First Mover Asia: Bitcoin Drifts Lower After Taproot Upgrade; Ether Drops

The most significant improvement to the Bitcoin network in four years generated weekend enthusiasm in the blockchain community (and a short video) – but nothing too exciting in terms of a price reaction.

AccessTimeIconNov 14, 2021 at 11:35 p.m. UTC
Updated May 11, 2023 at 6:45 p.m. UTC
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Good morning, Here’s what’s happening this morning:

Market Moves: Bitcoin’s highly anticipated Taproot upgrade fails to produce any noticeable price pop.

Technician’s take: Short-term upside appears to be limited given the loss of positive momentum.

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Prices

Bitcoin (BTC): $64,514 +0.4%

Ether (ETH): $4,562 -1.7%

Market moves

Bitcoin was trading flat after Taproot, the blockchain’s biggest network upgrade in four years, went live.

The upgrade, which took effect at 5:15 coordinated universal time (1:15 a.m. HKT/SGT), had been closely tracked by cryptocurrency traders and analysts as a supporting market factor, though many experts had told CoinDesk earlier this month that the phase-in was likelier to be seen as a long-term technological advance than a near-term price catalyst.

The tech milestone was celebrated by Bitcoin enthusiasts, with at least one pop-up “Taproot.watch” website posting a commemorative (and somewhat amusing) video to ring in the blockchain’s new era.

“Although the Taproot upgrade is generally a positive development, the verdict is still out if it will make a big improvement to the blockchain world,” Apifiny CEO Haohan Xu wrote in emailed comments.

The largest cryptocurrency has been trading mostly in the low $60,000′s since hitting an all-time high near $69,000 last week. Researchers at the crypto exchange Kraken wrote Friday that buy orders are concentrating around $62,000, while there appear to be interested sellers around $67,000 to $69,000.

Screengrab from the blockchain site Nicehash shows the Taproot activation going live at Bitcoin data block 709,632. (Nicehash)
Screengrab from the blockchain site Nicehash shows the Taproot activation going live at Bitcoin data block 709,632. (Nicehash)


Technician’s take

Bitcoin four-hour price chart (Damanick Dantes/CoinDesk, TradingView)

Bitcoin (BTC) dipped below $65,000 as buyers continued to take some profits. Lower support is seen around $60,000, which could stabilize the current pullback.

The relative strength index (RSI) on the four-hour chart is near oversold levels, similar to Oct. 27, which preceded a near 10% price rise. This time, however, buyers could face resistance around $65,000 given the loss of upside momentum this week.

Indicators suggest a period of consolidation could persist after upside exhaustion signals appeared on the charts last week. Further, a negative divergence on the daily RSI suggests limited upside over the short-term.

The weekly chart showed improving price momentum, although a decisive breakout above $69,000 needs to be confirmed before projecting upside targets.

Important events

9:30 a.m. HKT/SGT (1:30 a.m. UTC): China House Price Index (Oct.)

10 a.m. HKT/SGT (2 a.m. UTC): China Industrial Production (Oct. YoY)

10 a.m. HKT/SGT (2 a.m. UTC): China Retail Sales (Oct. YoY)

12:30 p.m. HK/SGT (4:30 a.m. UTC): Japan Industrial Production (Sept. YoY)

6 p.m. HK/SGT (10 a.m. UTC) Eurostat Trade Balance (Sept.)

On CoinDesk TV

In case you missed it, here are the most recent episodes of “First Mover” on CoinDesk TV:

“First Mover” hosts spoke with Bram Cohen, co-founder of the Chia Network, following his company’s announcement that it would be supplying technical services for the Costa Rican government to track climate change metrics. Plus, the show covered market insights from Toroso Investments Chief Investment Officer Michael Venuto.

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CoinDesk is an award-winning media outlet that covers the cryptocurrency industry. Its journalists abide by a strict set of editorial policies. In November 2023, CoinDesk was acquired by the Bullish group, owner of Bullish, a regulated, digital assets exchange. The Bullish group is majority-owned by Block.one; both companies have interests in a variety of blockchain and digital asset businesses and significant holdings of digital assets, including bitcoin. CoinDesk operates as an independent subsidiary with an editorial committee to protect journalistic independence. CoinDesk employees, including journalists, may receive options in the Bullish group as part of their compensation.

Damanick Dantes

Damanick was a crypto market analyst at CoinDesk where he wrote the daily Market Wrap and provided technical analysis. He is a Chartered Market Technician designation holder and member of the CMT Association. Damanick is also a portfolio strategist and does not invest in digital assets.

Bradley Keoun

Bradley Keoun is the managing editor of CoinDesk's Tech & Protocols team. He owns less than $1,000 each of several cryptocurrencies.


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