Best of the Week
Most Popular
1. US Housing Market Real Estate Crash The Next Shoe To Drop – Part II - Chris_Vermeulen
2.The Coronavirus Greatest Economic Depression in History? - Nadeem_Walayat
3.US Real Estate Housing Market Crash Is The Next Shoe To Drop - Chris_Vermeulen
4.Coronavirus Stock Market Trend Implications and AI Mega-trend Stocks Buying Levels - Nadeem_Walayat
5. Are Coronavirus Death Statistics Exaggerated? Worse than Seasonal Flu or Not?- Nadeem_Walayat
6.Coronavirus Stock Market Trend Implications, Global Recession and AI Stocks Buying Levels - Nadeem_Walayat
7.US Fourth Turning Accelerating Towards Debt Climax - James_Quinn
8.Dow Stock Market Trend Analysis and Forecast - Nadeem_Walayat
9.Britain's FAKE Coronavirus Death Statistics Exposed - Nadeem_Walayat
10.Commodity Markets Crash Catastrophe Charts - Rambus_Chartology
Last 7 days
Fasten Your Seatbelts Stock Market Make Or Break – Big Trends Ahead - 17th Sep 20
Peak Financialism And Post-Capitalist Economics - 17th Sep 20
Challenges of Working from Home - 17th Sep 20
Sheffield Heading for Coronavirus Lockdown as Covid Deaths Pass 432 - 17th Sep 20
What Does this Valuable Gold Miners Indicator Say Now? - 16th Sep 20
President Trump and Crimes Against Humanity - 16th Sep 20
Slow Economic Recovery from CoronaVirus Unlikely to Impede Strong Demand for Metals - 16th Sep 20
Why the Knives Are Out for Trump’s Fed Critic Judy Shelton - 16th Sep 20
Operation Moonshot: Get Ready for Millions of New COVAIDS Positives in the UK! - 16th Sep 20
Stock Market Approaching Correction Objective - 15th Sep 20
Look at This Big Reminder of Dot.com Stock Market Mania - 15th Sep 20
Three Key Principles for Successful Disruption Investors - 15th Sep 20
Billionaire Hedge Fund Manager Warns of 10% Inflation - 15th Sep 20
Gold Price Reaches $2,000 Amid Dollar Depreciation - 15th Sep 20
GLD, IAU Big Gold ETF Buying MIA - 14th Sep 20
Why Bill Gates Is Betting Millions on Synthetic Biology - 14th Sep 20
Stock Market SPY Expectations For The Rest Of September - 14th Sep 20
Gold Price Gann Angle Update - 14th Sep 20
Stock Market Recovery from the Sharp Correction Goes On - 14th Sep 20
Is this the End of Capitalism? - 13th Sep 20
The Silver Big Prize - 13th Sep 20
U.S. Shares Plunged. Is Gold Next? - 13th Sep 20
Why Are 7,500 Oil Barrels Floating on this London Lake? - 13th Sep 20
Sheffield 432 Covid-19 Deaths, Last City Centre Shop Before Next Lockdown - 13th Sep 20
Biden or Trump Will Keep The Money Spigots Open - 13th Sep 20
Gold And Silver Up, Down, Sideways, Up - 13th Sep 20
Does the Stock Market Really "See" the Future? - 12th Sept 20
Basel III and Gold, Silver and Platinum - 12th Sept 20
Tech Stocks FANG Index Nearing Critical Support – Could Breakout At Any Moment - 12th Sept 20
The Tech Stocks Quantum AI EXPLOSION is Coming! - 12th Sept 20
AMD Zen 3 Ryzen 4000 Questions Answered on Cores, Prices, Benchmarks and Threadripper Launch - 12th Sept 20
The Inflation Mega-trend is Going Hyper! - 11th Sep 20
Gold / Silver Ratio: Slowly I Toined… - 11th Sep 20
Stock Market Correction or Reversal? The Jury Isn't Out! - 11th Sep 20
Crude Oil – The Bearish Outlook Remains - 11th Sep 20
Crude Oil Breaks Lower – Sparking Fears Of Another Sub $30 Price Collapse - 11th Sep 20
Inflation by Fiat - 10th Sep 20
Unemployment Rate Drops. Will It Drag Gold Down? - 10th Sep 20
How Does The Global Economy Recover After This Global Pandemic? - 10th Sep 20
The Best Mobile Casino - 10th Sep 20
QE4EVER! - 9th Sep 20
AMD Ryzen Zen 3 4800x 10 Core 5ghz CPU, Cinebench Benchmark Scores (Est.) - 9th Sep 20
Stock Traders’ Dreams Come True – Big Technical Price Swings Pending on SP500 - 9th Sep 20
Should You Be Concerned About The Stock Market Big Downside Rotation? - 9th Sep 20
Options Traders Keep "Opting" for Even Higher Stock Market Prices - 8th Sep 20
Gold Stocks in Correction Mode - 8th Sep 20
The law of long-term time preference and Gold ownership - 8th Sep 20
Gold Bull Markets: History and Prospects Ahead - 8th Sep 20
Sheffield City Centre Coronavirus Shopping Opera Ahead of Second Covid-19 Peak - 8th Sep 20
Gold Price Trend Forecast Analysis - Part1 - 7th Sep 20
Bitcoin Price Crash - You Will be Suprised What Happens Next - 7th Sep 20
From Trump’s TikTok Mess to US Tech Cold War against China - 7th Sep 20
The Federal Reserve vs. Judy Shelton And Gold - 7th Sep 20
Fed Dials Up Inflation Target…Own Gold - 7th Sep 20
Does Gold Still Have Plenty of Potential? - 7th Sep 20
CDC Shock Admission - THERE IS NO PANDEMIC! Over 90% of Deaths NOT From COVID19 - 7th Sep 20
Stock Market SPX to Gold/Silver Ratios Explored – What To Expect Next - 7th Sep 20
Is the Precious Metals Market really Overwhelmed and Chaotic - 7th Sep 20

