The massive decline in BTC this week was also seen across the board in altcoins as seen in Ethereum (-13.8%), Litecoin (-21.2%) and EOS (-29.6%). Coming off the major decline, we are issuing a HOLD on Bitcoin for the following reasons:
BTC Market Cap: $154.7B
BTC Price: -15.9% ($10,241.27 to $8,617.65)
BTC Active Addresses: -5.4% (777.7k to 735.5k)
BTC On-chain Transactions: -15.4% (344.3k to 291.2k)
Price trend has just broken to the downside so it’s logical to fade any rallies in price
Sentiment has finally broken from the declining wedge, the next big move could mark a trend top
New VC fund-raising by Lightning Network partners continue to drive mainstream adoption by making Bitcoin payments cheaper and faster
Bitcoin continues to strengthen it’s core focus as a store of value as new payment processors and financial products come online
Bitcoin Network hashrate dropped 30% overnight, making the community question if BTC is actually decentralized
Bitcoin has left the 93-day technical ascending triangle to the downside, indicating a largely bearish trend
IF this happens, then we buy:
Bitcoin price trend suggests the recent selloff was the bottom, indicated by a high volume reversal
President Trump and the appropriate regulators open the path for Libra to be launched in the US
IF this happens, then we sell:
Bitcoin’s correlation to the US Stock market increases and they both decline on global economic fear
Bitcoin mining power continues to drop drastically, indicating a longer bear market is among us
The hashrate of the Bitcoin network fell from about 107 exahashes to a little over 59 exahashes over the span of about 14 hours while Bitcoin was still trading at $9,400. This implies that over a half-day nearly a quarter of all the safety of the Bitcoin network has been removed, rendering the network more susceptible to attack than it had been before. Interestingly, Bitcoin price by the end of the day wound up down 12%, reminding the community of the correlation between price and hashrate.
Bitcoin's mining network is comprised of thousands of computers that mine each new block by adding one byte of data — or one hash — to a publicly available database. Those computers can be collectively referred to as the "pool," and are then used to maintain a block index, tracking each transaction that enters and leaves the network.
The substantial decrease in the hashrate of Bitcoin has outlined several problems that affect the safety and decentralization of the network. An overnight loss in almost half of the power of the network may either indicate that a single actor actually owns a larger portion of the power of the network than previously imagined, or that multiple actors that constitute a large chunk of hashrate share the same infrastructure, such as electrical grid in a particular country.
Roughly 75 percent of the complete mining energy of Bitcoin may be situated within Chinese boundaries, according to latest studies. These “jurisdictional attack,” where a majority of hashrate is located in a particular location, leaves the network open to authorities compromising the network by targeting local mining pool operators, without the rest of the network fully knowing.
