Most Popular
1. It’s a New Macro, the Gold Market Knows It, But Dead Men Walking Do Not (yet)- Gary_Tanashian
2.Stock Market Presidential Election Cycle Seasonal Trend Analysis - Nadeem_Walayat
3. Bitcoin S&P Pattern - Nadeem_Walayat
4.Nvidia Blow Off Top - Flying High like the Phoenix too Close to the Sun - Nadeem_Walayat
4.U.S. financial market’s “Weimar phase” impact to your fiat and digital assets - Raymond_Matison
5. How to Profit from the Global Warming ClImate Change Mega Death Trend - Part1 - Nadeem_Walayat
7.Bitcoin Gravy Train Trend Forecast 2024 - - Nadeem_Walayat
8.The Bond Trade and Interest Rates - Nadeem_Walayat
9.It’s Easy to Scream Stocks Bubble! - Stephen_McBride
10.Fed’s Next Intertest Rate Move might not align with popular consensus - Richard_Mills
Last 7 days
THEY DON'T RING THE BELL AT THE CRPTO MARKET TOP! - 20th Dec 24
CEREBUS IPO NVIDIA KILLER? - 18th Dec 24
Nvidia Stock 5X to 30X - 18th Dec 24
LRCX Stock Split - 18th Dec 24
Stock Market Expected Trend Forecast - 18th Dec 24
Silver’s Evolving Market: Bright Prospects and Lingering Challenges - 18th Dec 24
Extreme Levels of Work-for-Gold Ratio - 18th Dec 24
Tesla $460, Bitcoin $107k, S&P 6080 - The Pump Continues! - 16th Dec 24
Stock Market Risk to the Upside! S&P 7000 Forecast 2025 - 15th Dec 24
Stock Market 2025 Mid Decade Year - 15th Dec 24
Sheffield Christmas Market 2024 Is a Building Site - 15th Dec 24
Got Copper or Gold Miners? Watch Out - 15th Dec 24
Republican vs Democrat Presidents and the Stock Market - 13th Dec 24
Stock Market Up 8 Out of First 9 months - 13th Dec 24
What Does a Strong Sept Mean for the Stock Market? - 13th Dec 24
Is Trump the Most Pro-Stock Market President Ever? - 13th Dec 24
Interest Rates, Unemployment and the SPX - 13th Dec 24
Fed Balance Sheet Continues To Decline - 13th Dec 24
Trump Stocks and Crypto Mania 2025 Incoming as Bitcoin Breaks Above $100k - 8th Dec 24
Gold Price Multiple Confirmations - Are You Ready? - 8th Dec 24
Gold Price Monster Upleg Lives - 8th Dec 24
Stock & Crypto Markets Going into December 2024 - 2nd Dec 24
US Presidential Election Year Stock Market Seasonal Trend - 29th Nov 24
Who controls the past controls the future: who controls the present controls the past - 29th Nov 24
Gold After Trump Wins - 29th Nov 24
The AI Stocks, Housing, Inflation and Bitcoin Crypto Mega-trends - 27th Nov 24
Gold Price Ahead of the Thanksgiving Weekend - 27th Nov 24
Bitcoin Gravy Train Trend Forecast to June 2025 - 24th Nov 24
Stocks, Bitcoin and Crypto Markets Breaking Bad on Donald Trump Pump - 21st Nov 24
Gold Price To Re-Test $2,700 - 21st Nov 24
Stock Market Sentiment Speaks: This Is My Strong Warning To You - 21st Nov 24
Financial Crisis 2025 - This is Going to Shock People! - 21st Nov 24
Dubai Deluge - AI Tech Stocks Earnings Correction Opportunities - 18th Nov 24
Why President Trump Has NO Real Power - Deep State Military Industrial Complex - 8th Nov 24
Social Grant Increases and Serge Belamant Amid South Africa's New Political Landscape - 8th Nov 24
Is Forex Worth It? - 8th Nov 24
Nvidia Numero Uno in Count Down to President Donald Pump Election Victory - 5th Nov 24
Trump or Harris - Who Wins US Presidential Election 2024 Forecast Prediction - 5th Nov 24
Stock Market Brief in Count Down to US Election Result 2024 - 3rd Nov 24
Gold Stocks’ Winter Rally 2024 - 3rd Nov 24
Why Countdown to U.S. Recession is Underway - 3rd Nov 24
Stock Market Trend Forecast to Jan 2025 - 2nd Nov 24
President Donald PUMP Forecast to Win US Presidential Election 2024 - 1st Nov 24

