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All you need to know about Blockchain and Bitcoin

Discussion in 'Sive Morten- Currencies and Gold Video Analysis' started by Sive Morten, Feb 6, 2018.

  1. Sive Morten

    Sive Morten Special Consultant to the FPA

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    Morning guys,

    So, it seems that our stake on collapse has worked. Now, since drop is rather solid, we need to shift to higher time frames. First is daily chart - now we again take in focus our 5900$ COP target .
    BTC_d_11_10_18.

    On 4H market has hit some intraday extension and within few hours we expect technical bounce:
    BTC_4h_11_10_18.

    But again - as yesterday, 3/8 Fib resistance will be an area for selling:
    BTC_1h_11_10_18.

    It is important feature of crypto that we have to note here. Take a look that BTC behaves mostly as an equity, so probably investors treat it closer to stock market rather than bonds or currency... Major currencies aprreciated against dollar yesterday.
     

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  2. Sive Morten

    Sive Morten Special Consultant to the FPA

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    Greetings everybody,

    Today is just minor update on BTC. Scenario that we've described yesterday stands the same and today we need slightly adjust the shape of price action that we expect to see.

    On 4H chart we have bullish engulfing pattern, and it suggests AB-CD upside retracement on 1H. Also - keep an eye on possible bearish grabber on 4H around 3/8 Fib level.

    Hourly chart suggests that we should get something like shown on the chart. Final AB-CD target could be slightly different and depends on the depth of "C" point, which we do not know yet.

    But, as soon as AB-CD will be completed, this should be a chance to re-establish bearish position. It shoud happen somewhere around 3/8 Fib level:
    BTC_1h_12_10_18.
     
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  3. Sive Morten

    Sive Morten Special Consultant to the FPA

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  4. Butcherfx

    Butcherfx Corporal

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    Time to return back to Bitcoin again. Everyone is selling dinapoli traders buying.

    See below weekly cluster of fibonacci expansion supports... For scalp trading you can expect a decent pullback at least on 4hr/1hr timeframes. I have several long positions inside the box at cluster support zone.

    We have also XOP controlling expansion support at 2390ish . Take note of stops below 3k low. I dont expect a drop to these levels but in case I have already pending buy limit order.

    BTCUSDWeekly.
    Note : Above chart is a snapshot from a broker platform, for accurate fib levels refer bitmex and/or bitfinex data.
     
    #144 Butcherfx, Nov 20, 2018
    Last edited: Nov 20, 2018
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  5. Sive Morten

    Sive Morten Special Consultant to the FPA

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    Nice to see you again, Rodge.
    Great insight on BTC.
     
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  6. Sive Morten

    Sive Morten Special Consultant to the FPA

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    Bitcoin fundamentals briefing. December 2018

    Here is guys, our traditional monthly view on Bitcoin fundamentals. Here we observe most important fundamental events in cryptocurrency world, analyze them and try to estimate possible impact on the market, what to expect in long-term perspective. So, here we go.

    For truth sake, mostly it will be sentiment analysis rather than fundamental, but for any cryptocurrency, this is common situation because of specific features and qualities of these assets.

    We try to estimate as positive as negative driving factors and try to understand which of them are stronger right now. Here we go.

    Our positive side.

    At first glance it is a real challenge to find something positive. Bitcoin lost more than 80% of its capitalization, and overall sentiment stands far from positive euphoria that was less than a year ago. But, everything stands not as bad as it seems on the surface. Our analysis tells that now we have two rather strong long-term factors that have real potential to change the situation drastically. They are long-term, and we should not wait for results too soon, but the same reasons bring more confidence that these factors really could work.

    The first big block is the strong activity of large financial corporations in cryptocurrency sphere. Such big whales as Fidelity, NASDAQ, ICE, Goldman Sachs, Morgan Stanley will not deal with sphere where they do not see potential, especially when they turn to crypto all together. They intend to enter the cryptocurrency market in 2019. These events can significantly change the situation in the industry, and the price of Bitcoin is expected to rise sharply again, many well-known experts say, - Thomas Lee, the founder of the Fundstrat, billionaire, and head of Galaxy Digital Mike Novogratz to name some, and others. But let’s start with the facts first and provide our analysis of these facts second.

