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The store of value narrative has largely been applied to Bitcoin over the past couple of years. BTC is often labeled ‘digital gold’ and this year’s hodling has proved that people are still willing to hold on to it for a longer term. Ethereum is evolving in a different way but it is also turning into a similar store of wealth as the ecosystem matures.

Ethereum Flips Itself

A recent article from the owner of ETH metrics portal ethereumprice.org has delved into some token utility charts which reveal an interesting trend developing. The charts indicate that Ether currently accounts for less than half of all transactions on the network.

According to Coin Metrics data there are roughly 300,000 daily ERC-20 transactions compared to about 290,000 ETH transactions. Ethereum appears to have flipped itself.

The Ethereum blockchain has a vibrant and active token economy which is clearly growing as this trend indicates. The report added that ‘Ethereum’s native token has passed on the torch to assets with greater transaction utility than its own.’

This could leave ETH investors scratching their heads wondering where the next price action momentum is coming from. If Ethereum is not being used for transactions, where is the utility coming from?

Ethereum is evolving and a new ecosystem is forming called decentralized finance. As Bitcoin has turned from peer-to-peer digital cash into digital gold, Ethereum is also moving into the realms of a store of wealth rather than a utility token.

The DeFi ecosystem is embryonic at the moment but has shown monumental growth this year as more ETH is staked onto lending and borrowing platforms managed by smart contracts. According to defipulse.com there is currently 2.5 million ETH locked in DeFi which is up over 90% on the same time last year.

This emerging industry has the potential to grow into a monster as mistrust of banks intensifies while the world slips into another recession. Add to that the transition to proof of stake consensus for Ethereum next year and there is another way to earn interest in a new form of finance.

Triple Point Asset

Bitcoin’s value is clear to work out, there are only 21 million of them and supply will decrease as demand increases. That is the theory anyway and it is the same one that governs gold prices. With Ethereum however there is no target as it could be considered as digital oil in addition to gold.

Ethereum issuance will fall considerably after the transition to ETH 2.0. This means that although the supply cap is not limited, the issuance of tokens will be greatly reduced from the current 4.4% to less than 1%.

Ethereum can also be leveraged through protocols such as MakerDAO and stablecoins such as DAI. It is perfectly suited for a world of decentralized finance which is well overdue considering the current state of the banking system.

The Bitcoin maximalists were not impressed with the article which added that BTC has questionable security and diminishing incentives as block rewards fall. The key take here is that there is room for both in a world dominated by unscrupulous bankers and politicians.

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Martin Young , 2019-11-19 05:00:27

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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.

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

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