The bitcoin value proposition is losing ground today as traders wake up to Gavin Andresen's and Mike Hearn's announcement of the public release of XT. The uncertainty introduced by the prospect of a hard fork of the Bitcoin block chain is expressing itself in the chart, and rightfully so: the fork and its bigger block size is technically hazardous and threatens the bitcoins we hold as well as Bitcoin itself.
Bitcoin Price Analysis
Time of analysis: 07h49 UTC
Bitfinex 4-Hour Chart
From the analysis pages of xbt.social, earlier today:
Price is falling away to previous lows on some - and way below - in other exchange charts as the indicators clock up on divergence.
We do not have a clear idea of where this is heading, and members are encouraged to hold short until their dynamic stop loss forces exit. It is also possible to close your trade at significant levels (such as the current previous low) and to then re-enter trend, but - as with flying - take-off and landing are the most risky moments.
At 17h00 UTC, Saturday, Mike Hearn officially launched the renegade Bitcoin fork software XT that now creates uncertainty in the Bitcoin ecosystem and could potentially damage (or ruin) Bitcoin. The market was in the process, yesterday, of tending lower and the announcement has provided the catalyst for action.
The question is where will it end? Mike Hearn has, on various occasions been described, by developers, as technically incompetent for his buggy bitcoinj software while Gavin Andresen has been accused of worse. The verity of such accusations is not being argued here. The concern is that developers see fit to flout the Bitcoin consensus rules to force their vision and in the process risk other peoples' money and Bitcoin itself.
As per the analysis outlook offered for the past two weeks, the downside target is $252 / 1550 CNY, with today's developments opening up $230 and potentially $210.
Bitcoin Price Analysis Update
Time of analysis: 15h00 UTC
Bitfinex 1-Hour Chart
Price has paused for a correction made to divergence in RSI (top). Subsequently, the correction pushed higher and has now caused reverse divergence in RSI - as price is only making a lower high but RSI is making a higher high in relation to a previous swing. It may still push higher but the eventual outcome should be a new price chart low.
The current low, by a strange twist of fate, was printed at $256. 256MB happens to be the projected XT block size in 2026 after doubling every two years from 8MB in 2016.
Let's hope that this XT inspired price slump does not show us the block size in 2024...
The downside is now a chasm of uncertainty and negative mood, just like the conditions that surround XT and the contentious action by a small minority of renegade developers. Targets are $252 / 1550 CNY and, potentially, $230 / 1500 CNY.
Bitfinex orderbook depth and Buy/Sell Volume:
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