Bitcoin’s price is once again on the decline, just days after closing the weekend with a $300+ boost. Last week’s enthusiasm created by the mining community finally reaching a consensus over the best way to upgrade the blockchain has been shattered again, as new problems emerge from the shadows.
Namely, one of the bigger news that hit the Bitcoin world this week is the announcement by a group of Bitcoin entrepreneurs and investors that they are planning to create a rivaling version of Bitcoin, called Bitcoin Cash, according to the New York Times. The idea behind Bitcoin Cash is reportedly to create a Bitcoin network that will increase the limit on transactions every 10 minutes so it can handle more transaction like PayPal or Visa can, for example.
This idea has been opposed feverishly by core developers who say it will lead to small companies taking over the network on the expense of individual users who won’t be able to handle such transaction numbers. Failing to gather majority support and following serious opposition, the camp behind Bitcoin Cash decided to split off from the rest of the Bitcoin network after seeing that the differences became “too stark” to go back to cooperating together.
Bitcoin Market in a Selling Mood
In the past week since our last update, the price of Bitcoin went drastically up and down over the course of a few days. The lowest point was reached on Thursday, when the price hit $2,251.54, while the highest point of $2,822.72 was hit on Saturday afternoon. Currently, the price sits near the $2,460 range, which is a definite improvement over last week but a -8.83% change over the past 24 hours.
The trading volume is back up to $1.14 billion, signaling there is high interest in the market but also more room for bigger price corrections. The market cap, on the other hand, is at $41 billion.
As for the market signals, our technical analysis show a clear selling mood, with all 12 moving averages and 9 out of 12 oscillators indicating sellers are in control. However, the path of less resistance is still on the upside, as the SMA 100 is still over the SMA 200. Judging from the current signals, if buyers don’t return on the scene soon Bitcoin’s price might be facing further drops.
November to be A Crucial Month for Bitcoin
Bitcoin avoided big losses last week after a proposed upgrade solution called BIP91 gained a majority of support, thus putting fears of hard forks and splits at ease. However, new information from the developers’ community reveal that all is not safe, as there is still yet another proposal that needs to be agreed upon if a split is to be avoided.
Namely, after the User Activated Soft Fork is triggered on August 1st, which should activate the SegWit solution if everything goes as planned, there is still concerns over the second half of the SegWit2x proposal that would see the block size increased to 2MB. Speaking to CNBC, research analyst Alex Sunnarborg said the 2 MB hard fork is still being “contested” by the developers. If a unanimous agreement on the proposed block size is not reached by November, it will reportedly lead to a Bitcoin split.
These news lead to a steep price drop on Tuesday, causing a 10% decline over last week and thus correcting the price push the BIP 91 lead to. Naturally, Ethereum prices also went down, especially after news of a hack attack that took away 153K Ethereum coins appeared on Twitter.