Bitcoin Bull Trap: Taproot Upgrade

Bitcoin and Ethereum drop, Dogecoin slides over 5%

Analysts warn on a price crash as the Bitcoin network is getting warm for the first upgrade since 2017.

Cryptocurrencies fail to hold the all-time price highs from earlier this week as traders fear to witness a spike in the trading volatility, triggered by Bitcoin Taproot upgrade, aiming to improve privacy and efficiency.

Bitcoin and Ether have more than doubled since May and added over 60% since September this year.

Analysts see that too many traders have entered bullish trades, making Taproot Upgrade into a Trap of Bulls event. Too many speculators are looking now beyond bitcoin for additional profit opportunities, totally ignoring a possible price correction.

Funds inflow into Bitcoin thematic products have just hit a record $6.4 billion this week, in total.

What is Taproot?

Bitcoin’s first major upgrade since 2017, Taproot, a highly anticipated upgrade to the leading cryptocurrency. It will go live in several hours, anticipated to start at block 709,632. You should not confuse it with a smart contract:

Taproot is supposed to enable Schnorr signatures, with more private transactions:

  • Flexible multi-signature transactions: Merkelized Abstract Syntax Tree (MAST) Allowing the sender and recipient to jointly sign a Bitcoin payment transaction.
  • Signature for superior security
  • Low fees

Taproot will enable new toolboxes and solutions, developers would need months if not years to implement. This so-called agreed Soft Fork update will bring value to the network but not necessarily a wild price boost for Bitcoin.

This Taproot Upgrade anticipation looks already overcrowded.

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