- Bitcoin has risen back to $8,000 with the widely tracked 200-day moving average beginning to curl upwards in favor of the bulls for the first time since May 2018.
- A bull flag breakout seen in the hourly chart indicates scope for a rise to $8,400. The breakout is backed by bullish readings on both the hourly and 4-hour charts.
- A rally to $8,400 may not be sustainable, unless the move is backed by a rise in trading volumes. The daily chart is reporting a bearish divergence of trading volumes.
- On the downside, $7,205 is the level to beat for sellers. A UTC close below that would confirm a double-top breakdown and shift risk in favor of a slide toward $6,000.
Bitcoin (BTC) has moved back above $8,000 as a widely followed long-term indicator turns bullish for the first time in over a year.
The world’s largest cryptocurrency by market value is currently trading at $8,020 on Bitstamp – up more than $500 in the last 24 hours. Prices hit a high of $8,032 earlier today.
The 7 percent rise from the previous day’s low of $7,468 is noteworthy as the short-term technical charts had turned bearish earlier this week.
The rise back to $8,000, therefore, could embolden buyers – more so, as the list of long-term technical indicators signaling a bull market continues to grow.
The latest to join the bandwagon is the 200-day moving average (MA) – a widely tracked barometer of long-term market trend.
The MA shed bearish bias (flattened out) in the first half of this month and is now beginning to curl upwards, further confirming a long-term bearish-to-bullish trend change signaled by several indicators over the last few weeks.
Bullish 200-day MA
As seen above, the 200-day MA has turned bullish for the first time since May 2018. As of writing, the average is located at $4,500.
It is worth noting that moving average studies are based on past data and tend to lag price. The 200-day MA’s bullish turn, therefore, likely reflects the recent price rally.
Hence, short-term corrective pullbacks are not ruled out. Should prices move below that MA, the long-term bullish outlook would weaken.
As for the next 24 hours, BTC could rise to $8,300, according to a bull breakout seen on the short-term technical charts.
Hourly and 4-hour charts
BTC witnessed a bull flag breakout on the hourly chart (above left) earlier today – a continuation pattern that often accelerates the preceding bullish move. The cryptocurrency, therefore, has a scope for a rise to $8,400 (target as per the measured height method).
The hourly chart also shows an upside break of the falling channel (lower highs and lower lows).
The relative strength index (RSI) is now biased bullish above 50, having breached the descending trendline in favor of the bulls earlier this week.
Meanwhile, on the 4-hour chart (above right), the moving average convergence divergence (MACD) histogram has crossed over to bullish territory above zero and the RSI has violated the falling trendline in favor of the bulls.
With the odds stacked in favor of the bulls, BTC could challenge the recent high of $8,390 in the next day or two. A violation there would expose next major resistance at $8,500 (June 2018 high).
Even so, the bulls need to observe caution, as trading volumes have dropped over the last seven days as seen in the chart below.
Bitcoin’s rise from last Friday’s low of $6,178 is accompanied by lower highs on the volume bars.
That bearish divergence puts a question mark on the sustainability of recent gains and a further rise to $8,300, if any.
That said, the case for a fall back to $6,000 would strengthen only if the price closes below $7,206, confirming a double-top breakdown, as discussed yesterday.
Two bitcoin cash (BCH) mining pools recently carried out what is known as a 51 percent attack on the blockchain in an apparent effort to reverse another miner’s transactions.
The move is tied to the bitcoin cash network hard fork that occurred on May 15. The two mining pools — and — carried out the move in order to stop the unknown miner from taking coins that they weren’t supposed to have access to in the wake of the code change. That day, an attacker took advantage of a bug unrelated to the upgrade (and subsequently patched) that caused the network to split and for miners to mine empty blocks for a brief time.
In the context of cryptocurrencies like bitcoin cash, a 51 percent attack involves an entity or group controlling a majority of the hash rate which thereby allows them to execute several things they aren’t normally allowed to do, such as attempting to rewrite the network’s transaction history.
At one point did alone control more than 50% of the power. But and they were able to join together to reverse the blocks of transactions. According to stats site Coin.Dance, the two mining pools currently have combined 44% of bitcoin cash hashing power.
The interesting part of this particular attack on bitcoin cash, though, is that it was arguably executed in an attempt to do something ostensibly good for the community, not to reward the attackers or to take the funds for themselves.
But not everyone in the bitcoin cash community agrees. As one bitcoin cash developer, going by the moniker Kiarahpromises, put it in an article from May 17:
“To coordinate a reorg to revert unknown’s transactions. This is a 51% attack. The absolutely worst attack possible. It’s there in the whitepaper. What about (miner and developer) decentralized and uncensorable cash? Only when convenient?”
Anatomy of an attack
The inner details of the mining pools’ attack (as well as the attack that prompted the attack) are complicated.
