DigiByte (DGB) Price Analysis And Prediction 2019: Did Good In Preserving Its Value Against BTC (June 5th Update)

Article structure notification: the article is divided in three sections. First section is focused on short-term, technical and speculative analysis of the project – this is regularly updated part of the article. Second section is focused on general market and sentiment analysis and third section is focused on the long-term, fundamental analysis and future prediction of the project – this is occasionally updated part of the article.

Total Market Cap Analysis

Let’s first look at what the overall market is doing. As you know, all coin prices are highly correlated with bitcoin’s price action and by extension with the whole market. Every time we see a surge or plunge of the total market cap, it spills over to the individual coins and their prices.

Market has lost almost $30 billion in three days dropped through a crucial Fib786 height at $241 billion after invalidating the uptrend line it formed and respected since end April. A drop to support at $219 billion is now likely.

This should be the rebound zone back up to test the $241 billion mark from the other side.

As mentioned above, the overall market movements influence individual coins and DGB is no exception. A good thing for DGB is that it preserved its value against bitcoin in these two days even though it lost a nice chunk of value in terms of USD (due to the bitcoin correction).

Daily DGBBTC

As forecasted in our last update, DigiByte did suffer a minor pullback from 184 to 170 sats before consolidating around this height at Fib382. It then made another mini rally up to 200 sats and the market plunge took the wind out of its wings and DigiByte fell back to 180 sats level where it hovers currently.

On the daily, DGBBTC is still in the bearish trend as all the moving averages are ordered in bearish setup. EMA20 acts as a support line. Most likely scenario for DGB in the upcoming days is ranging from Fib236 to Fib618 or expressed through value: 155-184 sats.

Breakout zone is 202 sats and breakdown level is 155 sats at Fib618.

The bad omen for DGB is the formation of rising wedge pattern – a bearish pattern that begins wide at the bottom and contracts as prices move higher and the trading range narrows. In contrast to symmetrical triangles, which have no definitive slope and no bullish or bearish bias, rising wedges definitely slope up and have a bearish bias.

4H DGBBTC

The 200 sats zone is an absolute breakout point for DGB where it got shunned four times already. Right now, DGB is stuck in a sideways horizontal action. Considering the overall market sentiment, a drop from this level to the 173 sats support is likely in the near-term future.

One thing to bear in mind is the turbulent and erratic nature of bitcoin – a sudden thrust up or slide down is always on the cards which would invalidate this and all other analysis and predictions. In such cases, market is shaken up with most traders exiting altcoins and entering bitcoin positions or seeking shelter in stablecoins, especially in the initial phases of bitcoin pumps and dumps. So it is always a good idea to keep a close eye on bitcoin’s behaviour before opening a long or a short on any other coin in the market.

Should this happen, stop by again to check out our updated charts and thoughts.

Trading volumes are not looking good with reported volume being a miserable $1 million and “Real 10” volume being $330k. What is good, though, is the volume overstatement is low, there is only 1.5x discrepancy between the reported and the “Real 10” volume (trading volume on the exchanges that prevent wash trading). This means that DGB’s poor liquidity is only slightly inflated which is not the case with the majority of other coins.


Moreover, DGB comparatively has a weak buy support, according to coinmarketbook.cc. Buy support is measuring sum of buy orders at 10% distance from the highest bid price. This way we can eliminate fake buy walls and whale manipulation and see the real interest of the market in a certain coin. DGB currently has meager $330k of buy orders measured with this method, which sets DGB buy support/market cap ratio at 0.30% which is an average figure for the crypto market. Bitcoin and Ethereum have a 0.27% and 0.28% ratios, respectively. This novel metric indicates there are a lot of manipulations, inflated liquidity and fake orders on DGB trading pairs.

Mid May Update: Fundamentals

To assess fundamental health of a project, we used the FCAS metric. FCAS is a comparative metric whose score is derived from the interactivity between primary project lifecycle fundamentals: User Activity, Developer Behavior, and Market Maturity.

