Best of the Week
Most Popular
1. Market Decline Will Lead To Pension Collapse, USD Devaluation, And NWO - Raymond_Matison
2.Uber’s Nightmare Has Just Started - Stephen_McBride
3.Stock Market Crash Black Swan Event Set Up Sept 12th? - Brad_Gudgeon
4.GDow Stock Market Trend Forecast Update - Nadeem_Walayat
5.Gold Significant Correction Has Started - Clive_Maund
6.British Pound GBP vs Brexit Chaos Timeline - Nadeem_Walayat
7.Cameco Crash, Uranium Sector Won’t Catch a break - Richard_Mills
8.Recession 2020 Forecast : The New Risks & New Profits Of A Grand Experiment - Dan_Amerman
9.Gold When Global Insanity Prevails - Michael Ballanger
10.UK General Election Forecast 2019 - Betting Market Odds - Nadeem_Walayat
Last 7 days
What ECB’s Tiering Means for Gold - 17th Nov 19
DOJ Asked to Examine New Systemic Risk in Gold & Silver Markets - 17th Nov 19
Dow Jones Stock Market Cycle Update and are we there yet? - 17th Nov 19
When the Crude Oil Price Collapses Below $40 What Happens? PART III - 17th Nov 19
If History Repeats, Gold is Headed to $8,000 - 17th Nov 19
All You Need To Know About Cryptocurrency - 17th Nov 19
What happens To The Global Economy If Oil Collapses Below $40 – Part II - 15th Nov 19
America’s Exceptionalism’s Non-intervention Slide to Conquest, Empire - and Socialism - 15th Nov 19
Five Gold Charts to Contemplate as We Prepare for the New Year - 15th Nov 19
Best Gaming CPU Nov 2019 - Budget, Mid and High End PC System Processors - 15th Nov 19
Lend Money Without A Credit Check — Is That Possible? - 15th Nov 19
Gold and Silver Capitulation Time - 14th Nov 19
The Case for a Silver Price Rally - 14th Nov 19
What Happens To The Global Economy If the Oil Price Collapses Below $40 - 14th Nov 19
7 days of Free FX + Crypto Forecasts -- Join in - 14th Nov 19
How to Use Price Cycles and Profit as a Swing Trader – SPX, Bonds, Gold, Nat Gas - 13th Nov 19
Morrisons Throwing Thousands of Bonus More Points at Big Spend Shoppers - JACKPOT! - 13th Nov 19
What to Do NOW in Case of a Future Banking System Breakdown - 13th Nov 19
Why China is likely to remain the ‘world’s factory’ for some time to come - 13th Nov 19
Gold Price Breaks Down, Waving Good-bye to the 2019 Rally - 12th Nov 19
Fed Can't See the Bubbles Through the Lather - 12th Nov 19
Double 11 Record Sales Signal Strength of Chinese Consumption - 12th Nov 19
Welcome to the Zombie-land Of Oil, Gold and Stocks Investing – Part II - 12th Nov 19
Gold Retest Coming - 12th Nov 19
New Evidence Futures Markets Are Built for Manipulation - 12th Nov 19
Next 5 Year Future Proof Gaming PC Build Spec November 2019 - Ryzen 9 3900x, RTX 2080Ti... - 12th Nov 19
Gold and Silver - The Two Horsemen - 11th Nov 19
Towards a Diverging BRIC Future - 11th Nov 19
Welcome to the Zombie-land Of Stock Market Investing - 11th Nov 19
Illiquidity & Gold And Silver In The End Game - 11th Nov 19
Key Things You Need to Know When Starting a Business - 11th Nov 19
Stock Market Cycles Peaking - 11th Nov 19
Avoid Emotional Investing in Cryptocurrency - 11th Nov 19
Australian Lithium Mines NOT Viable at Current Prices - 10th Nov 19
The 10 Highest Paying Jobs In Oil & Gas - 10th Nov 19
World's Major Gold Miners Target Copper Porphyries - 10th Nov 19
AMAZON NOVEMBER 2019 BARGAIN PRICES - WD My Book 8TB External Drive for £126 - 10th Nov 19
Gold & Silver to Head Dramatically Higher, Mirroring Palladium - 9th Nov 19
How Do YOU Know the Direction of a Market's Larger Trend? - 9th Nov 19
BEST Amazon SMART Scale To Aid Weight Loss for Christmas 2019 - 9th Nov 19
Why Every Investor Should Invest in Water - 8th Nov 19
Wait… Was That a Bullish Silver Reversal? - 8th Nov 19
Gold, Silver and Copper The 3 Metallic Amigos and the Macro Message - 8th Nov 19
Is China locking up Indonesian Nickel? - 8th Nov 19

Market Oracle FREE Newsletter

How To Buy Gold For $3 An Ounce

Bitcoin Price Strong Move Possible

Currencies / Bitcoin Aug 06, 2014 - 06:39 AM GMT

By: Mike_McAra

Currencies

In short: we still support long speculative positions, stop-loss at $550, take-profit at $880.

