June 2017 has been a turbulent month on the cryptocurrency markets.
Strong growth at the start of the month for both Bitcoin and Altcoins, followed by subsequent fall backs and declines in market value towards and beyond the end of June.
Bitcoin & Cryptocurrency Review June-July 2017
Here are the key features of the Bitcoin and Altcoin markets for June 2017:
Bitcoin Peaks And Then Trades Sideways
Bitcoin started the month at around $2400. The price rose to over $2800 during the first two weeks of June before tumbling down to a low of around $2200 by mid June.
It then climbed back gradually to around $2690 by the fourth week of July.
For the rest of the month Bitcoin traded in a wide sideways band between $2600 and $2300, finishing the month at around $2350.
Since then we’ve seen further sideways trading since the first two weeks of July between a resistance high of around $2600 and a low of $2200.
This trading band ($2200 – $2600) has largely held from June 15 to July 11.
Market Awaits Implementation of Bitcoin Changes
In my opinion, the reason for this sudden stalling and fall in the Bitcoin price is two-fold.
First of all Bitcoin has experienced a solid upward growth in value for well over a year (excepting some fall backs in early January and May 2017). It reached over $2800 which appears now to be the ceiling for the moment. From this point, and throughout June, we’ve seen a period of profit taking.
The second reason is the uncertainty around the future of Bitcoin. The network had been shown to have become extremely slow in processing transactions. At times during the last few months I’ve waited two or three days in some cases, and I know people who have waited up to a week for transactions to be processed.
There’s been ongoing discussion in the Bitcoin community on how to resolve these issues, with opposed groups competing to elicit support for their proposals among miners and node operators. Up until recently things were at deadlock with no practical progress on how to proceed.
But as of June it now seems as if consensus has been reached on some of the changes to the Bitcoin blockchain, which now seem likely to go ahead and provide much-needed relief for the Bitcoin network at least for the short to medium term.
What’s All This About Bitcoin And 1st August?
A User Activated Soft Fork (UASF) was scheduled for August 1. This was intended to force miners to recognize and activate the Segwit changes.
However, it now looks like Segwit is indeed going to be activated. So the UASF will in this case probably not be necessary.
But the “August 1” date has since passed into common circulation and continues to get passed around as if it’s some magic date when prices will instantly begin to swing round in the direction that people want. Not so.
Not only that but a further update, called Segwit 2x is also gaining popularity with update now around 85%.
Around July 21 Segwit2x (Segmented Witness) is expected to be released. This is a further modification to the Bitcoin blockchain which is expected to speed up the processing of transactions.
A week later BIP91 should be in effect. This requires all blocks to recognize Segwit or else find themselves orphaned off the main Bitcoin blockchain.
In the latter half of August Segwit should activate and Segwit transactions will then be legal on the Bitcoin network.
So What Will Happen To The Bitcoin Price in July & August?
In my opinion investors are holding off to see what happens, both with the segwit changes as well as with market sentiment regarding the price development. I feel we will see further sideways trading within a band from a ceiling of around $2400/$2500 (a slightly lower ceiling than up to now) down to a lower support floor of perhaps around $2200/$2000 – also lower than the present floor.
The price will be likely to pick up in anticipation towards the end of July, with value appreciation being priced in by traders. Not on 1 August, as some seem to think, but before then. Markets tend to price in anticipated changes before they actually happen and take up positions accordingly in advance. The laggards then follow. But if “1 August” means some nice hefty price increases, then why not.
So Bitcoin could climb back to the $2600 level before rising in August towards $3000 and beyond.
How far this might go for now I won’t venture to bet, but the BTC price could move up fast towards $4000 during August/September, with some possible minor fall backs through profit taking along the way.
On the whole, the outlook for Bitcoin is positive and the way ahead will be clear for further growth once the technical changes are accepted and active.
I’ve been moving in and out of USDT (Tether Dollars) according to Bitcoin volatility. Currently I have around 25-35% of the portfolio in BTC/USDT. This is higher than usual. Reason being the greater bitcoin volatility, plus the falls in altcoin prices of late.
