Bitcoin Price analysis 30th November 2016

Bitcoin Price Hits a New $1000 high on Indian Exchanges

Bitcoin was back on the headlines this week, reasserting itself as the asset of choice for Indians seeking a safe haven asset class. While on most days it’s China, this week demand peaked in India, where an official ban on 500 and 1000 rupee paper notes by Prime Minister Modi indirectly propped demand on Indian exchange ZebPay. Bitcoin traded at a $100 premium, leading Chinese and Western exchanges. In the United States, Coinbase, fought off an unprecedented civil petition in Federal Court by the IRS, seeking access to customer transaction history from 2013 – 2015. Meanwhile, Segregated Witness soft fork activation gained adoption by 26% of mining nodes, but, at the cost of reigniting 2015’s Bitcoin’s divisive block size debate.

BTC price recovery.png

BTC price recovery.png

Since the last analysis, the price of Bitcoin recovered from a $683 low dip, steadily rising up for another attempt at breaking $750 resistance, the 3rd attempt in the month of November. Previous highs at $744 and $740 also failed to breach this level. This has forced price into a sideways consolidation over the past 2 weeks, trading within a $50 range. The good news is, there is a consistent series of higher and higher lows since breaking $650 in late October.

BTC price chart 2.png

BTC price chart 2.png As seen on this 6 Hour chart, $669 and $683 were low dips that bounced back up strongly. I am biased on the next big move being up, but the market might have to drop to another low. If resistance does not give way at $750, BTC might have to retest $700 before we see further upside. Often, Bitcoin likes to retrace back a step to clear a hurdle before advancing. $700 looks like great support,having held fairly well over the entirety of this month. But, I am open to a continued gradual dumps to as low as $680.

BTC price chart4.png

BTC price chart4.png

As of writing this, price sits at $730. If this ascending wedge pattern plays out, a further dip to as low as $680 – $650 may pan out. This coincides with commonly observed 38.2% fibonacci pullbacks zones for a potential reversals.

BITCOIN FUNDAMENTALS

India’s Bans Cash, Bitcoin trades at a premium

Interest in bitcoin in India has peaked after the government’s sudden ban of the Rs 500 and Rs 1000 paper notes. Data available from marketplace localbitcoins and online google search indices point to a rise in interest. Zeb pay, an exchange platform based out of India Gujarat, noted trades occurring at a premium at $1000, compared to a $750 global average. Cryptocoinsnews reported,

“Prime Minister Narendra Modi’s surprise move to ban the old 500 and 1000 rupees was meant to undermine black market stores of wealth.”

The nation is contemplating a gold imports ban, a big blow to one of the safe assets Indian turn to as both a store of value and hedge. Only time will tell if Indians will consider bitcoin as an alternative.

Bitcoin Hard Fork Debate Resurfaces with SegWit activation

Segregated witness, a proposed soft fork that fixes malleability and bumps block capacity to 2.1MB, was activated and has now achieved 26% adoption by mining nodes. A faction calling for a hard fork to increase capacity has resurfaced, led by a vocal Roger Ver. Like most things in bitcoin, this debate has turned political as some miners, such as Via BTC, threaten to block the 95% threshold required.

With $11 billion worth of assets on the line, we do not have to look further than Ethereum to contemplate the grave effects of a hard fork on Bitcoin. A potential hard fork is bearish for price in the medium term.

Nigerian Government Proposes Jail term for Dollar Asset Holders

Nigeria continues to suffer the painful hangovers of a depressed commodity markets, particularly oil. Over the past 15 months, its forex currency reserves have dwindled, pushing the Central Bank to introduce a raft of capital control measures. While the official CBN dollar rate is pegged to the Naira at 356, forex dealers offer 400, while black market rates fetch 460 Naira per dollar.New measures are set to be introduced by the federal government, the Jide Salu Diary revealed

“A proposed an amendment to the Foreign-Exchange Act to enable the imprisonment of anyone who holds foreign currencies, especially the dollar, for more than 30 days.”

This move amounts to censorship, Bitcoin’s most valued quality.

Bitcoin Weekly Price Analysis

The price will continue to gradually pullback towards $700. The 3 day chart shows the larger decline playing out, and $700 looks like a shallow deep. Best to focus on the long term trend and not get caught up in the anxiety of intra day moves.

BTC 6.png

BTC 6.png

This daily chart shows a pitch fork stretching back to September 2015, when this 12 month up trend began. Sometimes price will dip to retest the lower rising trend lines. Once a firm support has been established, a thrust up returns price to retest upper rising trendlines. The blue mid trend line is due a retest. So an $870 target in the next 4 weeks is due.

Zooming in on the pink rectangle marking May to November 2016 price traction paints a better picture. BTC chart 850.png

BTC chart 850.png

A dip to as low as the $680 – $700 marked by blue square to find support for a bounce up. If you are holding BTC, keep holding!

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