Bitcoin Price Wavering around $600 - Which Way Will It Go?

By: Mike_McAra

In short words: we don't support any short-term positions at this time.

The Bolivian government banned Bitcoin in May, CoindDesk announced yesterday:

El Banco Central de Bolivia, the central bank of the South American nation, has officially banned any currency or coins not issued or regulated by the government, including bitcoin and a list of other cryptocurrencies including namecoin, peercoin, Quark, primecoin and feathercoin.

(...)

The decision to fully ban bitcoin puts Bolivia in unique standing in the international community, as other nations previously believed to be embracing restrictive policies - including China, Thailand and Russia - have since backed away from implementing similar measures.

(...)

Bolivia's announcement is also unique within the context of decisions made by its South American neighbors. For example, earlier this March, a report suggested that The Superintendencia Financiera de Colombia (SFC), Colombia's central bank, may have been seeking to implement a bitcoin ban.

However, despite worries from the local community, such fears did not come to pass. Colombia stopped short of the expected announcement, choosing instead to bar banks from working with digital currency companies.

Elsewhere in South America, central banks in Argentina and Brazil are permissive to digital currencies (...).

This is a major setback for investors in Bolivia but it doesn't change much as far as the international picture is concerned. It is possible that the country will follow in the footsteps of those countries which previously had banned Bitcoins but have reneged on this since then. It's too early to see this coming but we'll be keeping an eye on more info about Bitcoin and Bolivia.

For now, let's move on to the analysis of charts.

On the BitStamp chart, we see that Bitcoin declined back below $600 yesterday. This means that the next move up is not confirmed at this time. On Wednesday, we wrote:

We saw a move above $600 (solid green line in the chart) yesterday. This seems extremely bullish for the short-term if we look at the price action only. The volume is slightly more worrying since it was actually lower than on Monday. Because of that, we don't think this is a signal to jump into the market right away.

This caution turned out to be warranted since Bitcoin has come down since then. The move yesterday took place on relatively low volume which doesn't indicate that the move is lasting.

Today, we saw Bitcoin move down but it has returned since then (this is written before 10:30 a.m. EDT). The volume is increased compared with yesterday but neither the action nor the volume confirms a move up. The fact that Bitcoin is dancing around $600 seems to indicate that moves in both directions are possible.

On the long-term BTC-e chart we're seeing a period of consolidation around $600 (solid green line on the chart). Bitcoin is currently below this level but the volume is also down and this doesn't support any strong short-term move just now.

At this time, it seems that Bitcoin might still move lower in the short-term (this is not a sure bet) but the long-term move still seems to be up as the previous trend (black declining line) was broken decidedly.

Our best bet at the moment is a short-term move down followed by more appreciation. The situation, however, is not clear enough to go short just now. We're more inclined to see a strong move down and a reversal, or a move up and then to open longs.

Summing up, in our opinion no short-term positions should be held at this time.

Trading positions (short-term, our opinion): no positions.

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.

© 2005-2022 http://www.MarketOracle.co.uk - The Market Oracle is a FREE Daily Financial Markets Analysis & Forecasting online publication.