Midas Touch Director Gives Bitcoin Target Of $100K Or Higher

Bitcoin has been moving sideways during the day after an increase in selling pressure brought back to mid-range of its current levels. The first cryptocurrency by market cap trades at $47,394 with a 5.4% profit in the daily chart.

Bitcoin BTC BTCUSD

Despite the cool off in the crypto market, sentiment has turned bullish. Managing Director of Midas Touch Consulting Florian Grummes recently supported the optimism thesis for the long term.

In an interview with David from Kitco News, Grummes reiterated his prediction on Bitcoin and claimed that the cryptocurrency will continue into uncharted territory in 2021.

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In that sense, he expects BTC’s price to rise above the $100,000 mark in the next six months on the back of fresh capital coming into the market.

Financial institutions could have bigger motivations to jump into BTC. The cryptocurrency is amongst the best-performing assets of the decade and, as Grummes said, there is “a lot of pressure” on these entities to show good performance on their investments.

The Managing Director for Midas Touch believes that Bitcoin was designed to perform well under the current economical conditions. He said:

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(…) lots of institutions still have to catch up there, and I think this was all implemented in the game theory of Satoshi (Nakamoto, creator of Bitcoin) and it’s playing out wonderfully.

In the short term, Grummes acknowledged that BTC’s price saw a “good” bounce over the past weeks. However, the bullish sentiment generated by this price action might be turning into “greediness”.

Therefore, he recommended caution to those looking for an entry and added:

I wouldn’t buy here on these levels. I’ll be waiting for a pullback, I’m pretty sure it will come towards maybe $34,000 to $38,000 something around that range it’s going to be interesting again.

Bitcoin Rallies Against The Odds, On Track To $1,000,000?

This potential pullback will provide more information about future price action. Grummes didn’t rule out a revisit to the yearly open around the $20,000 levels if BTC’s price is unable to hold support at $35,000.

On the contrary, if support holds at the mid-area of those levels, “$100,000 will happen within the next 6 months”.

Speaking on the factors driving the bullish price action, Grummes referred to the BTC miners’ migration from China. Despite a great portion of the network was “eliminated”, the cryptocurrency continued in a demonstration of “what doesn’t kill you makes you stronger”, the Managing Director said.

If Bitcoin does manage to climb to $100,000, it will be business as usual with high levels of volatility as people FOMO into the market. This could lead to another 50% pullback, and a return to previous highs, a similar scenario to the past months.

Eventually, the first cryptocurrency by market cap could trade at $1,000,000, at some point “during the next decade”, Grummes predicted. However, this will depend on the monetary policy adopted by central banks.

If these entities keep “printing money”, Bitcoin could absorb it to drive its price much higher. Short-term holders and FOMO are the two main factors that could stand in the way of a fresh rally.

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Why Breaking $49K Is Important For Bitcoin To See Another All-Time High

Bitcoin has once again dipped back down below its $47K resistance point. This time, the price of the digital asset looks to have turned its attention downwards. While this downward correction continues, it is important to know where this correction might lead. Price dips are not a novel concept in bull markets. In fact, price dips are often expected following a rally in the price of any digital asset.

Related Reading | Why An 18% Drop In Bitcoin Could Still Be Bullish

This drop in price is usually the market taking a bit of a step backward. Not necessarily pulling out of the asset. Bitcoin had only recently broken $50K and did not rest at this position for long. So a small downward stretch will most likely lead to a bounce-back that will push the price higher back above $50K. With a consolidation point putting the digital asset at a reasonable position above $50K.

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Bitcoin Setup For New All-Time High

For bitcoin to hit a new all-time high as the market expects, some factors would play into this. Simply speaking, certain signals would need to be triggered for this price jump. Bulls still have majority standing currently, but it is no secret that the bears are determined to drag down the price of the asset.

Picture of a bitcoin chart showing $49K setup

Picture of a bitcoin chart showing $49K setup


BTC price set to hit new ATH if bounce-back leads past $49K | Source: Twitter

This has seen the price of bitcoin forming its first weekly bear after the run-up. As expected, bears are trying to straighten their hold on the market. Dragging BTC price down to test the $40K to $45K range again in the coming days. Current trends for the past 24 hours could very well put the market on track for this breakout level. Unless BTC sees a U-turn.

