Bitcoin Shrugs Off Tech Upgrade With Sideways Trading
“SegWit is old news for the market.”
So says crypto analyst Petar Zivkovski, and there’s evidence to suggest traders largely agree. Despite just completing perhaps its most significant technical upgrade ever, the price of bitcoin is down just under 1% over the last 24 hours of trading.
To Zivkovski, this shows that bitcoin’s upgrade, no matter how impactful, was for traders a classic “buy the rumor” event. He speculates much of the price activity in recent months was due to the upgrade – prior to it being clear SegWit would be activated (thereby increasing and redefining network capacity), he notes bitcoin was trading below $2,000.
But before the network adopts the top-level payment networks and other next-generation features enabled by SegWit, Zivkovski expects a run of profit-taking.
Others are less certain here. Arthur Hayes, CEO of bitcoin derivatives exchange BitMEX, said that while the price will likely decline slightly in coming days, he expects it to “zoom higher” in the aftermath of the activation.
“My upside price target is $4,500 then $5,000,” he told CoinDesk.
Elsewhere, comments hint that traders are just beginning to understand how cryptographic assets broadly respond to issues related to their technology. Charles Hayter, founder of exchange service CryptoCompare, for instance, chose to view it as the latest data point in an ongoing experiment on the matter.
Though he said it’s likely to provide a “positive catalyst” long term, he hinted at an uncertain outlook in the coming days, remarking:
“With litecoin we saw a fall after the enaction of SegWit, but with bitcoin cash we saw a price rise on 8MB blocks being mined – its half a dozen of one and half a dozen of the other for bitcoin.”
Eyeing future changes
Among analysts there was also a feeling that prices could be locked into the current range until November, when another technical change is anticipated for the network.
Given the controversy around the plan, and the possibility that it could result in the creation of a third major bitcoin asset, Hayes put forward this idea, arguing that while the price could creep above $5,000, it’s not likely to go much higher.
Elsewhere, developer and trader Jacob Eliosoff agreed that uncertainty is likely ahead as the market looks to price in those coming changes.
“I predict will be a huge mess and will do at least temporary damage to the price – around the split itself,” he said.