Technical Analysis: Bitcoin weakens while DOGE and DASH provide some bullish respite

Last week our trend continuation bear pennant pattern completed into the take profit zone. Arguably, a long setup could have been considered when closing a short in a support zone and along our immediate trend line support. However, counter-trend trading a bearish weekly engulfing candle has had limited success this year, so our onus should still be on finding a short setup for a possible next leg down to support.

We find values have returned to a range within prices that had previously consolidated in June and recently in August for two weeks. So it’s fair to assume we can expect similar range-bound trading setups. This means shorting $6620 USD to $6650 USD as a 0.382 retrace and prior support-turned-resistance level with stops above the 0.5 Fibonacci level. This is around $6800 . This trade, I’d argue, does require some trade management, as these levels may tend to invite volatile price “jumps” unexpectedly.

So perhaps setting a trailing stop or multiple take profit zones if the trade setup is valid.

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Daily bitcoin short setup 11 Sep 2018 by Pansyfaust on TradingView.com

An immediate trade one could make, if price fails to manage to enter our uppermost short zone, is a second, more aggressive short condition setup. Should we begin to show price weakness and close a daily candle under $6260 USD or closing outside of the bear pennant formation. If that happens, then look for an intra-day setup to short $6260 USD, stop loss $6410 USD and close the short at approximately $6020 USD. This is a highly aggressive short at these levels, so be prudent with your position size to limit risk.

As of yet, no long condition has activated on Bitcoin, since there are no interesting high time frame bullish divergences in price and oscillators. However, some Alt/BTC pairs have shown movement that can invite some attention, namely Dogecoin and DASH.

Looking at DASH/BTC on the long-term weekly time frame, DASH came right into a historically major demand zone, as prior highs through 2014-2017 that were resistance have become support, and as such, we should trade the trend that it’s beginning to suggest.

Not only that, but the weekly RSI dipped into oversold territory and has exited that zone on bullish price action. The question, now, is where can we enter the trend forming? Price has cleanly bounced and is forming a bullish price structure, making higher highs and higher lows while also invalidating a bearish consolidation zone, which seems to have turned into support (Red/Green Rectangle). To enter this trend while lowering your risk, bidding out the 0.382 Fibonacci at 0.0285 with a stop bellow prior lows at 0.025 should yield a favorable R/R. The daily bearish divergence on the RSI gives us a clue that we can expect a pull back, which can be longed.

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Daily trade setup for Dash. 11 Sep 2018 by Pansyfaust on TradingView.com

For those wanting to ride Doge to a new high, it might be prudent to manage those bullish dreams for now. After consolidating between 35 and 40 satoshis for weeks, Doge exploded upwards while the wider market reclined into bearish price movements. However Doge has come into major resistance, and after forming a bearish RSI daily divergence, it might be the signal to exit a portion of your longs you may have or at least short hedge on Poloniex. A good re-long zone would be 64 satoshis as it shares confluence with a 0.618 Fibonacci and a prior resistance-turned-support zone. If the price does decide to consolidate at these current 90-100 satoshi levels, it’s likely it will push to next resistance at 140-145 satoshis.

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DOGE Daily Update 11 Sept by Pansyfaust on TradingView.com

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Cryptocurrency to be a key focus for the European Union

The European Union (EU) has released an announcement regarding economic and financial matters. According to the council, cryptocurrency is going to be a focus for the EU.

The press release, dated from 7th September, shows the comments from European Commission Vice-President (VP) Valdis Dombrovskis at the Economic and Financial Affairs Council (Ecofin) conference in Vienna. The VP stressed the need to continue to improve the resilience of the financial system. He said that this will be done as a result of putting the post-crisis financial regulatory reforms into effect, as well as working on non-performing loans.

On top of strengthening the financial ecosystem, Dombrovskis also stated:

“We also had a good exchange of views on crypto-assets. We see that crypto-assets are here to stay. Despite the recent turbulence, this market continues to grow.”