“Since the original split in 2017, there has been a significant number of coins accidentally sent to ‘anyone can spend’ addresses (due to [transaction] compatibility of sigs, but no #SegWit on #BCH), or possibly they’ve been replayed from #Bitcoin onto the #BCH network,” bitcoin podcast host Guy Swann said, explaining the situation on Twitter.
But once one code change was removed during bitcoin cash’s May 15 hard fork, these coins were suddenly spendable “basically handing the coins to miners,” he added.
The unknown miner attacker decided to try to take the coins. That’s whenand swooped in to reverse those transactions.
“When the unknown miner tried to take the coins themselves, [and ] saw & immediately decided to re-organize and remove these [transactions], in favor of their own [transactions], spending the same P2SH coins, [and] many others,” Swann went on.
But some bitcoin cash users argue this was the right thing to do.
“This is a very unfortunate situation, but it is also what proof of work actually is. The miners in this case did choose to drop prohashes block and from what I heard, it is because they deemed a transaction within it to have been invalid,” responded active bitcoin cash supporter Jonathan Silverblood.
Still, others think that this is a bad sign for bitcoin cash, arguing that the event demonstrates that the cryptocurrency is too centralized.
Yet the thread of a 51 percent attack is a concern shared across proof-of-work crypto networks (and as mentioned above, some blockchains have been left exposed due to falling hash rates). For example, half of bitcoin’s current hashing power is divided among just three mining pools according to stats website Blockchain.
Individual investors will soon be able to invest in Grayscale Ethereum Trust, billed as “the first U.S. publicly quoted security solely invested in and deriving value from the price of ethereum.”
The Financial Industry Regulatory Authority (FINRA), Wall Street’s self-regulatory organization (SRO), has approved public quotation of shares in the trust, Grayscale Investments announced Thursday.
“All kinds of investors will be able to gain exposure to the price movement of ethereum without the challenges of buying, storing, and safekeeping ethereum,” wrote Marissa Arnold, a spokesperson for Grayscale, in an email to CoinDesk.
The trust managed about $7.5 million worth of the world’s second-largest cryptocurrency by market cap as of April 30, according to Grayscale’s website.
The security will trade over the counter (OTC) under the symbol ETHE. Entry-level investors will be able to own and trade an instrument tied to ethereum alongside their shares of Apple and IBM. The trust, created in December 2017, previously was open only to accredited investors and required a minimum $25,000 investment.
Grayscale has not yet determined exactly when the security will be available for trading (it estimated this will take about two weeks), but the FINRA approval is an important step in the process.
The ethereum movement, headed by flagship organizations like the Ethereum Foundation and the Brooklyn-based conglomerate ConsenSys, emerged from Blockchain Week 2019 with a common goal and a newfound sense of urgency.
In short, building ethereum 2.0 — the blockchain network’s ambitious reinvention plan — will require maturity.
“The only people left are those that want to be here and are working hard,” Ethereum Foundation consultant Eva Beylin said of the broader ethereum ecosystem. She spoke with CoinDesk at the ETH New York hackathon last weekend, where about 50 developers sat nearby coding and chatting with little fanfare.
Earlier in the week, the vibe was similar if certainly more flashy at the ConsenSys-organized Ethereal Summit in Brooklyn.
There, the Ethereum Foundation’s head of special projects, Virgil Griffith, told CoinDesk that relations with ConsenSys are getting “better,” despite lingering distrust between the nonprofit crowd and the for-profit venture headed by ethereum co-founder Joseph Lubin.
“We decided to outsource all the value-capture to ConsenSys,” Griffith said. “A lot of people in the foundation are wary of ConsenSys. But I think you can work with someone with a different view than you.”
Indeed, despite their divergent goals, the leaders of these two organizations arguably exert the most influence on ethereum’s development and usage. Based on CoinDesk’s conversations with 10 high-ranking people associated with ethereum’s top projects, this Blockchain Week may have been a turning point.
ConsenSys CMO Amanda Gutterman also told CoinDesk relations with the Ethereum Foundation are now better than ever, even as ConsenSys seeks to monetize some of the products and services the broader ecosystem relies on. This comes as the company emerges from a winter marked by layoffs and lingering doubts that its portfolio of startups can be spun out of the ConsenSys mothership.
Meanwhile, the Ethereum Foundation has been more focused on support for decentralized finance (DeFi) applications like Uniswap and MakerDAO, two projects supporters say embody ethereum’s collaborative spirit.
“We can and should build a financial system that is more equitable and open,” Uniswap founder Hayden Adams told CoinDesk.
In stark contrast to the individualistic bitcoin ethos, the DeFi movement is explicitly focused on rebuilding the global financial system. Uniswap, which now holds more than $14.9 million worth of ether, was developed under the guidance of ethereum creator Vitalik Buterin and funded by a grant from the Ethereum Foundation before it raised venture capital in April 2019.
