Much of the world has now heard about Bitcoin due to the global WanaCrypt0r 2.0 ransomware, which should continue spreading over the course of next week. Optics for Bitcoin aren’t great in situations like this because it furthers the notion that Bitcoin is used for nefarious means. You can follow a live feed of the incoming transactions from this twitter bot. However, the silver lining is that many people who did not know what Bitcoin is or how to use it before the attack certainly do now.
Worst-case scenario for Bitcoin here would be a government crackdown on its use and distribution, which, although a low probability, is probably not a non-zero possibility considering the current administration. This would create a large down day in the market similar to when Silk Road was shut down, Mt. Gox was found to be insolvent and Bitfinex was hacked. Of course, Bitcoin the protocol would be unaffected, so the price is likely to bounce back rather quickly.
The block size and scalability debate trickles on with no current end or resolution in sight. I wouldn’t really expect a push out of the SegWit camp until October or November, when the Bitcoin Improvement Proposal (BIP) is set to be tabled for the time being. The number of unconfirmed transactions continues to rise on an upward trend, all the while miners who support Bitcoin Unlimited are mining empty or non-full blocks.
The COIN ETF comment period closed yesterday, which isn’t to say there will be any type of decision on the SEC’s part. This will likely be a non-event for the market considering the ETF itself will remain in limbo until further notice.
Total cryptocurrency market capitalization broke a new all-time high (ATH) of $55 billionearlier this week, while Bitcoin dropped just shy of 50 percent of that total.
Some may view this as Bitcoin losing its impact and success, which can be partially attributed to the block size and scalability in-fighting. Others, like myself, view this shift as a massive altcoin bubble. Hockey stick parabolic curves on a chart like that end with large selloff candles. There is also only one Bitcoin, with a fixed supply, competing against an infinite number of altcoins, many with pre-mined or infinite supply as well.
Because of the correction late in the week, the weekly candle was threatening a bearish close with a wick longer than the candle body, but the heavy buying on Sunday prevented the bearish close.
This weekly close alone suggests continuation over reversal or sideways movement in price. Since the beginning of the trend, duration of consolidation between large upward moves has decreased. This will eventually lead to a parabolic, euphoric, blowoff top with a massive candle wick. Until then, expect more of the same. A small correction this week would just mean an even greater chance for extended continuation.
Bitcoin did make a new high this week of $1,868.50, according to index, and is currently drawing an “M for murder” double top. This likely represents consolidation to a further move upward and not exhaustion of trend.
This is the only chart I’m really focused on at the moment. There are plenty of potential patterns, such as head and shoulders or Adam and Eve, harmonics, and horizontal support levels here, but all that really matters is the larger consolidation pattern.
This may also represent a flag/pennant, which is another sign of bullish continuation.
A more ominous double top for a bull market would have similar price structure to the pattern that formed during the ATH of 2013.
As discussed above, a serious threat of reversal shows large candle wicks on high timeframes, which is not currently the case with price structure.
Most of the world is now aware of Bitcoin due to the WanaCrypt0r 2.0 ransomware.
The block size and scalability debate continues with large transaction backlogs in an upward trend.
Based on market capitalization, Bitcoin is currently hovering around 50 percent of the total.
Price remains in consolidation; once finished, expect a return to the status quo.
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