The Bitcoin market is changing every day. We’ve read an article on CoinDesk about yet another exchange expanding its services to offer Bitcoin derivatives. OKCoin, a Chinese exchange, made an announcement today on the subject:

Chinese exchange OKCoin announced today it will add futures trading to its platform, saying it is one of the first major exchanges in the world to offer users the chance to trade futures denominated in bitcoin.


(…)

Founder and CEO of OKCoin, Star Xu, said it was part of the company’s plan to bring institutional and professional trading tools to digital currency investors and help build the bitcoin trading platform of the future:

“Today’s launch of bitcoin futures trading capabilities builds on the algorithmic trading tools we pioneered and launched on our platform last month. We have already seen a favorable response from institutional and individual investors. We are helping to make participation in bitcoin a more safe and stable process. The ability to trade futures will further cement our position as one of the world’s leading bitcoin exchanges.”

OKCoin’s chief technology officer Changpeng Zhao said that OKCoin would ascertain it was gathering accurate pricing data with a US dollar index based upon prices from 10 different bitcoin exchanges.

The fact that Bitcoin derivatives are getting more and more available is generally a positive phenomenon. Entities not willing to take on the exchange rate risk (think – retailers accepting payments in Bitcoin) can hedge it. This means passing this risk on to other entities (think – speculators).

From a Bitcoin investor’s perspective, futures will have three major features. Firstly, they’ll improve liquidity, since opening and closing out contracts will most likely be quicker and less costly (in terms of commissions) than buying and selling Bitcoin via a Bitcoin wallet. Secondly, Bitcoin futures will enable investors to take short positions without much fuss. Thirdly, they’ll offer leverage.

All of these may be advantages but one has to extremely cautious when using derivatives. Trading futures without properly understanding them may be dangerous and it might lead to losses higher than the initial investment. Because of that derivatives are most probably instruments appropriate for experienced investors.

One also has to remember that buying derivatives is not the same as buying or selling the underlying bitcoins. Exchanges regulate derivatives trading and they might close your positions in periods of high volatility – when you’re either losing or winning big time. This is not the case with actual bitcoins.

For now, let’s focus on the charts.

On BitStamp, we saw Bitcoin moving up and down yesterday on increased volume. Overall, the currency closed the day pretty much where it had started it. Yesterday, we wrote:

A slowdown is (…) what we’ve seen so far. Today (this is written before 10:00 a.m. ET), Bitcoin has been moving up and down and it currently is around yesterday’s close. We might see an increase in volume today (the day is not over yet). At the moment, it would seem that the current period is a pause in the move up and not another slump. This could be somewhat confirmed by a move above $600 (dashed red line) in the next couple of days.

Today, we’ve seen some depreciation and the volume might be up again at the end of the day (this is written after 10:30 a.m. ET). The move hasn’t been strong which doesn’t suggest further depreciation at the moment.

Bitcoin is below $600 (dashed red line in the chart above) but above the recent declining trend line. Our take is that Bitcoin will stay below $600 before breaking out above this level and possibly starting another rally.

On the long-term BTC-e chart, we see Bitcoin below two possible medium-term trend lines (rising black lines) and below $600 (dashed red line). If you recall, yesterday we wrote:

The move up has been weakened now but it seems to us that this pause we’re seeing now might in fact be short. Right now, a move above $600 on strong volume could be a starting point of another sizable rally.

The recent developments have brought some relief to Bitcoin investors. As we’re analyzing the markets, we keep that in mind. But we’re also making an effort not to get overly optimistic. We’ve seen some encouraging action but it is important to keep a cool head and apply one’s investment strategy carefully. Our bet is still on a move up but we remain alert to any changes and will continue to communicate to you developments we see as important for the Bitcoin market.

We haven’t seen major depreciation which suggests that the situation remains unchanged now. We look at the charts every day just as you do and we try to analyze the situation and come up with opinions you can include in your investment process. There are days when not much has changed in the market and it seems that we’re in such a place just now. Bitcoin might have edged lower but the situation hasn’t deteriorated and consequently we follow our strategy right now and favor long speculative positions.

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

Trading position (short-term, our opinion): long, stop-loss at $550, take-profit at $880.

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

6 Critical Money Making Rules