Bitcoin Probes Key Price Support Below $3.9K After Range Breakdown

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Bitcoin Probes Key Price Support Below $3.9K After Range Breakdown

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  • Bitcoin fell below $3,920 yesterday, as expected, confirming a short-term bullish-to-bearish trend change. As a result, the crucial support of the 30-day moving average, currently at $3,883, could be breached in the next day or two.
  • A break below the 30-day MA, if confirmed, would strengthen the case for a deeper drop toward the key support levels lined up at $3,775 and $3,658.
  • A strong bounce from the 30-day MA would weaken the bearish case. That said, a UTC close above $4,055 is needed to revive the bullish view.

Bitcoin (BTC) is on the defensive after briefly falling below $3,900 at around 07:00 UTC this morning.

The cryptocurrency fell to a 10-day low of $3,850 on Monday, confirming a downside break of the recent trading range of $3,920–$4,055. Further, BTC closed (UTC) yesterday below $3,920, reinforcing the bearish outside reversal candle created on March 21.

The repeated failure to scale $4,000 in a convincing manner followed by the drop below $3,920 validates the bearish view put forward by the historically strong resistance of the downward sloping 21-week moving average (MA).

As a result, the cryptocurrency risks falling below the 30-day MA, currently flatlined at $3,883, in the short-term. Notably, that average has put brakes on the sell-off at least three times in the last three weeks. Hence, a break below $3,883 could further strengthen the bear grip around the cryptocurrency.

The bearish case, however, would weaken if the price bounces up strongly from the 30-day line.

As of writing, BTC is trading at $3,906 on Bitstamp, representing a 1.73 percent drop on a 24-hour basis.

4-hour and daily charts

As seen on the 4-hour chart, BTC has found acceptance below the 100-candle MA support, having dived out of the sideways channel yesterday.

While the 200-candle MA has held ground in the last 12 hours, its repeated defense has failed to produce a stronger bounce – a sign that bullish sentiment has waned. Validating that argument is the fact that the major averages (50, 100 and 200) have shed bullish bias (are flatlined).

On the daily chart, BTC has breached the ascending trendline and the 5- and 10-candle MAs have produced a bearish crossover, validating yesterday’s bearish close below $3,920.

Hence, both the 200-candle MA on the 4-hour chart and the 30-day MA, currently at $3,888 and $3,883, respectively, could take up the role of resistance in the next 24 hours.

3-day chart

The previous three-day candle closed below $3,920 – the low of the preceding doji candle – confirming a bearish reversal. As a result, the path of least resistance appears to be on the downside.

Disclosure: The author holds no cryptocurrency assets at the time of writing.

Bitcoin image via Shutterstock; charts by Trading View

A Bitcoin Lightning Web Standard, Inspired By Ethereum, Is Gaining Steam

Sending bitcoin lightning payments over the web might soon get easier.

That’s because a new bitcoin standard for simplifying lightning payments, the open-source WebLN standard, is gaining traction, now being used by Lightning Joule and Bluewallet, two of the more popular lightning wallets, as well as apps like Lightning Spin, to slim down the number of steps a user needs to make a payment.

This is an important step for lightning, an experimental technology that is still risky to send real money over. Developer warnings aren’t stopping eager users from trying out what they believe to be the future of bitcoin payments, and as they’ve toyed with payments, they’ve bumped into issues trying to send or receive value.

The standard, written by developer William O’Beirne, is inspired by his work contributing to popular ethereum services, MyCrypto and MyEtherWallet, both of which are used for storing ethereum’s native currency, ether. This might seem a bit odd because bitcoin and ethereum users often seem like rivals, battling on Twitter and debating the merits of each cryptocurrency. But O’Beirne doesn’t seem to care about that.

His work on ethereum’s web standard, Web3, led him to what he calls an “a-ha moment,” where he decided lightning opens up opportunities for a similar set of standards for bitcoin that could make interacting with payments on the Web much easier.

“The Web is the most obvious place for micropayments,” O’Beirne argued.

The ultimate goal, as he showed in his presentation of Chrome browser extension Lightning Joule last fall, is to embed payments into the web so that they’re really easy to use.

