Is Bitcoin’s price in a major reversal?
This past week, Bitcoin’s price held fairly well, trading within levels of $281 and $302. As per charts, $300 has been a resistance that for bulls attempting to break out. After the $300 resistance level is a long term bear resistance trend line – sloping slightly above $315. Multiple attempts to break past $303.96 on Bitfinex was immediately accompanied by a rebound to the lowest limit bounds of this range – $282.
Since price broke out from $232 on February 27, market expectations have been bullish. The price is still above the 10, 20, 30 and 50 Day Exponential moving averages (EMA). Short term EMAs are above long term EMAs, which bodes well for higher short term price prospects. Any change in market direction will first be reflected on short term indicators. So far, the market’s short term indicators are ripe for short term rally.
$295 was a midpoint for price fluctuations on either side. High sell volumes on March 14th threatened to take prices lower – $265, however, selling pressure was not enough to cover bids. Buyers bought back dumped coins on both attempts, restoring the price to within range.
At the SXSW conference this week, bitcoin was a focal theme, represented by the WinkleVoss twins who were scheduled to speak for an hour. Gemini, a widely anticipated US regulated Bitcoin exchange, is the brainchild of Cameron and Tyler Winklevoss. Gemini exchange is expected to be the first fully regulated exchange on US soil in addition to linkages with US banking infrastructure. Speaking at the SXSW Bitcoin Q & A session, Cameron was quoted
“2015 is the year of Bitcoin infrastructure. We are resolved on setting up a fully compliant bitcoin exchange; with a US bank involved, no money will cross borders.”
In addition to Gemini, they are also planning an ETF with a ticker symbol COIN. It is expected to be available to all investors on NASDAQ as an indirect exposure to bitcoin.
Meanwhile, Japanese e-commerce giant Rakuten Inc. now accepts bitcoin on US purchases only. Rakuten executives have hinted severally about plans to adopt bitcoin as a payment alternative and in fact, the company is already an investor in a bitcoin startup in San Francisco. In addition to the US, Rakuten’s German and Austrian units are set to follow suit in the 2nd quarter of this year, however. Details on when its Japanese unit (the largest Rakuten unit) will adopt bitcoin are tightly sealed.
Finally, Overstock reportedly acquired 24.9% of a registered broker – dealer at a price of $250,000. These revelations were unearthed from Overstock’s 10-K annual report filing on March 12th; the broker-dealer’s name was noticeably withheld. CEO Patrick Byrne, has regularly voiced his intentions of developing a democratized marketplace for cryptocurrencies and digital assets. As per SEC filings, Overstock is looking to “develop and license software to trade crypto securities using the Bitcoin network and its protocols.”
Bitcoin Price forecast
So what should we expect from the market this week?
The market looks promising; a slow gentle rise in the short term seems likely. A sustained break above $300 will head up to test the long term descending trend line at around $315 – $340. How the market responds to this upper resistance will be telling of whether we are out of the long term bear market for good.
Looking at 1 Day charts, the market has cut above 20, 30, 50 and 100 Day EMAs and has seemingly found support on 100 Day EMA trend line. Meanwhile on the weekly and 3 day chart, price reversal is not convincing as yet. the 12 hour chart is strongly bullish as the current price, 20,30 and 50 D EMAs are well above 100 Day EMA line. RSI levels are within acceptable range (70 and 30) meaning there is enough strength to follow through on a move up to above $300.
Elliott Wave chart analysts have targets at $315 after a 5 wave structured move up. The chart above by chessnut, shows a triangle terminal break followed by an expected dip in price. This was the bear move down that stopped short at $ 282.
Since the dip in price to $ 282, price has gradually come up to previous levels; a sudden break from $ 284 to current levels at $292 points to a retest of resistance at $303.
Evidently, long term charts are exhibiting all sorts of technical bullish signs. It is also clear that fundamentals on bitcoin’s development have improved. The January low had all the makings of a legitimate bottom – high volume crash and subsequent reversal; I expect trading range to hold around these levels bar major news this year.