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Bitcoin Weekly Price Analysis 26 April 2016

This week, the price of bitcoin was immensely bullish, stirring up trader sentiment on expectations of another bubble, just in time for the halving.

1

Price trend curved upwards, advancing +7.5% from last week’s high at $438 to a 6 month high at $471. Markets have not been this excited since October 2015, when price turned exponentially bullish.

On last week’s analysis, price was at (1) and the forecast was a jump up to $440 and subsequently $450. The trend however proved stronger than forecasted, and consistently broke levels pushing up to the highest price of 2016, $471. Here, a longer term resistance level, going back to September 2014, pushed back, forcing price to consolidate. A little dip or consolidation is natural here. As of writing this,  price sits at $463 as per Bitstamp.

2

There is high expectation of a run up to $680, the bullish breakout at (2) from the 6 month long pennant is a signal the whole market is keen on. Because it has an uncanny resemblance to the pre-run up at (1) on September to October 2015, the magnitude of a successful breakout is exciting to contemplate. Add in the reward halving expected in July 11th, and it is a recipe for a halving bubble.

it is a no brainer to hold onto your coins. Even if it does retrace, there will be a higher price at some point before the block reward halving which is only 70 more days. Everyone knows this.”

The only concern is (5) observable on all exchanges; volume thinning out while price ekes upwards, unlike October 2015’s run up. As per Elliott Wave Theory, if this is indeed a corrective continuation pattern of a bull trend from (1), then it is normal to have declining volumes on the 4th wave of a 5 wave impulsive move.

Another suggestion for low volume has been Chinese miners hoarding their freshly minted coins in anticipation of the halving bubble. The effect of this is a reduced supply into the market, thus low volumes at (5).
Rpietila on bitcointalk is of the opinion

This is a very bullish sign. It tells that the supply is exhausted and buyers are trying to not fall upon each other. It can turn explosive (see Oct-2013) literally any day from now with all the symptoms of FOMO appearing in a few weeks, the ones that have been absent for “so long”

4

The Relative Strength Indicator (RSI) is below oversold levels, the 70 threshold. There is plenty of room for higher prices observed on this weekly chart at (2).

Bitstamp acquires Luxembourg License to operate across Europe

On Monday, 25 April, Slovenia based bitcoin exchange Bitstamp, received a Payment Institution License from the Luxembourg government, becoming the first nationally licensed BTC exchange in Europe. This license, which takes effect from the 1st of June, will allow the company to operate across 28 EU member states.

Pantera Capital, an investor in Bitstamp, revealed a rigorous 2 year application process took place, involving Luxembourg financial regulator, the Luxembourg Financial Industry Supervisory Commission, government security reviews and a third-party audit by Ernst & Young Luxembourg.

Bitstamp also launched EUR/BTC currency pair trading, and will move its headquarters to Luxembourg.

Japanese Cabinet Approves Set of Bills Regulating Virtual Currencies

Over 2016, Japanese legislators have been discussing proposed bills to recognize virtual currencies just like regular currency – real money. This week, the Island’s cabinet approved bills that regulate VCs as digital assets that can be used for payments and transfer.

Amendments to the law now allow banks to get involved in virtual currency businesses and more crucially, IT – ventures. Before these changes, Japanese Banks were disallowed from investing  outside the banking sector, effectively cutting them off from FinTech.

The island is making a bold statement, bucking the trend of regulating bitcoin as an asset, as most Western governments have done.

bitFlyer, Japanese Bitcoin exchange secures $27 million series C funding

More great news from the Island of Japan where, SBI Investments and Venture Labo investments injected ¥3bn into bitFlyer’s latest investment round. This fresh capital now totals to $34 million received by the digital currency exchange over 5 rounds.

BitFlyer, which does not have trading fees, registered volumes of $8.8 million BTC/JPY currency pair traded on its platform in 24 hours. Japan is quickly coming up as a bitcoin hub. The Yen is the 3rd most traded currency against BTC, after the Chinese Yuan and US dollar.

Bitcoin Weekly Price Forecast

4

This week I am neutral to bullish. I expect price to consolidate for while below $470 level, given its significance. A worse case scenario would be a little dip in price, perhaps to as low as $450. But, the trend seems clear, the price is bullish.

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