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On September 7, Bitcoin encountered a critical long-term trendline as the US dollar demonstrated its strongest performance in six months. BTC’s price gravitated around the $25,700 mark, showing a degree of stability compared to the previous day, which witnessed fluctuations between $26,000 and local lows below $25,400 within an hour.

BTC/USD 1-hour chart. Source: TradingView

Caution Prevails Among Bitcoin Participants

Market sentiment regarding Bitcoin remained cautious, with many anticipating further downside. Prominent trader TraderSZ expressed this sentiment, suggesting that unless Bitcoin reclaims its May low, he expects further downward movement.

“Taken a short here half size targeting 23.6k. If we reclaim May low I will look to scale out.”

Key Level: 200-Week EMA

Michaël van de Poppe, CEO of trading firm Eight, emphasized the significance of the 200-week exponential moving average (EMA) at $25,670 as a pivotal level to monitor on weekly timeframes. The question on everyone’s mind, he noted, is whether Bitcoin will maintain its position above this crucial EMA.

BTC/USD annotated chart. Source: TraderSZ/X

Bearish Predictions and Altcoin Concerns

Trader and analyst Toni Ghinea made a more categorical prediction, envisioning Bitcoin’s decline to $25,000 and possibly lower. Ghinea also suggested that altcoins would follow suit with new lows. He asserted that the move downward is far from over and cautioned against overly relying on the ETF narrative, suggesting it’s used to manipulate the market.

US Dollar Strength and Its Impact on Crypto and Risk Assets

Beyond the cryptocurrency realm, the US dollar’s strength had broader implications for risk assets. The US dollar index (DXY), after surpassing May’s local highs, reached 105.15, marking its highest level since March 10.

Analysts expressed concerns that the US dollar’s rally would continue to exert pressure on risk assets, particularly those on the higher end of the risk spectrum, such as cryptocurrencies. This sentiment was echoed by trader Benjamin Cowen, who highlighted the potential drain on risk assets due to the strengthening US dollar.

U.S. dollar index (DXY) chart with moving averages. Source: Caleb Franzen/X

Caleb Franzen, senior analyst at Cubic Analytics, concurred, emphasizing the bullish nature of the US Dollar Index (DXY) and its potential bearish implications for financial assets, particularly US equities.

US Dollar Strengthens, Casting Shadow on Crypto and Risk Markets

As Bitcoin tests its crucial 200-week moving average, the surging US dollar raises concerns about the stability of risk assets, with both traders and analysts expressing caution and predicting further downside potential.

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During a sweltering August heatwave in Texas, Bitcoin mining firm Riot Platforms made significant energy reductions, earning $31.7 million in energy credits for the power it would have otherwise consumed.

Energy Demand Cut by 95%

Riot Platforms, in response to the scorching conditions, curtailed its energy demand by 95%. This measure allowed the company to redirect vital resources to the local electricity provider, ERCOT. In August, Riot Platforms mined only 333 Bitcoin, valued at approximately $8.9 million.

Maintaining Power Supply for Texans

Jason Les, CEO of Riot Platforms, emphasized the importance of these energy credits in maintaining electricity services for ordinary Texans. The reduction in power demand contributed to overall power stability in ERCOT.

Riot Platforms views these energy credits as a significant cost reduction element in its Bitcoin mining operations, positioning the company as one of the industry’s most cost-effective producers.

Texas Governor’s Miner-Friendly Approach

Texas Governor Greg Abbott has adopted a “miner-friendly” stance, advocating for more miners to establish operations in the state. This approach aims to address the state’s historically unstable grid by encouraging additional power generation facilities.

Market Challenges for Bitcoin Miners

Riot Platforms, like other crypto mining firms, has faced market challenges, including volatile energy costs and intense competition among miners. Despite impressive revenue growth in 2021, the company experienced net losses exceeding $500 million in 2022. While Bitcoin’s value rebounded in 2023, its stock remains significantly below its 2021 peak.

