Best of the Week
Most Popular
1. US Housing Market House Prices Bull Market Trend Current State - Nadeem_Walayat
2.Gold and Silver End of Week Technical, CoT and Fundamental Status - Gary_Tanashian
3.Stock Market Dow Trend Forecast - April Update - Nadeem_Walayat
4.When Will the Stock Market’s Rally Stop? - Troy_Bombardia
5.Russia and China Intend to Drain the West of Its Gold - MoneyMetals
6.BAIDU (BIDU) - Top 10 Artificial Intelligence Stocks Investing To Profit from AI Mega-trend - Nadeem_Walayat
7.Stop Feeding the Chinese Empire - ‘Belt and Road’ Trojan Horse - Richard_Mills
8.Stock Market US China Trade War Panic! Trend Forecast May 2019 Update - Nadeem_Walayat
9.US China Trade Impasse Threatens US Lithium, Rare Earth Imports - Richard_Mills
10.How to Invest in AI Stocks to Profit from the Machine Intelligence Mega-trend - Nadeem_Walayat
Last 7 days
UK EU Election Results, Brexit Party Victory, Labour and Tory Bloodbath, UKIP and ChangeUK Die - 27th May 19
The Three M's of Hyperinflation : Milosevic, Mugabe, And Maduro - 26th May 19
Global Multi-Market / Asset Charts Review - 26th May 19
An Oil Shock Could Be the Black Swan That Finally Drives Gold Higher - 26th May 19
Brexit Party Forces Theresa May to Resign, Boris Johnson Next Tory Prime Minister? - 26th May 19
IBM - Investing in AI Machine Intelligence Stocks - 25th May 19
Seasonal Dysfunction: Why Generations of Gold and Silver Investors Are Having Such Difficulty - 25th May 19
Employment - The Good and the Bad of Job Automation - 25th May 19
Gold Mining Mid-Tier Stocks Fundamentals - 25th May 19
Buy This Pick-and-Shovel 5G Stock Before It Takes Off - 25th May 19
China Hang Seng Stocks Index Collapses and Commodities - 24th May 19
Costco Corp. (COST): Finding Opportunity in Five Minutes or Less - 24th May 19
How Free Bets Have Impacted the Online Casino Industry - 24th May 19
This Ultimate Formula Will Help You Avoid Dividend Cutting Stocks - 24th May 19
Benefits of a Lottery Online Account - 24th May 19
Technical Analyst: Gold Price Weakness Should Be Short Term - 24th May 19
Silver Price Looking Weaker than Gold - 24th May 19
Nigel Farage's Brexit Party EU Elections Seats Results Forecast - 24th May 19
Powerful Signal from Gold GDX - 24th May 19
Eye Opening Currency Charts – Why Precious Metals Are Falling - 23rd May 19
Netflix Has 175 Days Left to Pull Off a Miracle… or It’s All Over - 23rd May 19
Capitalism Works, Ravenous Capitalism Doesn’t - 23rd May 19
The Euro Is Bidding Its Time: A Reversal at Hand? - 23rd May 19
Gold Demand Rose 7% in Q1 2019. A Launching Pad Higher for Gold? - 23rd May 19
Global Economic Tensions Translate Into Oil Price Volatility - 22nd May 19
The Coming Pension Crisis Is So Big That It’s a Problem for Everyone - 22nd May 19
Crude Oil, Hot Stocks, and Currencies – Markets III - 22nd May 19
The No.1 Energy Stock for 2019 - 22nd May 19
Brexit Party and Lib-Dems Pull Further Away from Labour and Tories in Latest Opinion Polls - 22nd May 19
The Deep State vs Donald Trump - US vs Them Part 2 - 21st May 19
Deep State & Financial Powers Worry about Alternative Currencies - 21st May 19
Gold’s Exciting Boredom - 21st May 19
Trade War Fears Again, Will Stocks Resume the Downtrend? - 21st May 19
Buffett Mistake Costs Him $4.3 Billion This Year—Here’s What Every Investor Can Learn from It - 21st May 19
Dow Stock Market Trend Forecast 2019 May Update - Video - 20th May 19
A Brief History of Financial Entropy - 20th May 19
Gold, MMT, Fiat Money Inflation In France - 20th May 19
WAR - Us versus Them Narrative - 20th May 19
US - Iran War Safe-haven Reasons to Own Gold - 20th May 19
How long does Google have to reference a website? - 20th May 19
Tory Leadership Contest - Will Michael Gove Stab Boris Johnson in the Back Again? - 19th May 19
Stock Market Counter-trend Rally - 19th May 19
Will Stock Market “Sell in May, Go Away” Lead to a Correction… or a Crash? - 19th May 19
US vs. Global Stocks Sector Rotation – What Next? Part 1 - 19th May 19
BrExit Party EarthQuake Could Win it 150 MP's at Next UK General Election! - 18th May 19
Dow Stock Market Trend Forecast 2019 May Update - 18th May 19
US Economy to Die a Traditional Death… Inflation Is Going to Move Higher - 18th May 19
Trump’s Trade War Is Good for These 3 Dividend Stocks - 18th May 19
GDX Gold Mining Stocks Fundamentals Update - 17th May 19
Stock Markets Rally Hard – Is The Volatility Move Over? - 17th May 19
The Use of Technical Analysis for Forex Traders - 17th May 19
Brexit Party Set to Storm EU Parliament Elections - Seats Forecast - 17th May 19
Is the Trade War a Catalyst for Gold? - 17th May 19
This Is a Recession Indicator No One Is Talking About—and It’s Flashing Red - 17th May 19
War! Good or Bad for Stocks? - 17th May 19
How Many Seats Will Brexit Party Win - EU Parliament Elections Forecast 2019 - 16th May 19

