The price of Bitcoin looks ripe for an attempt to break past the all time $1350 high on Western exchanges. In fact, a significant segment of the market is extremely bullish with forecasts as high as $1400, $1600 and even $2000. Since the sharp sell off to $891, after the $1350 pre-ETF announcement high, price has been going up in zig zags to a high of $1243 on Europe’s largest licensed exchange Bitstamp as at writing this . On Bitfinex, bitcoin is trading at a $90 premium, clocking a high at $1326!
Since last week’s analysis, price retraced from its $1229 peak to a low $1141, bouncing off the 30 day EMA on the 12 hour chart. A second bounce off this moving average line held at $1150 before 2 consecutive impulsive moves up to $1244 on Bitstamp and $1327 on Bitfinex.
But there is more than meets the eye.
For starters, the premium on BitFinex since last week, has worsened. Bitfinex announced on 17th April, they would be pausing USD wire deposits to the exchange. This was after the April 13th USD outbound withdrawal delays. BitFinex staff assured traders that the problem with outbound wires was limited to USD dollar flows only, and that other HKD and CHF currencies were viable alternatives.
So, to withdraw USD balance funds, traders have been buying up Bitcoin to wire them out to an alternative exchange or p2p marketplace and sell for fiat. Perhaps, enough outflows to prop up price bids – a premium.
Just 2 hours ago as at writing this, the exchange has once again updated their announcement page regarding outflows to customers.
“We were advised by our banks that we would be able to process outbound wires in HKD and CHF, and while we were able to successfully process several such transactions, we are now being told that the moratorium is being extended to these currencies, as well.”
Meanwhile, price continues to go up, leading all other exchanges. Meanwhile, BitFinex’s cold wallet storage, is draining fast as customers withdraw BTC funds. Since 26th March, the balance has declined almost 50% from 133k to 77k BTC.
BitFinex is not alone. Other exchanges have reported holding off on USD wire transfers because of issues with intermediary banks.
“Please do not make further deposits as your wires may be rejected by intermediary banks,”
Leading Chinese exchange OKCoin informed traders on its website of the change. Bitcoin withdrawals on the exchange were disabled and prices have been stuck at $1058 in Yuan prices since the exchange updated its AML/KYC policy under the pressure of the People’s Bank of China.
BTC-e, a European trading platform also announced they would halt USD wires.
“Due to change banking account we don’t accept USD wire transfers till the end of month”
The trail seems to end up in Taiwan, where a number of crypto currency exchanges and money services businesses actively operate bank accounts. Whale call speculates on the root cause in this medium,
“Many crypto currencies exchanges/services and MSBs choose to bank in Taiwan because they have more lax compliance/AML/KYC requirements then some banks but enough to meet the agreement in the US Banks. However, USA has changed these requirements recently at a Fed level. If you like USD you must comply.”
Bitcoin Weekly Price Forecast
This week, my medium to long term bearish bias has not changed. Whatever is going on with the current price rise is a correction, an elliott wave B correction of the $1350 wave 5 top.
“in some cases, wave (b) goes larger than (a) or wave (b) broke the start point of (a), we call it Irregular Correction”
In my analysis on March 1, i postulated several structures that typically form at tops in technical analysis. I said in the coming days, one of several structures would signal a top. The market is currently forming a top – an irregular wave B correction. One of 2, 3, 4 shown below thanks to Deepak Kumar
Considering the shaky fundamentals with exchanges, an uncertain future for Bitcoin’s block size and a bitter rift between China’s largest miners and Bitcoin core developers, any break past the all time high wave 5 peak to be short lived, similar to the sharp break out to $1350 that quickly declined on ETF disapproval. An irregular correction fits this narrative.
If you are trading this rise, be cautious of a top.
Speaking on a market analysis podcast, Tone Vays said he doesn’t see any bearish indicators and it should be full bullish steam ahead to a new all time high, unless some black swan event happens.
Question is, what will be the black swan event this time?
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