Looking Ahead

Bitcoin miners continue to navigate a landscape of record-high hash rates and forthcoming halving events, which will reduce miners’ rewards. Miners are diversifying their activities, with some venturing into high-performance computing services to cater to the growing artificial intelligence market.

In conclusion, Riot Platforms’ energy conservation efforts during the Texas heatwave highlight the resilience and adaptability of the Bitcoin mining industry in the face of evolving challenges.

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In the latest edition of Coinbrit’s Market Report, analyst Marcel Pechman delves into the factors propelling Bitcoin towards a potential $22,000 price point. He also examines BitMEX co-founder Arthur Hayes’s assertion that the Bitcoin bull market initiated in March.

Bitcoin’s Trajectory to $22,000

Pechman cites multiple drivers influencing Bitcoin’s upward trajectory. Investor sentiment has soured following Grayscale Investments’ much-hyped legal victory against the SEC on August 29 and its delay of several spot Bitcoin exchange-traded fund applications. Additionally, legal actions by the SEC against major crypto exchanges like Binance and Coinbase, accompanied by potential DOJ indictments for money laundering and Russian entity dealings, are raising concerns.

The Crucial Role of U.S. Inflation and the Federal Reserve

Pechman highlights the crucial role played by U.S. inflation, which has dropped to 3.2%, and the U.S. Federal Reserve’s efforts to reduce liquidity in the markets. These factors contribute to the bearish sentiment surrounding Bitcoin.

BitMEX founder Arthur Hayes contends that the Bitcoin bull market commenced in March. He attributes this to the Silicon Valley Bank’s troubles and the subsequent U.S. Treasury Department intervention.

The Complex Dynamics of the U.S. Dollar Index

Pechman acknowledges Hayes’s perspective but introduces the U.S. Dollar Index as a variable. Despite Bitcoin’s appeal, the index’s stability over the past six months suggests investor confidence that other countries would experience economic instability before the U.S. in the event of a global recession.

Ultimately, Pechman concludes that the Federal Reserve prioritizes the stability of banks, even if it triggers economic turbulence. U.S. Treasurys and the U.S. dollar continue to be perceived as safe havens in times of uncertainty.

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Grayscale has formally requested a meeting with the U.S. Securities and Exchange Commission (SEC) to discuss the conversion of its flagship Grayscale Bitcoin Trust (GBTC) into a spot exchange-traded fund (ETF). Following a recent court ruling against the SEC’s denial of the conversion application, Grayscale’s lawyers argue that there are no legal grounds left to block the process.

Screenshot of the letter sent to the SEC by Grayscale’s retained law firm Davis Polk. Source: Grayscale

Seeking Fair Treatment for Investors

Grayscale emphasized that it believes there are no reasons to treat GBTC differently from Bitcoin futures ETFs that the SEC has previously approved. The firm urged the SEC to ensure a level playing field for the nearly one million investors in the Grayscale Bitcoin Trust.

“Now that the Court of Appeals has spoken, there is no available rationale that would distinguish a Bitcoin futures ETP from a spot Bitcoin ETP under the legal analysis previously adopted by the Commission in rejecting spot Bitcoin ETPs.”

Grayscale pointed out that its conversion application has been pending for significantly longer than the time frame stipulated by SEC rules. The firm aims to expedite the process, aligning it with market demand and the interests of its investors.

GBTC Discount Narrows

Since the August 29 court ruling in favor of Grayscale, the discount on GBTC—indicating the difference between its trading price and net asset value—has narrowed to 19.9%. This development reflects growing investor confidence in the potential approval of the GBTC conversion.

“We believe the Trust’s nearly one million investors deserve this fair playing field as quickly as possible.”

Grayscale’s pursuit of converting GBTC into a Bitcoin spot ETF highlights the broader industry trend of seeking SEC approval for cryptocurrency ETFs. Such approval would enable greater access to Bitcoin for institutional and retail investors, potentially driving increased adoption of cryptocurrencies.