Still, Adams told CoinDesk there remain unanswered questions about whether Buterin’s cohort can “pull off” a functioning version of ethereum 2.0.
Meanwhile, ConsenSys alum and SpankChain CEO Ameen Soleimani, has emerged as a community organizer – announcing at Ethereal that his MolochDAO for funding ethereum infrastructure projects would be jointly funded by Lubin, Vitalik and a group of ConsenSys and Ethereum Foundation employees.
Soleimani told CoinDesk he hopes 2019 will be a time of collaboration.
Speaking of Lubin and Buterin’s leadership, Soleimani said:
“They have certainly guided us thus far and they seem well-positioned to make the best decisions.”
Based on interviews with numerous ethereum veterans across organizations, it appears that crucial decisions are on the horizon.
On May 10 at Ethereal, Ethereum Foundation executive director Aya Miyaguchi said the nonprofit plans to spend $30 million on ecosystem development this year.
One of the foundation’s main wallets shows that 2018 was a year of peak spending, with a balance worth $600 million in January 2018 plummeting to $67 million by January 2019. Even counting in ether, the foundation spent roughly 100,000 tokens from this primary wallet last year and only has 643,536 tokens left in it.
While Miyaguchi said at Ethereal that the nonprofit employs more than 100 freelance contractors, she later told CoinDesk there is not a “clear line” between the support structures offered to various teams. This applies to both freelance contracts and grants. Instead, she said the foundation makes decisions on a case-by-case basis by evaluating: “What are the most important things for us to support?”
According to former Ethereum Foundation employee Lane Rettig, who was laid off earlier this year and then became a controversial-yet-admired figure on Twitter, the foundation plans to cut staff to reduce its burn rate.
Griffith confirmed the Ethereum Foundation’s long-term plan, which is still under consideration, is to reduce its role in direct funding and governance by encouraging external community growth. However, no official plans for this – or staff cuts – have been made so far, Miyaguchi said.
“It’s not about winding down. It’s about shifting our role,” she told CoinDesk, describing the foundation’s new role as one of “coordination” between other players to help them build tools and use cases.
For the time being, the nonprofit doesn’t have any income model and mostly relies on reserves from the original ether token sale in 2014. As such, its future depends on establishing strong partnerships that can continue to work after grant funding tapers off.
Based on conversations with several sources, it appears the nonprofit’s priorities include developer projects such as MolochDAO, then industry collaborations with the likes of ConsenSys and Microsoft and finally partnerships with governmental agencies, most of which are still in the exploratory phase.
It remains to be seen which external organizations will commit significant resources to sustaining the ethereum network, and partnership-building certainly isn’t immune to infighting. An anonymous source told CoinDesk that Microsoft received complaints from Buterin about a perceived lack of focus on ethereum in the tech giant’s decentralized identity (DID) project, for example.
Buterin himself outlined some of the plans for making ethereum work at scale in a proposal published during Blockchain Week. Insiders tell CoinDesk a driving force behind the move for more coordination is a dawning realization: This may be the year the community finds champions to implement that vision or fails to scale entirely.
Blockchain-based live streaming service DLive has seen a 67 percent growth in its user base since PewDiePie, one of the world’s most popular YouTubers by subscriber numbers, joined the platform in April.
DLive now has more than 5 million monthly active users and over 70,000 streamers, Nikkei Asian Review reported Monday. The platform reportedly had around 3 million monthly active users and nearly 35,000 active streamers as of March.
PewDiePie, the 29-year-old Swedish content creator, real name Felix Kjellberg, signed an “exclusive” live streaming deal with DLive last month. His YouTube channel has over 95 million subscribers at press time, with his most recent video racking up close to 3 million views in less than 24 hours.
DLive is a decentralized platform built using the Lino Network blockchain, which rewards both content creators and viewers using its native token, “Lino points.” It takes no percentage of earnings and does not charge fees to content creators, although they do face platform fees when exchange tokens for fiat currency.
Wilson Wei, Lino Network co-founder, told Nikkei Asian Review:
“I think the lack of transparency and the huge cut that platforms take from content creators, are the two biggest problems the online streaming industry has. And blockchain is the perfect technology to solve both problems.”
DLive reportedly has plans to grow beyond its rival, Amazon-owned live streaming video platform Twitch, which takes a 50 percent cut from streamers and currently has 2.2 million daily broadcasters and 15 million daily viewers on average.
Lino raised $20 million in February 2018 to build a “YouTube on the blockchain” in a private token sale led by ZhenFund. Wei claimed at the time that he expects content creators to garner bring in three-to-five times the profits they make on YouTube or Twitch.