There are a few sub components which provide data to each fundamental:
User Activity is comprised of Project Utilization and Network Activity
Developer Behavior is comprised of Code Changes, Code Improvement and Community Involvement
Market Maturity is comprised of Liquidity and Market Risk. Market Maturity has less than 5% impact on a project’s overall FCAS.


FCAS ratings are on a 0-1000 point scale with a corresponding letter grade. Break points are based on standard deviations in the underlying component distributions.

900 – 1000 is marked as S for superb. 750 – 899 is marked as A for attractive. 650 – 749 is marked as B for basic. 500 – 649 is marked as C for caution. And finally, below 500 is marked as fragile. You can read more about it here.

DigiByte has been ranked as the C category – caution with overall 639 points as of May 10th. By far the strongest metric that contributed to this score is user activity that got 776 points, followed by market maturity with 564 and developer activity that had 546 points. This data backed fundamentals valuation model is a good insight into underlying driving forces of a project and as you can see DGB fares bad under the scrutiny of FCAS. Primary reasons for this are low developer activity but also weak market maturity that is a consequence of the lack of listings on bigger exchanges.

Below are some of the most important news around the project in the last 30 days.

  • Honeypod & DigiByte have joined in a strategic cooperation to bring a more secure, private, and anonymous internet experience. Honeypod will begin integration of the DigiByte cryptocurrency into the Honeypod infrastructure giving users the ability to be compensated by either HNY or DGB cryptocurrency. Honeypod provides security, data protection, and anonymity while you are online. Honeypod gives your a faster, cleaner, safer, more privacy friendly internet connection while also compensating you while you browse the web through advertisements or running your own VPN exit-node.
  • There was also a meetup in Amsterdam on 19th April.
  • DGB shills on Twitter had a fallout with Coinbase CEO Brian Armstrong, unnecessarily tarnishing project’s reputation.

Below is our long-term forecast where we cover general market movements and sentiment shifts before delving deeper into the specific predictions for DGB.

DigiByte Intro

If you are not too much into cryptocurrencies, you probably didn’t heard about the second tier coins like DigiByte. And that is precisely the reason why DGB, despite their feature-richness and superior tech, will have a hard time surviving the 2019.

DigiByte is widely considered as one of the safest cryptocurrencies out there, in part due to several pieces of crypto technology (like the DigiShield or its 5 mining algorithms) that the project developed and implemented. Its 5 year existence makes it one of the older projects on the market, one that managed to expand to over 200,000 nodes throughout the timeframe. Seemingly focused on the networking aspect at the time, DigiByte keeps moving along the path of achieving wider adoption in the world of crypto.

However, lack of presence on the biggest exchanges like Coinbase and Binance feeds into an already weak brand recognition which is one of the major factors for the development of the trust in a payment currency. Technology alone won’t get you there – people need to develop a shared belief that a currency is able to preserve their value for the future. Digibyte is far from that status right now.

How to evaluate fundamentals of a crypto project

We should consider crypto valuations like educated gambling, a ‘prediction market’ where we are betting on the odds of project and token success. There are some catalysts of success we can identify:

  • Project success drivers (user traction, strong financial bottomline, good treasury management, network effects/synergies between users and token investors)

Real user traction is the most important driver of success, that is what most of holders call “adoption”. If people start using certain crypto project because they find it useful and it makes their life easier, that is a guarantee of success. So far, almost no crypto project can claim to have done so.READ  Matic Network Guide and Review 2019 – 4th Binance Launchpad Token Sale

Strong financial warchest that will enable teams behind the project to develop their visions, incentivize other developers to join them and start using their product is also a crucial aspect of any project. Tied into it is treasury management – especially for the project that had big ICO proceeds. Temptation to squander all those millions into “conferences and events” (read hard-core partying on yachts and luxury hotels) was massive, especially if we consider that majority of token projects founders were no-names and ordinary employees that worked for a paycheck before the ICO fairy-tale happened to them.

Another adoption indicator – network effects, where every additional user of a good or service adds to the value of that product to others. When a network effect is present, the value of a product or service increases according to the number of others using it.

