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Bitcoin Price Crashed Amidst Wider Sell Off, This Could Be The Next Stop

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Bitcoin Price
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Bitcoin price plunged close to 8% over the past day owing to the high Consumer Price Index report.

The prices of most altcoins fell on their respective charts after the CPI showed a 0.1% increase in August, which has now taken the unadjusted value to 8.3%.

The annual increase was expected to be 8.1%. Over the last 24 hours, Bitcoin registered a 4% loss.

Given that the market is undergoing an extended sell-off, a further fall in BTC’s value could be expected. The technical outlook for the coin was bearish as buyers left the market at the time of writing.

Bitcoin price has been struggling at $18,900 for the past month, but it has managed to break through this price level in the last week.

Bitcoin has soared past the $22,000 level. The recent blow from the CPI report has pushed the coin downwards.

Indicators have chosen to side with the bears given how sellers are dominating the market at press time. The global cryptocurrency market cap today is at $1.04 trillion, with a 2.5% negative change in the last 24 hours.

Bitcoin Price Analysis: One Day Chart

Bitcoin was priced at $20,200 on the one-day chart | Source: BTCUSD on TradingView

BTC was trading at $20,200 at the time of writing. The plunge from the $22,000 mark was sudden due to the unanticipated number from the CPI report.

Immediate resistance for Bitcoin price was at the $21,000 mark. If BTC manages to topple this level, it can get back to trading above the $22,000 price mark.

Local support for BTC was at $19,200. However, with the intense sell-off, the coin could fall to trade near the $18,900 support line.

The amount of Bitcoin traded in the past session grew slightly, indicating that there was an influx of buying strength.

Technical Analysis

Bitcoin Price
Bitcoin displayed a small uptick in the number of buyers on the one-day chart | Source: BTCUSD on TradingView

BTC has registered a sharp fall in buying strength over the last 24 hours. This fall in buyers has further pushed the price near the nearest support line.

The Relative Strength Index was seen below the half-line, indicating strong selling strength and, therefore, bearishness.

Over the past few trading sessions, RSI noted a small uptick, indicating that the buying strength increased slightly.

Bitcoin price just fell through the 20-SMA line, which was also a sign that sellers were driving the price momentum in the market.

Bitcoin Price
Bitcoin registered buy signal on the one-day chart | Source: BTCUSD on TradingView

BTC displayed buy signal despite the market registering a tiny buy signal after buying strength displayed an appreciation.

The Awesome Oscillator depicts the overall market strength and the direction of the price. AO climbed above the half-line, indicating that buyers could act on this price action.

Even if buyers act on the buy signal, the price of the asset would hardly notice an upward movement. The Directional Movement Index signals the price direction and momentum.

DMI was negative as the -DI (orange) line was above the +DI (blue) line. The Average Directional Index (red) was above the 20 mark, which means that the present price direction has gathered strength.

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Arthur Hayes Questions PoS Ethereum’s Decentralization, Suggests Rising Price

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Arthur Hayes, Ethereum Logo
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The controversial Arthur Hayes is asking a burning question in his latest blog post. The former BitMEX CEO compares the PoS Ethereum to Binance Smart Chain, that’s famously and admittedly centralized. Arthur Hayes also describes how the validator’s disagreements with the majority are going to go, and predicts disaster for the dApps that build over a platform that doesn’t prioritize censorship resistance. In the short term, though, he’s bullish on Ethereum.

Before Artur Hayes gets into all of that, he describes a concerning reality that many people in crypto Twitter have noticed and discussed. It has to do with the validators:

“As of 21 September, Lido Finance, Coinbase, and Kraken together control slightly over 50% of all ETH staked on the beacon chain. This means they are the most powerful validators and, in essence, they could censor what sorts of transactions are processed. What do all three of these centralized entities have in common? They are all US-owned companies or DAOs with major investments from US venture capitalists.”

For those keeping score, that’s a centralizing factor and a few single points of failure. All of those companies are under US jurisdiction, one of the most restrictive in the world. And of course, Arthur Hayes recognizes  “protections in place to help ensure decentralization” and that the system punishes validators that censor transactions. Nevertheless, the PoS system seems fragile. Big institutions that the government can sue are the validators. And the biggest validators will control the whole system. 

Arthur Hayes Sees Centralization 

How will the slashing mechanism that punishes unruly validators play out? According to Arthur Hayes, this is how the system will deal with rebels: 

  • “There is a way to slowly lose your ETH if < 33% of the network refuses to attest to blocks. Slowly losing your ETH means that a validator is punished by reducing the deposit on a node. Should the deposit drop below 16 ETH, that validation node is removed from the network. This capital becomes dead capital as for the foreseeable future you cannot unstake ETH.”
  • “There is a fast way to lose your ETH if > 33% of the network refuses to attest to blocks. The penalties get exponentially worse quickly such that opposing validators quickly fall below the 16 ETH threshold and are booted from the network.”

If that happens, Hayes predicts that everyone will let that happen again and again, and compares it to the original DAO story. Ethereum’s developers decided to fork and “everyone at the time tacitly went along with the devs who forked the protocol so that folks could get their money back, rather than staying true to Ethereum’s supposed “code is law” ethos.”

ETH price chart on OkCoin | Source: ETH/USD on

Bullish On Ethereum Short-Term

Don’t get Arthur Hayes wrong, despite the criticism of the platform and PoS systems, he still thinks Ethereum will do well in relation to the dollar. 

“ETH as a financial asset — fully tethered to the US-led financial system and under the pretense of “decentralization” — could still do extremely well in the near future. The issue that I wrestle with is whether truly decentralized financial and social dApps can exist at scale (i.e., with hundreds of millions of users)”

In the end, it all goes back to the most important factor: scarcity. According to Hayes, the only thing that matters in the next three to six months is “how ETH issuance per block falls under the new Proof-of-Stake model. In the few days post-merge, the rate of ETH emissions has dropped on average from a +13,000 ETH per day to -100 ETH.” If this continues, Arthur Hayes is optimistic: 

“The price of ETH continues to get smoked due to deteriorating USD liquidity, but give the changes in the supply and demand dynamics time to percolate. Check back in a few months, and I suspect you’ll see that the dramatic reduction in supply has created a strong and rising floor on the price.”

Is the former BitMEX CEO right about this? We’ll find out soon enough.

Featured Image by GuerrillaBuzz Crypto PR on Unsplash  | Charts by TradingView

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VeChain Partners With TruTrace For Wider Blockchain Adoption

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Vechain Partners With Trutrace For Wider Blockchain Adoption
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