He claimed that initial coin offerings (ICOs) have a massive potential to become a feasible form of alternative financing. He stated that “last year, ICOs helped raise over 6 billion dollars in funding and this year this figure will be substantially bigger.”

Owing to this potential in innovative financial technology, Dombrovskis also pointed out that there are risks involved. The unpredictability is especially “linked to a lack of transparency”. This means that there “are risks for investment protection and market integrity, but also in the form of money laundering, potential fraud or hacking”. As a result of these risks, the EU is hoping to continue looking for developments and are doing so cooperatively with international partners at the Financial Stability Board or G20 level.

A key challenge that the EU is facing is the matter of categorizing cryptocurrency assets. The EU needs to classify them and consider the way in which the existing EU financial rules can be applied to these assets or whether new EU rules, especially for the cryptocurrencies, are needed.

For this case, the EU is working with the European SupervisoAuthoritiesies on “regulatory mapping of crypto assets”. According to Dombrovskis, there are the numerous Member States that are in support of this mapping and claims that a conclusion will be met later this year.

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“Cash is king” in illicit and terrorist activity, according to the FDD

The Subcommittee on Terrorism and Illicit Finance within the U.S. Congress recently explored the relationship that terrorism has with finance.

According to a press release from the Financial Services Committee, the council met in order to investigate the ways in which terrorist groups create and transfer funds. The Subcommittee Chairman Steve Pearce stated that extremist organizations founded on terror “cannot function without financial resources to organize and carry out their violent actions.”

Pearce gave reason to their reason for meeting was with the intention to “understand the nature of these threats that are currently facing the nation and the world, in order to do all they can to put an end to these illicit acts”.

The Congress further discussed on the matter and Yaya Fanusie, the director of analysis for the Foundation For Defense of Democracies (FDD) Center on Sanctions and Illicit Finance, stated that “[cold] hard cash is still king” and explained that cryptocurrency is “a poor form of money for jihadists because they usually need to purchase goods with cash often in areas with unreliable technology infrastructure”.

Fanusie also stated that “[terrorist] organizations have a long history of exploiting banks and other traditional financial institutions, as well as semi-formal means of transferring funds, such as the hawala exchange system. But emerging financial technologies offer new channels to raise and move funds”.

The FDD also released an announcement on Twitter that pointed out that digital currencies are not attractive to jihadist terrorist groups.

Despite the good news, Fanusie warned that cryptocurrency usage for illicit activity might increase as more alternative coins enter the market through smaller trading exchanges. He suggested that this stems from the US regulatory authorities clamping down on cryptocurrencies.

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Bitcoin’s low privacy almost fixed with these five coins

Anonymity was one of the important values of Bitcoin during its ascend. Later on, it became clear that there are some flaws in the system, giving rise to the privacy coins boom.

It’s all relative, so let’s define the rules first: there are dozens of Bitcoin forks, but not all of them are remarkable privacy coins. There are also plenty of privacy coins, but not all of them are based on the Bitcoin source code (for instance, Monero).

In the following list, we’ve tried to include only the most advanced privacy coins based on original Bitcoin code. We used this comprehensive Privacy Coin Matrix as the basis for defining “advancement”. The matrix is a publicly available and constantly updated document. It’s the result of the collaboration of initiative developers that originally emerged on Reddit and went viral in May 2018. 

We also used CryptoMiso in order to identify initial source code of the privacy coins mentioned in the matrix. Interestingly enough, Bitcoin itself is also mentioned in the list and it flops badly when it comes to almost everything related to privacy.

Bitcoin-based privacy coin №5: Dash  

Dash (DASH) is an open-source, decentralized, digital cryptocurrency forked from Litecoin back in January 2014. Since the source code for Litecoin was Bitcoin, we are back to the roots. Although Dash’s privacy is far higher than Bitcoin’s, it still performs poorly in comparison to all the other coins analyzed in the Matrix.