If you can objectively notice that your favorite token project has some of these traits happening for it, be happy – you might have found a winner.

  • Token success drivers (favourable demand-supply dynamics, programmable incentives on token, aligned incentives with management team and consensus on token as common unit of value creation).

Token success is completely dependent on tokenomics. As defined by infloat.co, tokenomics involves the incentivization of certain stakeholders to ensure particular behavior.

So, tokenomics is essentially an incentive structure designed to ensure that a token has a purpose and utility within its native network. It is the study of how coins/tokens work within the broader ecosystem that can be considered as a sovereign micro-economy. This includes such things like token distribution as well as how they can be used to incentivize positive behaviour in the network.

For example, bitcoin is designed to ensure that bitcoin miners have a reason to mine new bitcoin. Miners validate bitcoin transactions and receive (or create) newly minted bitcoin in the process.

On the other hand, individuals, businesses and other bitcoin users pay a transaction fee for miners to include their transaction in the next block. This ensures that even when all bitcoin have been minted (to the tune of 21 million, which should happen in around 2140), bitcoin miners are still incentivized to keep ‘mining’ (i.e. validating transactions).

To paraphrase all of the above in the simplest terms: if you, after weeks of research and reading, can’t figure out why the project needs to have a token, it probably doesn’t.

So why does the token exist then?

– To make the project founders rich.

But there are some people on Twitter, Reddit, Telegram claiming otherwise.

-Yes, they are either: paid to do so by those same founders, they are desperate and delusional bad holders or they are just stroking their own ego with newly learned fancy economic terms and jargon.

Needless to say – stay clear of such projects.

General Market Movements and Sentiment Shift

The downfall of altcoins that were mainstream media darlings at the start of the year, DGB among them, can be attributed, in part, to novice investors getting scared off once the bear market kicked in with a vengeance. Every resurgence of bitcoin in recent period, was met with the, for the most part, inability of altcoins to rally with it. Reason for that can be rookie investors learning from their mistakes, while smart money that was previously watching from the sidelines has begun to enter into bitcoin.

These entities weren’t about to buy BTC when it was trading at an all-time high, but they’ll take a look now, having missed the boat the first time around. None of them, it seems, are interested in altcoins however, despite the fact that many are trading at a 5x discount. Institutional investors may be cautious, but they’re not foolish.

What does the Electroneum (ETN) future look like?

Some altcoins will continue to have some speculative value for the foreseeable future. But just like the now infamous tulips, the hysteria will eventually subside. We are already witnessing the first phases of that slide and even though most of the bag holders react emotionally to articles that criticize their coins, I am just observing the developments on the market. You better start emotionally detaching yourself from your “great sounding” coin because if goes nowhere, ideas are worthless without execution and real users that see value in the project.

Our DGB Price Prediction for 2019

DGB, as the rest of the market, is tied at the hip of bitcoin’s price action. If bitcoin embarks on another bull run, DGB can hope for one as well. Since that is very unlikely, don’t expect much to change for DGB price-wise in this year. So 2019 will be a year of boring sideways action with minor bitcoin ignited jumps and slumps.

In general:

The main currency in cryptocurrency markets is Bitcoin and given this, altcoins tend to fuel Bitcoin runs and Bitcoin tends to do the same in return. Given this relationship, Bitcoin price movements (or lack thereof) tend to effect altcoin prices.

When Bitcoin goes up swiftly, it will likely:

  1. Suppress or depress altcoins as money flows into Bitcoin;
  2. Or, take altcoins along for the ride

In cases when Bitcoin plunges, it will likely:

  1. Depress altcoins as money flows into fiat;
  2. Or, cause altcoins  to boom as money flows into them, but this is rarely the case.

When Bitcoin moves sideways, it will likely:

  1. Cause altcoins to mimic that as traders wait for a clear sign on the direction of the market;
  2. Or, cause altcoins to flourish as traders look for returns in altcoins and try to get favorable trades in terms of BTC pairs.

