Bitcoin fears about a contentious fork are slipping over to the altcoin market. While the losses here are not large in BTC terms, there are in USD. Both Ether and Dash fell significantly from the highs made earlier this week.
Ether Tumbles From Highs
In US Dollars, Ether prices tumbled from the $415 high to a low of $288 today. This is a drop of $127 dollars or just above 30 percent. In BTC terms, however, which is the pair we cover in our articles, the drop was much lower at only 14.6%. Here prices fell from 0.1510 to a low of 0.129 BTC before rebounding somewhat. We are currently quoted at 0.1359 BTC, about 10 percent off the all-time highs. Technically this pair is still in an uptrend and will remain so until the bears take out the 0.0865 BTC swing low.
Fundamentally, the major reason behind the decline in crypto prices yesterday and today was renewed fears about a contentious bitcoin fork. Bitmain posted a ‘contingency plan’ to the User Activated Soft Fork (UASF) on August 1st. Bitmain runs a major mining pool and is a producer of most ASIC mining hardware. The UASF movement has some support in different online bitcoin communities but had little mining support (< 10%).
The blog post calls for an aggressive increase in the block size and Segwit only if the arbitrary discount rate of witness data segment is removed. This is a sharp departure from the NY agreement Bitmain signed a few weeks ago. The hard response increases market fears that others may join the USAF in revolt. Earlier today Bitsquare, a minor trading venue, issued a statement that they will support the U.A.S.F. side.
Traders naturally spooked by all this uncertainty choose to dump bitcoin first and ask questions later. In periods of panic, altcoins tend to get sold as well, because they are mostly traded versus bitcoin. In order to cash out, funds users have to sell their altcoins for BTC then sell the BTC for fiat. This caused some selling pressure in trading pairs like ETH/BTC, which should, in theory, go up on Bitcoin problems.
Dash Battles Key Resistance
Dash prices are battling the key resistance around the 0.07 BTC round figure. A few days ago DSH/BTC tried and failed to gain much traction above the 0.06809 BTC level. The second attempt higher failed as well, as can be seen on the chart below.
With those two failed attempts Dash remains in a range. A new bull market requires a decisive break (not just a brief spike) above the $0.07 round figure. A new downtrend may start on a break below 0.046 BTC per coin.
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