Bitcoin Price Analysis 12th May 2016

This week, the price of bitcoin pushed up to reclaim lost highs at $466 from 2 weeks ago, despite a hoax unmasking of Bitcoin’s mysterious creator. Perhaps a systemic risk, as Satoshi’s coins represent 7% of available scarce supply. Now, the headlines and traders are bullish. As of writing this, price sits at $453.

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As seen above on the 6 hour chart on Bitstamp, price has gradually advanced up towards $470, a resistance level that’s been tested multiple times over 2016. Once again, it pushed back on price, forcing a retracement down to $440. A double bottom on $440 level was a firm launch pad for another attempt at breaking higher. This time however, momentum failed at $466, forcing another sell off to $445.

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The only positive from this week’s action is the series of higher and higher lows that have held up consistently since November 10th 2015, seen here above. They are part of a larger ascending triangle pattern, that is typically a bullish continuation. As long as it holds, the bullish case remains. Ideally, a break above the top would cascade into buying frenzy (FOMO).

“The good news is that we seemed to bounce off the support line at or above the $445 box. This is very good news. If this holds we will have set a high low for this formation. In a formation such as this, that is a bullish sign.”

Trouble is, Western and Eastern exchanges differ marginally on where exactly this top lies. Depending on the exchange one looks at, it could be $504, $470, or 3100 CNY or 3350 CNY. This means the market is still within the triangle and no confirmation of a solid break out.

Another concern in the failure to breach $465 – $470 after four attempts since January 2016. This is the most significant barrier yet, and a failure to breach would send price lower, as low as $420. It could turn ugly if it falls any lower.

BitFinex long positions are only $200,000 away from the all time high, and a margin call of $ 31,700,000 longs could stir up a shake out, similar to August 2014. Back then, a massive overnight margin call triggered sell off, forcing price down to $162 on BitFinex and $192 on other exchanges. In hindsight, this was a shake out as price resumed an uptrend to $504 by early November. Below is a chart of this bluff.

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Satoshi Nakamoto IDentity Hoax stirs up Bitcoin Community, Price holds steady

This week, Craig Wright, an Australian cryptographer, via the BBC, GQ and the Economist, came out offering proof he is Satoshi Nakamoto. Witnessed by Jon Matonis and Garvin Andresen, at a closed door meeting in London, Wright provided proof he controlled keys to addresses in Block 9, closely linked to the Genesis block 0.

A hostile lash back from the Bitcoin community, however, led to a retraction of the claim by Craig. Only the action of moving bitcoins in block 0 would suffice as proof for critics. Instead, Wright penned a public apology, vowing to retire quietly.

Despite the implications of his purported control to 7% of the available bitcoin supply, price held steady, only dropping 4.6% and subsequently moving up to new weekly highs.

Bitcoin Bull awakens

Zerohedge ran an article titled, “Mother Of All Short Squeezes” Looms For Bitcoin based on Vinny Ligham’s Bitcoin 2016?— “There has been an awakening…”. After calling it right, the bear market in 2014, he is now bullish 25 months later and goes on to outline fundamentals that could tip price to the all time high.

Vinny, wraps up by saying

“I don’t know if the price is going to $1000 or $10,000? – ?but I do know that it is going up. If I was forced to predict, I would say that it would hit $1000+ in 2016 and $3000+ in 2017. Looking forward to seeing how this all plays out!”

NY State approves Ether trading on Gemini exchange

Reuters reported the New York State Department of Financial services, approved bitcoin exchange Gemini, to offer ether trading on its platform from Monday, 9 . This regulatory approval marks the first compliant digital trading license, besides bitcoin. This announcement however, seemed to have little impact on Ether markets. Tyler and Cameron, also revealed they had been buying up Ether since January 2016.

Bitcoin Weekly Price Forecast

This week, price is neutral to bearish, but only in the short term. Bitcoin could trade sideways between $440 and $470. If it turns bearish, $423 would be the lowest level. Otherwise, a bullish forecast for the next 3 months is still in force. Targets after breaking $470 are $650 upto $800 and potentially, the all time high at $1163. The coming supply halving, only 60 days away, should make for an interesting ‘bubble’.

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