Bitcoin-based privacy coin №4: Bitcoin Private

Bitcoin Private is an actual Bitcoin’s hard fork, with some enhanced features like cryptographic, and added sender and receiver privacy. It’s way better to solve the anonymity pickle, but it’s not very scalable and quite slow, e.g. private transactions computation time takes minutes.

Bitcoin-based privacy coins №3 and №2: Phore and PIVX

PIVX (PIVX) (previously known as DarkNet (DNET)) is an open-source, decentralized, cryptocurrency appeared in January 2016 (and rebranded as PIVX in February 2017) as a fork of Dash (and we remember that Dash’s source code is Bitcoin’s code).  As its original name proposed, the coin focus is anonymity of transactions and privacy, and it was designed to run on anonymous networks (like I2P or Tor).

Phore is a fork of PIVX with pretty much the same privacy and scalability features, with the theoretical max of 154 transactions per second (which comes close to PayPal average of 193 transactions per second). However, PIVX has a plan proposed for scalability: Bulletproof’s author Jonathan Bootle has joined project’s team and expects 90 to 95% private transaction’s size reduction.

Bitcoin-based privacy coin №1: Particl

Particl is an “open-source and decentralized privacy platform built on the blockchain specifically designed to work with any cryptocurrency”. The company’s mission is to encourage private and democratic economy supported by its native currency (PART).

This coin provides a great combination of privacy features and speed. Project’s team also has a clear plan on scaling, including utilizing the lightning network, Segwit, and bulletproofs.

The only downside is that top 100 addresses own 53.1% of a total coin’s supply.  But to be fair, the true decentralization (or the lack of it) is still the major problem of all cryptos.

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Australia confirms plans to develop a National Blockchain Platform

Australian businesses and government-led enterprises have embraced blockchain in-between applications all the way from air travel to energy management, and now the nation’s Commonwealth Scientific and Industrial Research Organisation (CSIRO) has announced the development of what will be called the Australian National Blockchain.

As a nationwide platform, the Australian National Blockchain will serve as an infrastructure platform for Australia’s digital economy, where businesses will be able to develop smart contracts as well as confirm the status and arrangement of legal proceedings with transparency.

The platform will broadly enable Australian businesses to use smart contracts to manage business events and further record information from sources such as Internet of Things (IoT) devices.

The Australian National Blockchain will first be trialed on IBM’s Blockchain platform, and will see CSIRO, Herbert Smith Freehills, Data61, and IBM collaborate to develop the platform in a pilot phase.

Speaking on the development, Dr Mark Staples – a senior research scientist at Data61 – expressed that “Our reports identified distributed ledger technology as a significant opportunity for Australia to create productivity benefits and drive local innovation. Data61’s independence and world-leading expertise will help to catalyze the creation of digital infrastructure for Australian businesses to transition to a digitally-enabled future. For complex enterprise contracts, there are huge opportunities to benefit from our research into blockchain architecture and into computational law. Smart contracts have many applications, and as the ANB progresses we look forward to exploring other business use cases to roll out.”

Paul Hutchison, vice president and partner, Cognitive Process Transformation, at IBM Global Business Services added that“Blockchain will be to transactions what the internet was to communication – what starts as a tool for sharing information becomes transformational once adoption is widespread. The ANB could be that inflection point for commercial blockchain, spurring innovation and economic development throughout Australia.”

The platform aims to collate the interests of Australian regulators, banks, law firms, as well as businesses, and is scheduled to launch before the close of the year.

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Charlie Lee on Bitcoin: “It’s always good to buy on the way down”

In a new interview with CNBC, Litecoin founder Charlie Lee has gone to elaborate that Bitcoin remains a good buy for interested investors – noting that the recent market downtrend had created a new investment opportunity for long-term prize-seekers.

Speaking on air, Lee quipped that “It’s always good to buy on the way down to dollar-cost average your buy-in… As long as you don’t spend money that you can’t afford to lose, I think that’s fine.”

