GB Market Commentary 15/09/2021
by Will Morris
Bitcoin has been in a large descending channel since the major retracement last week, however, there has been a breakout to the upside. As Marcus mentioned yesterday $47k was acknowledged as being a key resistance for Bitcoin, there has been sustained price above this level over the past 12 hours. The next major resistance is at $48k, some traders are predicting if this is broken, it could signal a major upward trend. The 200-day moving average and the 50-day moving average have crossed – historically this has generally heralded positive momentum. However, this is a lagging indicator and has resulted in downturns. Bitcoin is currently trading at $47,200. DeFi protocols continue to realise huge growth, over the past 7 days, Elrond is up 81%, Tezos up 78% and Avalanche 50%.
The Solana network shut down for over 16 hours, after experiencing 400,000 transactions per second, which caused an outage. Solana tweeted that the validator community successfully completed a restart and stated supporting systems will recover over the next several hours. They are yet to issue a tweet that everything is back online. The impact on the Solana price has been negligible, with only a 5% reduction.
Billionaire Howard Marks, co-founder, and chairman of Oaktree Capital Management shared his thoughts on Bitcoin on the podcast “We Study Billionaires”. Previously, outspokenly negative in 2017, he argued bitcoin had similarities when compared to gold: “inflation resistant and maybe crises resistant”. While also having advantages over gold: “no charges to store, easy to transfer, spendable, limited supply and empowering the unbanked.”
Senator Elizabeth Warren, during a hearing held by the U.S. Senate Banking Committee, said crypto has a list of problems including: “Unreliable tech, scams, devastating climate impact” and that high fees can make crypto dangerous for people who are not rich. Unreliable technology is not something that is a unique risk to the cryptocurrency industry. Most would agree that furthering technological capability was imperative for future success of humanity – failures are inevitable but that is no reason to fear technology as long as lessons are learned, and security is constantly enhanced. Scams - it could be argued that the internet is the largest facilitator of scams in the modern age, again, is this an argument against the continued use of the internet? Energy – we are experiencing an energy / climate crisis globally and I would argue not enough is being done across the board. Crypto has the potential to be one of the major drivers for a green revolution due to the enormous amount of capital generated, so far, which mining companies can readily invest in green tech. There is huge potential for mining companies who invest in the furthering of efficiency of green technologies for their own economic gain, let alone from an ethical standpoint. Lastly, crypto being dangerous for those who are not rich due to high fees. Those in America earning less than $10,000 dollars a year, on average, spend $597 on lottery tickets, annually. Raoul Pal said in December 2020 that Bitcoin was averaging 200% year on year returns. If someone had invested $500 in Bitcoin per year over the past 10 years, at this gain, it would be worth well over $10m today.