- Bitcoin lost more than 8% in February despite the stock market correction
- Coinbase CEO warns that Bitcoin may lose the race to altcoins in the future
- Bitcoin price fails in a bid to move above the resistance block around the $9,000, which may facilitate a deeper pullback
The value of the world’s largest digital coin, Bitcoin, decreased nearly 9% in February to push the price below the key short-term support/resistance around $9,000. The bulls’ inability to move back above this line signals that there might be more downside to come.
Fundamental analysis: Bitcoin may lose race to altcoins, warns Coinbase CEO
Brian Armstrong, CEO of one of the world’s largest exchanges Coinbase, said that Bitcoin’s status as the unrivaled digital coin may change in case some other altcoins raise their game significantly.
“For me, the biggest areas of development I see that I think we need to get right as an industry are: 1. Scalability – we need blockchains that can get to at least thousands of TPS [transactions per second] to get mainstream adoption of crypto (similar to broadband internet being a big unlock on the web),” said Armstrong.
The issue of scalability has long been discussed as the biggest obstacle towards mass adoption of cryptocurrencies. In layman terms, there is a limited rate at which networks can process transactions.
“[Secondly], Privacy – perhaps a contrarian view, but I think we’ll need privacy coins, just like we needed HTTPS as the default on the web, for many use cases in crypto long term. Everyone deserves access to financial services, and financial privacy,” added Armstrong.
“In conclusion: I think it’s still very much up in the air which blockchain will help get crypto from ~50M users to 5B. The chain that manages to ship some of these scalability, privacy, decentralized identity, and developer tool solutions will have a big leg up,” concluded Armstrong.
Technical analysis: Struggles to move back above $9,000
The second part of February witnessed the Bitcoin price action drop from $10,500 to $8,300. Despite the broader market selloff, Bitcoin hasn’t been able to capitalize on deteriorating risk appetite.
Of course, this move has seen Bitcoin break the important block around the $9,000 handle. Since then, the price action hasn’t been able to recover and trade comfortably above $9,300.
More specifically, Bitcoin has failed to break this block today as the price rotated lower in an impulsive manner. This is a signal that the bears currently have the upper hand and we may see lower levels in the coming weeks.
There is significant support for the bulls in the $8,400 – $8,700 range provided from two moving averages, as the bears target the supporting trend line around the $7,700 mark.
Bitcoin has failed to move back above the resistance block located above the $9,000 mark today, which may facilitate a deeper pullback. In the meantime, the CEO of Coinbase warns that any altcoin that makes huge steps forward in the areas of scalability and privacy may overtake Bitcoin as the world’s largest digital coin in the future.