Is Bitcoin Preparing for a Major Move? | Crypto Markets

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Excellent question. Overall, I would say that when bitcoin price is quiet, that's generally a good thing, right? Volatility has various negative impact among them. You know, it's very difficult to use something as a store of value when it's, you know, unpredictable what the price is going to be in the future. So we see this type of, this type of relaxation as overall a good progression. But I would say that there is kind of a little bit of apathy. I mean, just like right now, within the last few days, the transaction level has come down a little bit and volumes as well. What's happening right now is some consolidation, right? We had an excellent run so far this year, but in the last few weeks this is all noise, is like consolidation. Now in our last video, we call this a descending triangle, which means that the most likely outcome is we get a little bit of a break below the 9,000 level psychological support. But what we have here is the 200 day moving average, which is this blue line. Now the 200 day moving average has been always has, or at least over the last two, three years has been critical for Bitcoin's price. In 2017, it supported the price all the way up. And then in 2018, once it broke that blue line, we kind of knew we were in a bear market. Through 2018, it tested it several times, showing that this indicator acted as a great resistance. And then of course, when we had that April 2 infamous surge in bitcoin, it broke the blue line. And that's when we said, hey everybody, you know, the crypto winter is over and we can start getting bullish again. So even if we do break that 9k psychological support level, we do have that blue line which is creeping up right now. So the longer Bitcoin holds above 9k, the more chance we have that the blue line meets the price rather than the other way around.

How are altcoins looking? Do they still seem to be following Bitcoin's lead?

That's another good question. And actually the answer, I would say is a lot less than they have been. I mean, over the last six months while Bitcoin was zooming, we saw the altcoins very subservient. However, as I mentioned at the moment there's a bit more apathy surrounding Bitcoin and that allows other projects to come in and take a little bit of the spotlight back. And we can see here on coin checkup, you know, Bitcoin over the last week has done absolutely nothing. It's up less than half a percent. Whereas things like Ethereum and Eos have actually seen something of a gain. And then we have other, you know, other coins which are in a bit of a loss like binance coin and etc. So I would say that that dynamic where Bitcoin is leading seems to be ebbing off a little bit.

So Ethereum has been making a bit of a bullish run over the past couple days. Do you see this upward move continuing.

As far as, you know, the price of Ethereum? I mean, we can see that whereas Bitcoin has had a massive surge this year, Ethereum has kind of been lagging. And we can see they're just also playing with that 200 day moving average what I mentioned last week. And you know, Ethereum is obviously growing. I mean, we know that the scaling issues is actually a byproduct of that growth more than anything else. But the question really is, is regarding the growth of the network versus the incoming supply. Now there's about 13 and a half thousand new Ethereum coming online every single day. So that's the rate of inflation. The question is how much of that is actually being demanded, right? How much is required for, you know, new projects that are coming online that need the Ether for their development and et cetera, et cetera. Now, according to conversation I had with Joe Lubin, it's very difficult to tell because Ethereum is such an open platform. Anybody can really code any way they want to. So there isn't really a standardized format where they can pick out specific metrics to say, here's the growth on the network, here's the demand. All we really have to go by, you know, is the daily transaction levels, which is, you know, upward of about $100,000 per day. But still, if you think about $2 million worth of ether coming online, you know, every day, that's it's, it's quite significant. But just looking at this chart, I mean we can see it, we can see that we are finding or at least looking for some sort of a bottom and there is a whole bunch of upward potential if we do get some sort of a surge.

Very interesting, thank you. So bitcoin's hash rate has reached new all time highs this past week, almost hitting 100 quintillion hashes per second. What does that mean for the network and will this have any effect on the price?

So bitcoin hash rate I believe is actually an effect and not a cause. What we saw in the beginning of the year, you know, this massive surge in bitcoin has gotten a lot of people excited about mining bitcoin. And what we've seen is from the people who make those mining machines, they've put a lot of money into research and development to make sure that they get the latest model. There's actually a war going on between the top producers of mining equipment to see who can make the best machines that are the most energy efficient and produce the most amount of hash power. Antminer most notably just came up, came out with their, with their new 17 series and they sold out quite instantaneously. As soon as they put the product online, it was already sold out. So what we're seeing right now is a tremendous growth in interest and activity on the mining front. Now historically we know that bitcoin's hash rate and its price are usually quite closely correlated. So when the hash rate goes up, the price is, has a tendency to follow and vice versa. But we can't really, I mean, I've seen, you know, ridiculous analysis that say, okay, according to the hash rate, Bitcoin needs to be $100,000 right now. Let's not get carried away. What we're seeing right now, I believe is the effect of that surge at the beginning of the year. And now the hash rate is growing exponentially because of technological advances that were due to that.

So it's just a sign that the network is growing and it's good.

Exactly. The network is growing both with the number of people that are interested in participating and the technology behind it is growing as well.

Excellent. So futures are beginning to arrive in earnest. As I'm sure you've heard, Bakkt will be launching regulated, physically settled bitcoin futures contracts in just over a week. On September 23rd. How is this launch going to affect bitcoin? Or have we already seen the effects of this news on bitcoin?

I think that the community has been kind of speculating on this for quite a while. A lot of that growth that we've seen this year, I mean, is due to excitement surrounding institutional adoption. I mean, Bakkt is just one of those, you know, one of those institutions, but it is one of the biggest ones who wants to introduce bitcoin futures to Wall Street. Now, it is a very good thing for the network because it introduces more players, especially ones with deep pockets. So what we see is more liquidity, which bitcoin notoriously lacks due to its limited supply. So we see more liquidity in the market that would tend to lend itself towards more price stability, which is also a good thing. Now, the bigger question that a lot of people are asking is who's going to be doing what as soon as it launches? Right, as soon as it launches. Is there, you know, kind of a backlog of orders or backlog of people who, who want to get in on opening day? And anything can happen, obviously. And I don't know the future, and I certainly don't know what's happening on Bakkt order books at the moment. But my guess would be that there isn't anybody, especially with the apathy that we've been seeing in the last few is Wall street is in tune. I mean, people who are trading, they are in tune with the market conditions. So what I would say is that I wouldn't necessarily expect a huge surge on the day that Bakkt opens, you know, because you have a flood of money coming in, but rather during the next surge, whenever it happens, for whatever reason, then you have all of a sudden people who are very familiar and able to and have a lot of money and are able to contribute to that next surge.

How is the arrival of this unique type of regulated, physically settled contract going to affect bitcoin dominance over altcoins, seeing as altcoins have yet to see this kind of physical settlement system established?

Yeah, so I was looking at, I mean, because you asked about bitcoin dominance. So obviously we have to look at CoinMarketCap's Bitcoin Dominance Index. And at the moment it is almost as high as it was before there was an altcoin market. I mean, to be quite clear where this is January 2017, that's before the ICO, you know, revelation happened. So bitcoin dominance, I believe. I mean, you can see we spoke at the beginning of the video about the about that dynamic where bitcoins kind of getting apathetic and other ones are starting to shine in its place. And you can kind of see that happening here where that growth in dominance is kind of slowing down a little bit. I would find it very difficult, I would imagine it would be imagined that it would be very difficult for bitcoin to actually grow much in dominance past where it is right now. I mean, we're talking about, you know, compared to pre, you know, 2016 levels where, you know, the only competitor was, you know, maybe Ethereum and xrp. But I mean, nowadays there's an entirely new market with many different blockchains and to see it that strong at the moment is quite frankly pretty surprising.

Thank you everyone for watching. This has been Jackson with senior market analyst Mati Greenspan bringing you your weekly Crypto market update. Always remember to like subscribe and HODL.

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