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Related Reading | Puell Multiple: The Bitcoin Metric That Says BTC Miners Aren’t Ready To Sell

While below $45K is more than likely, BTC price charging back up past $49K will very well see a break away from current bear trends. Not only will this totally weaken bears’ hold but will also trigger a run-up towards $60K.

Time To Buy?

Despite the recent dip, market sentiments have not moved much. The Fear & Greed Index shows that the market has now moved out of “extreme greed.” But generally has remained in greed, with a current score of 75.

Bitcoin’s current price is mostly a buying opportunity for investors in it for the long run. Also known as diamond hands. Losing over $3,000 in the space of 24 hours will usually see a price rebound. The weekend will most likely usher in an uptick in trading volumes that will see BTC recover above its crash point.

Bitcoin price chart from TradingView.com

Bitcoin price chart from TradingView.com


BTC price falls below $47K | Source: BTCUSD on TradingView.com

At this time of writing, BTC is trending around $46,600, with an overall market cap of $881 billion. The beginning of the week saw the price break out past $50K. Current trending patterns show the asset will usher in the weekend below $50K.

Featured image from The Independent, charts from Twitter and TradingView.com

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DIY Bitcoin Private Key Project

This is a fun project that will help you understand Bitcoin keys better. You’ll need a pencil, paper, something to generate random output in binary (like a coin) and a computer. The purpose here is to get you doing something which will help you learn a lot, instead of just reading about pure theory. And it’ll be easy enough that you can just jump right in and follow along.

Important Preamble

Don’t use this key for your actual bitcoin. Practice with this guide first.

When you make your real key — the one that will hold real bitcoin — you must make it on an air-gapped computer if you use this method. An air-gapped computer must have no capability of connecting to the internet. It’s not enough to just temporarily switch off your wifi connection on a regular computer if you are serious about security; clever hackers exist and can extract your private keys even if you are temporarily disconnected from the internet. At the end I’ll explain what to do next if you want to use this method to make your real keys.

Ok, let’s begin the project…

Step #1 – Make A Big, Random Binary Number

You can flip a coin 256 times, but it’s better and faster to use dice. You can buy casino-grade dice to ensure fair, random rolls. But it’s also okay to just save money and just use any old dice. Even if your dice are not perfect and have some bias, as long as you use several at a time, you will achieve sufficient randomness.

This is the procedure (one of many ways)…

  • Take four or so dice (e.g. from an old board game lying around).
  • Consider the numbers 1, 2 or 3 to be an output of zero while 4, 5 or 6 will be an output of one. This way you’ll get a binary output (only zeros and ones in the final result) with dice (e.g. roll a 3, record a zero; roll a 6, record a one).
  • Roll them and read left to right (consistency, decided beforehand, is important to maintain randomness). If it’s a close call about which is more to the left or right, just roll again.
  • Make 23 lines of 11 digits. The 24th line will only need three digits only. For each line, clump digits into groups of 4-4-3 (see image below) for easy reading and calculating. Keep your vertical columns aligned as much as possible and leave space between each row for manual calculations. This will all make sense later.

Like this example:

image8

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There are 256 binary digits here — 23 complete sets of 11 digits with the 24th row only needing three digits.

You’ll see later more clearly but, for now, understand that every 11 digits of binary will be translated to a mnemonic seed word. For the total 256 random binary digits, we can divide by 11 to get the number of words in the seed. But the answer to 256 divided by 11 is not a whole number; it’s 23.27. We can’t have 23.27 words in our seed.

We need eight more bits to have enough to make our 24th word. Once we have 264 bits in total, it all divides nicely into 24 sets of 11, yielding a 24-word mnemonic seed. As you’ll see later, these final eight extra bits will have their own important role to play.

A note on randomness:

You can make these 256 bits of random data any way you want, as long as it’s actually random. If it’s not random, someone might be able to reproduce the data. They would then be able to recreate your private key and could take all of your bitcoin. For example, if you make 256 bits of all zeroes (clearly not random), then someone will be able to guess your private key. Here’s proof: I generated a private key from that terrible all-zeroes randomness and found someone’s existing wallet. If it hadn’t already been emptied, I could have stolen the funds.

image9

They clearly knew what they were doing because it was a small amount and they didn’t leave any coins there for long. It might have been a demonstration, who knows. But other people have made non-random private keys that were guessable and as a result lost their bitcoin. But don’t worry, if you make a truly random private key, someone would have to exactly repeat your binary dice rolls or coin flips and, thanks to exponential math, that’s not going to happen during the life of the universe.