    - As Bloomberg tells - Nasdaq Inc. is moving ahead with a plan to list Bitcoin futures, according to two people familiar with the matter, betting on sustained interest despite the cryptocurrency’s dramatic plunge over the past year. Nasdaq has been working to satisfy the concerns of the U.S.’s main swaps regulator, the Commodity Futures Trading Commission, before launching the contracts, the people said. The Nasdaq futures will be based off the Bitcoin’s price on numerous spot exchanges, as compiled by VanEck Associates Corp., the person said.

    - New York Stock Exchange owner Intercontinental Exchange Inc. said it would launch its contracts on Jan. 24. We briefly talked about it in our previous report in November.

    - Fidelity Investments is launching a cryptocurrency trading and storage platform. Fidelity Digital Asset Services, LLC will provide cryptocurrency custody and trading services for enterprise clients, the company announced Monday. Tom Jessup, who is heading up the new division, announced the platform at Bloomberg’s Institutional Crypto event. It hopes to draw institutional investors, including hedge funds, family offices, and market intermediaries. Fidelity is one of the five largest financial services providers in the world, maintaining some $7.2 trillion in client assets.

    “Those efforts have been successful in helping us understand and advance our thinking around cryptocurrencies … The creation of Fidelity Digital Assets is the first step in a long-term vision to create a full-service enterprise-grade platform for digital assets,” he said, going on to add - “In our conversations with institutions, they tell us that in order to engage with digital assets in a meaningful way, they need a trusted platform provider to enter this space. These institutions require a sophisticated level of service and security, equal to the experience they’re used to when trading stocks or bonds.”

    - While Goldman may not directly offer a service for storing client coins, it has made efforts to enter the space–despite the murky legal landscape of cryptocurrency–by investing in custodial service provider BitGo Holdings Inc. in October. Also, Goldman was one of the first to clear Bitcoin futures offered by Cboe Global Markets Inc. and CME Group Inc., showing some inclination by the company to wade into the space of cryptocurrency–even with prices in their present spiral.

    - Morgan Stanley is reportedly preparing to offer bitcoin swap trading for clients, joining other top banks in a sector-wide effort to explore digital currencies. Traders will have the choice to go either long or short using so-called price return swaps; Morgan Stanley will charge a spread for each transaction, the source told Bloomberg.

    Well, it seems as good news, but why it is so big rush and euphoria around big banks coming to crypto market. Major suggestion stands around new money flow that should come from big clients of these banks who wants to invest in cryptocurrencies. This is a new and large source of liquidity. Here are some statements on this subject:

    The current bear markets are the “golden time” to be in crypto, major Wall Street crypto bull and co-founder of Fundstrat Global Advisors Tom Lee said Wednesday, Nov. 28, during his speech at BlockShow Asia 2018.

    Fundstrat’s co-founder named three main reasons behind the recent crypto market collapse: Bitcoin Cash’s (BCH) contentious hard fork, the regulatory actions of the U.S. Securities and Exchange Commission (SEC) forcing Initial Coin Offerings (ICO) to return funds to investors, and the “terrible” condition of global markets, which have dropped by approximately 10 percent in October and November.

    “[We] have a price correction taking place, which has caused the price to fall even below its 200-day [a popular technical indicator used by investors to analyze price trends], but if you’ve got time, it will arise. It will not happen within three months, or one year, but in two to three years, and this is the golden time to be in crypto. As soon as Bitcoin crosses its 200-day, we know there will be a flood of money coming.” “The only time the return is better than 7 percent is when you buy at a bear market [...] Bitcoin may have downsides in the near term, but this doesn’t change the fact we are still in the earliest days of crypto, and it’s about to become an emerging asset class.”

    According to his BlockShow speech, crypto has only 50 million active wallets so far against the 254 million PayPal accounts in Q3 2018 and 4.6 billion Visa and MasterCard accounts. Comparing Bitcoin (BTC) to other payment systems in terms of social network value, Lee supposed that in ten years Bitcoin could be worth $10 million per one coin.

    - Jeff Sprecher, chairman of the New York Stock Exchange, says bitcoin and other digital assets are here to stay. Sprecher is also CEO of the Intercontinental Exchange, which is teaming with Microsoft and Starbucks to launch Bakkt, a company that will facilitate bitcoin futures in January. “We’re creating that infrastructure that doesn’t exist today, which we think is a big opportunity for institutional investors to come in,” Loeffler said.

    The second block suggests changing the structure of the market. Major drop of Bitcoin happens because of a massive restructuring of the market framework, algorithms that it works on, regulation, etc. When restructuring is over, new upside cycle should start. At first glance, some regulation issues bring negative moments, especially SEC intruding, but this is the time of purification of the market and its civilization, new spiral of evolution. Maybe the crypto market will stop to be romantic Wild West, but it definitely will benefit from a civilized approach to clients and safety of their money and transfers.

