Upgrade on Watch

Bitcoin prices are sharply higher on Monday as the leading digital coin undergoes a boost in investor sentiment ahead of a planned network upgrade due to go live later today. The Bitcoin mainnet upgrade schedule for midday UTC Monday will allow developers to create tokens on the network, along with other changes, and is touted to bring better security and privacy to the network. The ‘CashTokens’ upgrade will allow for decentralized applications directly on the Bitcoin Cash network. As such, the upgrade is expected to usher in a new wave of demand which should help propel Bitcoin prices higher near-term.

Recovery in Sentiment

The crypto sector had suffered the effects of a negative shift in sentiment recently amidst further bankruptcies (Bittrex) and technical issues at Binance. Liquidity concerns and regulatory fears in the US have been a major headwind for Bitcoin recently but bulls and ‘diamond hands’ are hoping today’s ‘hard fork’ will help boost sentiment and drive prices back up to highs. The enhanced security on the network should help reinforce demand for cryptos premised on ideological drivers set against a backdrop of US banking sector concerns, underscoring the benefits of cryptocurrencies. Movements in USD will also be key to watch this week as traders monitor progress in the US debt ceiling talks.

Technical Views

BTC

The recent sell off has seen the market breaking down out of the contracting triangle pattern and below the 27415 level. The fall has found demand into Friday’s lows, however, with price now attempting to reclaim the broken level. Back above 27415, focus will be on a return to highs and a move up to 32185 next. To the downside, 24930 is the next support to note.