Step 2 – Calculate The Checksum

These final missing eight digits need to be calculated to form what is called the “checksum.”

What is a checksum? A checksum is how computers know that you’ve made a typo when you enter things like your credit card number or bank account number. It’s a useful thing to have the computer warn you that you’ve made a typo in your Bitcoin private key!

To calculate the checksum you’ll need a Linux or Mac computer. If you have Windows 10, you can install the Ubuntu App (a version of Linux) from the Microsoft Store. Just search “Ubuntu” and install it. You’ll use the Ubuntu terminal to run the commands that follow. The app is a temporary session; no files are stored on the Ubuntu app. This means you’ll get a clean session each time you run it.

Windows users need to do this workaround and it’s a nuisance. I tried other workarounds but met with various issues.

Now that you have a terminal on your Mac, Linux orWindows 10 machine, type the command below. Replace my binary digits with your own random binary digits (note that this should all be one very long line, even though the way it’s displayed here may look otherwise)

echo 1010111100111000000011110110001111010111101001010010001011001111011110100011000010100011111100100010100011110001110101000110011111110000101000110001010111010001010011111110101001010011110110110110000001101111010011000001110101101001000010001000010000100111 | shasum -a 256 -0

It can be hard to interpret that if you’re not used to the command line. I’ll spell it out: type “echo” then a space, then your series of zeros and ones without any spaces, then a space, then the “pipe” symbol (usually below the <delete> key on most keyboards), then a space, then the “shasum” command, a space, hyphen “a”, a space, “256”, a space, another hyphen and then the zero digit. Then hit <enter>.

Explanation of the code: The “echo” command just repeats back whatever you type next. The pipe symbol (“|”) takes that output and passes it to the command to the right of the pipe symbol (it “pipes” the data from left side to the right side!). The recipient of your bit stream is the ”shasum” hashing command. “-a” is an option to specify which algorithm to use. “256” represents SHA-256 — famous in the Bitcoin world — which is our choice for “-a”. Finally, “-0” is an option to say that the input should be interpreted as binary data, not regular text (aka ASCII) data.

When I run this command my resulting hash is displayed under the command. It’s the line that starts with “b184”:

image1

Now we can begin calculating the checksum. We take the first two digits of the hash output, in this case, “b” and “1”. These are hexadecimal numbers. In hexadecimal, instead of displaying digits from 0 to 9, we count up to 15 by using letters of the alphabet to represent numbers greater than nine:

0, 1, 2, 3, 4, 5, 6, 7, 8, 9, a, b, c, d, e, f

Similar to how playing cards count from 1 to 13 using their own substitutions:

Ace, 2, 3, 4, 5, 6, 7, 8, 9, 10, Jack, Queen, King

So in my hash, my first digit, “b”, represents 11. And “1” in hexadecimal is the same as a “1” that we’re used to dealing with.

Now we convert these first two numbers to their four-digit binary representations. You can do this by referring to the chart below:

11 in four-digit binary is 1011. 1 in four-digit binary is 0001. (Instructables circuits)

11 in four-digit binary is 1011. 1 in four-digit binary is 0001. (Instructables circuits)



So we went from b and 1, to 11 and 1, and finally to 1011 and 0001.

These four-digit numbers are the checksum that we’ll add to our bits to complete our 24th word!

Add them to the 24th line to complete the final set of 11 binary digits. You now have 264 digits in total (see how the 24th line is completed in the diagram further down)

Step 3 – Converting Binary To Decimal

Each of the groups of 11 binary digits needs to be converted to a decimal number.

You can enter them into an online binary-to-decimal calculator, but only for this practice wallet. For your real wallet, I’ll show you how to do it manually.

A bit about binary. In a binary number system, there is only 0 and 1. The other digits you know (2,3,4,5,6,7,8,9) don’t exist. So counting upwards we start with 0, then 1, but the next number is unusual. There is no “2” available. So the next biggest number after 1 is “10”. Don’t read it as “ten,” read it as “one, zero.” In binary, “10” represents the “2” you are used to. The next number up after 10 (binary) is “11” (“one, one,” not “eleven”!). That’s equal to “3” in decimal. For the next number “12” is not possible because there is no “2” digit in binary; the next biggest number we can represent with just zeros and ones is “100” (“one, zero, zero”). That’s actually “4” in decimal. Then 101=5, 110=6, 111=7, 1000=8, 1001=9 and so on.