What does Cardano future look like? See our ADA Price Prediction 2019

To summarize, Bitcoin is the focal point of the crypto market in many ways, and with BTC trading pairs on every exchange, the gravity of Bitcoin is hard to evade.

DGB-BTC price correlation

Correlation is measured on a scale from -1 to 1. Values above 0 shows the degree to which altcoin is moving in the same direction as BTC prices (either up or down in tandem), and values below 0 shows the degree to which altcoin moves in the opposite direction of BTC prices (so when BTC goes down, altcoin goes up, or vice versa). Values around 0 shows that when BTC price moves, altcoins stays steady, or alternatively that when altcoin moves up or down that the BTC price is staying steady.

DGB has had a correlation coefficient of 0.80+ for the most of its market life, with occasional drop to zero territory (mostly due to the inability to follow bitcoin’s sudden jolts upwards) shown on the image below – source.

dgb btc correlation

The majority of projects will fail — some startups are created just to gather funds and disappear, some would not handle the competition, but most are just ideas that look good on paper, but in reality, are useless for the market. 

Vitalik Buterin, co-founder of Ethereum said:

“There are some good ideas, there are a lot of very bad ideas, and there are a lot of very, very bad ideas, and quite a few scams as well”

DigiByte Future Outlook

Why will DGB succeed?

Bitcoin supports 7 transactions per second with 10 minutes of block time. Bitcoin Cash supports 34TPS and 10 minutes block, Western Union supports 30, Litecoin supports 56tps with a 2.5min block time, and Paypal supports 130TPS.

Digibyte currently supports 560TPS and only 15 seconds of block time, and 2000TPS by 2020 and exponentially growing 280,000TPS in the near future.

DigiByte is the fastest, longest, most secure and most distributed UTXO blockchain in the world. DigiByte is not just a method of storing and exchanging value, but has the scalability to handle so much more, such as notarizing documents into the blockchain, identity validation, or even having tokens built on top of it without having to worry about a cat-game slowing it down when it reaches peak enthusiasm.

Why will DigiByte fail?

When it comes to money and value exchange, it really is not all about the technology as people are erratic and chose to use a thing that is not the best or most efficient. People are lead by emotions and rigid, analytical coders are foreigners with that side of human nature and rely too much on their “superior” technology to bring them to the promised land. DGB exemplifies how you need other profiles of people that can paint the picture of that technology in much warmer colors so customers can see the value and start using it.

Well, one DGB holder put forward an analysis as to why he thinks DGB lacks recognition and adoption. The gist of it is the lack of business-like handling of the project – it is run more like a hobby according to him.

The analysis is pretty long and is a combination of praise and critique towards the project leadership. After praising the culture of DGB communities, he laments about lack of accountability and seriousness in running the project.

DGB is functioning well enough behind the scenes; it’s a functional product but it lacks any kind of adoption and the outlook for the future is grim.

Since Lightning Network is picking up the pace and grows substantially every month, DGB and other payment coins are in a serious existential jeopardy as LN could render them all obsolete.

Can DigiByte reach $1, $10 or $100?

Everything is in realm of possibility, but probability levels vary. Considering Digibyte’s pretty high yearly inflation of 11.65% and massive total supply of 21 billion tokens, reaching $1 is going to take a jaw-dropping and unprecedented price surge which borders with the wildest fantasies.

DGB would need to grow almost 77x from the current price level. It would either need to completely obliterate bitcoin and take its aspiring role of reserve global currency or it would need to grow apace with bitcoin. In that case, bitcoin would need to be at $392k per coin.

Reaching $10 or even $100 is completely out of the domain of reality and if you know someone claiming DGB will get to those heights, make sure the claimant gets a good psychiatric treatment.

Is DigiByte dead?

No, judging by the team activity on social media, github, their own website. Their communities on Reddit and Telegram are also active, although much lower engagement levels are noticeable when compared to 2017. Coin is also still listed on most of major exchanges which indicates that DGB is far from a dead project.

