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Bitcoin price analysis 6th October 2015

1

This week, Bitcoin markets settled at a bottom, $ 235.11 and has been trending up since to current high (as of writing this) at $243. The most recent leg up was a $ 6 move up following consecutive green candles attempting to break past resistance at $ 240. This upper resistance level, was last reached on September 9th, after breaking past $241 up to $248, before declining back below. A solid bottom at $227 preceded another go at breaking and holding above $241, presently unfolding.

2

The first attempt to break higher. labelled 4, was not strong enough to change 30 and 50 day trends, after a double top failure at 30 and 50 day EMA resistance. Highlighted in rectangle 5, is the current attempt that has breached the 30 and 50 day, holding so far. The next logical target is 100 EMA at $ 245.

It will take some time before a breach of $245 and a strong probability of $255 thereafter. Some retracement might be in order, after resistance at 100 EMA line, to find support lower at 50 day EMA or a convergence of both. This will be a base for a second go at breaking 100 day EMA. Alternatively, if the market has real intent, it may well break 100 EMA and continue up to $255.

3

In my view, we are in a correction, similar to August (labelled 2,4) – only difference is 6,5,7,8 – a correction – will take a different form and last longer. 7,8 shows how high the short term bull trend may go up, but despite any higher highs, the general trend is a bear down. It is only a matter of time before limited upside succumbs to the general bear trend.

4

Extrapolating fibonacci levels from extremes – peak to peak, $ 316 high and $196 low – the significance of $241 as an upper resistance is emphasized. Since August 18, price has been trending within a range bound by 23% lower fibonacci and an upper 38% fib line. It almost resembles a larger trend we have been in since January, oscillating between $ 200 and $ 300 on the weekly chart. Notably, volumes thin out, a characteristics of corrections (2,4). We are in for more of this correction.

How the market reacts to this resistance at $241 will confirm prices breaking up 4, followed down by 5. Alternatively, if resistance proves strong, 6 down to 23% fibonacci.

This week’s forecast, neutral to bullish.

BITCOIN FUNDAMENTALS

Bitcoin and Central Banks

This week, Central Banks around the world, even the Federal Reserve, made public comments on bitcoin the currency! A huge contrast from their usual reserved remarks on the Bitcoin Blockchain

Commonwealth Central Bankers Discuss Bitcoin for Remittances

Coindesk reports Commonwealth Central bankers are set to meet on the 6th and 7th in Lima, to discuss the role of Bitcoin and digital currencies in the global remittances industry. 53 member countries will be represented, most are developing countries’ representatives likely to benefit from lower costs and efficient flows.

An interesting choice for a chair, Aitur Rahman, Governor from Bangladesh Central Bank which banned bitcoin use in September, 2014.

This development comes on the back of a Virtual Currencies Working Group in August, which recommended member nations regulate virtual currencies.

Dutch Central Bank Official on Bitcoin

An official from De Nederlandsche Bank (DNB), Jakob Haan, responded to questions on the role of bitcoin in global finance, posed to him at a Reinvent Money Conference on 26 September. According to Coindesk’s Pete Rizzo, the Head of Research said his institution was open minded to Bitcoin’s potential emphasizing their researchers were following developments closely.

“You might think we are fundamentally opposed to these alternatives, we are not,” he said

Final Silk Road Auction, US Government to sell 44,000 BTC

The final stash from a civil forfeiture actions taken against Silk Road by the FBI will be publicly auctioned on the 5th of November. Registration of potential bidders is open from 19th October to 2nd November, after which 44, 341 BTC valued at $ 10.6 million (as of writing this) will be sold in 21 blocks of 2,000 BTC each as per Coindesk.

An interesting comment on this story

“it’s such a hypocritical stance for the government to take it down, only to turn around and profit from drug money”

US Federal Reserve chairwoman: Bitcoin’s Popularity Unrelated to Central Bank Policy

Janet Yellen made seemingly positive comments on Bitcoin in her response to questions from a US representative, Mick Mulvaney. Mulvaney, had sought clarity on Central Bank’s opinion on bitcoin after economic crisis in Greece. Both the submission and Yellen’s response are viewable on slideshare. Yellen believes regulators should be careful not to stifle innovation emerging from digital currency like bitcoin and blockchain technology.

She also added

“We do not interpret bitcoin’s popularity as having a relationship with the public’s view of the Federal Reserve’s conduct of monetary policy.”

Winklevoss Twins launch Gemini Exchange

This long awaited regulated exchange from Tyler and Cameron will start trading on Thursday, 8th October and is already accepting sign ups. Gemini, is a fully compliant bitcoin exchange, with approval from New York State Department of Financial Services (NYSDFS) and a charter to function as a limited liability trust company. Considering their target audience, it is a pretty uniques combination in this ecosystem

“. . . we wanted to build an exchange that both Main Street and Wall Street could use and trust, so we decided to obtain a limited liability trust company charter in order to do so.”

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