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Bitcoin And Ethereum Price Continues to Remain Stagnant, A Possible Breakout Is Imminent

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Bitcoin and Ethereum

Bitcoin is currently gaining all of the spotlights in the crypto market. While in recent months, the king crypto’s price rallied above $12,000, it pulled back in early September as crypto assets corrected. The world’s number one crypto, Bitcoin, has been consolidating within the mid $10,000 range since its massive sell-off on September 3rd. 

On another note, Ethereum recovered along with other altcoins from the recent losses, rising with almost 10% to about $380.

Bitcoin Weekly Recap

Bitcoin’s charts indicators are flashing bullish this week. The primary crypto has risen by as much as $1000 over the last 7 days and has seen a consistent rise over the past 72 hours.

Bitcoin chart: 7-day timeframe (CoinMarketCap)

At the start of the week, Bitcoin left the major resistance and support levels untested. Bitcoin saw a bearish start to the week after experiencing a fall from an early Sunday morning high of $10,441 to a low of $10,259. Bitcoin retested the $10,500 levels, but was met with rejection as prices plummeted to $10,259. 

By September 14, Bitcoin surmounted to a record price gain of more than 3%, as bulls took on the $10,500 in a retest of strength. Bitcoin eventually broke above the $10,500 range high, sitting comfortably at $10,704 and surging towards the $11,000 mark. 

Tuesday, 15th September,  BTC made a new local high at $10,779, breaking out from the narrow range located between the levels of $9,825-$10,700. The coin experienced an oversold market condition. 

BTC saw a major uptrend on Wednesday 16th September. The coin reached the $11,000 high but was resisted. Bitcoin experienced this uptrend occurring simultaneously with the announcement from the U.S Fed as regards its plans to keep interest rates low, short-term. It would seem that Bitcoin reacted positively to the announcement as the asset steered upwards, breaking the resistance psychological line at $11,000, before reaching its new two weeks high at $11,085. However, the primary coin couldn’t sustain its run as it retraced southwards to settle below $11,000.

READ ALSO: Tech Stocks, U.S Elections: These Two Sentiments May Influence Your Bitcoin Investment

At the opening of the market on Thursday, after 3 consecutive bullish days, Bitcoin rose and peaked at a new daily high of $11,044, but eventually retraced to just over $10,900. However, the coin is on the brink of hitting $11,000 and it would probably be appropriate at this level to say Bitcoin will hit this figure in a significantly short period of time.

Bitcoin saw a bullish start to the day yesterday, recording a 0.29% early morning gain. Bitcoin started the day trading at $10,956 and once again tested the $11k levels. The coin peaked for a brief moment past the $11k but retraced a bit and ended the day changing hands at $10,938.

Bitcoin has recorded a 0.29% loss in the past 24 hours. At press time, Bitcoin is trading at $10,927. Bitcoin market cap is currently $202 billion, with $27 billion traded in the past 24 hours.

Bitcoin Chart: 24 hours time frame (CoinMarketCap)

Ethereum Weekly Recap

Although Ethereum began the week on a quite good note, the coin obtained some consistent loss within the week. ETH gained almost 10% on a 7-day timeframe. 

ETH Chart: 7-day timeframe (CoinMarketCap)

On the 13th of September, ETH started the day at $387. However, a slight bearish day saw the coin fall back into the deep red to rest at $361 by the end of the day.

By Monday, the coin found support recovering from the previous day’s downward move, to end the day at $372. Starting the day on Tuesday at $376,  the coin dipped once more and ended Tuesday changing hands at $366.

A slight bearish move set in and drove its price further down by Wednesday. Ethereum tumbled to an early morning intra-day low at $360, before making a move. The coin fell through the first major support level at $360 before hitting a late afternoon intra-day high at $370. Amid falling short of the first major resistance level at $370, ETH experienced a late pullback, falling through the 38.2% FIB to end the day at $365 level. 

However, the charts began to move in the opposite direction in the wake of the recent market reverse that was seen in BTC within the past 48 hours. As ETH gradually made gains, it moved up the charts by around 6% yesterday, to record its $392 price by the end of Thursday.

After trading yesterday at $387, ETH today saw a rather bearish start to the day with a record of about 1.7% loss. Ethereum is currently changing hands at $380, with a total market cap of $42 billion.

ETH Chart: 24-hour timeframe (CoinMarketCap)

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Market Watch

Jack Dorsey‘s Square to develop open source Bitcoin mining

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Jack Dorsey Bitcoin

On Friday, October 15, Twitter CEO Jack Dorsey announced that American fintech company, Square, would be looking to get into Bitcoin mining. Jack Dorsey who is also Square’s CEO announced this on Twitter which subsequently sent waves through the bitcoin market, surging its price to almost a record high, rising over $62,000 over the weekend. According to the Twitter boss, Square is looking to building an open source Bitcoin mining system that would be available to individuals and businesses.

Sharing his thoughts further on the initiative, he stated that “Mining needs to be more distributed” and that “the more decentralized [mining] is, the more resilient the Bitcoin network becomes. He also mentioned the apparent inaccessibility of mining stating that “Bitcoin mining should be as easy as plugging a rig into a power source.

Dorsey also believes that bitcoin mining “needs to be more efficient and that “clean and efficient energy use” would be undoubtedly beneficial to the digital currency in the long run.

