President of Free Republic Liberland Vít Jedlička presented update on development of blockchain governance at Web3 Summit, Berlin. You can meet him in Hackerspace.
Day: August 21, 2019
If you have been in the CryptoWorld for a while, you probably came accross this indicator.
What is it?
The crypto market behaviour is very emotional. People tend to get greedy when the market is rising which results in FOMO (Fear of missing out). Also, people often sell their coins in irrational reaction of seeing red numbers. With our Fear and Greed Index, we try to save you from your own emotional overreations. There are two simple assumptions:
- Extreme fear can be a sign that investors are too worried. That could be a buying opportunity.
- When Investors are getting too greedy, that means the market is due for a correction.
Therefore, we analyze the current sentiment of the Bitcoin market and crunch the numbers into a simple meter from 0 to 100.
The complete list of factors with their weighting
- Volatility (25%)
- Market Momentum/Volume (25%)
- Social Media (15%)
- Surveys (15%)
- Dominance (10%)
- Trends (10%)
For a full disclosure on what are these factors exactly referring to please go to their website
We are seeing a very high level of fear (or low level of greed). I posted below a graph of their Fear & Greed Index followed by a graph of the Bitcoin Price.
In the last 18 months, the indicator dipped strongly 2 times before and when it did you can see the reaction by BTC a few weeks later !
I am not saying it is a 100% probability metric but something is SURE; I prefer buying when people are scared than the opposite. And today, it seems investors are being careful maybe too much?
Crypto Fear & Greed Index since inception
BTC / USD Price
Altcoins continue to get hammered. Meanwhile, BTC is plodding along steadily in a sideways direction, the bulls trying to break to new 2019 highs, but not having the power to overcome the bears who could plunge prices back towards $8000. The old 5 August chart (shown below) from THIS POST is still valid from the bearish perspective. I consider the market to be in favour of the bears at the moment, so this is still the chart which I am basing my own BTC buying prices on.
What we are watching is the interplay of market cycles. Lately I have found myself discussing market cycles in the comments sections of various posts on multiple platforms.
I would like to thank CryptosDecrypted in particular for inspiring this post. If you read his post titled “The Sunday Recap – Down the Rabbit Hole 42“, you will see that he chats a bit about market cycles, a chat which we continued in the comments section of that post. Incidentally you can follow him on Twitter if you don’t already do so. He’s a quality crypto analyst and blogger, so I recommend that you keep an eye on what he has to say: https://twitter.com/GordonBuckley3
Bitcoin price moves in cycles. Altcoin prices move in cycles – generally together and closely tied to that of Bitcoin. The major financial markets of the world move in cycles. In his blog post, CD remarked:
“My two cents – we are a full economic cycle from BTC (and only BTC) becoming established as a reliable counterweight to global market corrections.”
That got me thinking a bit, to the point that I believe I must share my own views on the topic (hence this post). Note: I’m not saying that CD is wrong, his opinion carries weight and is probably at least as valid as my own. Realise that none of us analysts own a working crystal ball, we all just call what we observe as best we can. Here is my take on it:
I doubt that we’ve seen a proper global stock market crash since The Great Depression. Bear (pun intended) with me here: I realise that the 2008 crash is spoken about in hallowed tones. But 2008 was akin to a failed suicide attempt: a dramatic cry for help, but a cry which averted the disaster. You see: the markets bounced straight back. The reason that we don’t call it “The Great Depression II” is that it was nowhere near that scale or duration. Yes, it has absolutely had a lasting effect on some asset classes, look at precious metals for instance, but the fiat based assets recovered and moved on!
We must now ask the “How?” and “Why?” questions. The answer is not pretty.
Zooming out on the situation and looking in retrospect, we can observe how fiat saved itself. Contrary to reason and sound financial practice, solid assets – good stores of value – were sacrificed in order to prop up the failing fiat house-of-cards. As analogies go, I don’t think you can do better then comparing fiat money to a house-of-cards. Ironically, the booming housing market played a role in the last “crash”, ironic because property is typically a good store of value. Regardless of the cause, the markets took a big dip, but they were prevented from crashing entirely. Governments stepped in to protect their house-of-cards from being blown down by the Big Bad Wolf. Unfortunately for them, there was no Big Bad Wolf. All there was was a very shaky arrangement of unbacked fiat-based derivatives built on top of an unbacked fiat money system.
