Beijing Now Controls the Price of Bitcoin
Bitcoin kicked off the new year at lofty levels of $1139, inches away from gold parity – depending on which exchange you looked at. The digital currency surprised critics last year, scooping pole position for best performing currency and commodity class of 2016. Bitcoin investors took home 125% returns at close of December 31st.
Then follow us on Google News!
But the momentum that spilled over into 2017, has come under dubious events, sparking off multiple sell offs from its high. China, is home to at least 90% of Bitcoin trading; the Yuan is traded most against BTC, trailed closely by the Japanese Yen and third by the US dollar. The People’s Bank of China has been mulling over tighter foreign exchange and capital controls – according to Reuters – and this time, Bitcoin exchanges have been roped in under scrutiny. The price of Bitcoin reacted to these events in typical fashion – 2 sharp consecutive sell offs to a $751, and a price of $816 as of writing this.
Between January 4 and January 7, rumours of a ban in China sparked a sharp sell off from $ 1139, a drop that halted at $ 812. It was reminiscent of the December 2013 Chinese government ban, that preceded a sell off from the all time high. Buy the rumour, sell the news – insider information from China turned out to be FUD, and price retraced back to a $940 and stabilized at $900.
BTCC CEO Bobby Lee, came out to clear the air; the People’s Bank of China had indeed summoned Chinese Bitcoin exchange reps. Along with Huobi and OkCoin, the discussion with PBOC officials expressed concern over high margin trading and asked exchange operators to take best measures. An official statement read
“The Shanghai financial office jointly met with the relevant regulatory authorities bitcoin trading platforms Bitcoin China main person in charge to understand the operation of the platform. We urge the platform control laws and regulation to carry out self examination and rectification accordingly.”
This seemed to calm the market, at this point, anything was better than a Chinese Bitcoin ban. Price consolidated sideways from January 6 to January 10, flat lining to a narrow range at $900. Perhaps symptomatic of the ambivalence between longs expecting a continued recovery up from the $812 low, and shorts who expect a double dip to confirm a bottom before any further price rises.
“This is such a tough market to get a handle on right now. There could be more pain for longs, but I just feel that the price is going to rebound soon”
More rumours trickled in from China, Central Bank officials were apparently taking a closer look at Bitcoin exchange operations, including office visits. Again, the market was spooked, and price dropped pierced sharply past $850 support, to a surprise low $755. The $780 resistance level was now broken, and it looked like the possibility of fresh lows to $600s was on the table.
A quick pull back materialised, to a local $826 high, but offered little as price dipped back to $751 3 hours later, forming a double bottom at $751; in hindsight a final short term low. Over the past 36 hours, price has trended up to $831, retraced to a higher low at $776, back up to another failed attempt to break $840, before settling for a 3rd higher low at $807 as of writing this.
The sharp sell off at 2 resembles back in July and August 2016, when a $75 million BitFinex exchange hack dampened the mood. But price recovered gradually in the 3 months that followed at (1). This week’s events seem to have exhausted negative news to suppress price. But the excitement of an incredible run from 2016 is yet to wane.
Bitcoin ETF Expected in March
Needham company, one of the few asset management companies tracking Bitcoin the asset class, this week released a report saying it expects $300 million to flow into Bitcoin if the SEC approves the long awaited WinkleVoss ETF. A decision is expected on March 11 2017
Spencer Bogart from Needham was quoted by Brave New coin
“Conservatively, we estimate that a bitcoin ETF could attract $300 million in assets in its first week and the resulting effort to source the underlying bitcoin for the Trust would likely drive the price of bitcoin up significantly.”
Bitcoin Weekly Price Forecast
This week i am bullish up to a target of $920. I expect a continued gradual rise from the $750 lows. I consider the $750 low as an extended long wick of $780 confirming support. The current gradual decline that has now touched $807, is a quest to find a bottom, for a higher, higher lower after – $751, $774 and now possibly $800.
So we should continue the already- strong uptrend from back before the excitement and dump, after the market has fully digested the turmoil. This is either literally the bottom of another uptrend or beginning of bearish consolidation/distribution.
TheBitcoinNews.com – Bitcoin News source since 2012
Virtual currency is not legal tender, is not backed by the government, and accounts and value balances are not subject to consumer protections. TheBitcoinNews.com holds several Cryptocurrencies, and this information does NOT constitute investment advice or an offer to invest.
Everything on this website can be seen as Advertisment and most comes from Press Releases, TheBitcoinNews.com is is not responsible for any of the content of or from external sites and feeds. Sponsored posts are always flagged as this, guest posts, guest articles and PRs are most time but NOT always flagged as this. Expert opinions and Price predictions are not supported by us and comes up from 3th part websites.
Advertise with us : Advertise