With eleven binary digits, the smallest possible number is zero (00000000000), and the largest is 2047 (11111111111).

We take each of these eleven binary digits on our page (each line) and convert them to decimal. You can do it manually or convert them from the command line in Linux, Mac, or the Ubuntu App.

For the number 10101111001, you’d type:

echo “$((2#10101111001))”

You’ll get an output of “1401”. Just change the 10101010101 to match each group of eleven digits and calculate its equivalent decimal number.

Doing this conversion solely by hand is harder, but possible.

On the top of the page, write this exact sequence of numbers from right to left, vertically in line with the binary digits below:“1024” above the first column of binary digits. Then “512” over the next column. Then “256”. And on and on, halving the number each time until you end up with “1” above the last (eleventh) column of your binary digits.

image12

Now look at the your first row of binary digits. Wherever there is a “1”, you add the decimal number that’s directly above it and record it below the binary digit. Where there is a “0” you ignore the number above. Like this:

image7

In this example, there’s a “1” under the 1024 column, the 256 column, the 64, the 32, the 16, the 8 and the 1.

Add the decimal numbers to get the total:

image11

Now repeat this process for all 24 rows:

image5

image6

You now will have 24 decimal numbers that range between 0 and 2047.

Step 3 – Look Up The BIP 39 Words

The BIP 39 protocol (Bitcoin Improvement Proposal number 39) specifies 2048 different words, listed in alphabetical order. When this list is read in by code, each word can be identified by its ordered position in the list. The numbers you just calculated are used to look up their corresponding word. For example, the first row resulted in the number 1401 which equals the word “quality” in the ordered BIP 39 wordlist.

Zero is the smallest possible value you could calculate for a row (from binary 00000000000). In that case you would select “abandon,” the first word on the list.

The largest possible number is 2047 (from 11111111111). The correct word for that would be “zoo,” the last word on the list. This is word number 2047.

There’s one confusing wrinkle to be aware of: computers count items starting at 0. So the fifth item in a list is the computer’s number 4.

This extra confusion is unfortunate. The official specification of the BIP 39 words is on GitHub but the word list is displayed with line numbers that start with one instead of zero. So while “abstract” is the eighth word and is listed on line number 8, its actual BIP 39 numeric equivalent is 7.

image4

My first line of 11 binary digits adds up to 1401 in decimal. So on the list in Github, I have to find the word on line 1402 (1401 + 1). That word is “quality”. Proceed to look up each decimal — taking care to add an extra 1 to your calculated result to match Github’s line numbering — and find the word for each of the 24 lines.

image3

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Well done if you’ve made it this far! You now have a valid 24-word Bitcoin mnemonic seed. You should now throw it away — unless you used the fully manual approach, you can’t use these for your bitcoin as they were not created in a safe environment!

Actually, before you do toss them, you could enter the words into a hardware wallet or software wallet and see if they are rejected. If it is rejected, you’ve made an error somewhere, which is very easy to do with this manual approach. If there’s any error anywhere, the checksum will not match and all wallets will signal an error immediately.

For Your Real Keys

You really need to do key generation on an air-gapped computer.

You can learn to build a cheap $10 Raspberry Pi Zero air-gapped computer here, buy one ready-made or if you have extra money you can build a custom desktop computer without any wifi or Bluetooth components. The Raspberry Pi option is very cheap but the computer is very slow, so be warned. It is excellent if you want to have many distributed keys in a multisignature setup.

Heard some FUD about air-gapped computers? See some anti-FUD here in Q&A number 23.

In addition to the safe generation of keys, you have to consider storage and duplication or distribution.

To drastically reduce your risk of attack or loss, the next level up is learning about multisignature wallets — something I teach in my mentorship program.

If you are in the single-signature key phase of storage (most people are), then you really should keep your seed in a hardware device. Most people let the hardware wallet (HWW)make their key and never verify that key on an air-gapped computer. That’s fine for most people. But if you are paranoid, you should verify that the key produces the public key and addresses you expect.

And now that you know how to securely make your own key (the totally manual, offline approach described above), you don’t have to trust the HWW to generate a good key. You first make a new key yourself and then instead of creating a new wallet on the hardware device, you “restore” a wallet instead and enter your newly calculated words into the device. The words are then “locked” in the HWW and protected by your PIN.

The hardware device is thus a digital safe for your private key.

