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'The Best and Cleanest Bitcoin is From the Silk Road' 101
Source: iStock/skodonnell

‘The best’ bitcoins are the ones from the Silk Road, the first modern darknet market, because they’ve got through the U.S. Marshalls and have been ‘blessed’ by the U.S. government – ‘those are very clean,’ Matt Walsh, Partner at Castle Island Ventures, a U.S.-based venture capital firm, joked while discussing so-called “virgin bitcoins” during a podcast.

He and another partner at the firm, Nic Carter, are co-hosts of the On the Brink podcast. In their latest episode, released on December 2, they talked to Dan Matuszewski, Principal and Co-Founder of crypto trading firm CMS Holdings, who previously led one of the largest OTC desks in crypto markets at Circle for over two years and was a part of Kraken’s early team.

On the interviewer’s question about virgin BTC going for a premium as they are “clean,” Matuszewski quickly replied with “no.” CMS Holdings has never seen demand for it. “I’ve never seen anybody coming to us trying to buy them,” he says, adding that “people who don’t know what they’re talking about sometimes ask” if a coin is a virgin coin, but it has never happened for somebody to ask to buy specifically and only a virgin coin and say they’re willing to pay more for it.

In either case, Flex Yan, CEO of Babel Finance, a Hong Kong-based crypto financial services company, said in August this year that buyers of “virgin bitcoins” are paying up to 20% more for coins with no transaction history. Yan argued that demand for the virgin coins is growing as “without any transactional history, there is essentially no risk of the coins being seized or frozen due to their involvement in questionable past dealings.” Meanwhile, at the same time, Dovey Wan, Partner of crypto investment firm Primitive Ventures, was looking for buyers interested in this kind of BTC.

Back to the podcast, the hosts and the founder further discussed the legend of a virgin coin, saying that there couldn’t possibly be such a thing as fees themselves have history and possibly some taint, and it’d need to be a zero-fee block to have a virgin coin.

In the beginning, CMS Holdings was sourcing Bitcoin (BTC) and Ethereum (ETH) directly from the miners, by establishing good relations with them and buying all their flow. It was “a natural pairing” between “consistent sellers […] consistent buyers,” says Matuszewski.

2017 changed it all, as it changed the miners and their industry. The “stuff started to get wild” back then and:

  • many miners got really rich really fast,
  • many stopped hedging and decided to keep more inventory,
  • they got smarter and more sophisticated, and many bigger ones established their own treasury functions.

At pixel time (13:10 UTC), BTC trades at c. USD 7,330 and is almost unchanged in the past 24 hours. It’s up by 2.4% in the past week, trimming its monthly losses to 20%. The price is up by 81% in a year.

Sead Fadilpašić , 2019-12-03 15:38:01 ,

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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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