This week, the price of bitcoin was on a hungover from the $40 surprise sell off from last week, 11 September. Price retraced from the low $594 bottom, and traded sideways within the $595 – $610 range. Bitcoin did not make the headlines this week, as much of the news comprised alternative blockchains.
The dominant trend as seen above has been a sideways ranged flanked by $600 lower and $610 upper. The huge drop from $630 needs to retrace fully to resume the anticipated trend up to $650. Until then, this consolidation will persist sideways within this range. It is worth watching out for any great news about bitcoin from DevCon 2 in Shanghai that may tip a decisive break.
This chart shows a fork from January 2015 base. Price broke below a major quarterly trendline (in blue) before finding support on a second quarterly line(in pink). In the wake of the BitFinex Hack of August 1, it has found support and drifted up the trendline, breaking up to $630. The mid-level trendline (in blue) cut across by $670, is due a retest. If price is indeed set for a resumed up trend, it should continue well above $650.
Calls for a retest of the All time high of $1000 from December 2013 imagine a retracement of the large fractal drop from $780 in mid-July to $465 on August 3rd. Even for this bullish case, $650 – $670 is the first significant level to overcome. It continues to be the target for further upside.
We know there was a bottom at C ($465) after the large triangle broke downwards on hacking news. 62% is a strong guideline for a retracement of this drop.
The retracement from $780 top to $465 bottom touched the 50% fibonacci level at $623. Typically retracements get to 61.8%, $660 level as per this chart. A second attempt at retesting 50% level is underway on the 30 min chart. Bar any significant news this week to break this level, a retest of low $590s will follow before a leg up to $660.
DEVCON 2 Kicks off in China
The second Global Blockchain Conference is happening this week in Shanghai China from the 19th to 24th September as reported on Bitcoin Magazine. An overarching theme from the conference is uniting networks. Hyperledger Executive Director, Brian Behlendorf, expressed concerns over the duplication of development efforts in a limited ‘blockchain’ resources environment.
Early afternoon, Ethereum founder Vitalik spoke on scaling their protocol, hours before Ethereum geth nodes crushed due to an out of memory bug. A security alert on the ethereum blog was followed by an 1.4.12 update.
Bitcoin is still running as it is supposed to 8 years on. Any blockchain discussion on collaboration will have to include Bitcoin.
BitFinex Announces Repayment Plan for Token Holders
According to Coindesk, Holders of BFX tokens from a hack on bitfinex exchange, will receive $1 USD equivalent in a special purpose vehicle. BnkToTheFuture, a crowdfunding platform, will manage the transition of the vehicle to own part of iFinex. IFinex is listed as a parent company of BitFinex.
Bitfinex made a press release on their blog saying
“Today we are happy to release details regarding two opportunities for holders of BFX tokens to convert them into a beneficial interest in iFinex Inc.”
Bitcoin Payments App Circle Launches on iOS 10
Following the anticipated arrival of iOS 10, peer to peer messages on its iMessage platform will now be powered by Bitcoin. Thanks to Circle, a bitcoin blockchain payments app, users can send dollars, pounds, or euros via text messages.
Up until now, in app payments have been limited to social platforms like Venmo. With circle, payments can be sent to anyone around the word, in line with the company’s ambition to emulate WeChat in China.
“Recipients whose local currency isn’t USD, GBP or euro will receive Bitcoin, which they can exchange for local currency.”
Circle uses the Bitcoin blockchain to bridge users exchanging fiat currencies. While attention has shifted to private blockchains, CEO of Circle Jeremy Allaire reserved praise for the bitcoin blockchain.
“the financial services industry did not fully realise the potential of the open-source blockchain”
Bitcoin Weekly Price Forecast
This week I am neutral. I maintain a target of $650 at some point, but this week’s consolidation may continue and possibly dip some to $590 to retest a level for another leg up. I am also keen on the conference in China and how any excitement around ETH or BTC may find its way into the market.
I expect a retest of up to $700 if this trend line holds. But there are more confident bulls out in the forums
“So far, 2016 is pretty good, but there aren’t any clear signs of a real rally still. Price hasn’t broken the ATH, but I wouldn’t say that we’re still in a bear market. IMO, we have been back in an up-trending bull market since after the first half of 2015.”