Amid signs that the U.S. economy is weaker than expected, Bitcoin could face an even larger selloff ahead. Here's why, according to 10x Research.
Recent declines in the price of Bitcoin could merely be the beginning of a more dramatic fall, a crypto research firm has predicted, attributing this potential downturn to a looming economic storm and a decoupling of the cryptocurrency from the broader stock market.
The analysis, authored by Markus Thielen of 10x Research, noted that there were some recent positive signs when it came to the resilience of the crypto market, from institutional interest in spot Bitcoin ETFs to the price of BTC withstanding the return of billions in Bitcoin by Mt. Gox.
The trend line near $70,000 was tested for the sixth time–however, the situation soon took a turn,” the firm wrote. “In the past 48 hours, it has become apparent that the U.S. economy is weaker than the Federal Reserve initially believed.”
The findings hinge on the growing divergence between the robust performance of the stock market—particularly fueled by AI hype—and the weakening underlying economy as signaled by the ISM Manufacturing Index, a key metric measured by the Institute for Supply Management. 10x Research said “a weak ISM index sent shockwaves through risk assets.”

"Historically, Bitcoin has experienced sharp corrections when the ISM peaked," the report states. "What makes this situation particularly perilous is the lingering effect of the COVID stimulus and aggressive government support, which may have artificially inflated the stock market."
While the Federal Reserve has adopted a dovish tone, suggesting potential rate cuts in the fall, the research warns that this might be too little too late to prevent an economic downturn.
The firm's prediction is further underpinned by the rising probability of a recession in 2025, a trend historically associated with stock market declines. If this scenario unfolds, it notes, Bitcoin could suffer a significant selloff—echoing the conditions that preceded the 2001 and 2007 recessions.
“Suppose the stock market follows the downward trend of the ISM Manufacturing Index or even starts to anticipate a near-recession,” the report said. “In that case, stocks will likely decline significantly over the next few quarters.

“This would have substantial negative implications for Bitcoin as well,” it continued. “If this scenario unfolds, Bitcoin prices could revisit the $50,000 level and fall even lower.”

The report's grim outlook is compounded by the recent surge in Bitcoin mining difficulty.
Galaxy Digital's Head of Research Alex Thorn said Bitcoin mining difficulty reached an all-time high after a 10.5% adjustment, which was also the largest difficulty increase ever.
“In [percentage] terms, this was the 24th biggest increase since 2016, the 73rd biggest since 2012, the 119th of all time,” he tweeted.
yesterday, #bitcoin mining difficulty reached an all-time high after a +10.5% adjustmentin absolute terms, this was the largest difficulty increase of all timein % terms, this was the 24th biggest increase since 2016, the 73rd biggest since 2012, the 119th of all time pic.twitter.com/OTjIIWXEbE— Alex Thorn (@intangiblecoins) August 1, 2024

This unprecedented surge in mining difficulty reflects the growing competition among miners and the increasing computational power being devoted to securing the Bitcoin network. 
While it underscores the robustness of the Bitcoin ecosystem, it also introduces new dynamics to the market. Increased mining difficulty can put pressure on miners' profitability, potentially influencing their decisions to hold or sell Bitcoin—which could, in turn, affect market prices.

All About Day Trading

Day trading is a popular trading strategy in the markets where traders aim to profit from short-term price movements within a single trading day. It involves buying and selling financial instruments, such as stocks, currencies, commodities, or cryptocurrencies, within the same trading day, with the goal of capitalizing on price volatility.

Here are some key aspects of day trading:

1. Short-Term Trading: Day traders open and close positions within the same trading day, and they rarely hold positions overnight. This approach is in contrast to swing trading or long-term investing.

2. Capital Requirements: Day traders typically need sufficient capital to trade comfortably, as they aim to take advantage of small price movements. This means having enough funds to cover potential losses and meet margin requirements.

3. Technical Analysis: Day traders often rely on technical analysis to make trading decisions. They use charts, indicators, and patterns to identify potential entry and exit points.

4. Volatility: Day traders seek out assets that exhibit significant price volatility, as these fluctuations provide opportunities for quick profits. Highly liquid assets are also preferred to ensure smooth order execution.