O’Beirne told CoinDesk:

“I want to make it really easy for new lightning projects to have a great UX for making payments without having to reinvent the wheel of how to display payments to users, or get them to provide invoices.”

He gave an example of a WebLN-enabled site that allowed users to quickly paying a Satoshi (worth about $0.00004) to get rid of advertisements for the day.

Easier payments

That said, while WebLN is inspired by ethereum, O’Beirne says “WebLN is a lot more stripped down than Web3.” After all, lightning is not a “Turing-complete system.” Rather, since bitcoin’s lightning is more focused on payments, that’s where the focus of WebLN lies.

But it’s similar in that it’s a standard that makes app building easier for developers. And in the end, helps to reduce the number of steps users need to take to make a payment.

By example, Bluewallet recently launched a marketplace within its mobile app that lists a bunch of different services which accept lightning transactions, including LN.pizza, Bitrefill, a startup that sells gift cards for bitcoin, and the like.

If a user were to go to, say, the LN pizza website on its own, they would have to grab the invoice by copying it, open their lightning wallet, then stick it in the wallet.

But if you go straight through Bluewallet marketplace, it simplifies the process. It automatically grabs the invoice and copies it into Bluewallet for a user to pay to buy their pizza. “They use WebLN to inject [the invoice] into the page,” O’Beirne said.

“[WebLN] allows us to provide a better user experience – like one-tap payments and withdraws, and facilitates and standardizes “actions” that should be standardized for the sake of the industry moving faster and in the right direction. So we fully support it and try to make other developers to do the same,” BlueWallet product and UX engineer Nuno Coehlo told CoinDesk, adding that it has enabled “thousands” of purchases.

This little marketplace is like a window into how much easier the process could be for lightning micropayments across the World Wide Web, if such a standard gained enough traction and was used everywhere – perhaps the big dream goal – rather than just on a few random apps.

Lightning apps can get this functionality to work for their app if they want. But with a standard like WebLN, the idea is developers don’t need to reinvent the wheel.

Or, O’Beirne added, in the future, he plans to add an experimental technology that allows users to send money directly to a node without generating an invoice.

WebLN has some other features as well that aren’t quite related to payments.

“There’s also an element of identity,” O’Beirne said, where users could use their lightning node’s public key – a string of random letters and numbers showing – to login to a website. It could effectively replace passwords.

“Some of this is still being built out,” he added.

‘Stealth’ projects and beyond

Still, as the project GitHub points out, WebLN is still “early-stage” and “subject to change.”

O’Beirne said that next steps are to improve the developer documentation and draw up some demo videos to make it easier for developers to implement WebLN.

O’Beirne has also been in touch with Casa (a popular lightning service that launched a Chrome extension that looks a lot like his project, Lightning Joule), as well as Bitlum, another browser-based wallet. But while both seem interested in WebLN, neither wallet has “committed” to doing so quite yet.

Other “stealth projects” are interested, too. “I get DMs from people working on stealth projects – asking how the spec works.”

Over the summer, O’Beirne will be working at Chaincode Labs, a research group led by Bitcoin Core contributors Alex Morcos and Suhas Daftuar that funds some of bitcoin’s most active protocol developers. He hopes that this will give him an opportunity to continue working on WebLN, and get more wallets to adopt the standard.

All that said, though, there’s also another standard lightning developers are eyeing right now that has to do with standardizing how lightning is used in the Web: W3C, which is the international organization drawing up rules for the Web for all browsers to follow.

Since some think developers should focus on that set of standards, O’Beirne goes as far as to call it a “spec war.” But so far, there don’t seem to be any implementations of W3C that support lightning.

That said, he sees WebLN gaining traction as he works on it this summer: “At this point, I feel like we’re going to see more adoption. At least for generating lightning invoices, which is a frustrating experience.”

Www image via Shutterstock

Bitcoin’s Trading Range Narrows In March to Hit Two-Year Low

Bitcoin’s average daily trading range so far in March is its lowest in nearly two years when, at the time, the world’s largest cryptocurrency was worth roughly a quarter of what it is now.

At the time of writing, bitcoin’s average 24-hour trading range so far this month, defined as the average difference between the high and low price of each day in a given month, has been just $85, its lowest average range since the same metric recorded $32 in April of 2017, according to CoinDesk data.

