Best of the Week
Most Popular
1. Stock Markets and the History Chart of the End of the World (With Presidential Cycles) - 28th Aug 20
2.Google, Apple, Amazon, Facebook... AI Tech Stocks Buying Levels and Valuations Q3 2020 - 31st Aug 20
3.The Inflation Mega-trend is Going Hyper! - 11th Sep 20
4.Is this the End of Capitalism? - 13th Sep 20
5.What's Driving Gold, Silver and What's Next? - 3rd Sep 20
6.QE4EVER! - 9th Sep 20
7.Gold Price Trend Forecast Analysis - Part1 - 7th Sep 20
8.The Fed May “Cause” The Next Stock Market Crash - 3rd Sep 20
9.Bitcoin Price Crash - You Will be Suprised What Happens Next - 7th Sep 20
10.NVIDIA Stock Price Soars on RTX 3000 Cornering the GPU Market for next 2 years! - 3rd Sep 20
Last 7 days
The Copper/Gold Ratio Would Change the Macro - 21st Oct 20
Are We Entering Stagflation That Will Boost Gold Price - 21st Oct 20
Crude Oil Price Stalls In Resistance Zone - 21st Oct 20
High-Profile Billionaire Gives Urgent Message to Stock Investors - 21st Oct 20
What's it Like to be a Budgie - Unique in a Cage 4K VR 360 - 21st Oct 20
Auto Trading: A Beginner Guide to Automation in Forex - 21st Oct 20
Gold Price Trend Forecast into 2021, Is Intel Dying?, Can Trump Win 2020? - 20th Oct 20
Gold Asks Where Is The Inflation - 20th Oct 20
Last Chance for this FREE Online Trading Course Worth $129 value - 20th Oct 20
More Short-term Stock Market Weakness Ahead - 20th Oct 20
Dell S3220DGF 32 Inch Curved Gaming Monitor Unboxing and Stand Assembly and Range of Movement - 20th Oct 20
Best Retail POS Software In Australia - 20th Oct 20
From Recession to an Ever-Deeper One - 19th Oct 20
Wales Closes Border With England, Stranded Motorists on Severn Bridge? Covid-19 Police Road Blocks - 19th Oct 20
Commodity Bull Market Cycle Starts with Euro and Dollar Trend Changes - 19th Oct 20
Stock Market Melt-Up Triggered a Short Squeeze In The NASDAQ and a Utilities Breakout - 19th Oct 20
Silver is Like Gold on Steroids - 19th Oct 20
Countdown to Election Mediocrity: Why Gold and Silver Can Protect Your Wealth - 19th Oct 20
“Hypergrowth” Is Spilling Into the Stock Market Like Never Before - 19th Oct 20
Is Oculus Quest 2 Good Upgrade for Samsung Gear VR Users? - 19th Oct 20
Low US Dollar Risky for Gold - 17th Oct 20
US 2020 Election: Are American's ready for Trump 2nd Term Twilight Zone Presidency? - 17th Oct 20
Custom Ryzen 5950x, 5900x, 5800x , RTX 3080, 3070 64gb DDR4 Gaming PC System Build Specs - 17th Oct 20
Gold Jumps above $1,900 Again - 16th Oct 20
US Economic Recovery Is in Need of Some Rescue - 16th Oct 20
Why You Should Focus on Growth Stocks Today - 16th Oct 20
Why Now is BEST Time to Upgrade Your PC System for Years - Ryzen 5000 CPUs, Nvidia RTX 3000 GPU's - 16th Oct 20
Beware of Trump’s October (November?) Election Surprise - 15th Oct 20
Stock Market SPY Retesting Critical Resistance From Fibonacci Price Amplitude Arc - 15th Oct 20
Fed Chairman Begs Congress to Stimulate Beleaguered US Economy - 15th Oct 20
Is Gold Market Going Back Into the 1970s? - 15th Oct 20
Things you Should know before Trade Cryptos - 15th Oct 20
Gold and Silver Price Ready For Another Rally Attempt - 14th Oct 20
Do Low Interest Rates Mean Higher Stocks? Not so Fast… - 14th Oct 20
US Debt Is Going Up but Leaving GDP Behind - 14th Oct 20
Dell S3220DGF 31.5 Inch VA Gaming Monitor Amazon Prime Day Bargain Price! But WIll it Get Delivered? - 14th Oct 20
Karcher K7 Pressure Washer Amazon Prime Day Bargain 51% Discount! - 14th Oct 20
Top Strategies Day Traders Adopt - 14th Oct 20
AMD is KILLING Intel as Ryzen Zen 3 Takes Gaming Crown, AMD Set to Achieve CPU Market Dominance - 13th Oct 20
Amazon Prime Day Real or Fake Sales to Get Rid of Dead Stock? - 13th Oct 20
Stock Market Short-term Top Expected - 13th Oct 20
Fun Stuff to Do with a Budgie or Parakeet, a Child's Best Pet Bird Friend - 13th Oct 20
Who Will Win the Race to Open a Casino in Japan? - 13th Oct 20
Fear Grips Stock Market Short-Sellers -- What to Make of It - 12th Oct 20
For Some Remote Workers, It Pays to Stay Home… If Home Stays Local - 12th Oct 20
A Big Move In Silver: Watch The Currency Markets - 12th Oct 20
Precious Metals and Commodities Comprehensive - 11th Oct 20
The Election Does Not Matter, Stick With Stock Winners Like Clean Energy - 11th Oct 20
Gold Stocks Are Cheap, But Not for Long - 11th Oct 20
Gold Miners Ready to Fall Further - 10th Oct 29
What Happens When the Stumble-Through Economy Stalls - 10th Oct 29
This Is What The Stock Market Is Saying About Trump’s Re-Election - 10th Oct 29
Here Is Everything You Must Know About Insolvency - 10th Oct 29
Sheffield Coronavirus Warning - UK Heading for Higher Covid-19 Infections than April Peak! - 10th Oct 29
Q2 Was Disastrous. But What’s Next for the US Economy – and Gold? - 9th Oct 20
Q4 Market Forecast: How to Invest in a World Awash in Debt - 9th Oct 20
A complete paradigm shift will make gold the generational trade - 9th Oct 20
Why You Should Look for Stocks Climbing Out of a “Big Base” - 9th Oct 20
UK Coronavirus Pandemic Wave 2 - Daily Covid-19 Positive Test Cases Forecast - 9th Oct 20
Ryzen ZEN 3: The Final Nail in Intel's Coffin! Cinebench Scores 5300x, 5600x, 5800x, 5900x 5950x - 9th Oct 20

