Bitcoin prices fell as fears reemerged about a contentious hard fork last week. Litecoin initially followed the decline but later clawed back some losses.
Bitcoin Falls on Fork Fears
Bitcoin fell over 12 percent since our last update as a contentious hard fork scenario became a possibility. Prices dipped as low as $956 on FXOpen (BTC-E) and $930-$940 on other exchanges. We have since recovered some of the losses but BTC/USD remains in a downtrend.
During the past few days, the hashing power signaling for ‘Bitcoin Unlimited‘ reached over 40 percent. In theory, at 51% the conglomerate could ‘attack’ the network and try to get its version of the rules adopted. The miners behind BU have previously said that they will wait for a +75% scenario but it’s unclear if they will stick to this pledge in a climate of growing animosity between the two camps.
On the other end, we have the bitcoin developers with ‘Segwit’, a ‘soft fork’ update that requires +95% adoption, making it even less likely. Last week most major BTC/USD exchanges signed up to a statement that would classify any BU fork as an altcoin. So on one end, you have 40% of miners signaling for BU while on the other bitcoin developers and exchanges (the economic majority) are voting for ‘Bitcoin Core’. A very messy situation indeed!
Technically we are now in a downtrend like we mentioned above. To end it, bitcoin has to break above this month’s high. While this is only $1,269 on FXOpen, prices spiked to $1,330-$1,360 on other exchanges during the ETF hype. The longer-term charts for BTC/USD (weekly and monthly) are still in bullish territory.
Litecoin Avoids Bitcoin Fate
Litecoin prices managed to narrowly avoid starting a downtrend of their own last week. We traded as low as $3.88 on Saturday, over 15 percent down from the $4.57 highs.
But this wasn’t enough to trigger a trend change as the tentative uptrend remains in place. To end it as well as start a new downmove, the bears will have to push LTC/USD below the $3.67 swing low.
On the other end, weak resistance can be found at the March 2nd swing high of $4.32, closely followed by the $4.50 round figure. Higher still we have this month’s high at $4.57 and the multi-month high at $4.60. A clearing of this resistance area could propel LTC prices higher. The weekly charts are slightly bullish but the monthlies are seeing no trends.