Notably, the average trading range (also known as the average daily volatility) segmented by month has fallen much faster than bitcoin’s market prices as can be seen below.

Indeed, bitcoin is currently trading across exchanges at an average price of $3,943, comparable to levels seen in September 2017, while volatility has returned to levels observed when bitcoin’s price was roughly $1,000.

Yet, periods of low volatility tend to precede a big move in a market, as was the case in 2017.

In fact, April of 2017 was the first month to close sufficiently above the top of its previous bull run in 2013 and was followed by a multi-year bear market. After April closed with an average daily trading range of $32, the price of bitcoin went on to surge 65 percent the following month with an average daily trading range of $153 – nearly four times higher than that seen the month prior.

BTC/USD Weekly Chart

Just as bitcoin’s price was indecisive in April as it approached the key technical hurdle of a previous all-time high, bitcoin is now approaching another major technical hurdle in the form of long term downtrend resistance.

As shown above, bitcoin’s current price is just below a crucial downtrend line, which if broken could be a sign its market has shifted from bearish to bullish or at-least bearish to neutral, just as it did in 2015 when prices surpassed a near identical downtrend line.

Disclosure: The author holds several cryptocurrencies, please see Sam’s author profile here for more information. 

Measurement tools via Shutterstock; Charts by TradingView

TrueDigital Expands Distribution of Its Bitcoin and Ether OTC Reference Rates

Institutional digital assets platform trueDigital Holdings has signed two new distribution deals to expand the reach of its over-the-counter (OTC) reference rates for bitcoin (BTC) and ether (ETH).

Announcing the news on Monday, trueDigital said that it has partnered with Kaiko, provider of cryptocurrency market data, and Inca Digital Securities, a data aggregation and analytics platform, for the expansion.

The partnership will see Kaiko and Inca offering BTC and ETH OTC reference rates to their customers, including asset managers and institutions, trueDigital said.

“Kaiko’s mission is to build the data distribution infrastructure for institutional involvement in the cryptoassets industry. Our partnership with trueDigital will further this mission while also promoting much-needed data transparency,” said Kaiko CEO Ambre Soubiran.

Inca will also use the reference rates data to develop new analytics, according to the announcement. “The aim is to provide users with institutional-grade pricing data that helps elevate the quality of trading and risk management.”

TrueDigital’s OTC reference rates for BTC and ETH were launched in July of last year in partnership with nine firms to enable “institutional grade derivative products.” Back in January, the firm similarly partnered with three other firms – CMT Digital, Blockfills and QCP Capital – for distribution of its reference rates.

The reference rates are derived from the bid and offer prices from trueDigital’s 12 institutional market-maker partners, including Genesis Global Trading and Circle.

Last month, trueDigital hired a new CEO from the world’s largest hedge fund Bridgewater Associates. The firm has also helped build a blockchain payments system for crypto-friendly Signature Bank in December.

Bitcoin, ether image via Shutterstock

‘A Sad Joke’: Bitcoin Cash’s Lead Coder Quits Bitcoin Unlimited Project

Amaury Séchet, a leading developer of bitcoin cash, is renouncing his membership in one of the projects that paved the way for the controversial cryptocurrency.

He’s sticking with bitcoin cash as lead developer of the code implementation BitcoinABC, but he’s unhappy with the direction of Bitcoin Unlimited, a code implementation that arguably got bitcoin cash off the ground as one of the first code implementations to increase bitcoin’s block size parameter.

All these different “bitcoins” may be hard to keep track of, but it’s important to note that Bitcoin Unlimited remains relevant because it provides an alternative code implementation of bitcoin cash.

Revealed to CoinDesk prior to publication, Séchet wrote a detailed explanation for his departure, posted to Medium Monday, in which he explained he is disappointed with Bitcoin Unlimited’s development process, partly because lingering bugs in the code allowed an unknown developer to crash most Bitcoin Unlimited nodes.

Instead of getting better, he argues Bitcoin Unlimited’s process has since gotten worse:

“The BUIP process has turned into a sad joke, with proposals more and more absurd being voted on. BU leaders are complacent and, while saying that the attitude of the [Bitcoin Satoshi’s Vision (BSV)] community will cost them developer support, they continue to enable the toxic behavior by supporting BSV.”

