raid his private home.

Wright went on to delete his public internet accounts and resurface in 2016, where he claimed to be Satoshi Nakamoto. Ultimately, however, Wright chose to retract his statement and to date has not offered public proof of his involvement in authoring the Bitcoin white paper.

Dave Kleiman

Dave Kleiman, born in 1967, was a forensic computer investigator and author. Following his death in 2013, the author’s estate has claimed that he was fundamental to the creation of Bitcoin.

Kleiman’s name first truly reached headlines earlier this year, where a pending lawsuit against Craig Wright describes that both men reportedly worked together to furnish Bitcoin into existence.

Court documents allege the two men collaborated from March of 2008 to develop the Bitcoin network. Following its launch, the two later supposedly sent each other Bitcoin transactions which were recorded on the blockchain.

Following his passing, Dave Kleiman’s brother – Ira Kleiman – elected to bring the lawsuit to bear against Wright, claiming that Dave Kleiman had informed him that he “might have left a legacy in the form of bitcoins and codes on hard drives held by the estate”.

Found after Kleiman’s death, an unfinished draft of a trust contract supposedly revealed that Wright had entrusted Kleiman with a sum of 1.1 million BTC in 2011, which Kleiman would return at a later date.

The funds were reportedly stored on a heavy-duty USB drive which Dave Kleiman kept on his person at all times. Ira Kleiman reportedly now owns the drive, but might not be able to access the contents given the fact that the late Kleiman apparently encrypted its contents with a proprietary cipher.

While court papers do not reveal either Craig Wright or Dave Kleiman as Satoshi Nakamoto, they do not that “For reasons not yet completely clear, they chose to keep their involvement in Bitcoin hidden from most of their family and friends. It is undeniable, however, that Craig and Dave were involved in Bitcoin from its inception and that they both accumulated a vast wealth of bitcoins from 2009 through 2013”.

Subsequently, the impending legal tussle centers around 1.1 million BTC (which translated to approximately $10 billion USD at the time), as well as including compensation for the claims of intellectual property.

Wright has previously confirmed Dave Kleiman’s involvement in authoring the Bitcoin white paper – leaving many to suspect that the cryptographer, or his brother, may have been Satoshi Nakamoto.

Why does it matter?

‘Satoshi Nakamoto’ has been granted with the favor of a following who have lauded the anonymous author’s work on the Bitcoin white paper and the conceptualization of a decentralized monetary system. However, that writer’s decision to remain anonymous instead may have gifted Bitcoin with the greatest asset possible.

Thanks to its lack of a visible developer, author, or even advertiser, Bitcoin is effectively decentralized from the influence of its creator.

Without a clear figurehead, Bitcoin proceeds by the will of its community alone – an attribute and detriment which many have cited as the factor that empowers its existence in the first instance, and also wrenches its developers apart as scaling concerns and other debates mount.

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Cryptocurrency startup reportedly holds a massive $10 billion USD worth of Bitcoin in vaults

Xapo, a Hong Kong-based bitcoin wallet provider, allegedly holds approximately 7% of the world’s entire Bitcoin supply in its vaults. At the time of writing, this portion equates to a rough – and whopping – $10 billion USD, according to a report from Bloomberg.

The report says that Xapo has spent time building a thorough network of underground vaults on five of the seven continents, “including one in a decommissioned Swiss military bunker” and in these chambers lie the wealth of years of storing the cryptocurrency – racking up the startling amount. The startup, which only formed in 2014, made headlines with the Swiss bunker’s bitcoin make-over towards the end of last year. Xapo had also previously had issues with regulations when it moving from Switzerland to the US.

Bloomberg reports that the startup “has more “deposits” than 98 percent of the roughly 5,670 banks in the U.S” but still has trouble with the regulators owing to the fact that custodians are treated differently.

Not everyone has the same take as regulatory authorities, though, and Ryan Radloff from cryptocurrency investment and research company Coinshares has expressed his point of view on the matter saying that “[everyone] who isn’t keeping keys themselves is keeping them with Xapo,” and that “[you] couldn’t pay [him] to keep it with a bank.” Coinshares currently has an estimated $500 million USD worth of Bitcoin stored at Xapo.

The concept of storing the cryptocurrency in a locker is attractive to some – if the key to a wallet is stored on an electronic device it is at the risk of a hacker stealing it, but “cold” storage (an offline manner of keeping one’s key, such as on a thumb drive) greatly reduces the risk. Bloomberg reports that Xapo’s plan to resolve, or at least attempt to counter, this issue is to “bury a cold-storage device in a mountainside and layer on electronic safeguards.”

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