This week on Planet Bitcoin - 18 March 2016

Friday 18 March 2016

TL;DR bitcoin steady, Eth and alts down: same old in cryptoland for now.

For bitcoin, it has been another relatively quiet week. After last week’s wobble below $400, there’s very little to report. We started the week around $415 and that’s roughly where we’re ending it. The chart looks like there’s been some action in the meantime, but a second glance shows the price has remained within a narrow band between $410 and $420, only briefly straying outside of that range.

Chart

If bitcoin is quiet, then Ethereum has been providing some excitement. It topped out just a shade below 0.038 BTC early this week, flirted for a while with the 0.03 level, and then dropped dramatically below it. At the time of writing it's below 0.025, meaning an overall fall of a third since the peak. When you have a market cap of over a billion dollars and daily volumes of tens of millions of dollars, that means a lot of burned investors (and a few who have done very well out of it - the nature of such things, though, is that there are a smaller number of big winners and a larger number of losers). It’s only natural that such a correction would occur; Ethereum’s price growth has been a textbook case of too much, too soon, and around the Serenity release profit-taking was always likely. The question now is where things head next: back down towards the baseline of 0.003-0.006 BTC established over the course of many months following its initial release, or somewhere rather higher - or, of course, there may be a new influx of money and a new all-time high. That would prove surprising at this point, but the history of bitcoin teaches us never to say never.

Back to bitcoin, there’s apparently some increased interest in the Classic fork, with a third of the network now represented by Classic nodes. However, they still account for less than 5% of hashrate, suggesting that they don’t carry a lot of weight and any newcomers look suspiciously powerless. The good news is that transactions are back to being fast and low-cost since the end of the accidental ‘spam attack’, caused by a faulty wallet.

In the alt world, there have also been some big movers - mostly down, after the previous week of substantial rises. The reality is still that most alts do not have viable use cases, either through a lack of tech or lack of adoption, so their value is almost entirely speculative. Investor sentiment rather than fundamentals drives price movements, and a move up one is usually followed by a move down, all things being equal.


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