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Top 10 Machine Learning Algorithms for Beginners

how does machine learning algorithms work

Using statistical methods, algorithms are trained to determine classifications or make predictions, and to uncover key insights in data mining projects. These insights can subsequently improve your decision-making to boost key growth metrics. Our study on machine learning algorithms for intelligent data analysis and applications opens several research issues in the area.

how does machine learning algorithms work

Semisupervised learning works by feeding a small amount of labeled training data to an algorithm. From this data, the algorithm learns the dimensions of the data set, which it can then apply to new unlabeled data. The performance of algorithms typically improves when they train on labeled data sets. This type of machine learning strikes a balance between the superior performance of supervised learning and the efficiency of unsupervised learning. Decision tree learning uses a decision tree as a predictive model to go from observations about an item (represented in the branches) to conclusions about the item’s target value (represented in the leaves).

Machine learning vs. deep learning

Choosing the right algorithm can seem overwhelming—there are dozens of supervised and unsupervised machine learning algorithms, and each takes a different approach to learning. The many different types of machine learning algorithms have been designed in such dynamic times to help solve real-world how does machine learning algorithms work complex problems. The ml algorithms are automated and self-modifying to continue improving over time. Before we delve into the top 10 machine learning algorithms you should know, let’s take a look at the different types of machine learning algorithms and how they are classified.

Use regression techniques if you are working with a data range or if the nature of your response is a real number, such as temperature or the time until failure for a piece of equipment. To understand the working functionality of Linear Regression, imagine how you would arrange random logs of wood in increasing order of their weight. You have to guess its weight just by looking at the height and girth of the log (visual analysis) and arranging them using a combination of these visible parameters.

Artificial Neural Network and Deep Learning

They deliver data-driven insights, help automate processes and save time, and perform more accurately than humans ever could. Decision tree, also known as classification and regression tree (CART), is a supervised learning algorithm that works great on text classification problems because it can show similarities and differences on a hyper minute level. It, essentially, acts like a flow chart, breaking data points into two categories at a time, from “trunk,” to “branches,” then “leaves,” where the data within each category is at its most similar. This can be seen in robotics when robots learn to navigate only after bumping into a wall here and there – there is a clear relationship between actions and results.

how does machine learning algorithms work

While machine learning is a powerful tool for solving problems, improving business operations and automating tasks, it’s also a complex and challenging technology, requiring deep expertise and significant resources. Choosing the right algorithm for a task calls for a strong grasp of mathematics and statistics. Training machine learning algorithms often involves large amounts of good quality data to produce accurate results. The results themselves can be difficult to understand — particularly the outcomes produced by complex algorithms, such as the deep learning neural networks patterned after the human brain. Rule-based machine learning is a general term for any machine learning method that identifies, learns, or evolves “rules” to store, manipulate or apply knowledge. The defining characteristic of a rule-based machine learning algorithm is the identification and utilization of a set of relational rules that collectively represent the knowledge captured by the system.

Machine Learning

Unsupervised learning, also known as unsupervised machine learning, uses machine learning algorithms to analyze and cluster unlabeled datasets. These algorithms discover hidden patterns or data groupings without the need for human intervention. This method’s ability to discover similarities and differences in information make it ideal for exploratory data analysis, cross-selling strategies, customer segmentation, and image and pattern recognition.

how does machine learning algorithms work

The biggest challenge with artificial intelligence and its effect on the job market will be helping people to transition to new roles that are in demand. While a lot of public perception of artificial intelligence centers around job losses, this concern should probably be reframed. With every disruptive, new technology, we see that the market demand for specific job roles shifts. For example, when we look at the automotive industry, many manufacturers, like GM, are shifting to focus on electric vehicle production to align with green initiatives. The energy industry isn’t going away, but the source of energy is shifting from a fuel economy to an electric one. The all new enterprise studio that brings together traditional machine learning along with new generative AI capabilities powered by foundation models.

