It has certainly been a better weekend than most in July, and bulls will be glad to see Bitcoin further its stay above the psychological barrier of five-digit US dollar valuations, but it is hard to deny that many will be disappointed that the rally did not take place on the weekend.

After yesterday’s steady ascent, Bitcoin continued a climb for over 12 hours, registering a high of USD 10,909 at around 7:15 pm London time, late afternoon most US times, but then proceeded to shed off some value due to profit-taking that took price all the way down to USD 10,573 around 1:00 pm Shanghai (CoinDesk). Buyers would have been relieved that early Sunday European action looks to recover from that fall, with price now on a fine USD 10,700 at 10:30 am London. Sunday hopes and dreams seem to rest on their trade counterparts in North America, but the first thing to see is if profits at this stage are too tempting to ignore, or if there is will to overcome resistance and retake USD 11,000.

Either way, volatility does seem to be injecting itself some life on the weekend, although volumes have yet to match the numbers of June.

So is this a sign that a fresh rally isn’t quite on the cards just yet or is this just further confirmation that a consolidation stage for Bitcoin is now underway?

The first point to study the direction of the answer to that question could be Bitcoin’s dominance, which continues to make record highs in 2019. Dominance is now approaching 70% again (CoinMarketCap), a result of both Bitcoin strength and altcoin weakness, with most other coins failing to capture the same success as Bitcoin.

The second point to look at is yet another all-time high in Bitcoin hashrate and difficulty which was just reached this week. And with all that computing power securing the network, the digital asset’s intrinsic value just keeps increasing, and estimates show that with hashrate entrance not diminishing, the network difficulty is expected to rise more and more, at over 6.54 billion estimated in the next adjustment in ten days (BitcoinWisdom).

In our article yesterday on Bitcoin mining technology approaching the quantum tunneling limit, our staff writer Zachary points out that “the demand for mining technology has caused manufacturers to develop mining rigs with the newest, most powerful, and most efficient technology”. Transistors on chips need to get smaller and more efficient to get better at hashing — mining to secure the Bitcoin network — but once they get smaller than 7 nm, there is a quantum tunneling problem. We won’t get into the specifics of that but the thing is, there is a technological limit to keeping up with the demand for hashpower, and innovation and progress are being hastened to make that happen.

So if miner demand is fueling new technological discoveries, the rest of the computing industry can and should thank Bitcoin!

And now, with a fourth consecutive green candle on 4 August, the case for this month being the one to break July’s trend of a downturn is getting stronger. One analyst is now explaining that a fourth monthly “Doji candle” is also appearing. Historically, this sign of uncertainty, when formed several times, is a precursor to huge bull runs. According to him, this all points to Bitcoin priced at USD 50,000.

And, in keeping with the topic of global uncertainty with traditional assets, Crypto Voices recently published a chart that shows the price levels that it would take for Bitcoin to surpass each nation’s monetary base value, including silver and gold caps. Some like CryptoTwitter are now referring to these graphics as the Real Bitcoin Dominance Index.

So there we have it. However you want to look at it, both from a bear and bull perspective, Bitcoin does need to go through a long period of uncertainty before it embarks on its next moon run. And whatever its current position now, it already measures up very well to the monetary base value of some countries, challenging the likes of South Korea, India and Russia!

Then again, just because history shows it to have repeated cycles of boom and bust, there is little guarantee that it will come back full circle this time.

We can only wait and see, but for now, Sunday trading beckons.

 

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