Bitcoin gained 1.36% earlier today rising from $442 to $448 in just one hour right after Glenn Hutchins, a Federal Reserve Bank of New York board member and investor, came forth with bullish news about Bitcoin and the BlockChain technology. In his speech he drew a bold parallel between Bitcoin and the Internet and, among other things, mentioned that he has bought Bitcoin himself and is currently investing in various Bitcoin companies.
We didn’t reach $500… yet
In the last weeks of April there was a lot of fuss on Bitcointalk about the possibility of the price reaching a whopping $500 USD mark on or before May 1’st, but as we all now know, this somewhat feasible dream was instead met with a steady two-day price decline on the 27th and 28th of April where the value of Bitcoin fell sharply a total of -7,25%.
Impact of bullish news
Glenn Hutchins is a man to be taken seriously and we have already witnessed that the first wave of bulls have returned, albeit cautiously for now.
When a board member of a Federal Reserve Bank of New York comes out in the open and says that “hey, I’ve bought Bitcoin myself and I will start investing in Bitcoin companies“, it’s not that far-fetched to think that at any moment now the herd will follow.
$500 in May or early June?
This, along with the fact that an event called “the halving” is right around the corner, leads me to believe that $500 in May is a very strong possibility especially because in the last few days the price has fallen just enough for it to look delicious again for the bulls.
After all, Bitcoin is an asset more closely controlled by the fundamentals than anything I’ve seen before. It’s true that technical analysis works to a certain degree, but every time news like this comes out, Bitcoin simply goes nuts!
It’s like a feather in the wind that’s blowing from many different directions and that being said, I believe this month and the next will be a very interesting ride to either simply observe or be a part of directly.
Something strange just happened to the price of Bitcoin where it rapidly fell from $430 to $383 in just an hour and then recovered again only to go on round two just an hour of standing relatively still. At least that’s what the Bitstamp charts are saying. Have a look:
What’s happening on Bitstamp?
Well, something had to cause this and I have to admit I jumped a little when I saw this just now, but it appears it only happened on Bitstamp as Bitfinex, Kraken, CoinBase and BTC-E seem to be completely oblivious about it.
Still, knowing that there are a lot of traders out there who only rely on Bitstamp data, I can’t help but wonder if this incident can fuel a significant panic dump very shortly?
It certainly doesn’t look natural/unintentional, but right now all we can do is wait and see if anyone can shed some light on the matter. I guess it’s time to lurk on the speculators forum again…
21 hours later
This is an update 21 hours later and looks like it happened again a third time:
More and more bears are showing up as we speak so I don’t think this is going to hold for much longer.
Bitcoin sure likes to blaze it or so it would seem. The price is back around the 420 area where it reached in November 2015. Ever since the Mike Hearn news, Bitcoin has been struggling to break the $400 resistance, but it finally managed to do so just in time for Valentine’s day and while most speculators on BitcoinTalk tend to agree that this is the new floor for the crypto, I’m a little worried about the head and shoulders pattern that’s forming on the hourly charts.
Head and shoulders on 1H
As I’ve stated before I’m a Bitcoin permabull and would love to see the cryptocurrency rise to an all time high this year. I was super excited to see the breakout on Valentine’s day, but it’s possible that this is about to turn south real quick due to the formation of a very popular chart pattern known as the head and shoulders. Have a look at the chart below to see what I mean.
A great source for learning, Investopedia, explains it pretty well. Basically if the neckline is broken, we can expect a more serious downward movement to take place. Right now it doesn’t look like the neckline is broken just yet, but it’s definitely getting closer due to the selling power increase as indicated by the red bars at the bottom of the chart.
Fundamentals bearing more weight
There’s been plenty of good news on the media surrounding Bitcoin lately and it’s the main reason the cryptocurrency is rising right now. I’ve also noticed that the technical traders are getting burned more often than before with not just trading Bitcoin but pretty much everything else.
For example the popular forex pair EUR/USD surprised many seasoned technical traders this year with a massive surge upward and while I’m not qualified to really speculate on the matter, I saw a very influential trader post on the Forex Factory forums that technical trading is getting more and more difficult to the point where it no longer makes sense to be involved at all. So perhaps the 2016 financial crisis will remove most technical traders out of the equation for Bitcoin as well?
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.
Bitcoin’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.
Bitcoin just broke the 400 usd barrier shortly after rumors about the revealed identity of the Bitcoin protocol founder were released on the internet. According to Wired and Gizmodo, the mysterious man behind Bitcoin, Satoshi Nakamoto, is in fact an Australian entrepreneur Craig S Wright.
Bitcoin stable around 420
The sudden $16,50 USD jump in Bitcoin price quickly found stability around the 420 USD per coin area today where it has been hovering for pretty much the entire day showing signs of further upward momentum.
Is Craig S Wright really Satoshi?
The evidence provided so far can’t be used to conclude that Craig S Wright is Satoshi Nakamoto and in Wired’s case, the evidence was presented with extreme caution. There is still a very high chance that the claim is simply false.
The raid at Wright’s house
Shortly after the news release Craig S Wright’s home was raided by the Australian police showing that they aren’t taking any chances. The Guardian reported that a total of 10 agents were seen searching for evidence on cupboards and areas of the garage. The police entered Wright’s home on Wednesday afternoon merely hours after the release of previously mentioned news articles and even though officially the raid isn’t related to the revelation, you can’t help but wonder if they are trying to cover something up.
Let’s wait and see
Only time will tell if Craig S Wright really is the mastermind behind Bitcoin and the Blockchain technology, but the market has already reacted very strongly despite the fact that for now we are dealing with nothing more but speculation at this point. Given the fact that such rumors can move the price up so fast, I would be wary of trading the cryptocurrency for a few days or at least until we figure out what’s really going on.
Ever since my last post about Bitcoin more than two weeks ago, I have been keeping a close eye on the price movement and the news as well. Judging from the chart alone, it’s highly possible that Bitcoin will soon break the $400 resistance level, because it has tested it twice already in the last two days and today’s hourly candle closed a lot closer to this level than the previous. The technical analysis is definitely showing an increasing pressure from the bulls, but that’s not all! The news have been very favorable as well.
Visa is Testing Remittances on the Bitcoin Blockchain
Visa Europe became the latest enterprise financial institution to announce a blockchain proof-of-concept this month, when it revealed it was working to leverage the emerging technology for remittances.
Report: Barbados Central Bank should hold Bitcoin
Two Barbadian economists have concluded that the country’s central bank may want to consider holding a small amount of bitcoin as part of its portfolio of foreign reserves.
Former assistant of President Obama joins Bitcoin Miner Bitfury
“I believe in the blockchain and the transformation power of this technology. And you should too. In fact, I believe in the blockchain so much that I just left my fantastic job working for Edelman … to take on the role of global chief of communications at BitFury.” Source: http://www.coindesk.com/former-white-house-staffer-joins-bitcoin-miner-bitfury/
Bitcoin bulls just getting started
The above three news were just a few examples how seriously people are starting to take Bitcoin and its underlying technology, the Blockchain. Deutsche Bank, for instance, has claimed that the Blockchain technology will become mainstream within just the next decade.
I’m a Bitcoin permabull myself and I strongly believe that we can break the $400 barrier this year. Perhaps there’s not enough power to test $500 within just two weeks, but we should be getting there in the first part of 2016 as well. See you on the moon!
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.