On January 12, prior to the three percent drop in the Bitcoin price, a cryptocurrency trader with an online alias “Hsaka” said that Bitcoin was showing a sign of weakness based on its performance from January 11 to 12.
At the time, the trader tweeted:
“Some thoughts. The first wick below the range low led to a tap of the range high. The second one (this current one) has failed to reach that high as of now. Sign of weakness in my opinion.”
Since then, Bitcoin has fallen through key support at $3,600 and hit an intraday, and yearly low of $3,545 a few hours ago. BTC is currently trading at the bottom of its range, down 2% on the day at $3,590 says CoinMarketCap. Analysts are predicting further losses over the coming months and the 2019 rally is now officially over.
As usual Ethereum has been hit harder with a 5% dump back to $116 before it made an attempt at recovery to $119. Since its high of $160 ETH has dumped over 25% and it seems that even Constantinople can’t rescue it at the moment. The gap between XRP in second is now almost a billion dollars again as the Ripple token recovered much quicker and is only posting a 2% loss on the day.
End of Ethereum Mining as we Know It
As we already wrote, Ethereum is preparing for its next milestone – Constantinople hard fork. The launch is planned in four stages: Frontier (beta stage to develop and test dapps), Homestead (to stabilize the platform), Metropolis (ongoing) and Serenity (upcoming).
However, it seems that now it is showing pre-fork jitters. As of this Jan. 14 writing, the Constantinople hard fork is only 15,000 blocks away, with fork deployment scheduled at block 7.08 million. Since this is a hard fork, even in the best case scenario, there will be two competing Ethereum blockchains for a period of time.
Ethereum (ETH) developers have explicitly stated that Proof of Work (PoW) will eventually be abandoned in order to make way for Proof of Stake (PoS), which would end Ethereum mining as we know it.
Other major cryptocurrencies such as, EOS, Bitcoin Cash (BCH), Ethereum Classic (ETC) were performing even worse than Bitcoin. Total market capitalization plunged over 4% in a third dump a few hours ago but has since recovered to $119 billion. It has just hit the lowest level of 2019 and is less than $20 billion away from 2018’s low.
Chances of recovering now are very slim and the most likely direction for crypto markets to go next is down. However, this is still well above the $100 billion level we saw in mid-December during the worst of the bear market.
This is kind of strange market behavior given upcoming Hard Fork (January 16th) and Bakkt launch (most likely January 24-28). Just for a reminder, the year began with ICE’s Bakkt platform announcement that they have raised a whopping $182 million worth funds from 12 high profile partners and investors.
However, it seems that we’ll have to wait some more for Bakkt to get its Bitcoin futures contract approved. A new report claims that the CFTC’s decision-making process has been progressing slow and now it is likely to go live only in February 2019.
What Waits for Investors?
Constantinople fork that is scheduled for January 2019 is said to be the largest upgrade for the network. According to a well-known cryptocurrency expert Alex Krüger, Constantinople upgrade could greatly affect ETH.
On his Twitter account he wrote:
On the long run, this is decidedly bullish. https://t.co/4bbgAHMz7Z
— Alex Krüger 🇦🇷 (@Crypto_Macro) December 24, 2018
The cryptocurrency market may recover in a lower price range as large buy walls prevent bears from pushing the market below key support levels.
However, in the next few days, wild volatility is generally expected, and based on the performance of the dominant cryptocurrencies, the majority of digital assets in the global market could become vulnerable to short-term drops.