Stepping back, while Bitcoin Unlimited paved the way, Bitcoin ABC was the first group to actually go through with these promises to increase the blocksize parameter back in 2017. Then sentiments in the community began to strain, partly because Craig Wright, a developer who claims to have created bitcoin (without evidence), joined bitcoin cash’s ranks.

A bit over a year after bitcoin cash launched, Wright went to war with developers, including Séchet, ultimately breaking bitcoin cash into two cryptocurrencies: bitcoin cash and bitcoin SV (BSV).

As this happened, Bitcoin Unlimited released software supporting both cryptocurrencies. But this code split ended up splintering the Bitcoin Unlimited team, with some eagerly supporting BSV. Drama between bitcoin cash and bitcoin SV hasn’t stopped with the fork, however. A few days ago, influential bitcoin cash coder, Antony Zegers, left Bitcoin Unlimited as a member, inspiring Séchet to follow.

“The Bitcoin Cash project seeks to bring more freedom to the world by engaging in voluntary cooperation to build a better form of money. It is important that the Bitcoin Cash community protect itself from people and groups attempting to take advantage of its cooperative nature and undermine the project,” Séchet continued.

He concluded:

“My goal is to make Bitcoin Cash successful. Life is too short, and convenient sound money is a goal too important to be distracted from.”

Amaury Séchet image via CoinDesk archives

Bitcoin Price Consolidation Continues, Downside Break Looks Likely

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  • Bitcoin’s current trading range of $3,920–$4,055 could be breached to the downside, as last week’s doji candle created at the key 21- week moving average resistance is signaling bullish exhaustion.
  • A downside break of the trading range, if confirmed, could yield a sell-off toward the support levels lined up at $3,775 and $3,658.
  • On the higher side, a UTC close above $4,055 is needed to put the bulls back into the driver’s seat, although that looks unlikely at press time.

Chart signals of bullish exhaustion suggest bitcoin’s (BTC) narrowing trading range could soon be breached to the downside.

The leading cryptocurrency by market value is sidelined below $4,000 for the fourth straight day, and has been restricted to the narrow range of $3,920–$4,055 since March 17, according to Bitstamp data.

More importantly, prices clocked a high and low of $4,055 and $3,920, respectively, last week before closing Sunday (UTC) largely unchanged at $3,970. The price swing formed what’s termed a doji candle on the weekly chart, which is usually taken to represent indecision in the marketplace.

The candle, however, has appeared following a 20 percent rally from lows near $3,300 seen at the end of January. So, it could be argued that the indecision, as represented by the doji, is predominantly among the buyers.

As a result, the probability of BTC ending the ongoing consolidation with a convincing break below $3,920 appears high.

As of writing, BTC is trading at $3,970 on Bitstamp, largely changed on a 24-hour basis.

Weekly chart

As seen above, BTC created a doji candle at the crucial 21-week moving average (MA) resistance, validating the bearish view put forward by that still-downward sloping momentum indicator.

The case for the downside break of the $3,920–$4,055 trading range looks stronger if we take into account the price action seen over the last five weeks.

To start with, BTC hit a high of $4,190 and created a bullish inverted hammer candle in the third week of February – a sign the market is bottoming out. That candlestick is usually followed by a quick move to the higher side.

In the last four weeks, however, BTC has failed to again challenge $4,190, weakening the bullish case.

Daily and 4-hour charts

On the daily chart, the short-term MA studies are now biased toward the bears, with the 5-day MA having dropped below the 10-day MA. Further, with the price well below the March 21 high of $4,055, the bearish outside-reversal candle created on that day is still valid.

So, the sideways channel seen in the 4-hour chart could be breached to the downside in the next day or two.

A range breakdown if confirmed would open the doors for a deeper drop toward $3,658 (Feb. 27 low).

A UTC close well above $4,055 would revive the short-term bullish view and could yield a rally toward $4,200, although gains may be short-lived, as the 21-week MA is still trending south.

Bitcoin image via Shutterstock; charts by Trading View