Artificial Intelligence & Machine Learning Bootcamp

Uses range from driverless cars, to smart speakers, to video games, to data analysis, and beyond. That list I just wrote is the bedrock of nearly every machine learning algorithm, so having this solid foundation will set you up for success in the long run. Comparing approaches to categorizing vehicles using machine learning (left) and deep learning (right). Consider using machine learning when you have a complex task or problem involving a large amount of data and lots of variables, but no existing formula or equation. Regression techniques predict continuous responses—for example, hard-to-measure physical quantities such as battery state-of-charge, electricity load on the grid, or prices of financial assets. Typical applications include virtual sensing, electricity load forecasting, and algorithmic trading.

A Machine Learning Algorithm Finds its First Supernova – Universe Today

A Machine Learning Algorithm Finds its First Supernova.

Posted: Tue, 17 Oct 2023 07:00:00 GMT [source]

Let’s dive into different kinds of machine learning and the most-used algorithms to get an idea of how machine learning works. Machine learning revolves around algorithms, which are essentially a series of mathematical operations. These algorithms can be implemented through various methods and in numerous programming languages, yet their underlying mathematical principles are the same. In today’s world, vast amounts of data are being stored and analyzed by corporates, government agencies, and research organizations.

Unlike supervised learning, which is based on given sample data or examples, the RL method is based on interacting with the environment. The problem to be solved in reinforcement learning (RL) is defined as a Markov Decision Process (MDP) [86], i.e., all about sequentially making decisions. An RL problem typically includes four elements such as Agent, Environment, Rewards, and Policy. Association rule learning is a rule-based machine learning approach to discover interesting relationships, “IF-THEN” statements, in large datasets between variables [7].

What is Clustering in Machine Learning? Definition from TechTarget – TechTarget

What is Clustering in Machine Learning? Definition from TechTarget.

Posted: Thu, 17 Aug 2023 19:14:40 GMT [source]

This article shows you a detailed look on how to become a machine learning engineer, what skills you will need, and what you will do once you become one. Let’s consider a program that identifies plants using a Naive Bayes algorithm. The algorithm takes into account specific factors such as perceived size, color, and shape to categorize images of plants. Although each of these factors is considered independently, the algorithm combines them to assess the probability of an object being a particular plant. Fueled by the massive amount of research by companies, universities and governments around the globe, machine learning is a rapidly moving target.

Training models

A supervised learning algorithm takes a known set of input data and known responses to the data (output) and trains a model to generate reasonable predictions for the response to new data. Use supervised learning if you have known data for the output you are trying to predict. When Rosenblatt first implemented his neural network in 1958, he initially set it loose on images of dogs and cats. By necessity, much of that time was spent devising algorithms that could detect pre-specified shapes in an image, like edges and polyhedrons, using the limited processing power of early computers.

how does machine learning algorithms work

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The Ministry of Education in El Salvador has embarked on a groundbreaking initiative in partnership with the non-profit organization Mi Primer Bitcoin (My First Bitcoin or MPB) to integrate Bitcoin education into the country’s public school curriculum by 2024. This innovative endeavor aims to equip educators with the necessary knowledge to introduce students to the world of cryptocurrency.

Collaboration with Mi Primer Bitcoin

Mi Primer Bitcoin, in collaboration with Bitcoin Beach, will play a pivotal role in assisting the Ministry of Education with this educational venture. MPB’s existing program, “My First Bitcoin,” will serve as a primary resource for the Bitcoin component of the curriculum. This program issues students a diploma of completion upon its conclusion.

Training for the pilot program is scheduled to commence on September 7th, with support from Bitcoin Beach. The initial phase will involve instructing 150 public school teachers from 75 different schools, providing them with a foundational understanding of Bitcoin. These teachers will later return to their respective schools to impart the curriculum developed by the Ministry of Education.

Global Expansion of Bitcoin Education

If the pilot program proves successful, the Ministry of Education plans to roll out Bitcoin education to every school in the country in the following year. As the first nation in the world to embrace Bitcoin as legal tender, El Salvador seeks to set a positive example for other countries, emphasizing the significance of quality education.