Altcoins Volatile With Heavy Market Falls
June has been a difficult month for altcoins. We’ve seen strong volatility in the altcoin sector. Many coins have seen substantial growth throughout June before the fallbacks occurred at the end of the month.
Some examples (approximate figures)
Pivx which had been lacklustre up to now suddenly saw growth of around 80%
Even Dash, which has also been lacklustre with up and down trading saw a growth throughout June of some 40%
Other coins experienced heavy falls. Among them:
STR (STELLAR) -30%
Most alts have been experiencing falls throughout the first week of June with the market down overall.
Into the second week of July and some coins are seeing falls of 20-40% and more from the start of the month.
Hedge Fund Results For June 2017
Week 1 saw growth of +15% in Bitcoin terms, and +26% in fiat currency (EURO) value.
Week 2 saw a growth of around +4% in BTC value for that week.
However, strong BTC/EUR price rises yielded a growth in EURO value since the start of the month of +51%
Week 3 yielded an 8% rise in BTC value for that week. Plus +40% rise in EURO value since start of month.
Week4 experienced falls of -2% in Bitcoin value, but with a EURO rise of +42% since start of month.
Week 5 saw a fall of -6% in BTC for that week, and an overall EURO rise in value of +23% since start of the month.
Overall the fund’s Bitcoin value from June 1 to June 30 has risen by +20% in BTC terms, and by +23% in EURO.
That’s despite the falls in Bitcoin and Altcoin during the last week of June. It’s modest growth by Bitcoin and Altcoin standards so far this year, but the fund did at least reach the end of the month in profit.
The fund had a total of 63 different cryptocurrencies in the portfolio. I’ve since reduced this to around 30. Plan now is to keep this to a maximum of 30 and preferably to between around 20 to 25.
Long Term Holds
A number of coins are held for the long-term, meaning 1 year and beyond. Among these are
Medium Term Holds (3-6 months+) include
People have asked me about investing in coins such as Potcoin and Doge. The trouble with these coins is that they are basically gimmicks which do not offer anything technically unique. They can experience sudden rises through PnD (pump and dump activity) but in my opinion they are unsuited to long-term or even medium term hold.
I’ve since exited the “penny” coins Reddcoin and BitBean. These were very low-priced “exotics” which I purchased a few months back as little adventures. They then both saw very substantial rises in value but have been slowly but surely losing value over the last weeks (before the latest general market falls) and I’ve now sold off these completely.
One good thing about them is that they are both POS (Proof of Stake) coins which means you receive staking rewards simply for holding them in the wallet. You need of course to download, install and run the wallets for them 24×7.
So What’s Going To Happen To Alts in July?
The market is gradually getting flooded with more and more ICOs (Initial Coin Offerings).
I’ve participated in a handful of these so far this year, among them TaaS and HMQ. Though I think these two are fairly solid, I’m much more critical of upcoming ICOs than before and no longer inclined to subscribe to an ICO on the basis of market sentiment and hype.
I expect to see solid value propositions and innovation. For too many startups, ICOs are an easy way of setting up your money-printing press.
More And More People Are Entering The Market
Interest in Cryptos is growing fast. Many people in my acqaintance, including both friends and family have been getting into Bitcoin and buying cryptocurrencies. The volume of users of exchanges such as Poloniex continues to rise, as does the membership of Facebook groups such as Cryptocurrency Collectors Group For Beginners (CCCB). More and more instances of the popular real-time portfolio management app Blockfolio are being downloaded.
All this indicates more people and with that more money entering the sector.
Governments and Big Business Are Getting Interested
Governments and large corporates are becoming interested in the potential for blockchain-based digital currencies. This too has the effect of stoking public interest in the sector.
So all in all, market outlook for the medium and long terms are excellent.
Once the Bitcoin blockchain modifications are activated, and the current market fall clearout in alts has run its course, the way will be free for a new bull market to begin for Bitcoin and Altcoins in the second half of 2017.
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