What To Expect From Bitcoin on the 1st Of August, Perhaps a New All Time High?

Under Bitcoin Improvement Proposal (BIP) 148, Bitcoin will be undergoing a user activated soft fork on August 1, 2017.There are three possible outcomes of the soft fork, although the exact outcome is unknown as the outcome will depend on the actions of the nodes on the network.

In a worst case scenario, BIP 148 could cause Bitcoin to chain split into two separate blockchains, one with SegWit activated and one without.

However there are 3 possible scenarios.

  1. BIP 148 succeeds: The protocol upgrade will activate smoothly. Non-compliant blocks will be orphaned. Bitcoin goes on exactly as it did on July 31st but with all blocks signaling for SegWit and all SegWit-ready nodes will eventually activate SegWit. Nobody has to change any of their software.
  2. BIP 148 fails: If no nodes are running BIP148, then BIP148 has failed. Bitcoin goes on exactly as it did on July 31st. People who installed BIP148 nodes need to roll back their nodes to be able to spend their bitcoins. Everyone else is unaffected.
  3. Neither side is a clear winner: Neither side is the clear winner and the blockchain splits, where two versions of the blockchain emerge. This is the disaster scenario. All coins that existed prior to the chain split will exist on both chains. If there is a greater demand for the blocks produced by the BIP148 miners, then profit-driven miners would eventually flock to BIP148 chain.
  • Most likely, one of the first two scenarios will unfold, where BIP148 either succeeds triumphantly or fails definitively, and Bitcoin will go on as it was, for better or for worse.
  • Yet despite the odds, however improbable, an investor must always consider the worst case scenario.

However, if we look at the chart, it could help to see the potential short term price fluctuations. Bitcoin found the support at USD 1760 and rose sharply. While going up it broke above the descending channel suggesting the continuation of an upward move. While correcting down, it rejected 38.2% Fibonacci retracement level  and now could be ready to make a new all time high, targeting USD 3,100 mark as a first target, and potentially up to USD 4,000-5,000

 

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