Market Oracle FREE Newsletter

How to Protect your Wealth by Investing in AI Tech Stocks

Bitcoin Price Continuation of a Move up

Currencies / Bitcoin Aug 23, 2014 - 12:41 PM GMT

By: Mike_McAra

Currencies

Cutting right to the chase: we support long speculative positions, stop-loss at $440, take-profit at $620.

A recent report by Wedbush Securities considers the effects volatility might have on the Bitcoin market:

We see investing and trading bitcoin as one of the first major applications of crypto currency and believe increased investment and trading activity is helping create the payment network infrastructure and monetary base that will facilitate increased economic activity in the future.


(...)

(...) volatility in the price of bitcoin may not go away anytime soon, as the potential for bitcoin is being constantly measured by the market in light of rapid technology development and unpredictable regulatory constraints. However, we do not believe this volatility, in itself, will impede the growth of bitcoin technology and ecosystem.

We believe traders value volatility as they continue to gravitate to bitcoin trading as an active 24/7 market uncorrelated with other asset class returns. The connection between volatility and trading volumes is well established in equities (page 3) and is beginning to emerge in bitcoin trading.

(...)

Volatility in the price of bitcoin should not impede retailer acceptance of bitcoin, in our opinion, as merchants and payment processors are entirely shielded, and we expect consumers will be shielded in the future.

The remarks on the impact of volatility on future Bitcoin adoption seem insightful. The fact that Bitcoin is not correlated with other assets like stocks or bonds might make it valuable for investors since it provides diversification benefits. This could increase the trading volume in the future as further investors and finance professionals enter the market.

The comments on volatility not being a significant threat to Bitcoin becoming a widespread payment system also seem accurate. Retailers like Dell have entered into agreements with Bitcoin startups to lock in the exchange rate applied to transactions. In the future, we would expect more startups working on similar solutions, possibly not only for retailers but also for customers.

Let's turn to the charts.

On BitStamp, we saw a move up yesterday but the appreciation was subsequently erased and Bitcoin ended the day where it had started it. The volume was down from the day before yesterday but not necessarily weak.

Yesterday, we wrote:

On BitStamp, we saw another move up yesterday, approximately 5.0% up. The volume was relatively high, lower than during the final part of the recent decline but still relatively significant.

Does this mean that we're actually seeing a reversal now? Our answer will follow in the course of this commentary.

(...)

It has actually turned out so far that the move is not spurious (this is written around 8:15 a.m. ET). Bitcoin has gone up some more and is now trading around $525. The volume is down compared with yesterday but it isn't actually weak. Based on a move above $500 yesterday and the action today, the short-term outlook seems to have improved.

Today, Bitcoin went down in the early hours today but has recovered these losses (this is written around 11:45 a.m. ET). The volume might be down from yesterday (the day is not over yet) but is not insignificant. The current situation seems not to change much in the short-term outlook. If anything, the daily reversal today suggests more strength than the move yesterday.

On the long-term BTC-e chart, we see little change but the move to $550 is now visible. Whether this move will be completed remains to be seen.

Yesterday, we wrote:

It would seem that the action up has become stronger now. It is still not very strong, but strong enough, in our opinion, to bet on a move further up at this time.

Today, we've seen a daily reversal on BTC-e just as we have on BitStamp. The volume might not be up but the move still seems in place. If the move was strong enough yesterday, it seems even more pronounced today because of the daily reversal. Consequently, the short-term outlook remains bullish.

Summing up, in our opinion long speculative positions might be the way to go now.

Trading position (short-term, our opinion): long, stop-loss at $440, take-profit at $620.

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.


Post Comment

Only logged in users are allowed to post comments. Register/ Log in