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The worst case scenario for Bitcoin


On Monday, alongside the surge in risk appetite in global markets, buyers’ interest in

crypto-currencies

Crypto-currencies

Cryptocurrencies are almost forgery-proof digital currencies that rely on blockchain technology. These can be obtained using cryptography or virtual currencies. Cryptocurrencies are decentralized networks, leveraging blockchain technology that are crucially overseen by a central authority. This makes cryptocurrencies unique in their function, effectively placing them outside the sphere of influence of any government or central bank. This digital currency arises from encryption techniques used to secure networks used to authenticate blockchain technology. Cryptocurrencies can also accept online payments called “tokens”. Tokens are represented as internal ledger entries in blockchain technology, while cryptocurrencies describe cryptographic methods and encryption algorithms. This includes public-private key pairs, various hash functions, and an elliptical curve. By design, every cryptocurrency transaction that occurs is recorded in a web ledger with blockchain technology. Therefore, these are also trusted by a disparate network of nodes or individual computers that maintain a copy of the general ledger. For each new block generated, the block must first be authenticated and confirmed ‘trusted’ by each node, which makes tampering with cryptocurrency transaction history nearly impossible. Cryptocurrencies Go Mainstream2009 saw the rise of Bitcoin, which became the first blockchain-based cryptocurrency and has since grown into the world’s most traded and valued cryptocurrency. Since then, many other cryptocurrencies have been launched and have grown in popularity in recent years. These are known as altcoins. Common examples of these cryptocurrencies are Ethereum, Ripple, Stellar, and Dash, among others. Cryptocurrencies also promise a wide array of technological innovations that have yet to be structured.

Cryptocurrencies are almost forgery-proof digital currencies that rely on blockchain technology. These can be obtained using cryptography or virtual currencies. Cryptocurrencies are decentralized networks, leveraging blockchain technology that are crucially overseen by a central authority. This makes cryptocurrencies unique in their function, effectively placing them outside the sphere of influence of any government or central bank. This digital currency arises from encryption techniques used to secure networks used to authenticate blockchain technology. Cryptocurrencies can also accept online payments called “tokens”. Tokens are represented as internal ledger entries in blockchain technology, while cryptocurrencies describe cryptographic methods and encryption algorithms. This includes public-private key pairs, various hash functions, and an elliptical curve. By design, every cryptocurrency transaction that occurs is recorded in a web ledger with blockchain technology. Therefore, these are also trusted by a disparate network of nodes or individual computers that maintain a copy of the general ledger. For each new block generated, the block must first be authenticated and confirmed ‘trusted’ by each node, which makes tampering with cryptocurrency transaction history nearly impossible. Cryptocurrencies Go Mainstream2009 saw the rise of Bitcoin, which became the first blockchain-based cryptocurrency and has since grown into the world’s most traded and valued cryptocurrency. Since then, many other cryptocurrencies have been launched and have grown in popularity in recent years. These are known as altcoins. Common examples of these cryptocurrencies are Ethereum, Ripple, Stellar, and Dash, among others. Cryptocurrencies also promise a wide array of technological innovations that have yet to be structured.
Read this term returned. The cryptocurrency fear and greed index added 9 points to 25 overnight. It’s still an area of ​​extreme fear, but recent larger coin dynamics indicate now is the time for investors with increased risk appetites to step in.

BTCUSD has added 4.9% in the past 24 hours, trading just above the $ 51,000 level. The RSI on the daily candlestick charts fell below 30 (oversold zone).

Price found buyer’s support at the important 200-day moving average. This is a strong signal to many participants that the overall market remains in a long term bullish phase.

But so far we are seeing very cautious buying which creates doubts. A better signal would be a strong rise, crossing that line, like in July and October of this year and before that in April 2020.

This is a fairly bullish scenario for bitcoin, where it enjoys sustained bullish support, preventing it from descending into an uncontrollable fall.

