Price of Bitcoin pulls back from yesterday’s high of $452+

The price of Bitcoin retraced from yesterday’s high of $452 to $443 today on the 22nd of April, 2016 declining -1,99%. It has currently formed a nice hammer on the BitstampUSD chart and while there is still more room to go down on the Slow Stochastic oscillator along with MACD and RSI, the overall feel is very bullish and looks like we’re currently around a good place to go long once again.

Bullish Bitcoin getting everyone excited

Bitcoin price pollGiven that the price of BTC has been moving rather slowly for the past couple of months, it’s no wonder that there’s an increased activity on Bitcoin related forums and message boards now when the bulls have returned and people are eagerly looking forward to the $500 per coin in the short term.

When a poll was opened today on Bitcointalk, the majority of voters believed that Bitcoin will reach above $480 by May 1’st which is only 8 days from now.

A beautiful swing

When you look at the chart below you’ll see that we are currently at around a very good level for buying some more right after we get a confirmation candle along with a solid crossing on the Slow Stochastic oscillator in the oversold area.

BitstampUSD 22 April 2016 Stochastic slow fast Bitcoin price swing trading

Bitcoin payments coming to Steam

Furthermore, a popular gaming platform, Steam, just came out with more bullish news for Bitcoin by announcing yesterday that Bitcoin is coming soon to Steam as a means for gamers to pay for various games.

Bitcoin payments coming to steam

News like this, like we’ve seen numerous times before, tend to work out really well for the Bitcoin bulls as price is likely to increase soon after.

So, what are you still waiting for?

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Bitcoin bullish, rising for two days from $433 to $445+

It looks like the three mysterious flash crash/recoveries on the BitstampUSD chart had absolutely no effect on the overall market as BTC is yet again strongly bullish with a slight hint of a small retracement on the horizon as the stochastic oscillator (both fast and slow) are crossing in the overbought area at the time of writing this post. Check it out:

BTC USD price on April 21 2016 445 usd

Will Bitcoin reach $500?

By lurking on the Bitcointalk forums it has become apparent that a lot of people are expecting it to reach at least $500 by the time block halving happens, but after that the opinions about the future of Bitcoin get mixed.

On one hand there are people who believe it will continue to rise and eventually reach a new all time high and on the other hand there are speculators who say that Bitcoin will not survive after the halving has occurred.

Now, I don’t believe that Bitcoin will simply die just like that, but hoping for a Bitcoin that’s worth thousands of dollars is a little unrealistic even after the halving because halving doesn’t actually decrease the overall supply, but merely slows it down.

In reality nobody knows for sure, but I personally believe that it’s worth betting on a new all time high price instead of being overly pessimistic about it. Okay sure, there are a few competitors on the horizon like Etherum, but at the end of the day Bitcoin will be worth exactly how much other people are willing to pay for it and since the hype is still strong and we’ve only recently gotten our feet wet in the mainstream trading world, I don’t see why we can’t rise higher.

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Bitcoin slowly recovering after Mike Hearn news in January

In the first weeks of January 2016 a leading Bitcoin developer Mike Hearn announced to the world that Bitcoin is dead and broken. In his article he talks about how the community has failed and how the Blockchain technology can’t reliably handle too many transactions at once. He also mentions that the market is controlled by Chinese miners and just two miners control more than half of the entire hash power. Naturally this announcement caused a network wide panic as people were worried Bitcoin is done for good this time.

BitcoinsBitcoin’s death greatly exaggerated

After the usual media shitstorm and Bitcoin selling marathon came along the CNBC and announced to the world that Bitcoin’s death was mostly just exaggeration and even though Bitcoin has been officially declared dead more than 90 times in its relatively short lifespan, the cryptocurrency will rise and continue moving forward just like it has always done.

Moreover, various conspiracy theorists claimed Mike Hearn to be a shill working for MI6 or some other major corporation, perhaps even the central banks. While unlikely, we can’t really rule anything out at this point because one can’t help but wonder whether Mike Hearn profited from the Bitcoin selling that he himself initiated. It’s quite possible that the first wave was in fact from his own Bitcoin stack which he dumped on the market.

Price stabile below 400 USD

After the Mike Hearn news Bitcoin’s value on most markets started to rapidly fall as traders were trying to get rid of a “broken” currency as fast as possible. Eventually the price found stability a little above $360 USD per Bitcoin and has since then been hovering in the sub 400 area for a month.

From the 2nd half of January until mid February 2016 the price of Bitcoin fluctuated systematically between $390-$365 indicating that the speculators were still around and hadn’t abandoned ship completely. The past month has been a very profitable time for the technical traders because of the market’s rather predictable movement.

Testing $400 on Valentine’s day?

