Christmas came this year with a major price correction to almost all digital currencies. Bitcoin prices severely corrected down to $10,400 on the 22nd, dragging the whole market down. While John Mcafee confidently calls it a Christmas discount, CNBC went as far as hinting a bubble burst, labeling the correction a “crypto carnage”.
Following the decline, one digital currency in particular, Bytecoin soared by 57% in the last 24 hours. It currently occupies the 25th position with a market cap of over $1.4 billion. The token, rose to an all-time high of $0.0092 on POLONIEX, a four-digit rise from the $0.000044 last January.
As of press time, the impressive uptrend seems to be correcting around $0.008.
What is Bytecoin? What reasons may possibly explain its astronomical rise in value in the matter of weeks?
Bytecoin in a nutshell
Bytecoin (BCN) is a digital currency launched in July 2012, as the first cryptocurrency to implement the CryptoNote protocol. This open source protocol, profites Bytecoin by making it an untraceable and highly privacy-preserving token. Its blockchain works with a Proof of Work (PoW) algorithm known as CryptoNight, developed over CryptoNote.
Besides, Bytecoin was designed to make CPU and GPU mining efficient, while restraining ASIC mining. As detailed by their website, anyone can participate in validating network operations by allowing a portion of computing power from his own computer, to mining purposes. Individual miners can join their computing power to mining pools like minergate, and get rewarded with Bytecoin portions each time a block is created.
With a constantly growing ecosystem, Bytecoin is currently offered for trade in many exchanges, like HitBTC, Coinspot and POLONIEX. In addition, Changelly offers the possibility of purchasing Bytecoin with fiat currency.
It is worth mentioning that Monero (XMR), the most known CryptoNote based digital currency, has forked from Bytecoin in April 2014.
What is causing the hype?
From the beginning of December to this day, the developing team released three major updates. On December 11th, an official release disclosing new features added to the official web wallet. The news came to follow up on the release of an android based wallet app last November.
On December 20th, the team released an official statement stating that they sustained massive Network attacks aiming to take the whole system down, steal tokens, and spread the power between CryptoNote based coins. Even though its blockchain resisted the attacks, wallet synchronization were halted. The team is now working on preventing similar situations in the future, through testing the algorithm to fix potential flaws and inconsistencies.
The latest update came on December 22nd presenting a new roadmap for the coming year. The roadmap states a new BCN wallet release to be effectively tested and implemented by March 2018. A hard fork is set to take place on June 2018 including a “new dynamic fee system” as explained by the development team.
On the other hand, a marketing strategy, with plans to grow the token’s exposure to Asian, Middle-eastern and African markets was hinted as well, with no further explanation.
In our analysis, we chose tradingview platform, for its ease of use and built-in technical analysis tools. We gathered Bytecoin prices data from Poloniex exchange. A short-term candlestick chart, with a 15 minutes interval was built. We then placed the Fibonacci retracement levels on the overall uptrend in order to break down the extent of the ongoing surge. We also based the following analysis on Relative Strength index (RSI), and the Moving Average Converging Diverging (MACD).
From the candlestick chart above, prices seem to be retracing down to $0.008 after a surge to almost the 1 cent milestone. MACD and RSI indicators show that a retracement down to a 38.2% Fibonacci level (around $0.0075) and below is very likely to occur. This may be explained by the MACD short and long term indicators, both pointing downward. A possible bullish cross is likely to happen in the coming hours/days though. The RSI is still above the threshold of 30 (around 50 as of press time), indicating moderate overbought condition. It went above 70 earlier today, hinting the current pullback after an overbuying state that drove prices to $0.009. The market is still looking bullish with a consistent demand on the asset in the period covered by the chart.
Lately the debate around enforced anonymity created quite a hype around coins offering the feature. Another cryptocurrency, Verge (XVG), also built around enforced security and privacy-protection, soared in the last three days by over 170%. However, while major updates can pump a coin’s value to a certain extent, only real work with added value and implemented improvements can sustain it. With that being said, even with the largest circulating supply among all cryptocurrencies, there is still plenty of room for growth to Bytecoin.