Happy Monday to everyone!
I am not necessarily here to spread FUD but more like a fair warning to people that are reading this and are heavily invested into Bitcoin.
While some analysts predict a short term target of 12000$ to 13000$, and some even as high as 15000$ per Bitcoin. Some of them are not accounting for the upcoming difficulty retarget and the unconfirmed transactions on the main Bitcoin Chain.
Currently unconfirmed transactions are sitting between 50k-60k, see here:
https://blockchain.info/unconfirmed-transactions
Currently at 15-16 transactions per second are sent through the network, where currently it is only able to process about 3 transactions per second in reality. If it continues like this, with this many or more transactions per second the mempool will be clogged again, and fees will skyrocket once again.
The other issue is the difficulty retarget in 2 days and 10 hours, more information here:
https://fork.lol/pow/retarget
The difficuly will adjust upwards by roughly 15%, this is just an estimation but the closer we get to the time of the difficulty adjustment the more accurate the data on the site is.
In case it rises by 15%, that might cause the following:
Miners direct their hashrate to Bitcoin Cash instead as it might be more profitable for them to do so.
->
Main Bitcoin chain slows down even further
->
Further clogging in the network
->
Even higher fees
The last time this happened around November 12th there were a total of 170k unconfirmed transactions
So here are two possibilities that might happen at the next retarget:
Why these two? Both of them are getting more attention and people are looking for a payment system that actually works and has low fees. Dash probably gained the most from the battle between the two biggest Bitcoin chains. But this is not to say that XMR or ETH, LTC and other alts did not receive great benefits.
This is not financial nor investment advice, but for now I 'retreated' into alts and hold no Bitcoin until the situation regarding transaction clogging is resolved. Meaning I am betting on option 1. Whatever price Bitcoin has now does not matter to me personally if it has large fees and might be unusable for an unknown period of time.
In some European countries, Santa is coming on December 6th. I expect 'red days' around that time. This means it might be a good opportunity for some people to buy in.
As seen before when the BTC price starts falling, all the other coins start plummeting compared to USD$.
Santa came late. The correction happened a few days after Wednesday.
I was wrong with my assumption that miners will switch to BCH from BTC. This is because BTC's price increased significantly and mining profitability did not decrease. But it does look like we entered a correction wave. I would not be surprised if it goes down to a range between 8.000 - 10.000 $ before starting another upward trend.
I was right about the increasing fees and the unconfirmed transactions. There were over 200k unconfirmed transactions for many days. And a few exchanges again started acting up, for example GDAX, where the price run up to 19.000 then immediately fell back, and a few exchanges disabling Bitcoin deposits due to delayed transactions.
https://blockchain.info/unconfirmed-transactions
Unconfirmed transactions are still around 114k and it does not seem like it will clear quickly enough. Generally on Sunday the network had less usage than during the weekdays. But still there is an average of 3-6 transactions per second happening on a network that can not (at this moment) support more than 3. (Plus another 7% if you count SegWit...)
The backlog might continue to grow as more and more people are trying to use the network.
But it clearly shows the system is unstable and can not support the current demand.
Pay attention to the difficulty adjustment coming in the next week as well!
Currently fork.lol shows an increase of 15-20% in the mining difficulty.
This will affect the profitability of Bitcoin mining and if hashing power is directed to another chain it can cause the backlog to grow even more.