    Here are the facts:

    - VanEck has been trying to win approval from the Securities and Exchange Commission for a crypto-based exchange-traded fund. They have followed to the pioneer in this sphere - SolidX startup cryptocurrency that applied to SEC in March 2016. SEC verdict should be given in March 2019. According to VanEck manager Gabor Gurbacs, a new instrument may be approved shortly; the company has never been so close to the positive verdict of the regulator. This is not denied by the SEC representative Hester Peirce; she believes that the agency should be more loyal to bitcoin-ETF, while the Securities and Exchange Commission chairman Jay Clayton said that this is possible only after the problem is solved with manipulations.

    - Colorado startups were closed by the regulator. SEC Colorado obliges to close ICO startups of Global Pay Net, Cred LLC (Credits), CrowdShare Mining and CyberSmart Coin Invest.

    - SEC ruled that non-custodial cryptocurrency exchanges allowing users to trade are firmly within their scope - Aphelion Disables Mainnet DEX.

    - Securities and Exchange Commission Recent Actions
    upload_2018-12-19_15-39-45.
    Source: Diar.com

    - Initial Coin Offerings (ICO) is all but over with November seeing total raised funds at $65Mn. ICOs in 2018 have raised over $12.2Bn but have now petered out from regulatory backlash fears, as well as a slow-down in cryptocurrency markets with token prices plummeting leaving retail investors with a bitter taste. In a speech, last week the US Securities and Exchange Commission (SEC) Chairman Jay Clayton said that he believes that "ICOs can be effective ways for entrepreneurs and others to raise capital. However, the novel technological nature of an ICO does not change the fundamental point that, when a security is being offered, our securities laws must be followed." It's unlikely the contentious fundraising mechanism, at least in its current unregulated format, to garner much interest moving forward with regulated tokenized securities platforms paving the way for a new realm of finding investor capital.
    upload_2018-12-19_15-40-32.
    So, although we call it “positive” factors a lot of negative issues stands behind, such as the closing of ICO’s and different crypto authorities by the regulator. Still, we think that this is the phase of restructuring of the market, bringing it to some unification, and this can’t hold absolutely smooth and silent.

    Now what we have on the negative side? Speaking in two words, events on the dark side include market drop and its impact on miners, ICO popularity, hackers’ attacks and either issues that SEC struggle against or just short-term consequences of SEC action. Except for SEC action, other events are technical mostly and not new.

    Our negative side.

    - Coindesk analysts Omkar Godbole thinks BTC could drop below 3000$;

    - Ethereum looks ready to resume its selloff as it found resistance at the top of its descending channel.

    - Between 600,000 and 800,000 bitcoin miners have shut down since mid-November amid declines in price and hashrate across the network, according to the third-largest mining pool. Stepping back, Mao said there are multiple factors that contributed to the shakeout among miners, including the recent market decline that followed the bitcoin cash hard fork on Nov. 15; an increase in electricity costs in China; and the fact that Chinese manufacturers are still racing to upgrade their products, making older machines increasingly uncompetitive. “All these factors are overlapping right now which led to this recent phenomenon,” Mao said.

    - The Bitcoin hashrate has fallen around 31% since the start of November 2018, equivalent to around 1.3 million Bitmain S9 machines. The price drop has so far caused two large downward difficulty adjustments to Bitcoin, 7.4% and 15.1%, on 16th November and 3rd December, respectively. The 7.4% adjustment was the largest since January 2013, and the 15.1% adjustment was the largest since October 2011.

    - The Norwegian government raise 34 times the power cost for miners;

    - Thin air Etherium bug. When ETH is sent to an address, that address is able to perform arbitrary computations paid for by the originator of the transaction. This is a known vector for griefing. However, in some cases, at-risk systems such as exchanges did not put proper protections in place. GasToken, which takes advantage of the refund mechanism on storage in Ethereum, allows users to store gas when the gas price is low and receive a gas refund when the gas price is high. By minting large amounts of GasToken when receiving ETH, the griefing vector mentioned above can now be a profitable attack. Because it was unknown which exchanges did and did not have the protections in place, the private disclosure was made to as many exchanges as possible, many of which were not at risk. To our knowledge, all affected exchanges that received the disclosure have patched the vulnerability.