Dorsey ended the thread by saying that a “technical investigation would be undertaken by a Square team led by Jesse Dorogusker, Square’s hardware lead. If successful, this initiative would be another of Square’s bitcoin focused projects which includes a Bitcoin hardware wallet.

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Learning Guides

Understanding Speculation and Crypto Volatility

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Everyone who dabbles in the crypto industry learns almost immediately that the market is very volatile and oftentimes things can change very quickly. That volatility is the fundamental reason why some investors make absolutely stunning gains in so short a time and others lose a lot of money as well. Trading in crypto is one of the riskiest ventures any person can undertake and as they say, it’s not for the faint of heart. The risks can be mitigated of course and sometimes depends specifically on the coin or crypto asset being traded on, barring general market trends.

Nevertheless, to get to the bottom of the volatility concept, one must understand speculation in the market. To start off, the concept of speculation isn’t limited to cryptocurrencies, on the contrary, speculation has existed for as long as economics and trading has. But it is worth saying that speculation is often a feature of novel sectors, assets, commodities and the like. So, even though cryptocurrencies have been around for more than a decade, they’re still in their infancy as far as markets go. One could say that the market is still trying to find its feet.

One of the fundamental reasons why cryptocurrencies are so volatile is that they are fundamentally backed by nothing of value outside the attention that they get. Unlike many fiat currencies which are either pegged to another currency’s value or whose value is unilaterally determined by a central authority, cryptocurrencies only derive value as a function of how many people are willing to use is to transact, i.e. trust in the asset because other people trust it. As a rule of thumb, the larger the number of people who accept the asset, the more valuable it becomes.

This is one of the hallmarks of speculative trading. In the crypto world or in any market that’s novel and untested, many people are in it to win it which means their strategies in trade has the objective of making as much profits as possible in the short term. Therefore, the market enters a subtly dangerous cycle of rapidly changing prices of assets. Basically, investors typically buy assets when prices are low and wait. As more investors are attracted to the commodity for its low prices, it sets off a cascade where more people buy in, causing the price to steadily rise. 

However, all good things must come to an end and it almost always gets to a breaking point whereupon the price gets high enough for investors to begin to sell. This reverses the earlier cascade and as more and more investors pull out, the prices can fall dramatically causing even more to sell off in fear of losing whatever investments they have left. The prices having fallen resets the game and primes investors to begin buying again.

Volatility has been one of the talking points of many critics of cryptocurrencies often comparing it to a Ponzi scheme. And in certain cases, persons of interest with large pulls and audiences can substantially affect the rate at which prices rise and fall. Other factors include government regulations. Volatility at its core reflects the often chaotic nature of trade and market interactions and human hopes and fears.

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Market Watch

What China’s crypto clampdown means for investors

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Over the weekend, China, the biggest crypto mining country once again, began to clamp down on cryptocurrency. Ten Chinese agencies including the central bank and banking, securities and foreign exchange regulators have vowed to work hand in hand to expose illegal cryptocurrency activity.

China has always placed stricter rules on cryptocurrencies but the new rule has made all crypto-related activities illegal. According to the People’s Bank of China (PBOC), it is illegal to cryptocurrency trading and anyone that does so will be severely punished; this includes those within China that are working for overseas platforms. To fully phase out the cryptocurrency mining sector, the National Development and Reform Council (NDRC) said that it would launch a nationwide crackdown on cryptocurrency.

Over the years, China does not recognize cryptocurrency as a legal tender. In 2013, the Chinese government referred to Bitcoin as a virtual commodity that individuals are allowed to freely participate in. This freedom, however, precludes banks and payment companies from providing services that are Bitcoin related.

In 2017, Initial Coin Offering (ICO) was banned. The ban was also extended to the conversion of legal tenders to cryptocurrencies by trading platforms which led most of the platforms to shut down operations in China. The crackdown led 88 trading platforms and 85 ICO platforms to withdraw from the market as of July 2018.

To China, the crackdown on cryptocurrency is necessary as the country is trying to launch its official digital currency and the need to fulfil its 2060 climate targets. The crackdown was necessary as cryptocurrency was seen as infringing on people’s properties and ‘disrupting the normal economic order.’

The statement by PBOC on Friday was unequivocal as the current crackdown is distinct from the previous ones. In his statement on Friday, PBOC called Bitcoin, Ether and Tether ‘legally irreparable’ and should not be used. The new regulations forbid financial institutions, marketing and IT providers from supporting crypto-related activities. The activities of both crypto holders and miners are now considered illegal. This is what Henri Arslanian, a PwC crypto leader termed as “No ambiguity. No room for discussion. No grey areas” in his tweet.  

What does this mean for crypto holders worldwide?

The major effect of China’s crackdown on cryptocurrency is the increase in price volatility. While volatility is a common phenomenon in the crypto world, a crackdown initiated by the world biggest cryptocurrency mining country will have a huge effect on market price.    

After the PBOC interview, Bitcoin fell by 4% within 24 hours and is currently trading at $43,320. Ethereum fell by 6% and it is currently trading at $3,036. With the Evergrande debt crisis and the huge blow bedevilling the crypto market, a clampdown by China would most likely keep the market price on the red until another good news crops up.

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