The pessimistic scenario of

bitcoins

Bitcoin

Bitcoin is the largest and the first digital currency in the world launched in 2009 by the entity Satoshi Nakamoto. Being a digital currency, a defining characteristic of Bitcoin is that it operates without a central bank or a single administrator. Instead, Bitcoin can be sent over a peer-to-peer (P2P) network, which itself lacks any intermediary. Instead of being physical currency, Bitcoins represent pieces of digital code that can be sent and received over a kind of ledger network called a blockchain. As Bitcoins are not issued or backed by any government or central bank, they are considered legal tender. Transactions on the Bitcoin network are confirmed by a network of computers (or nodes) that solve a series of complex equations. This process is called Bitcoin mining. In exchange for mining Bitcoin, computers receive rewards in the form of new Bitcoins. Over time, mining becomes more and more difficult, which leads the subsequent rewards to become smaller and smaller. Given the structure of the code, there will only ever be 21 million Bitcoins. However, in 2020 there were already 18.3 million Bitcoins in circulation. Bitcoin Makes History Since its launch in 2009, Bitcoin has remained the world’s most popular and largest cryptocurrency by market capitalization. Its popularity has also significantly contributed to the release of thousands of other cryptocurrencies, now known as altcoins. At its inception, the crypto market was originally hegemonic, although today the landscape contains countless altcoins. Bitcoin has also been controversial since its initial launch. It has been heavily criticized for its use in illegal transactions and money laundering given its decentralized nature. As Bitcoin is impossible to trace, this makes cryptocurrency an ideal target for illicit behavior. Critics also point to its high consumption of electricity for mining, soaring price volatility and stock theft. Bitcoin has been viewed by some as a speculative bubble given its lack of oversight.

Bitcoin is the largest and the first digital currency in the world launched in 2009 by the entity Satoshi Nakamoto. Being a digital currency, a defining characteristic of Bitcoin is that it operates without a central bank or a single administrator. Instead, Bitcoin can be sent over a peer-to-peer (P2P) network, which itself lacks any intermediary. Instead of being physical currency, Bitcoins represent pieces of digital code that can be sent and received over a kind of ledger network called a blockchain. As Bitcoins are not issued or backed by any government or central bank, they are considered legal tender. Transactions on the Bitcoin network are confirmed by a network of computers (or nodes) that solve a series of complex equations. This process is called Bitcoin mining. In exchange for mining Bitcoin, computers receive rewards in the form of new Bitcoins. Over time, mining becomes more and more difficult, which leads the subsequent rewards to become smaller and smaller. Given the structure of the code, there will only ever be 21 million Bitcoins. However, in 2020 there were already 18.3 million Bitcoins in circulation. Bitcoin Makes History Since its launch in 2009, Bitcoin has remained the world’s most popular and largest cryptocurrency by market capitalization. Its popularity has also significantly contributed to the release of thousands of other cryptocurrencies, now known as altcoins. At its inception, the crypto market was originally hegemonic, although today the landscape contains countless altcoins. Bitcoin has also been controversial since its initial launch. It has been heavily criticized for its use in illegal transactions and money laundering given its decentralized nature. As Bitcoin is impossible to trace, this makes cryptocurrency an ideal target for illicit behavior. Critics also point to its high consumption of electricity for mining, soaring price volatility and stock theft. Bitcoin has been viewed by some as a speculative bubble given its lack of oversight.
Read this term, and the broader cryptocurrency market, assume a bullish / bearish sentiment associated with 4-year halving cycles. The previous two bear markets occurred in 2014 and 2018, giving speculators a good kick to rock that train and leaving only the most resilient crypto enthusiasts.

A sharp downturn after a dizzying increase occurred at the end of 2013 and 2017 and lasted around a year. This suggests a high risk of a reversal at the end of 2021. From high to bottom in 2013-2014, BTC lost over 70%, and in 2017-2018 – 85%.

A repeat of these scales puts BTCUSD in a 10-20,000 range. In our opinion, even a drop to 20k – the highs of the previous cycle – looks like a very pessimistic scenario for now. But it may very well materialize in a set of negative circumstances, although it is sure to attract the interest of long-term buyers.

Bitcoin must pass several checkpoints before seriously considering such a scenario. The first is the 200-day moving average (currently at 48k). Confirmation that we will have a drop below $ 40,000, the level of previous local lows.

This article was written by Alex Kuptsikevich, Senior Market Analyst for FxPro.


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