Market Oracle FREE Newsletter

U.S. House Prices Analysis and Trend Forecast 2019 to 2021

Bitcoin Time for More Action?

Currencies / Bitcoin Oct 03, 2018 - 12:25 PM GMT

By: Mike_McAra

Currencies

Bitcoin has been moving up for some time now. The path to higher values has been a rocky one and Bitcoin bulls might be getting some encouragement. Whether this translates to a bullish outlook is another question entirely.

Not all governments are hostile to Bitcoin. Actually, a lot of governments are simply not sure what Bitcoin is and how to approach it. The government of Malta stands out as an example of how officials might actually try to understand the currency and regulate it. In an article on CoinDesk, we read:

Now, in an address to the United Nation's General Assembly, Malta Prime Minister Joseph Muscat has said he sees blockchain technology as the tool which will allow bitcoin and crypto to "inevitably" gain widespread, mass adoption and become the future of money.


Muscat has previously said he believes bitcoin and blockchain have the ability to eliminate third party service providers, giving users more freedom over information and money.

(…)

"By being the first jurisdiction worldwide to regulate this new technology that previously existed in a legal vacuum. Blockchain makes cryptocurrencies inevitable future of money. More transparent, it helps filter good business from bad business.”

This is a pretty interesting development. We are actually seeing one country talking about regulating Bitcoin and including it in the financial system. Is this a breakthrough? For starters, it is hard to overlook the fact that Malta is a rather small country. This means that whatever its government does, doesn’t necessarily have to have any impact on the developments in the broad Bitcoin market. But we can’t brush this event off either.

The willingness of one government to regulate Bitcoin provides us with a hint that it might not be completely unreasonable to expect governments to regulate Bitcoin in the years to come. So, Malta gives us something to look forward to. That is, we are on the lookout for systemically important countries changing their approach to Bitcoin. For instance, any similar comments from the U.S. government could be interpreted as bullish. We are not at this point yet, though.

Bitcoin Moving Higher?

On BitStamp, Bitcoin has been, on average, trading higher in the last three weeks. This might be encouraging for Bitcoin bulls. But is it a game-changer?



In our opinion, it is not. Even though the currency has been generally trending higher, there are still other factors to consider. One of them is the fact that the most prominent moves to the upside took Bitcoin above the 50% Fibonacci retracement level but were stopped by the 38.2% level. Second, the currency is now back below the 50% level and this suggests that the recent move up might have broken down. Third, the recent two local tops – the last two ones formed in the last month – follow a pattern of a lower top, which suggests that the move up might have dried up.

The mentioned factors point to possible lower values for Bitcoin. The action of the last three weeks looks like a correction within a more pronounced move down. The immediate level to which Bitcoin could drop is slightly above $6,000. It could turn out to be the trigger for more action to the downside.

$6,000-6,500 Area

On the long-term Bitfinex chart, we are seeing a move to the upside but it is pretty clear that this move pales in comparison with other moves from the not-so-distant future.



The long-term chart also provides us with an indication that Bitcoin seems to be dancing around the 78.6% Fibonacci retracement level based on the rally from around $3,000 to the all-time high around $20,000. This line seems to have coincided with the February bottom, the April one, and the currency has been moving around it since mid-June. If we see a sustained move below this line, then it might provide a trigger for the move down.

But there’s another level quite close, which could also turn out to be the beginning of more significant declines. Namely, $6,000 is the support level suggested by a different set of Fibonacci retracements (the ones based on the February rally) and by recent lows. It would seem that together, these two levels suggest that the $6,000-6,500 area is a place where powerful declines could start. And we’re right at the upper boarder of this area (at the moment of writing).

It is entirely possible that we could see a move up from the current levels, but the signals that we see in the market suggest a bearish outlook. Any move to the upside from here might be volatile and quickly reversed to the downside.

Summing up, in our opinion both short-term and long-term signals suggest a bearish outlook.

If you have enjoyed the above analysis and would like to receive free follow-ups, we encourage you to sign up for our daily newsletter – it’s free and if you don’t like it, you can unsubscribe with just 2 clicks. If you sign up today, you’ll also get 7 days of free access to our premium daily Gold & Silver Trading Alerts. Sign up now.

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.

Mike McAra Archive

© 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