Stability is the word to briefly characterize the developments within the BTC/USD pair.
Last Monday, we saw the same levels as today. It is quite possible that the time is not far off, when one or half a percent change in the price will be discussed by the entire financial community as widely as the stock market fluctuations are being discussed today. There are prerequisites for this: the volatility of the world’s first cryptocurrency dropped by 98% over the year. On January 16, 2018, this figure was $3,468 and a year later, it came to a mere $61. It is not only volatility, but the entire market that is falling. For example, the current bear market has become the longest in history. The price has been falling for 411 days is a row.
The hourly chart clearly shows the levels within which the price is moving. A strong support level is at $3 460 and it is doing a great job holding back the decline. The price, however, is not in a rush to rise above this level.
As a result, the pair traded with minimal volatility levels all week. Resistance was observed within the range between $3,565 and $3,600. Moving averages are above the price in the horizontal neutral position. MACD indicator is in the negative area. To determine the scenario, the price should go out of the current range, and this reduction is likely to result in the testing and hitting a new yearly low.
Everything on the 4-hour timeframe indicates the continuation of the downward trend. Moving averages are above the price tending downwards. MACD indicator is in the negative area. The risk of a new yearly low is still persisting. In order to rise, the price needs to overcome the resistance of ЕМА50 $3,533 level, and thereupon, the $3,580 – $3,600 range.
The daily chart shows obvious decline in volatility. The price can get out of the current triangle pattern with a sharp impetus. It is impossible to understand at the moment, which way the price is going to move. Technical analysis allows for a possibility of testing the $3,215 level and the psychological level of $3,000. Moving averages are above the price tending downwards, MACD indicator is in the negative area.
Now, let us take a look at the news. We have already discussed key past week’s news in our previous review. We wrote about the resubmission of Bitcoin-ETF application by VanEck and SolidX, custodial service launch by Fidelity.
A New Distributed Protocol Just round the Corner
A New York-based startup has announced the development of a new protocol called “Stacks” which will use a network’s hashing capacity along with a Proof-of-Burn (PoB) solution. Both Proof-of-Work (PoW) and Proof-of-Burn mechanisms will initially be used to process blocks, but eventually, the chain will completely switch to Proof-of-Burn. According to the developers, PoW is used to ensure network security by being able to prevent up to 51% of attacks.
How does PoB Work?
Instead of spending money on electricity bills, Proof-of-Burn network miners will burn their own bitcoins. Every participant competing to generate new blocks, must burn a certain number of BTC. The probability of finding a new block will depend on the number of bitcoins burned. The winner will receive a reward in the Stacks tokens.
Lightning Network Capacity Growth
The networks’ capacity has exceeded 600 BTC. It has grown by as much as one third in the past month. Today, the network has 22,618 payment channels interconnected by 5791 nodes. Lightning Network is one of the important solutions for scaling Bitcoin network, reducing commissions and increasing confidentiality.
Has the Market Frozen?
The market seems to have come to a standstill in anticipation of something, and that anticipation raises anxiety and leads to mistakes: inexperienced traders get emotional and lose money on false breakthroughs. Our task is to set aside emotions when trading. To achieve it, we analyze the market and share the results with you. Our advice would be to wait and determine a clearer picture of further development. Play it cool!
Good profit to all of you!