Most Popular
1. THE INFLATION MONSTER is Forecasting RECESSION - Nadeem_Walayat
2.Why APPLE Could CRASH the Stock Market! - Nadeem_Walayat
3.The Stocks Stealth BEAR Market - Nadeem_Walayat
4.Inflation, Commodities and Interest Rates : Paradigm Shifts in Macrotrends - Rambus_Chartology
5.Stock Market in the Eye of the Storm, Visualising AI Tech Stocks Buying Levels - Nadeem_Walayat
6.AI Tech Stocks Earnings BloodBath Buying Opportunity - Nadeem_Walayat
7.PPT HALTS STOCK MARKET CRASH ahead of Fed May Interest Rate Hike Meeting - Nadeem_Walayat
8.50 Small Cap Growth Stocks Analysis to CAPITALISE on the Stock Market Inflation -Nadeem_Walayat
9.WE HAVE NO CHOICE BUT TO INVEST IN STOCKS AND HOUSING MARKET - Nadeem_Walayat
10.Apple and Microsoft Nuts Are About to CRACK and Send Stock Market Sharply Lower - Nadeem_Walayat
Last 7 days
The NEXT BIG EMPIRE WILL BE..... CANZUK - 25th June 22
Who (or What) Is Really in Charge of Bitcoin's Price Swings? - 25th June 22
Crude Oil Price Forecast - Trend Breaks Downward – Rejecting The $120 Level - 25th June 22
Everyone and their Grandma is Expecting a Big Stocks Bear Market Rally - 23rd June 22
The Fed’s Hawkish Bite Left Its Mark on the S&P 500 Stocks - 23rd June 22
No Dodging the Stock Market Bullet - 23rd June 22
How To Set Up A Business To Better Manage In The Free Market - 23rd June 22
Why Are Precious Metals Considered A Good Investment? Find Out Here - 23rd June 22
UK House Prices and the Inflation Mega-trend - 22nd June 22
Sportsbook Betting Reviews: How to Choose a Sportsbook- 22nd June 22
Looking to buy Cannabis Stocks? - 22nd June 22
UK House Prices Momentum Forecast - 21st June 22
The Fed is Incompetent - Beware the Dancing Market Puppet - 21st June 22
US Economy Headed for a Hard Landing - 21st June 22
How to Invest in EU - New Opportunities Uncovered - 21st June 22
How To Protect Your Assets During Inflation - 21st June 22
AI Tech Stocks Current State, Is AMAZON a Dying Tech Giant? - 20th June 22
Gold/Gold miners fundamental checkup - 20th June 22
Personal Finance Tips: How To Get Out Of A Tough Financial Situation - 20th June 22
UK House Prices Relative to GDP Growth - 19th June 22
Will Global Markets Be Pushed Deeper Into Crisis Event By The US Fed? - 19th June 22
Useful Things You Need To Know About Tweezer Top Candlestick Pattern - 19th June 22
UK House Prices Real Terms Sustainable Trend - 17th June 22
Why I’m buying the “new” value stocks… - 17th June 22
Optimize Benefits from R&D in Software Product Development with an R&D Tax Credit Software - 17th June 22
Want To Save On Your Business Energy? Here Are Some Helpful Tips - 17th June 22

Market Oracle FREE Newsletter

How to Protect your Wealth by Investing in AI Tech Stocks

Bitcoin Price Up Move Might Be Less Bullish Than You Think

Currencies / Bitcoin May 09, 2014 - 02:57 PM GMT

By: Mike_McAra

Currencies

To the point: we still support short speculative positions in the Bitcoin market, stop-loss at $470.

Bitcoin is sometimes viewed as a highly disruptive innovation with the potential to change the payment system. While it surely provides a lot of opportunities, it doesn’t necessarily mean that it will cut the banks out of the system. Bloomberg posted a piece yesterday in which it argues that the very banks that would feel any kind of threat from Bitcoin are currently studying the innovative nature of Bitcoin to possibly come up with their own kinds of seamless payment systems:


While Jamie Dimon and Warren Buffett express doubts about bitcoin, executives running the financial industry’s back offices are looking at mimicking the virtual currency’s methods of moving money quickly and cheaply.

FIS, a provider of systems used by banks to handle payments, is examining whether a public ledger like bitcoin’s could help securely move funds on existing networks, Fred Brothers, the firm’s chief innovation officer, said in an interview. Fiserv Inc. (FISV), a provider of technology for payments and accounts, is examining bitcoin’s use of encryption to ensure transfers are secure, said Marc West, a senior vice president.

(…)

“It’s safe to say that every bank is looking at what’s going on with bitcoin and those types of technologies,” said Steve Kenneally, a vice president at the American Bankers Association. “Most of the larger banks are investigating it. The larger the banks, the further along they are.”

This is not very surprising as competition dictates that market players will adapt to the changing conditions. The incumbent middlemen are trying to figure out what kind of threat to their operations Bitcoin might be and to turn this threat into an opportunity.

What is not clear is the extent to which these efforts will succeed. Currently, Bitcoin is still the dominating alternative currency in spite of a slew of alt-coins mushrooming up in the last couple of years. So, any efforts by banks, payment companies or other market players are not immediately guaranteed to take off. For now, Bitcoin is the currency of choice as far as cryptocurrencies are concerned.

Let’s take a look at today’s charts.

On BitStamp, Bitcoin edged 0.5% down yesterday which could be an indication that the short-term strength was over. This was further supported by the fact that the volume was almost halved when compared with that of the previous day. There was no strong move down, however.

Today, we’ve seen a move up (this is written before 10:00 a.m. EDT). Not a very strong one, 2.1% so far. Does this change anything as far as our suggested short position is concerned? Not really. The move hasn’t even brought Bitcoin back above $450 and, more importantly, it has taken place on weak volume, weaker than yesterday. So, another day of appreciation on weak volume might just mean that we’re getting closer to the short-term top (if this can even be called a top), and the bearish short-term outlook remains unchanged.

On BTC-e, Bitcoin went 0.2% up yesterday on falling volume. This kind of move doesn’t count as any sort of meaningful indication on its own but considered together with the recent appreciation, it seemed that it was actually more bearish than not.

Today, there has been appreciation, 1.4% but the move hasn’t been strong, the volume has been not even half of what was seen yesterday. The 1.4% seen today doesn’t look as anything more than the final stage of a move up and might be followed by declines. If you recall what we wrote yesterday:

Today, we’ve seen some more appreciation (this is written at 10:10 a.m. EDT) but it hasn’t been particularly strong. What is more, the volume is now significantly lower than it was yesterday. Consequently, we don’t view today’s move as bullish. Not only that. We actually view today’s move (so far) as bearish for the short term.

This seems not to have been invalidated by the events of today (so far). Consequently, we still think that the short speculative positions we suggested yesterday might become profitable in the near future.

Summing up, in our opinion short speculative positions might be the way to go now.

Trading position (short-term, our opinion): short, stop-loss at $470. We expect the move up to be reversed and more declines to follow in the near future.

Regards,

Mike McAra
Bitcoin Trading Strategist
Bitcoin Trading Alerts at SunshineProfits.com

Disclaimer

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 http://www.MarketOracle.co.uk - 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