Holy Cow! Now that was a correction! The price of Bitcoin pulled back all the way to $1974 which is pretty much right at our .786 Fibonacci Retracement level! As scary as that is, it was needed. Markets don't go up, and up, and up with no correction from time to time. That's why I get nervous when the price just goes up like crazy without even pausing. Let's see what it looked like on the chart.
You can see in the chart that the Bitcoin price went all the way up to nearly $2300($2296) before pulling all the way back down to retest support at the high $1900s. If you've been following along, you know that I was expecting a retest of $1995 at the .618(most common) retracement level. The price dipped a little further on this correction, but that is the worry.... the bigger the increase, the bigger the pullback! Inversely, the bigger the dip, the bigger the increase usually is. Pretty neat, huh?
Price has already recovered to the $2120s and I would expect it to spend a little time here building support. Of course, the market will do what it wants to. The good thing about this correction is that it further solidifies $2000 as a support level in my opinion. Even though it dipped a little below it, no candles CLOSED below it. That makes it seem pretty significant to me. It doesn't hurt that it's a psychologically important number to the market as well.
I think a lot of this increase was due to news coming from the Consensus conference. Barry Silbert held a meeting with several prominent people in the industry, including: Bitmain(Jihan Wu), Bitfury, Bitpay, Xapo, among others. An agreement was reached to implement Segwit ASAP with a Hardfork to 2mb around Sept. 2017. While this sounds like great news at first glance, this agreement isn't the panacea it sounds like....hence, the pullback. A leaked copy of the agreement reveals that NO Bitcoin Core developers were invited to the meeting. Furthermore, the agreement seeks to implement SegWit on bit 4(Segwit - BIP 141 is on bit 1) with 80% miner support, making it incompatible with the current Bitcoin clients. This means there will have to be a rewrite of Segwit.
Who would be responsible for the rewrite? That would be Rootstock, who happen to be closely tied to Bitmain. Imagine that. This is nothing more than another attempt by the miners to try to hang on to covert ASICboost. If this proposal were to pass, the miners would get a 2mb Hardfork in September while Rootstock spent the next year rewriting and testing a new implementation of Segwit that doesn't interfere with covert ASICboost. It's a hijacking attempt by Bitmain and their subsidiaries.
That's why, last night, I switched my node over to a BIP148 USAF(user activated soft fork) node. It's time we(Bitcoin Users) show Jihan Wu that he will NOT take control of OUR Bitcoin. We can pass SegWit ourselves just like we did P2SH. We can put Jihan and any other future individual, who might think they can take over Bitcoin, in their place. Miners may secure blocks, but NODES verify the ledger. Bitcoin belongs to everyone and NO ONE!
If you would like to take a stand and run a UASF node as well, Bitcoinreminder.com has made it easy. Visit http://uasf.bitcoinreminder.com and you can have a node running in under a minute. Just choose the proper link for the operating system you have. I think Bitcoin Core also has UASF binaries on the Bitcoin github as well. Many Bitcoin Core developers support BIP148 UASF. We must keep Bitcoin decentralized!
Thanks for reading. I apologize for my rant there. As always, keep those stops tight and trade safely.
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Disclaimer: I am not a professional. Trading is risky and you could lose money. Only invest if you're sure what you're doing.