While the current focus is on El Salvador, MPB’s founder, John Dennehy, envisions a broader mission to bring Bitcoin education to the global stage. Already, MPB is in preliminary discussions with two other Latin American governments interested in implementing a similar Bitcoin education model for their students.

Impacting Thousands of Students

The impact of Bitcoin education in El Salvador is already noticeable, with over 25,000 students having learned about Bitcoin in their classrooms through initiatives like Bitcoin Beach. This pioneering effort in public Bitcoin education is being closely watched by the international community.

El Salvador’s commitment to introducing Bitcoin education in schools signifies a significant leap forward in the adoption and understanding of cryptocurrencies. As other nations express interest in following suit, the world is witnessing the potential for Bitcoin education to become a global phenomenon, bridging the knowledge gap in the ever-evolving digital financial landscape.

 

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Australian cryptocurrency exchange Swyftx is introducing an “Earn and Learn” educational platform to reward users for completing courses that cover various crypto scams. The platform aims to equip the public with crypto knowledge, particularly related to scams, as the industry awaits full regulation. The courses will help users identify scams, understand the crypto market, and reduce their susceptibility to fraudulent schemes.

Combatting Crypto Scams

Swyftx’s educational platform will cover a range of scams, including fraudulent tokens, pig butchering schemes, social media cons, and pump-and-dump schemes. It will also provide users with a checklist to assess the utility of tokens, considering factors like the project’s team, tokenomics, financials, VC backing, and project goals.

Matthews said that the demand for more education has been largely driven by the high level of grassroots crypto adoption in Australia, adding:

“The demand for quality educational resources is close to exponential at the moment. The next market cycle will be driven by knowledge, not hype and people are now far more aware of the risks around token scams or failures in the wake of Terra/Luna.”

Growing Demand for Crypto Education

Swyftx identified a significant increase in demand for crypto education during bear markets. The platform plans to reward users with Bitcoin for completing courses. The first 4,000 people who complete the fundamental analysis course will receive $3.20 in Bitcoin, with up to $64.30 in total rewards available per participant over the next year. Swyftx anticipates up to 80,000 Australians will participate.

“This includes areas like the background of their founding teams, the strength of their tokenomics, any weaknesses in the project, the strength and profile of their VC backing, the financials and tokenomics, and understanding the project’s goals and relevance.”

Educational Initiatives in the Crypto Industry

Swyftx joins other cryptocurrency exchanges like Coinbase and Binance in launching educational platforms with crypto incentives. These initiatives aim to educate users about cryptocurrencies, blockchain technology, and the risks associated with the crypto market while promoting safe and informed investment decisions.

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Arthur Hayes, co-founder of BitMEX, believes that Bitcoin has been in a bull market for the past six months. However, he suggests that the broader market has yet to fully respond to this trend, but it will do so within the next six to 12 months.

The Catalyst: Federal Reserve’s Intervention

According to Hayes, Bitcoin’s bull run commenced on March 10, coinciding with the Federal Deposit Insurance Corporation’s takeover of Silicon Valley Bank (SVB). Just two days before SVB’s takeover, Silvergate Bank had gone into liquidation, and on March 12, New York regulators forced Signature Bank to close.

Hayes speaking at Korea Blockchain Week in Seoul. Source: Andrew Fenton/Coinbrit

In response to these developments and to prevent further collapses in the banking system, the Federal Reserve introduced the Bank Term Funding Program (BTFP). This program offered banking loans of up to one year in exchange for “qualifying assets” as collateral.

Bitcoin as a Hedge

Hayes views the Fed’s actions as effectively backstopping the entire banking system by creating more money. This, in turn, prompted market participants to consider fixed-supply assets like Bitcoin as a hedge.

Despite Bitcoin’s price increase of approximately 26% since March, Hayes believes the broader market has yet to fully react to this bull trend. He anticipates that this response will occur within the next six to 12 months.