You should never have just one copy of your private key. If you lose it, you will lose any bitcoin stored by the key in there. Technically there are no bitcoin in the device; they are on the blockchain. The hardware wallet, as I said, is a digital safe for your private key which is represented by the words you just made. To understand this a little better, see this article.

The code within the HWW uses mathematical functions to calculate your extended public key from the private key and then many individual public keys are mathematically derived from the extended public key. And then each of those can be used to calculate a collection of seemingly infinite addresses. Everything is downstream from the private key. You can enter your private key in a different device and reliably (mathematically) produce exactly the same collection of public keys and addresses. More details on this here.

The point of saying this is for you to appreciate that it’s as if the bitcoin are stored on the 24 words you created — not the hardware wallet. And you should very, very carefully back up those words and keep them safe from thieves and natural disasters. If you make copies and store them in different locations, then a fire in one location won’t cause you to lose all of your bitcoin because you’ll have a copy somewhere else.

Inheritance

Once you have your keys that you generated on an air-gapped computer and you’ve backed them up very securely, it’s time to think about how to pass them on to your heirs.

There are trusted third parties that can hold your keys or you can develop a plan in a trustless way — my preferred option. I am happy to assist people that need this.

Happy Bitcoining.

This is a guest post by Arman the Parman. Opinions expressed are entirely their own and do not necessarily reflect those of BTC Inc or Bitcoin Magazine.

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Analysts say Bitcoin price pullback and profit-taking at $50K ‘was expected’

The euphoria seen across the cryptocurrency ecosystem over the past couple of weeks was tampered down on Aug. 26 as an early morning attempt by bulls to push the price of Bitcoin to $50,000 was soundly rejected. 

Data from Cointelegraph Markets Pro and TradingView shows that following its rejection, the price of Bitcoin slid to a low of $46,457 before bulls managed to regroup and put a halt to the downturn.

BTC/USDT 1-day chart. Source: TradingView

Here’s what analysts are saying about Thursday’s price action for Bitcoin and a few things they are watching for as the digital asset is caught between a tug-o-war between bulls and bears.

BTC price could trend south for a while

The $50,000 price level was identified as a critical area for Bitcoin by market analyst and Cointelegraph contributor Michaël van de Poppe, who posted the following tweet outlining the significant support and resistance areas.

According to van de Poppe, Bitcoin is likely to spend some time in a downward trend following this latest pullback, but there is a significant amount of support at the $44,000 level that could protect it from further decline.

The $51,000 price level was noted by van de Poppe as an important price to overcome to invalidate the current bearish trend.

The analyst said:

“It’s obviously not a bear market, but the overall consensus is that emotions can take over. Especially if Bitcoin corrects some more towards $44,000 or potentially $42,000, the topic of ‘long bear cycle’ will start to take over.”

Traders expect the $46,200 support to hold

According to Whalemap, a crypto-focused data tracking service, the calls for a lengthy bear cycle are premature at best according to on-chain data.

Bitcoin volume profile. Source: Whalemap

As seen in the chart provided, the $46,200 support level is important as the next support level is found at $39,600. On-chain data also shows that there is a limited amount of selling volume between $46,200 and $57,400.

Whalemap analysts said:

“No reasons to get bearish just yet. Risk reward looks pretty positive if you look at on-chain data. A lot of UTXOs held unspent at $46,200 and not much selling pressure up until $57,400.”

Related: Grayscale Bitcoin Trust FUD is now over as the last GBTC unlock totals just 58 BTC

Profit-taking at $50,000 was expected

Crypto analyst Will Clemente issued some reassuring words on Aug. 24 when warned of a possible short-term bearish pullback based on exchange inflows and whale wallet activity.

Thursday’s pullback in the market showed that Clemente’s concerns were warranted and the analyst followed up the previous tweet with, “I think the large portion of this short-term move is probably over.”

In a separate tweet, Clemente said:

“It’s not unexpected to see some profit-taking after the move up to $50,000, but watching the rate at which this is happening and more importantly, are sellers willing to start selling at a loss? Some clues can be offered by Realised P/L, SOPR, SOAB, ASOL, and Realised Gradient.”

The overall cryptocurrency market cap now stands at $1.999 trillion and Bitcoin’s dominance rate is 44.2%.

The views and opinions expressed here are solely those of the author and do not necessarily reflect the views of Cointelegraph.com. Every investment and trading move involves risk, you should conduct your own research when making a decision.