The markets dipped simply because investors were no longer confident that what they held was worth what the markets said it was worth. That’s bad. That means that the fiat foundation of the house-of-cards has cracked. But fear not! The government came along and applied liberal doses of Quantitative Easing plaster and patched over the cracks. Then they painted it with a big tin of debt coloured paint, the special kind which contains micro-particles of Fractional Reserve Banking.
So we’re all living in the same house-of-cards which we lived in a decade ago, only now it is much MUCH bigger, is covered in considerably more debt, contains a wealth of inefficient private entities which should have died (but which were bailed-out with public funds), and is generally looking about as sturdy as a crowbar made of cheese.
The reason this matters is because the really big crash has not been avoided, it’s been delayed. A healthy corrective crash – a correction which would have weeded out much of the unsustainable fiat rot – was prevented from occurring. What has happened is that the market’s have been set up to fail, far more than they ever would have a decade ago if they had just been allowed to crash organically.
That matters too.
That matters because it means something very important to us: There is no precedent for what will happen next.
We can talk about market cycles, but we will be kidding ourselves. What happens next will break new ground. Our best bet will be to look at what happened during the Great Depression. But even that was almost a century ago and in a very different world – there is only so much that we can take from that example. 2008 may look big to us, but that’s only because we don’t have something bigger to benchmark it against. We haven’t seen a proper crash since the establishment of Bretton Woods. That caused an upset of its own, but that was just the market reestablishing its footing at the time. Everything since then has been a mini-crash or a temporary correction, much like 2008 – fiat has yet to fail, so far it has not been allowed to do so in an unrestricted fashion.
Look at the cryptocurrency market of 2008. that was a crash, a proper crash. All the little altcoins that should no longer exist due to poor management, lack of funds, lack of performance or just poor marketing – they were wiped out. Nobody bailed them out, and the altcoin world is now far stronger for it. The fiat markets took the exact opposite approach, they did the equivalent of bailing out the shitcoins which should have died, be it the tiny little ones or BITCONNNEEEEEEECCCCTTT!!! itself!
Take home point: the market cycles may well soon “break” and behave unpredictably. The current system is an unsustainable house-of-cards. Something has to give, and when it does, it will definitely have enormous repercussions.
End of Part 1
Let that sink in a little. In Part 2 we will look at crypto cycles – BTC and the altcoins. Then we will determine if and how these cycles may influence one another.
Yours in crypto
“The secret to success: find out where people are going and get there first”
~ Mark Twain
“Crypto does not require institutional investment to succeed; institutions require crypto investments to remain successful”
~ Bit Brain
Bit Brain recommends:
- Vitalik Buterin: Increasing Transaction Costs Risk Limiting Ethereum Adoption ;
- Facebook Libra Already Facing an EU Antitrust Probe: Report ;
- Pieter Wuille Unveils ‘Miniscript,’ A New Smart Contract Language for Bitcoin ;
- Messari Disclosures Registry Tops 50 Cryptocurrencies With 11 New Additions ;
- Bitcoin Price Drops by $700 in Minutes After Failing to Crack $11K ;
- ? Daily Crypto Calendar, August, 21st?
- STEEM Trading Update
Welcome to the Daily Crypto News: A complete Press Review, Coin Calendar and Trading Analysis. Enjoy!
The increased cost of transacting on the ethereum blockchain is hurting the software’s adoption, says project creator Vitalik Buterin.
Speaking with the Toronto Star this week, Butertin suggested projects that are considering whether to build on the technology will likely be butted out as the blockchain is overloaded with transactions, or in his words “almost full.” (While a blockchain cannot ever be technically ‘full,’ Buterin’s comments indicate his current sentiment on the severity of the problem.)
Still, Buterin’s comments speak to his understanding of the difficulties ahead for the project, with major planned upgrades including Ethereum 2.0 and a switch to proof-of-stake consensus ahead.
He told the newspaper:
“If you’re a bigger organization, the calculus is that if we join, it will not only be more full but we will be competing with everyone for transaction space. It’s already expensive and it will be even five times more expensive because of us. There is pressure keeping people from joining, but improvements in scalability can do a lot in improving that.”