Bitcoin’s Resilience

Hayes asserts that even if central banks like the Fed continue to raise interest rates for economic tightening or resort to further money printing, Bitcoin will continue to perform well. He believes that the cryptocurrency industry is well-positioned to thrive in both scenarios.

In essence, Hayes suggests that the Fed’s actions and Bitcoin’s performance have shifted the market’s focus away from the value of fiat currencies, emphasizing the growing interest in fixed-supply assets like Bitcoin as a result.

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According to the latest CoinShares Digital Asset Fund Flows Weekly Report, digital asset investment products experienced a cooling trend, with minor outflows totaling $11.2 million. This extends the seven-week period of negative sentiment, resulting in a cumulative outflow of $342 million. However, Bitcoin witnessed inflows during this time.

Bitcoin saw inflows of $3.8 million, while short Bitcoin products continued to experience outflows for the 19th consecutive week, totaling $3.3 million. The assets under management (AuM) for short Bitcoin products have declined by 48% from this year’s peak.

Throughout the year, digital asset investment products have maintained a net inflow position of $165 million. However, investor flows have been subject to significant fluctuations, largely influenced by expectations and concerns surrounding digital asset regulations.

The past week exemplified this rollercoaster ride, with initial high expectations for the approval of a spot ETF in the United States, followed by disappointment when it was announced that other spot ETF applications would face delays. Despite this turbulent sentiment, trading volumes remained remarkably high, reaching $2.8 billion for the week, which is 90% above the year-to-date average.

On the other hand, altcoins experienced outflows, with notable losses in Polygon and Ethereum, amounting to $8.6 million and $3.2 million, respectively. However, Solana continued to attract investor interest, with inflows for the ninth consecutive week totaling $0.7 million. Among altcoins, Solana has received the most inflows this year, amounting to $26 million.

Blockchain equities also faced outflows for the fourth consecutive week, totaling $25 million. As the digital asset landscape remains dynamic and influenced by regulatory developments, investors continue to navigate a challenging and volatile market.

These findings highlight the ever-changing nature of the cryptocurrency market, where investor sentiment is highly susceptible to regulatory changes. Despite recent outflows and concerns, the crypto market continues to witness significant trading activity, demonstrating its resilience and potential for further expansion.

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The enthusiasm for spot Bitcoin ETFs waned after Bitcoin retraced the entire 19% rally that followed BlackRock’s initial ETF filing, settling back around $26,000. An attempt to reclaim the $28,000 support also failed as investors anticipated ETF approval following Grayscale Bitcoin Trust’s (GBTC) positive news.

Cryptocurrency investors’ morale waned as the S&P 500 neared its all-time high, and gold remained distant from its peak. This environment has left Bitcoin investors less optimistic than anticipated, especially with the upcoming 2024 halving.

Regulatory Challenges

Some analysts attribute Bitcoin’s lackluster performance to ongoing regulatory actions against major exchanges like Binance and Coinbase. Reports also suggest that the U.S. Department of Justice (DOJ) may indict Binance, adding to market uncertainties.

While some believe the potential gains from a spot ETF approval outweigh regulatory actions against exchanges, this analysis may not fully consider the current state of U.S. inflation, which has decreased from 9.1% in June 2022 to 3.2% in July 2023. Additionally, the U.S. Federal Reserve has reduced its total assets, draining liquidity from markets, potentially affecting Bitcoin’s inflation protection narrative.

Bearish Bitcoin Derivatives

Bitcoin monthly futures’ premium over spot markets has dwindled to 3.5%, the lowest since mid-June. This suggests reduced demand from leverage buyers using derivative contracts. Options markets also show signs of bearish sentiment, with protective put options trading at a 9% premium compared to call options.

Bitcoin derivatives data indicates that bearish momentum is gaining strength, particularly due to potential ETF approval delays until 2024, driven by SEC concerns about unregulated offshore exchanges and stablecoins. Regulatory uncertainties favor bearish sentiment, making a retracement to $22,000 the most likely scenario, given the recent struggle to sustain positive price momentum despite spot Bitcoin ETF prospects.

 

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