Cautioning users against using borrowed funds to invest in Bitcoin, Lee noted that “It’s hard to predict prices. I’ve been in this space for seven years now. I think sometimes it comes back within six months to a year, and sometimes it takes three or four years.”

Lee expressed that Bitcoin’s price movements – and the general price movements of the cryptocurrency market itself – was largely driven by speculation and that, in future, prices would generally reflect the success and adoption of a particular cryptocurrency itself.

Speaking on his own creation – Litecoin – Lee noted that he would not seek to re-invest in the cryptocurrency any time soon.

Earlier this year, Lee publicly sold his Litecoin holdings to avoid any allegations of a conflict of interest – and later expressed his intent to move away from the cryptocurrency entirely in the interest of decentralization.

At the time, Lee explained that “Litecoin is more centralized because I am around, so it has a more centralized development team, has more centralized foundation.”

Speaking to CNBC, Lee expressed the same sentiment – saying “I sold because of conflict of interest, so I’m not going to buy my litecoins back anytime soon — or at all.”

Bitcoin itself is down by -0.70% to trade at $7,009.06 USD, while Litecoin itself is down by -1.67%, and trades at $60.77 USD at press time.

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Cryptocurrency interest is rising in American universities, according to Coinbase

A survey has been done on the amount of interest that universities and students have in cryptocurrency, and the results might surprise you.

According to the study carried out by mega-cryptocurrency exchange Coinbase, there is an appeal that blockchain-based currencies are holding, and the attraction to the technology is gaining in a major way – despite the market’s recent dip.

Coinbase shared the results:

Key Findings

  • 42 percent of the world’s top 50 universities now offer at least one course on crypto or blockchain
  • Students from a range of majors are interested in crypto and blockchain courses — and universities are adding courses across a variety of departments
  • Original Coinbase research includes a Qriously survey of 675 U.S. students, a comprehensive review of courses at 50 international universities, and interviews with professors and students

As a case study, Coinbase used a cryptocurrency class at New York University Stern School of Business to show the increased interest. At the university, David Yermack started a course on blockchain and financial services in 2014 and only 35 students signed up. However, in 2018 the number of enrolled students was sitting at 230 students, resulting in the university having to move the course to the largest lecture theatre. That’s an increase of more than 550% students.

Regarding the course, Yermack stated that a system “is well underway that will lead to the migration of most financial data to blockchain-based organizations [and] students will benefit greatly by studying this area.”

Stern Business school is not the only university to show increased attention to cryptocurrency studies. Coinbase found that Stanford was offering ten different courses in the field, Cornell offers nine and the University of Pennsylvania holds six.

According to the study, the students opting for cryptocurrency courses come from an array of different departments, such as finance, computer science, and anthropology. Dawn Song, a computer science professor at the University of California conjectures that it could be possible that blockchain is interesting owing to its potential to affect different domains in society, saying that “Blockchain combines theory and practice and can lead to fundamental breakthroughs in many research areas” and offering that it could “have really profound and broad-scale impacts on society in many different industries.”

Earlier this year, it was found that 20% of American students had been using their university loans to buy cryptocurrencies, so it only makes sense that students are interested in the digital currencies and the way in which the blockchain on which it is based works.

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Square wins new patent for a cryptocurrency payment network

Square – the company headed by Twitter co-founder Jack Dorsey – has successfully been awarded a patent by the U.S. Patent & Trademark Office (USPTO) which details a new payment network that would enable merchants to accept payments in any currency – including the likes of Bitcoin and other cryptocurrencies – and then withdraw their currency of choice following a transaction.

The patent elaborates that:

“The disclosed technology addresses the need in the art for a payment service capable of accepting a greater diversity of currencies…including virtual currencies including cryptocurrencies (bitcoin, ether, etc.)…than a traditional payment system in a transaction between a customer and a merchant, and specifically for a payment service to solve or ameliorate problems germane to transactions with such currencies. Specifically, the payment service described herein can facilitate real-time (or substantially real-time) transactions, allowing a customer to pay in any currency of their choice, while the merchant can receive payment in a currency of their choice.”

