Bitcoin is becoming more concentrated - and traders are grappling with what that means for the market.
The world's largest cryptocurrency often moves by $1,000 or more in a matter of minutes, and the wild swings could be more intense in the future as ownership becomes more concentrated among large investors.
Addresses with 1,000 to 1 million bitcoins, colloquially known as whales, hold 42% of the total supply, according to data analytics firm Coin Metrics. That's up from 38% during the 2017 bull market.
And the market appears at the mercy of whales. If a couple of them unload their holdings, the cryptocurrency can quickly drop by a few thousand dollars.
Some of the whale addresses might be custodians or exchanges, holding bitcoins on behalf of clients.
But the data challenge the narrative that bitcoin is a decentralized, peer-to-peer cryptocurrency contrasted with fiat currencies, which are controlled by governments and central banks.
And a widely-tracked non-price metric shows that the bitcoin-mining industry is becoming more centralized - geographically. Nearly 65 percent of Bitcoin's hash rate, or the computing power dedicated to mine new data blocks and secure the network, is supplied by China.
At press time, the hash rate stands at 84.38 exahashes, or quintillion hashes, per second (EH/s), having peaked around 100 EH/s in October.
China, the world's second-largest economy, has many poorly developed areas with abundant supplies of low-cost electricity, such as Xinjiang, Yunnan, Inner Mongolia and Sichuan. |
 
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Defending Psychological Support
BTC: Price: $7,100 | Market cap: $129.45 billion | 24-Hr Volume: $17.19 billion
Short-term trend: Bearish
Bitcoin could see a minor bounce to $7,220-$7,300, having defended the psychological support of $7,000 two times in the last 48 hours.
A UTC close above $7,870 (Nov. 29 high) is needed to invalidate a lower-highs setup on the daily and confirm a bull reversal.
A failure to hold above the descending 5-week MA at $7,212 will likely attract stronger selling, possibly yielding a drop to recent lows near $6,500. Long-term trend: Neutral
Bitcoin's monthly MACD histogram has dropped below zero, signaling a bearish reversal. The cryptocurrency is trapped in a five-month bearish channel.
Even so, the outlook remains neutral, as the MACD is a lagging indicator. Further, the miners’ reward halving, usually a price-bullish event, is due in May 2020.
With BTC looking oversold after a 50 percent drop from June highs above $13,800, a notable recovery ahead of the supply-cutting event can’t be ruled out – more so, as the 50-week MA has crossed above the 100-week MA, confirming the first golden bull cross since May 2016.
After all, the previous bull cross had marked the start of a long-term bull market. The cryptocurrency picked up a strong bid near $430 following the bull cross confirmation in May 2016 and charted its way a record high of around $20,000 in December 2017.
That said, the outlook as per the weekly chart would turn bullish only if and when prices break higher from the five-month long bearish channel.
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Enjincoin Rides High Once More ENJ: Price: $0.083 | MCAP: $165.9 million | 24-Hr Volume: $14.1 million
Short-term trend: Pullback ENJ is up 14 percent and is currently one of today's best performing crypto in the top 100 by market capitalization, according to data provider Messari.
ENJ is a cryptocurrency and blockchain platform designed for the video game industry that utilizes fungible and non-fungible tokens (ERC-1155) in a single deployed smart-contract to forge online items.
The current market structure on the daily chart is presenting a higher low (typically bullish) alongside declining technicals including volume, the RSI and the awesome oscillator.
Expect a pullback to $0.082 in the immediate short-term (prior high close) and $0.076 (prior wick bottom) should the bulls concede further losses on the day.
Long-term trend: Neutral
Despite being significantly up on the month, ENJ has to retain above $0.072 in order to shore up investor confidence for further gains in the long-term or risk falling back into a bearish zone between $0.051 and $0.070.
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| | | Disclaimer: The information presented in this message is intended as a news item that provides a brief summary of various events and developments that affect, or that might in the future affect, the value of one or more of the cryptocurrencies described above. The information contained in this message, and any information liked through the items contained herein, is not intended to provide sufficient information to form the basis for an investment decision. The information presented herein is accurate only as of its date, and it was not prepared by a research analyst or other investment professional. You should seek additional information regarding the merits and risks of investing in any cryptocurrency before deciding to purchase or sell any such instruments. |
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Whales in Control?