Ethereum’s seven-day transaction fee average, a measure of demand on the network, actually sits at a 50-day low, falling since July 1 to sit around 0.11 ether per transaction currently.
Facebook is reportedly already under investigation by the EU over antitrust issues related to its Libra cryptocurrency project.
A document seen by Bloomberg indicates that the European Commission is “currently investigating potential anti-competitive behavior” by the Libra Association. The report describes the document as a questionnaire suggesting the commission is concerned that Facebook’s planned digital payment system could unfairly lock out competitors.
The governance structure and membership of the Libra Association is apparently under scrutiny. A number of major companies including Mastercard and Visa have already signed loose agreements to partner with the Libra Association on the project.
Smart contracts could soon get a boost in bitcoin as prominent programmer Pieter Wuille has unveiled a new coding language designed specifically for their use.
Posted to the bitcoin developer mailing list Monday, the ‘Miniscript’ language aims to make it easier for programmers to write up “smart contracts” or conditions for spending bitcoins. Programmers Wuille, Andrew Poelstra and Sanket Sanjalkar have been working on the code for roughly a year, Wuille said.
Although it’s been shared around behind the scenes, Wuille said he is now posting it to the email list because it’s now it’s reached “a stage where I’d like to get it some more attention.”
Backing up a bit, “Script” is the smart contracting language in bitcoin, which allows users to specify certain conditions need to be met before the bitcoin can be spent. Say, funds are locked up until a certain time before they can be spent. Or, two people need to sign off on a transaction before the money can be moved, a concept called “multi-sig.”
This are how these rules are implemented in bitcoin’s Script:
OP_EQUALVERIFY OP_CHECKSIGVERIFY <144> OP_CSV OP_ENDIF
Eleven crypto projects announced Tuesday they had joined the Messari Disclosures Registry, including four top-100 projects by market cap: Cardano, Lisk, V Systems and Beam.
“The ability to find basic information on networks and their underlying tokens will be essential to responsible growth in the industry; and we’re thrilled to be working with such a great group to move the industry forward,” Ryan Selkis, Messari’s founder, told CoinDesk.
Bitcoin (BTC) price faced fresh bearish sentiment Aug. 21 after a rejection of $11,000 sent markets tumbling hundreds of dollars in minutes..
$9K Levels on horizon for Bitcoin price
Data from Coin360 shows BTC/USD topping out at just under $10,900 before reversing. Hours later, a sudden loss of support saw the pair dip to below $10,100 before bouncing slightly higher*
? Daily Crypto Calendar, August, 21st?
“We will be breaking down the basics of blockchain and crypto in this interactive intro session at 301 Howard Street First Floor,SF.”
“Come by to learn more about Ethereum Classic Labs’ accomplishments over the past year of advancing the Ethereum Classic technology…”
“This Wednesday, we’re hosting a testing session with @TestessenBerlin for our wallets and website at the Atrium Tower offices.”
“We invite you to our DEV AMA on Telegram. When: 5pm EST Wednesday 21st August .”
“Launch of a campaign to attract international organizations from 67 countries in the field of wildlife protection, improvement of…”
STEEM Trading Update by my friend @cryptopassion
Here is the chart of yersterday :
Here is the current chart :
Today, we validated the testing of the resistance line at 0.18$ but we failed to break it and so we are currently having a rejection. Except if the BTC is starting a new correction, I think we should try soon to break this line again in the coming hours. The worst case would be that we go test the support line related to the previous low around 0.165$.
- ? Daily Crypto News, August, 20th ?
- ? Daily Crypto News, August, 19th ?
- ? Daily Crypto News, August, 16th ?
- ? Daily Crypto News, August, 14th ?
- ? Daily Crypto News, August, 13th ?
- ? Daily Crypto News, August, 12th ?
- ? Daily Crypto News, August, 8th ?
- ? Daily Crypto News, August, 7th ?
- ? Daily Crypto News, August, 6th ?
- ? Daily Crypto News, August, 5nd?
- ? Daily Crypto News, August, 2nd?
- ? Daily Crypto News, August, 1st?
- ? Daily Crypto News, July, 31st?