It’s Valentine’s day today and interestingly the price of Bitcoin has just increased from $380+ all the way up to $399 within just a few hours. There’s just one more dollar to go before we test the $400 mark and things are looking very good right now. In fact at the time of writing this post the price has already risen to $399,7 quite rapidly so I believe we will see 400 in just a few moments.

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Is Bitcoin getting ready for another bullish rally?

After almost two weeks of sideways movement we have once again started to see “strange” movement on the BTC/USD pair. A massive dump yesterday, then a couple of hours of sideways movement followed by a massive bullish candle almost exactly the same size as the dump indicates that something is indeed brewing in the Bitcoin world. The recent Bitcoin rally that peaked around $520 USD per Bitcoin on November the 4th, may have just been a prequel for what’s coming.

Japan as the next pump

The previous pump was initially started by the Chinese investors when their economy ran into trouble. Now, Japan has also announced that they have fallen back into recession. Could the Japanese investors follow China’s lead and start a new bullish rally?

I think that’s very likely as gold and other precious metals are currently falling too, so the only seemingly safe move would be to buy Bitcoins given the upcoming block halving event and the current belief among most traders that this event will double, if not triple the value of Bitcoin.

It will only take a nudge

As we have previously seen with China, it doesn’t take much to initiate a FOMO (Fear Of Missing Out) where small, medium and big investors panic together as they see a huge bullish candle and start buying up the coin in order to make a quick profit. I predict these types of pump and dumps will become a lot more frequent all the way towards the block halving which, by the way, isn’t guaranteeing a Bitcoin’s increase in reality.

 

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Bitcoin declines -20.5% after this week’s insane bullish rally

Bitcoin rallied all the way to $459,200 on the charts of BTC-E and even broke the $500 barrier on Bitstamp this week after the last weekly candle from October closed nicely above $304,300 resistance level indicating more bullish movement. It didn’t take long for a panic buying frenzy of massive proportions to take place shortly after that. Everyone wanted to get in early in fear of missing out.

Sudden decline

Bitcointalk was teeming with investors and traders speculating on the price of Bitcoin and the vast majority of people agreed that this is going to be a serious breakout. Even bigger than the last one (in 2013) and that we would see prices higher than a thousand dollars very soon.

What people didn’t realize was the resistance from 2014 at around $454 USD (remember, I’m almost always using BTC-E charts to do my analysis) that made the price bounce back down shortly after it reached there. On the hourly chart you can see BTC trying to break the resistance seven times in a row until finally giving in to the pressure of the bears and falling down further.

This along with a number of people from Bitcointalk screaming that this is the end of the bubble, fueled the bears even more and the price declined a total of -20,5% in just two days. Heck, even the Chinese quit pumping money into the cryptocurrency which of course meant that a lot of people just gave up altogether. In OKCoin many traders who went literally “all in” received margin calls all around from the sudden decline as they were hoping we’d be flying to the moon on the next rocket.

The bigger picture

It’s always fun to watch people buying in panic and then starting to sell as soon as someone claims it’s the end of the world. These people just can’t see the bigger picture which, at this point, clearly indicates we’re going to see another jump in value very soon. Maybe not next week, maybe not even next month, but soon enough. Remember, the halving is right around the corner and we are safely above the support of $304.300 so unless this gets broken, the long bulls are good.

It’s true that on a shorter time scale, we are currently inside a downward moving tunnel, but when you look at the daily, weekly and monthly charts, you will see there is no reason to panic just yet.

Here’s a cute chart:

bubble chart

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Bitcoin just hit the $420 mark and it doesn’t look like it’s stopping

The last time we saw Bitcoin around these levels was exactly one year ago in November 2014. We were just coming down from a down trend correction that peaked at $667,530 on the 25th of May as people were desperately trying to get rid of their remaining coins and we had no idea where it would stop. Then, less than a month later we finally hit the bottom at $200 where the price remained solid for almost a year, continuously dancing between $260 and $198.

Strong news to back it up

BTC USD Price November Rise ClimbThe first thing that comes to mind when you look at such a chart is obviously that someone’s trying extra hard to manipulate the prices for their own evil profit. I thought so too until I read the following news:

Bitcoin to become the 6th largest global reserve currency by 2030

The above article talks about how global banks are super hyped about the Blockchain technology that Bitcoin is running on and how they have already invested billions of dollars into it. They are finally taking this new technology seriously enough and who can really blame them? It’s a lot more secure and simply a better way to transfer funds than the traditional system we currently have. The article fails to show the relevance of Bitcoin in all this, because as you know, Blockchain is *not* Bitcoin, but there is more!

