DigiByte: Fundamental Analysis for 6 Phases

In the past two weeks, the coin DigiByte went through quite strong ups and downs. In the picture below, you can see the value over time from the 1st June to 11th June 2017. In this post, I will have a look at the news which are responsible for the development of the coin. In any case, you should always have a glance at the news when investing in cryptos. If you do not do this, you will possibly be surprised at how the value develops. Long term, investors are only successful, if they have an edge in the market.

DigiByte value chart

Chart of DigiByte on Bittrex from 1st June to 11th June 2017

Fundamental Analyse of DigiByte

Phase One and Two

Where exactly, or especially why, phase one started is difficult to determine. I wrote about it in how a value of a currency is determined, but cryptos… phew! A volatility of 30% per day is nothing special in the crypto world. DigiByte probably just caught the interest after a while, like many other coin “randomly” do. The coin itself was listed on Bittrex in August 2014 and started with 10000 Satoshis. Though, within a month the value shrank down to 100 Satoshis. Since then, a lot has changed. In the end of May 2017, the typical raise of 30% started to get the attention of more investors, since an early entry into such a raise means more profit later on (in case it raises more).

In the end of May, the news went around that DigiByte will participate in the Citi® Tech for Integrity Challenge on the 9th June 2017. The event was quite important, due to strategic partnerships with companies IBM, Microsoft, Facebook, LTP, PWC, Clifford Chance and MasterCard. This is always a good change for a crypto currency to get attention from news. At the same time, the information started going around that on the 10th June, DigiByte will start a Minecraft Server. The news explicitly stated that neither Mojang nor Microsoft are involved in this., yet the rumour implied that DigiByte would be the first crypto currency used in Minecraft.

One can imagine, both news together started to generate quite a bit of attention for DigiByte. That resulted in even more investors jumping into it. That was phase two.

Phase Three

This phase is just a technical correction on the value development. Since this is more about chart analysis than fundemental analysis, I will keep it short. A technical correction is a correction of the current value against the current trend. This is very common in an overheated market. I commonly describe it, as the maximum price the market is willing to pay has been marked. There are no more buyers willing to pay the price and thus the price will drop.

Phase Four

Till the event is starting, the price of DigiByte is barely volatile. Everyone is waiting for more news to come. But in phase four, there are no news.

Phase Five and Six

Early on the 9th of June (phase five), the value of DigiByte grew stronger than before. Classic example of euphoria in the market, because everyone expects the Citibank Tech Challenge to raise the interest and thus the value. However, during noon time the winner of the challenge was announced in a Twitter Post and the market went crazy. Immediately, the value crashed since the team of DigiByte was not the winner – of course. Thus, ever since the value has just gone further and further down. Within three days, DigiByte lost 50% of its value. Even the start of the Minecraft server did not change anything.

I expect that the rate is dropping even further as long as no new news has been published from DigiByte on something good. At least, they should post about the event and that maybe it helped them to network and gain really good connections into the big companies. But while they are not posting something positive, there is no reason for DigiByteto rise any more. Just simple news about some strategic partnership would probably help. That would even mean that DigiByte would be one of the first crypto currencies publicly supported by these companies and that would probably easily push DigiByte 100% or more. But, as I said, as long as there are no good news, there is no raise in value.

And what is your opinion about DigiByte? A coin for the future or just another hyped one with no hope?

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