5. Risk Management: Effective risk management is crucial for day traders. This includes setting stop-loss orders to limit potential losses and using proper position sizing.

6. Trading Strategies: Day traders employ various trading strategies, such as scalping, momentum trading, breakout trading, and mean-reversion trading. Each strategy has its own set of rules and objectives.

7. Market Monitoring: Day traders need to closely monitor the markets during trading hours. They often use real-time news, level II quotes, and trading platforms to make informed decisions.

8. Psychological Discipline: Day trading can be emotionally taxing, as traders face the pressure of making quick decisions and managing the stress of financial risk. Maintaining discipline and emotional control is vital.

9. Regulations: Day trading is subject to regulatory rules, including pattern day trading rules in the United States that require traders to maintain a minimum account balance if they make more than a certain number of day trades in a rolling five-day period.

10. Tax Considerations: Tax implications can be significant for day traders, as short-term capital gains are typically taxed at a higher rate than long-term gains. Traders should be aware of tax laws in their jurisdiction.

11. Education and Practice: Novice day traders are encouraged to undergo education and practice on demo accounts before risking real capital. This helps build skills and gain experience without financial risk.

12. Record-Keeping: Maintaining detailed records of trades is important for assessing performance and tax reporting.

It's important to note that day trading is not suitable for everyone. It requires a solid understanding of the markets, a disciplined approach, access to real-time data, and sufficient capital. Many day traders experience both wins and losses, and it can be financially risky.

Additionally, it's recommended to research and understand the risks and potential rewards before engaging in day trading, and some traders may consider seeking advice or mentorship to improve their trading skills.

Secure Multi-Party Computation (sMPC) is a powerful cryptographic concept that enables multiple parties to jointly compute a function over their inputs while keeping those inputs private. This technology has significant implications for blockchain and beyond. Let's delve deeper into sMPC, its applications, and its importance in the blockchain ecosystem.

Key Concepts of sMPC:

1. Privacy Preservation: The fundamental principle of sMPC is that it allows computation on data without revealing the data itself to any party involved in the computation.

2. Distributed Computation: The computation is split across multiple parties, with each party performing a portion of the calculation.

3. Input Privacy: Each party's input remains hidden from other parties throughout the computation process.

4. Output Integrity: The final result of the computation is guaranteed to be correct, assuming the protocol is followed correctly.

How sMPC Works:

1. Secret Sharing: The input data is divided into "shares" and distributed among participants.
2. Computation on Shares: Parties perform calculations on these shares without reconstructing the original data.
3. Result Aggregation: The final result is assembled from the individual computations.

Applications in Blockchain:

1. Private Smart Contracts: sMPC allows for the execution of smart contracts without revealing sensitive data to the blockchain network.

2. Decentralized Exchanges (DEXs): It can enable price discovery and order matching without exposing individual trade information.

3. Voting Systems: sMPC can be used to create secure and private voting mechanisms on blockchain platforms.

4. Privacy-Preserving Analytics: Blockchain data can be analyzed without compromising individual transaction privacy.

5. Cross-Chain Interoperability: sMPC can facilitate secure communication and transactions between different blockchain networks.

Beyond Blockchain:

1. Financial Services: Banks can collaborate on fraud detection without sharing customer data.

2. Healthcare: Medical researchers can analyze patient data across institutions while maintaining patient privacy.

3. Supply Chain Management: Companies can optimize logistics without revealing sensitive business information.

4. Government Services: Agencies can share and analyze data while adhering to privacy regulations.

Challenges and Considerations:

1. Computational Overhead: sMPC protocols can be computationally intensive, potentially impacting performance.

2. Network Requirements: They often require significant communication between parties, which can be a bottleneck.

3. Trust Assumptions: While sMPC provides strong privacy guarantees, it still relies on certain trust assumptions about the participants.

4. Implementation Complexity: Designing and implementing secure sMPC protocols is challenging and requires expertise.

Future Developments:

1. Efficiency Improvements: Research is ongoing to make sMPC more efficient and practical for real-world applications.

2. Integration with Other Technologies: Combining sMPC with other privacy-enhancing technologies like zero-knowledge proofs could lead to even more powerful privacy solutions.

3. Standardization: As sMPC becomes more widely adopted, we may see efforts to standardize protocols and best practices.