Chinese Yuan 15-20% devaluation by 2016

Since China is a global giant such news are definitely going to change a lot. The article talks about how China already devaluated their currency in order to help exporters and more devaluation is imminent. The current price rise of Bitcoin is almost entirely made up of money flowing into Bitcoin from China so people are already getting ready for a serious meltdown by the looks of it. This reminds me how Kim DotCom tweeted in August suggesting people to buy Bitcoins now and thank him later.

Regulated Bitcoin exchange, Gemini, set to launch

Gemini is the world’s first legal and regulated Bitcoin exchange with its headquarters located in New York, USA.

Cameron and Tyler Winklevoss, famous for their legal spat with Facebook founder Mark Zuckerberg, launched bitcoin exchange Gemini on Thursday. While the currency has received criticism for its role in exchanges such as online black market Silk Road, the brothers contend they have established sufficient safeguards to unlock its potential.

Bitcoin now treated legally the same way as money

Bitcoin can now legally be treated the same way as real money after a court ruling on Thursday which stated that Bitcoin transactions are exempt from VAT (value-added tax). That alone is enough to raise the price of Bitcoin considerably for obvious reasons. Even the oldschool investors who didn’t care about Bitcoin before are now looking into this tax-free investment.

Panic buyers fueling the price further

Given all the positive media fuss around Bitcoin lately and seeing the price skyrocketing in a matter of days has got a lot of people standing on their toes right now. The value of Bitcoin rose from $328 up to $420+ in a single day today as more buyers are jumping on the train, thus fueling the rally even further.

$500-$600 a very real possibility

In one of my previous posts I was quite skeptical about the price moving anywhere above the $450 area and even though I still believe we are going to see some resistance at the $454 area, it looks like Bitcoin is just getting started and we have only seen the tip of the iceberg right now. Basically any correction, especially the one that should happen around $454, will be a good entry point for a LONG position from now on.

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Bitcoin holding steady over the highest point ever in the year 2015

In my previous post about Bitcoin I said that breaking $300 was important, but that was only important because it’s a nice round number and human beings like these sort of things. The actual level that needed to be broken was $304,3 which was the highest point Bitcoin had ever been this year and sure enough it managed to not only break this level, but stay above it steadily for more than 24 hours. As of right now, Bitcoin has not been this expensive in the entire year of 2015 so things are looking rather good!

BTC USD 1D Chart Graph

Unlikely a pump and dump

Given the fact that this rally is happening slowly and steadily makes me very confident to say that we’re not dealing with a plain old pump and dump right now. Of course, I could be wrong, but a pump and dump usually happens a lot faster unless the whales are trying a more careful approach this time. Also we shouldn’t underestimate the buying power of China because apparently they’re the ones mostly responsible for this.

Price manipulation or not, I have closed all of my LONG positions for now because nothing can climb so high without falling down at least a little bit. The candles are indeed getting wider, but that’s all the more reason to believe that we are going to max out very soon.

We can see further indication of an imminent correction by looking at RSI which is currently showing a strong overbought market at 87.8%.

Highest value in 2015

Throughout the year we have witnessed Bitcoin climb from $230-$250 lows up to $300 and coming back down again. This happened on two previous occasions until finally in October 2015 we managed to break the old barriers and stay afloat above the highest point from July. As of right now Bitcoin’s value is the highest it has ever been this whole year.

Big expectations

A lot of investors from Bitcointalk.org are being overly optimistic about the current price movement and are throwing around numbers as big as $500, $600 and even higher. I unfortunately don’t share that enthusiasm because I can’t simply ignore all the technical analysis data which is showing the current price increase as nothing more but a mere correction in an overall down trend when looked at from the 1W and 1M time scales.

It is my estimate that if indeed we continue the bullish run, it won’t reach higher than $450-$475 before coming back down again hard.

Only one thing can change my estimate and that is when Bitcoin can successfully close this week’s candle outside the 1W Bollinger Bands which have been contracting since April. We could be dealing with a major breakout should this happen and given that we only need to survive one more day, it’s a very likely scenario.

Halving in less than a year

Bitcoin block halving is estimated to take place in less than a year from now and when it happens the rewards from solving a block are reduced from 25 to 12.5 per block. This is significant because it could very well be the end for Bitcoin as we know it. Why?

Because small time miners have been selling their Bitcoin mining rigs and/or switching to other, more easily mined cryptocurrencies for a couple of years now. What do you think will happen if suddenly the reward for solving a block gets halved when it’s already barely profitable to mine for most miners?

The most logical thing to happen is that the few miners that we have left are going to dump all their hardware, move to a more profitable crypto currency or quit mining altogether.

When exactly is the halving going take place? Nobody can say the exact moment, but Bitcoin Block Half has a fairly good estimate.

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