Market Oracle FREE Newsletter

How to Get Rich Investing in Stocks by Riding the Electron Wave

Bitcoin Price Trading Range Narrows

Currencies / Bitcoin Feb 04, 2014 - 10:18 AM GMT

By: Mike_McAra


Key take away from this alert: in our opinion, closing long positions is not the way to go.

On Jan. 30, the Financial Crimes Enforcement Network (FinCEN) of the U.S. Department of Treasury released two additional guidelines on Bitcoin. The first takes a stance on whether Bitcoin miners are to be considered money transmitters:

To the extent that a user mines Bitcoin and uses the Bitcoin solely for the user's own purposes and not for the benefit of another, the user is not an MSB under FinCEN's regulations, because these activities involve neither "acceptance" nor "transmission" of the convertible virtual currency and are not the transmission of funds within the meaning of the Rule.

In other words, if you mine Bitcoins for your own account, you're not under regulations for money transmitters. The second ruling offers some insight as to whether companies investing in Bitcoin are considered money transmitters:

(...) to the extent that the Company limits its activities strictly to investing in virtual currency for its own account, it is not acting as a money transmitter and is not an MSB under FinCEN's regulations.

Which means that companies investing in or speculating with Bitcoin are not considered money transmitters. Why is this important? Because being a money transmitter adds restrictive responsibilities to your business operations.

These rulings seem to recognize that entities might want to mine bitcoins for other money and they might want to invest in Bitcoin without necessarily wanting to transfer money to other parties. This piece of regulation will most likely be welcome by Bitcoin enthusiasts. It is also another proof that government agencies are hard at work trying to figure out rules for Bitcoin.

