China Pumps Bitcoin to 21 month high at $580
This week was exciting to watch the price of bitcoin break out sharply on May 27 Thursday night. Price blew the cap off the 3000 Yuan price, a 6 month resistance level. Momentum was driven by Chinese volumes, leaving Western exchanges with no option but to follow the trend.
For a while, price arbitrage between Huobi and Bitstamp was as much as $70, after Huobi soared as high as $580, before retracing to $550 as of writing this.The overall market cap is now over $8 billion and bitcoin is back on the news.
With the halving supply just around the corner, only 40 days away, mainstream media is beginning to take notice, as all sorts of rationalizations are bandied about to justify the price rice.
A zerohedge article, ‘Bitcoin Is Soaring On Unprecedented Burst In Chinese Buying’ cited Yuan devaluation fears as the impetus for the dramatic upswing, or even possibly part of $30 trillion in deposits fleeing capital controls. There’s been a reported doubling in trading in the last 4 days exchanges in China, although no one can confirm the authenticity of these figures, even volumes at these exchanges.
I am dubious of the Chinese. Bitcoin was always going to break out of its 6 month corrective triangle seen above, it was only a matter of when. Judging by comments from BTCCs Bob Lee, Huobi’s Leo Lii and OKCoins Jack Liu, China’s economic events was the right catalyst for a breakout. It is rather obvious all of them are milking the story, while mainland traders play along; makes for a great story just around the halving, that mainstream media can pick up on and run with.
“Crypto-currency adds $1 billion in market capitalization amid supply concerns”
The halving perhaps has the most impact. Comments from China via Bitcoin Magazine play up the overall theme. The block reward is a key feature of bitcoin, that lends itself to a bubble speculation.
“in light of the fact that the Bitcoin supply will be halved in just over a month, adding to deflationary supply pressures and increasing the digital asset’s investment value in the short, and long term.”
As a long term bull myself, a speculative bubble around halving time is great media attention for bitcoin, a reminder to the world it is still up and running.
Currently, price is consolidating just above $520, as seen above, a move that could last over this coming week.There is no denying, the market is ripe to spike again, there is real intent.
Australian Bitcoin Auction Facilitated by Earnst Young
24, 518 Bitcoins seized as part of proceeds from a crime in 2015, are up for auction in Sydney. The assets are split up into 11 lots of 2,000 coins, allowing bidders to bid on one or multiple lots. Earnst Young expects registration for the bid to open on June 1 and run till June 7. The Australian Financial Review reported
“Earnst Young expects digital asset investment managers, digital currency exchanges, investment banks and hedge funds to make up the bulk of the bidders and mostly from North America and Europe.”
The auction is set to take place on the 20th of June and will run for 48 hours.
KNC Miner declares bankruptcy
Coindesk broke the news of Swedish bitcoin mining company KnC miner, which declared bankruptcy on May 27 and placed under Nils Åberg, as the controlling receiver. Founded in 2013, the startup had raised $32 million from investors such as Accel and Creandum. The CEO Sam Cole, cited the upcoming bitcoin supply halving, as a major reason for its decision, saying
“Effectively our cost of coin – how much we produce the coins for – will be over the market price. The price is now [roughly] $480. With all of our overhead, after July, the cost will be over $480. All of the liabilities we’ll have after that time will be too high.”
Bitcoin backed ETN trading halted on Swedish Nasdaq
KnC’s woes spooked investors in XBT Provider AB’s bitcoin backed electronic traded note (ETN) that trades on Sweden’s NASDAQ exchange.The firm moved in to reassure its clients when trading halted saying
“XBT Provider and investor assets are not affected by the KnC bankruptcy. Our instruments are always fully hedged.”
The bankruptcy did not affect XBT Provider despite KnC miner’s partial holdings in XBT Provider. A meeting on Monday failed to restore trading of the bitcoin instrument.
Bitcoin Weekly Price Forecast
I bullish until we hit $650.
The market is heading up some more,and the current retracement is a consolidation to targets at $650. There is wide consensus on this, higher estimates target up to $720. Still, there are more bullish calls for the last all time high at $1000. Holding is a good strategy now