The patent describes methods through which a point-of-sale (POS) system could eliminate latency in cryptocurrency transactions to the point that both cryptocurrency and credit card transactions could process at the same speed.

The system would make this claim a possibility through managing a private blockchain that could record transactions from Square wallets. While this approach does not eliminate the potential for double-spend attacks, it does eliminate that risk from a merchant and places the onus on itself, instead.

Square CEO Jack Dorsey has previously gone on record as a Bitcoin supporter – noting that Bitcoin could become the world’s foremost means of exchange within the next ten years.

At the time, Dorsey quipped that Bitcoin’s market emergence will “probably take over ten years”, and went on to say that “The world ultimately will have a single currency, the Internet will have a single currency… I personally believe that it will be Bitcoin.”

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Bitcoin breaks through $7000 USD as cryptocurrency markets resurge

After a month of pressure, cryptocurrency markets appear to have broken a stranglehold invoked by the  US Securities and Exchange Commission’s decision to reject (and later re-evaluate) several Bitcoin Exchange Traded Fund proposals.

While the middle of August saw a minor rally, Bitcoin has largely struggled to surpass the $6500 USD mark, while Ethereum has remained deflated below $300 USD.

As of today, Bitcoin has powered through the $7000 USD mark to reach $7,061.28 USD – while Ethereum has flirted with positive gains to touch $293.32 USD at press time.

Leading the charge are several prominent altcoins – Holo has climbed some 27.31% to reach $0.000836 USD, while Bytecoin, MaidSafeCoin, and EOS have climbed by 13.68%, 10.03%, and 9.93% to reach $0.002249 USD, $0.276411 USD, and $5.89 USD, respectively.

A notable return to form is Dash, which has now climbed by 9.44% to reach $194.16 USD.

Among the cryptocurrencies seeing losses, Substratum leads the pack with a -7.34 decline, while Aion and VeChain follow closely by posting losses at -5.53% and -4.67% respectively.

Bitcoin dominance itself presently hovers at around 52.8%, while the total market cap of all cryptocurrencies is presently valued at $230,548,537,071 USD.

As our technical analyst Graeme Tennant noted last week, cryptocurrency markets remained stagnant ahead of what appeared to be imminent volatility – noting a clear reversal signal above Bitcoin’s $5800 USD support zone.

Our sentiment analysis, courtesy of Remy Stephens, noted that while sentiment on Bitcoin itself remained neutral, the altcoin market had taken a bullish term with support rallying for Basic Attention Token, Wanchain, and Bulwark – among other projects.

The US SEC is expected to resume its course and offer a verdict on yet another Bitcoin ETF proposal by the 30th of September. More broadly, US regulators have announced the continuation of ‘Operation Cryptosweep’ – a joint endeavor that has probed some 200 ICOs and cryptocurrency firms.

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Does Dash have what it takes to be a frontrunner in the cryptomarket?

The current market is sending many a-token to sinking values and few coins are managing to stay positive in the current downturned digital business. In this, we are looking to see whether the Dash is managing to outrun the bear market.

At the beginning of the year, the token was sitting as in the eleventh position of most valuable cryptocurrency by market cap on January 7th and was trading at a value of $1,334.78 USD. In January, it was totaling a market cap of $10,415,498,427 USD.

Moving ahead to the current state of affairs, Dash has dropped to the thirteenth most valuable cryptocurrency and is trading for $183.95 USD, with a total market cap of $1,523,552,858 USD.

To put it in statistical form, the network has lost a whopping 86% of its trading value over the past eight months, while its market cap has similarly diminished by approximately 85%.

Transaction fee estimates

According to calculations based on the network’s average transactions, the network’s fees will see a value of 0.00019 DASH/KB per high priority transaction, (1-2 blocks) 0.0001 DASH/KB per medium priority transaction (3-6 blocks) and 0.00007 DASH/KB for a low priority transaction (more than 7 blocks).