    - Hackers steal approximately $1 Bln. In 2018, according to CipherTrace report. In the third quarter of 2018, the total amount of stolen funds from cryptocurrency exchanges exceeded $ 927 million, according to a study by CipherTrace. In the first half of this year, hackers stole more money from the marketplaces than in the whole of 2017. In early 2018, criminals broke into the Japanese stock exchange Coincheck and stole $ 533 million worth of cryptocurrency from it, after which BitGrail clients suffered, and $ 170 million was stolen from it. In the summer, the criminals successfully attacked the South Korean Bithumb and Coinrail, after which the country significantly tightened the regulation of the blockchain industry. In mid-October, analysts at Group-IB reported that over the past year and a half, criminals had hacked 14 large marketplaces, five of which attacked members of the North Korean hacker group Lazarus. Experts believe that next year the number of such thefts will increase.

    Conclusion:

    So, guys, putting it all together we see two big processes on the cryptocurrency market. First is wide intruding of big capital. This process will be slow, but as it has started already - it should continue. Beyond major world exchanges and transnational banks serious capital stands, and once they have started this invasion – this will stay in this way. They are not the kind of authorities that do something occasionally. They smell money and keep nose to the wind, following it. The activity of big banks in crypto sphere resolve the very big concern that was standing around crypto a few months ago – what the phenomenon of crypto is? Either this is a long-term new market, the new asset, or this is just temporal modern toy. Now it seems that the former is more correct than the latter. This, in turn, means that somehow, maybe slowly but stubbornly this process will continue and sooner or later, but big money of investors should come on the market. This lets us suggest at least deep upside retracement on the market within a year.

    Second is regulation. This is a two-edged sword, and it will change the circle of market participants. Initial romantic of Wild Bitcoin market is disappearing and replaced by pragmatic features of the common exchange-traded product. All negative moments that we’ve talked above are short-term, mostly technical consequences of the first stage of market development. Such issues as hackers’ attacks, drop of miners’ activity, bugs in blockchain protocols, etc. are not global. They are just a result of market specific features on the first stage, its construction nuances. As government regulation steps in – many features will remain on paper only. Regulation definitely brings centralization, safety, and strict control. Bitcoin and Blockchain start to lose such features as decentralization, users’ incognito, etc. They could stay on the paper, but if 80% trades on exchanges or through big banks such as Goldman – they will control everything. Hackers’ activity also should decrease, because it is more difficult to steal coins from NASDAQ or ICE exchanges accounts. Besides, SEC has a legal right to put the hand on everything, to regulate all ICO’s and other processes. So, Bitcoin gradually will become very similar to traditional futures on financials or commodities. What this step will lead the market to? There will be one big change. The participant contingent will change. Those who need special features of incognito transactions, decentralization start to leave the market or will use small agents services. There is a big part of different criminal spheres that use these features as well. While other people who just invest in Bitcoin or trade it are don’t care, or even should see improvement in more safety and liquidity in the market.

    Thus, as a bottom line, our opinion on the market is very close to what Vinny Lingham, Civic CEO, said on whether bitcoin can actually make a comeback. Bitcoin will be in the $ 3000- $ 5000 range in the next 3-6 months, thinks Vinni Lingham, head of the Civic blockchain-startup. In an interview with CNBC, the expert said that shortly, the cryptocurrency exchange rate is unlikely to fall below the $ 3,000 area, since there are active purchase stands. However, if the bearish cycle does not end in the next one or two quarters, this level may not withstand, and the asset will fall sharply in price.

    Currently, we see culmination point for investing in Bitcoin, a kind of “pain or gain” situation. Our all-time downside targets stand at 2900 and 1800$ correspondingly. Investing around 3000$ brings the best risk/reward ratio. While it is safer to buy at 6000$ when upside action already will start, but the price level will be less attractive. Taking into consideration fundamental background that we have – the destruction and closing of cryptocurrencies right now are hardly possible. It makes the long-term investment at current levels, with adding more in case of a drop to 1800-2900$ very good strategy for a long-term perspective.

    Finally - here is some technical positive. A simple comparison of 2014 and 2018 price action shows that they are similar. Following the harmonic relation, there is a suggestion of price action for 2018-2019 years. It assumes a final drop to our 1800$ before real rising from the ash.
    upload_2018-12-19_15-43-2.
    Source: rbc.ru
     
    #146 Sive Morten, Dec 19, 2018
    Last edited: Dec 19, 2018
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