Conclusion

Digibyte should look at the 2019 as the crucial year for them to make a all-in push on all fronts, especially in achieving new partnerships, force more penetration in the merchants markets and generally work more on their marketing efforts. The best technology is not worth much if no one has heard about it.

coinmama
 
CaptainAltcoin's writers and guest post authors may or may not have a vested interest in any of the mentioned projects and businesses. None of the content on CaptainAltcoin is investment advice nor is it a replacement for advice from a certified financial planner. The views expressed in this article are those of the author and do not necessarily reflect the official policy or position of CaptainAltcoin.com

15 Comments
  1. Breaking down an “analysis”… No it’s not an analysis – it’s just a guy mad that he’s doesn’t have his lambo… Interesting that said analysis doesn’t mention anything about the 130+ million market cap at the time of the analysis. Nor does it mention anything about the OVERALL bear market…. You have to realize that 99% are heavily tied to BTC… Future is “grim”.. Seriously?? Everything is down… Even such an amazing project as ADA was trading at less than 3 pennies at the time of the analysis… It has been moving side ways since March of 2018… I can’t even begin to outline your lack of actual analysis and in depth review. You position DGB as the ONLY coin that’s doing this shitty. (I’m not even invested in DGB just doing my due diligence before I get in) The worst review I’ve ever read. Can’t believe Google’s SEO shows this.

    • Reply
      Julian Joseph Lehmann January 16, 2019 at 22:04

      You seem to carry heavy bags of DGB so your bias and remorse fuel your rage. It’s ok, make sure to celebrate your bad investment as a teaching moment for the future.

  2. I am tired of seeing newbies selling themselves as some experts or crypto gurus, and finance mentors.
    People learn from their mistakes and become educated as time passes by.
    When the masses learn at least the basics, Digibyte will bulldoze its way to the top, either you like it or not.
    So I suggest you keep those few Digibytes you got left instead of humiliating yourself, in public, zuliu

    • Reply
      Julian Joseph Lehmann January 26, 2019 at 10:17

      I am afraid you are delusional if you believe your bags of DGB will ever be worth something.

      • I just can’t believe how blind you are to what DigiByte brings. You are entitled to your opinion. Can you promise me this? Write another article when the price doubles from 180 sats and say you made a mistake and you’ve learned from it. Deal?

        Email me, so I can send you a press release. Amon

      • Who are you again? 😂

  3. Sorry about those two angry idiot posters above, and thanks for the article. I have always been interested Digibyte for it’s tech and was lately wondering why it is doing so poorly. In the last month or two it is doing worse than the crypto market overall, I think. Your article helps explain some of what’s going on. There needs to be more articles that look at the fundamentals of crypto assets rather than just speculating about fibonacci retracements and whatnot. It’s sad that Digibyte can’t gain traction with it’s superior tech, but you are onto something that there needs to be brand trust which requires strong project leadership.

  4. I agree Julian. In my opinion you can see the opposite in that TRX coin. Is all but announcement and partnership, they haven’t produce a single line of code as of yet and i can assure you that people is poised to invest in that heavily.
    DGB with a good dose of marketing plan and adoption shall rise to the skies. When i think about it, is like this memorable example in any economy class, of a lot of people making a better burger than MacDonald’s but none can sale a single one, just because of the good marketing of the Giant.

  5. I will keep this short and simple…Digibyte will be at the top!

  6. First of all this article is totally Bunk thanks captain obvious for the ICO reminder which DigiByte is not. This project does not have a team behind it squandering other peoples investments. Thanks captain obvious again for doing your Diligent homework! This article has nothing to do with DigiByte. Try again.

  7. What do We Want?
    We strive to share the most reliable, interesting, and accurate information to our readers. (LIE)

  8. A very uninformed article. The writer clearly has no real understanding of DGB.

    Here’s a great rebuttal/dismantling of it: https://www.youtube.com/watch?v=X2q8w1JYqNk

    • Which part of the video is useful? It is 15 minutes of adverts before he reads first part of our article, where we introduce general market state and perimeters to pay attention to when assessing a coin. And he stopped before the DGB specific part, how convenient. It is a trash video, not worth commenting on more than I just did here.

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