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Bond market veteran Nik Bhatia says that with Lightning, Bitcoin (BTC) has become an unprecedented asset by combining a store of value with medium-of-exchange scale and speed.

This recognition prompted him to quit his former work for an institutional asset manager trading United States Treasuries on Wall Street, as he outlined in a blog post on Nov. 18.  

“Unprecedented in human history”

Bhatia is now an adjunct professor of finance and economics at the USC Marshall School of Business, whose involvement in Bitcoin has since evolved to include a research role at Bitcoin payments stack developer OpenNode.

In his post, Bhatia several times underscores the almost ungraspable difference in the scale of the two financial worlds he has inhabited. Back when he first encountered the cryptocurrency in 2016, he writes:

“Bitcoin had less than $20 billion in total value. I, a relatively small player in the bond market, was turning over $20 billion in Treasuries in just a few months.”

Crucial to closing this gap — to bring Bitcoin’s adoption to a level that can rival the Federal Reserve’s processing of $767 trillion via its wire system in one year — Bhatia focuses on the functionality that Lightning Network brings to the cryptocurrency.

As previously reported, the Lightning Network is a second-layer solution to Bitcoin’s scalability limitations, opening payment channels between users that keep the majority of transactions off-chain, turning to the underlying blockchain only to record the net results.

Recognizing the potential of Bitcoin’s digital scarcity (and its resulting store-of-value properties) when combined with the functionality of Lightning-enabled fast transaction settlement prompted Bhatia to resolutely turn his back on his erstwhile Wall Street career. He writes:

“Bitcoin’s supply schedule initially hooked me, but Lightning was the force that was pulling me in […]  a store-of-value asset exhibiting medium-of-exchange currency speed and scale is unprecedented in human history, and worth pursuit.”

Digital Gold — and micropayments

Earlier this month, investor Tim Draper singled out innovations such as the Lightning Network and OpenNode would be key in propelling the Bitcoin price higher, reaffirming his belief that BTC/USD would hit $250,000 by 2022 or 2023. He said;

“It’s because of Lightning Network and OpenNode and maybe others that are allowing us to spend Bitcoin very freely and quickly, so that it’s not just a store of value but it can be used for micropayments.”

Cointelegraph By Marie Huillet , 2019-11-19 11:49:00 ,

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NewsBlock © 2019 - 2020 All rights reserved.

NewsBlock © 2019 - 2020. All rights reserved.

While Bitcoin’s price seemingly moves without rhyme or reason — collapsing by dozens of percent and embarking on face-melting rallies on a whim — the cryptocurrency market is filled to the brim with fractals.

Related Reading: Analyst: Bitcoin Price Likely to Fall to Low-$8,000s as Chart Remains Weak

A brief aside: A fractal, in the context of technical analysis and financial markets anyway, is when an asset’s price action is seen during a different time. This form of analysis isn’t that popular, but it has proven to be somewhat valuable in analyzing Bitcoin.

One recent fractal popularized by a well-known cryptocurrency trader is implying that BTC is going to return to the low-$7,000s in the coming days.

Bitcoin Fractal Implies Retracement to Low-$7,000s

A well-known crypto trader going by “Tyler Durden” on Twitter recently posted the chart below, which shows that a Bitcoin price fractal may be playing out. The fractal has four phases: horizontal consolidation marked by one fakeout, a surge above the consolidation phase, a distribution, then a strong drop to fresh lows.

If the fractal plays out in full, BTC could reach the low-$7,000s again, potentially as low as $7,100. This would represent a 20-odd percent collapse from the current price point of $8,800.

It isn’t only a fractal that is hinting Bitcoin has the potential to visit its lows. As we reported on Saturday, Bloomberg believes that if the GTI Vera Convergence Divergence Indicator flips red, a downtrend could push the cryptocurrency back to $7,300.

Related Reading: Stephen Colbert Pokes Fun at Bitcoin in Monologue: Mainstream Gone Wrong?

Can Bulls Step In?

But again, many believe it is irrational to have such bearish interpretations of the cryptocurrency’s chart at the moment. As reported by NewsBTC earlier, Popular crypto trader Mayne recently noted that the “people waiting for $6,000” are irrational. He quipped that Bitcoin retracing and consolidating after its fourth-biggest bull move in history ($7,300 to $10,500, a 42% gain) is perfectly par for the course, but noted that it’s totally possible we can go lower from $8,800.

The medium-term technicals support this.

Trader and CoinTelegraph contributor FilbFilb found that by the end of November or start of December, the 50-week and 100-week moving averages will see a “golden cross,” which he claims is far more significant” for the Bitcoin market that other technical crosses.

Also, a Bitcoin price model created using Facebook Prophet machine learning found that the leading cryptocurrency is likely to end the year at just over $12,000. What’s notable about this model is that it called the price drop to $8,000 months in advance, and forecasted a ~$7,500 price bottom for BTC.

To put a cherry on the cryptocurrency cake, Crypto Thies observed that when Bitcoin bottomed at $7,300, it bounced decisively off the 0.618 Fibonacci Retracement of the move from $3,000 to $14,000, which correlates with the two-week volume-weighted moving average. He added that summer 2019’s consolidation was marked by Bitcoin flipping major resistances into support levels, implying that a bullish reversal and subsequent continuation is likely possible in the coming weeks.

Featured Image from Shutterstock

Nick Chong , 2019-11-10 12:00:38

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