Now back to the market itself.

On Mt. Gox, Bitcoin went 1.4% up yesterday to end the day at $954.00. The volume was real tiny, B1,458.55. Stagnant is the word for what we saw then. No moves, no action and Bitcoin still seemed stuck at around $950.

Today, the action has been down, Bitcoin has lost 0.7% so far (this is written past 7:20 a.m. EST). The volume at B619.63 is almost non-existent, might turn out to be lower than yesterday. In combination with the barely moving price, not much has been going on today.

We've been writing about the lack of action in the Bitcoin market for some time now. But it seems that if we thought there had been no moves in Bitcoin earlier, the market is testing our patience now. Even compared with most of January, what's been happening since last Tuesday looks jarringly calm.

Since Jan. 28 Bitcoin has, in fact, barely moved. That day saw relatively high volume (compared with the recent levels) of B10,017.57 but in the following days the trading subsided. These developments might be read as a situation in which the price-setting mechanism was tested on Jan. 28 and investors were seeking a new price level following the more volatile period of Jan. 25-27. There was no pronounced move and the price settled around $950 and has been trading there ever since. But there is no certainty that this is what actually happened.

Anyway, we've been experiencing a period of tiny ticks within a period of calm. We don't see the price as truly stabilized at $950. Neither do we think that there's no possibility of Bitcoin taking a sudden turn anytime. The amount of bitcoins exchanged today up to the moment we write this is below $600,000. This might be a whole awful lot of money if you're an individual investor, but might be barely noticeable to spend for companies or even wealthy individuals. No, this is not about manipulation. The fact that the volume is so small warns us that it might be easy to swing the price one way or another but our point is that at such times even medium-size orders can visibly move the market without speculation in mind.

The current environment suggests that most of the appreciation/depreciation might take place in very short periods of time. On the other hand, these moves might be short-lived if they are not followed by more capital.

So far, nothing has changed. Bitcoin is still between $800 (dashed red line on the chart, our stop-loss level) and $1,000-1,100 (which is marked by the solid green line on the chart). The short-term outlook remains unchanged. If there is anything worrying, it might be the volume. A couple of bigger orders might start a new trend here.

It is unclear how long the current cooling-down period in the Bitcoin market might last. As we've written before, we would like to see at least one more swing at $1,000 before reconsidering our opinion on positions in the market. We're not seeing such a move at the moment, so there's no change in our take on the market just now.

Summing up, there's been almost no action in the market. This means that Bitcoin might be prone to sudden moves in case big orders are placed now but the short-term outlook remains unchanged, in our opinion.

Trading position: it is our opinion that being long might be more profitable just now than being short or being out of the market, and that the appropriate stop-loss level might be $800. We are looking for more orders coming in and for an immediate trend to crystalize.


Mike McAra
Bitcoin Trading Strategist
Bitcoin Trading Alerts at


All essays, research and information found above represent analyses and opinions of Mike McAra and Sunshine Profits' associates only. As such, it may prove wrong and be a subject to change without notice. Opinions and analyses were based on data available to authors of respective essays at the time of writing. Although the information provided above is based on careful research and sources that are believed to be accurate, Mike McAra and his associates do not guarantee the accuracy or thoroughness of the data or information reported. The opinions published above are neither an offer nor a recommendation to purchase or sell any securities. Mr. McAra is not a Registered Securities Advisor. By reading Mike McAra’s reports you fully agree that he will not be held responsible or liable for any decisions you make regarding any information provided in these reports. Investing, trading and speculation in any financial markets may involve high risk of loss. Mike McAra, Sunshine Profits' employees and affiliates as well as members of their families may have a short or long position in any securities, including those mentioned in any of the reports or essays, and may make additional purchases and/or sales of those securities without notice.

© 2005-2019 - The Market Oracle is a FREE Daily Financial Markets Analysis & Forecasting online publication.

Post Comment

Only logged in users are allowed to post comments. Register/ Log in

6 Critical Money Making Rules