Bitcoin is moving into the typically low volume weekend following a 3.1% decline in the past 24-hours as it begins to re-test the $9,000 level of support.
At the time of writing the world’s largest cryptocurrency, which has a market cap of $169 billion, is at the tail end of a prolonged period of consolidation.
Following its rally from $4,000 to $10,000 between March and May, Bitcoin has endured one of the least volatile periods of price action in its 11-year history, with price being confined within a tight trading range below $10,000.
Its failure to break above $10,000 with any kind of conviction has been telling, as it demonstrates a lack of bullish momentum to the upside, which may well cause a break down in price over the coming weeks.
The recent Bitcoin halving is one event that paints a bullish picture from a macro perspective, as supply will naturally be reduced over time so when demand begins to soar so will the price of Bitcoin.
However, as seen in the two previous Bitcoin halvings, price typically lags behind by up to 12 months after the halving as hype around the event subsides.
In this case, it seem likely that Bitcoin may take a further correction as the summer winds to a close before building a platform to spring from in Q4 of this year.
This would tie into the stock-to-flow model as well as the theory that as volatility slumps to an all-time low, it will almost certainly be followed by a major move in either direction.
Key levels of support remain at $8,830 and $8,450 while the notable level of resistance to look out for is still the psychological barrier at $10,000.
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In August 2008, the domain name bitcoin.org was registered. On 31st October 2008, a paper was published called “Bitcoin: A Peer-to-Peer Electronic Cash System”. This was authored by Satoshi Nakamoto, the inventor of Bitcoin. To date, no one knows who this person, or people, are.
The paper outlined a method of using a P2P network for electronic transactions without “relying on trust”. On January 3 2009, the Bitcoin network came into existence. Nakamoto mined block number “0” (or the “genesis block”), which had a reward of 50 Bitcoins.
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