An unusual partnership

Although it is not a breaking story, it is still worth remembering that the network positioned itself as the frontrunner for a Zimbabwean cryptocurrency in the partnership struck with KuvaCoin.

At the time, Dash Core CEO Ryan Taylor stated that the company could flourish in the African nation:

“I have been advocating for quite some time the potential benefits Dash can provide to economies with less stable currencies, and Zimbabwe seems a prime location for these benefits.

This project, in particular, is well-researched with value propositions, branding, and go-to-market strategies tailored to the local market. Combining the ideal network – Dash – with a well-considered strategy should lead to a high probability of success.”

Looking to the future

With the markets being in the current space they are in, we can’t predict with ease how tokens might perform. If we take a look only at the last month, Dash has taken been on the up since the weekend and has seen a positive trajectory after taking a major dip at the beginning of the month.

At press time, Dash trades at $183.55 USD.

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Three things you need to know about Bitmain’s IPO

According to industry sources, Bitmain – the giant behind an estimated 80% of all cryptocurrency mining equipment in existence – is mulling a Hong Kong-based Initial Public Offering (IPO).

For the uninitiated, an Initial Public Offering – the first sale of a stock issued by a company to the general public – marks the transition where a ‘private’ company becomes a ‘public’ one.

When a company goes ‘public’, it gains the potential of drawing in thousands of new investors (and subsequently, new capital), and can more easily facilitate acquisitions and mergers through issuing stock. However, this is weighted against regulations which ensure that public firms account to a strict set of legal procedures, form a visible board of directors, and are beholden to financial regulators.

Given Bitmain’s large footprint, the news that the company – under its CEO and co-founder Jihan Wu – could go public has set tongues wagging in numerous circles.

$3 billion USD: The IPO that could be

While no official figures have yet been published by Bitmain nor Wu, early reports indicate that Bitmain could seek to raise as much as $3 billion USD to $18 billion USD through its IPO, and the company might file a listing application with the Hong Kong stock exchange in September this year.

The company is reportedly valued at around $15 billion USD, though no official valuation has yet been given. The company is believed to have brought in $2.5 billion USD in revenue in 2017 through both sales of mining equipment and its involvement with several mining pools.

The company will be set to compete with Canaan Inc – which has similarly filed for a $1 billion USD IPO in Hong Kong – and further with Ebang International Holdings.

Bitmain reportedly unloaded its Bitcoin in favor of Bitcoin Cash

In a leaked dossier that apparently depicts pre-IPO information, Bitmain revealed that it had sold most of its Bitcoin in favor of Bitcoin Cash.

In a purported slide, Bitmain apparently disclosed that it owned some 22,082 BTC in January of 2018 (down from 71,560 BTC in December of 2017) and carried some 1,021,316 BCH (up from 841,866 BCH in the same time period).

Commentators on Twitter have noted that the company may be proceeding with an IPO in an attempt to offset its losses throughout 2018’s ongoing bear market.

Source: Bitcoin Magazine

In a popular thread by Vijay Boyapati, communities debated the allegation that Bitmain had sought to prop up Bitcoin Cash as a company-controlled alternative to Bitcoin, and, as a result, was now forced to obtain other means of funding as the deal soured.

Should Bitmain elect (or be forced to) dispense with its Bitcoin Cash holdings at any stage, the company could ultimately shake cryptocurrency markets by selling as much as 5% of the cryptocurrency – potentially pushing the digital currency into all-time lows.

Bitmain may branch out into other sectors

In more positive news, an IPO might propel Bitmain into new industries.

In an interview with Bloomberg in May, Wu quipped that the next phase of the company would involve “advancing our technology beyond what we’ve already achieved” – and it remains to be seen as to where Bitmain itself might head once public.

The company might square off more closely against Canaan Inc, which itself has committed to developing silicon chipsets applied to both artificial intelligence and cryptocurrency mining.

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