Market Oracle FREE Newsletter

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

Bitcoin Price Short-term Bottom Not Far Away?

Currencies / Bitcoin Oct 07, 2014 - 03:10 PM GMT

By: Mike_McAra

Currencies

In not too many words: no speculative positions.

"Buy when there's blood in the streets," or so the saying goes. And we're starting to catch first whiffs of "blood," if not streaks of it in the media coverage. There's been a marked increase in articles that focus on "Bitcoin going under $300" or ones exploring the idea that it might be all over for the currency. We read on Quartz:


People are starting to notice: The bad boy of the digital currency world is losing its mojo.

Which is to say, bitcoin prices in US dollars have been heading south, hovering at just under $350 after peaking at more than $1,100 just a year ago. At one point, bitcoin was the worst performer of nearly any asset class.

It's not a coincidence, either, that bitcoin hasn't really been in the news of late, as the currency was during last year's explosion. The crypto-currency is remarkably sensitive to media coverage, and one of the main dynamics of its rise has been the hype cycle of successive rounds of excited investors piling into the currency, much to the benefit of early adopters.

But the last point might also point in a different direction. There definitely seems to be more negative coverage of late than it was only a couple weeks ago. Arguably, this still is not exactly the panic and widespread dismissal one might expect near major bottoms. But it seems that the stories about Bitcoin might have changed tack from focusing on venture capital investments and security issues to commenting on the lackluster performance this year.

There are still no headlines about Bitcoin on homepages of major finance news services which suggests that there still might be room for some more depreciation but the climate seems to be changing to a more reserved one. This might be the first indication that a major bottom might be in the cards in the future. We're on the lookout for more info about how Bitcoin is a "terrible investment." Once we see such pieces put out by major news outlets, we might face an important buying opportunity, even for long-term investors.

For now, let's turn to the charts.

Bitcoin Chart 1

On BitStamp, we saw yet another spike in volume (fourth day of rising volume), with almost 70,000 bitcoins traded. The currency went below $300 in the day, but came back above $300 to close not far from $330. Overall, compared with Sunday, it was a day of a higher daily low, higher high and a higher close, all on rising volume. This suggests that yesterday was an important day as far as the short-term outlook was concerned.

Today, there's been a visible drop in trading volume and it seems that if the last couple of days were wild, we might be getting back to "normal" (this is written after 7:30 a.m. ET). Bitcoin is still below $350 which doesn't suggest a meaningful reversal just yet, but signs of a possible rebound are there.

Bitcoin Chart 2

On the long-term BTC-e chart, yesterday's move is visible and so is the spike in volume we saw in the last couple of days. If you recall, yesterday we wrote:

The most important question for traders now is whether the slump has come to a halt and the rebound can be taken as a sign of strength. After two strong slides not far from one another and with Bitcoin in a downtrend, it might seem as though more depreciation is just a matter of time. On the other hand, precisely after two sell-offs of such magnitude, there might not be much selling power in the market, and the important psychological level of $350 in place it might be where market players will push Bitcoin.

Currently, our bet is on Bitcoin staying above $350 and recovering some ground after the recent declines. Because of that, we think a limit buy order might be appropriate at this time with an entry price at $360.

This is still very much up to date and coupled with the fact that we've seen an increase in negative news on Bitcoin points to the fact that a bottom, if not a long-term one than a short-term one might be in or close to being in.

If there's anything that bothers us, it's the fact that Bitcoin hasn't gone above $350 yet. In the current environment it seems that betting on rising prices might not be the way just now. Instead, we would prefer to wait for Bitcoin to go above $350 on relatively strong volume.

Summing up, we don't support any short-term positions in the Bitcoin market at present.

Trading position (short-term, our opinion): no current positions. A buy limit order with an entry price of $360, stop-loss at $337.

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