This week the price of bitcoin has been moving up in a series of higher lows, from a low bottom $382, but, only marginally moving up from a sideways trading range active since the first week of March.
This 12 hour chart from Bitstamp shows $420, a resistance and support level, tested multiple times in a bid to break up or down. On March 15, a second attempt to break $420 failed and a retest of low $403 held up a short bull run, going up $30, to $431, breaking $430 in the process.
The market over the month of March, has made 3 significant higher lows $382 on March 6, $404 on March 18, and as at writing this, $407. The retracement from $431 was only natural and now seems to have found a bottom. I expect a retracement back up to this week’s $431 high.
On the 1 day chart, a series of lower lows marked (1) (2) (3) have formed since the November $502 high just below a declining trendline. More interesting is the double top at each encounter with the trendline. A similar pattern should take form at (3), the first top is underway and I am looking at $440 as a target, with an allowance for spikes, a defining characteristics of Bitcoinmarkets.
Overall, the market is in a consolidation phase seen above. It resembles the large consolidation from late 2014, August through October. A big move is expected here once a corrective pattern resolves.
For this symmetrical triangle, the converging lines forecast a break in mid April. I must admit, i am less bullish on this triangle now than I was a month ago. But still bullish. However, it could easily turn ugly, and the pattern everyone is watching turns sour. Best to be cautious on this too. Which is why, some analysts are bearish and are expecting a bearish turn.
Paul Sproge on twitter says
“Don’t buy into this pump. Big money running up price to sell into bids before significant price drop. This happened 1/8, 2/21, 2/29”
There is an ultra bullish case too, by adamstgBit on bitcoin talk thread, forecasting $750 over the next 2 months, making current prices a cheap bargain
“I’m currently buying the FUD about bitcoin being slow broken, unable to scale, i’m buying into this FUD because I thinking it is unjustified.Despite the lack of resolution from “The Bitcoin Roundtable Consensus” the graph still looks good doesn’t it.This is the bull market effect, FUD can only slow down or temporarily prevent a rise.”
Bitcoin could be the world’s next great safe asset.
This week, Vice President of the St. Louis Federal Reserve, David Andolfatto opined a refreshing article on Bitcoin as a safe asset class in the event of a monetary crisis. Because of its unique qualities – possession corresponding to ownership, supply cap, simplicity and no counterparty risk, it would come in handy during financial uncertainty.
However, even if Bitcoin is not, in my opinion, a particularly ideal monetary instrument, this does not preclude it from serving as a safe asset or longer-term store of value.
Coming from a mainstream finance professional, David’s blog is great validation for Bitcoin as a neo asset class, that could possibly resonate with large institutional money.
Bitcoin Undervalued says Investment Bank Report
According to Coindesk, Needham, an Investment and assets management company, believes bitcoin should be at least $655, a 58% undervaluation. In its report, Needham advised exposure to Bitcoin through share purchases of an investment vehicle, the Bitcoin Investment Trust (GBTC).
Spencer Bogart, an equity research associate covering bitcoin and blockchain, said of Bitcoin
“We believe bitcoin has value as both a digital gold and as a payments channel.”
CFTC Commissioner advises ‘do no harm’ to Bitcoin and Block chain tech
While addressing the Depository Trust & Clearing Corporation 2016 Blockchain Symposium, Commissioner J. Christopher Giancarlo spoke warmly regarding Blockchains, saying the technology could have saved Lehman brothers collapse back in 2008.
“Lehman’s prudential regulators could have used data mining tools, smart contracts and other analytical applications to recognize anomalies”
He also likened the early days of the internet to the current wave of experimenting with distributed ledgers. He called upon regulators to rein in their urge to oversight, but rather ‘First, do no harm’.
The full speech is available on CFTC’s press room section.
Bitcoin Weekly Price Forecast
This week I am bullish, after the current retracement from $431 finds a bottom, for another go at higher highs. A bottom is necessary for support. As of writing this, price is at $412 after moving up from a low $407. I expect this to be the lowest low this week. Price will move up gradually till just under $440. The image below shows a target at the declining trendline. My target is $437.