​Bitcoin Price Analysis 12th August

Posted by: pesa_mic

August 12, 2015

BBVA Bank of Spain on mainstreaming Bitcoin

BBVA bank, Spain’s second largest bank, this week released a video tutorial on how to send and receive payments via bitcoin! The video, walks users through the process of opening a wallet, backing it up, purchasing and sending bitcoins. It also simultaneously released a report on blockchain technology title Blockchain technology poised to be financial industry’s biggest disruptor yet. The Spanish bank, an investor in Coinbase (US & European Bitcoin exchange), is an indicator of growing investor and mainstream interest in applications of blockchain and to some extent, bitcoins. Interestingly, the bank’s fintech awards features 3 bitcoin start ups

New York BitLicense Wards Off Exchange business

2 of the largest bitcoin exchanges by funding and trading volume,Kraken and Bitfinex, have cut off services to New York residents, geofencing the island after expiry of a 40 day grace period. Bitlicense regulations are set to kick in, and a number start ups in this space aren’t too pleased by onerous application and compliance rules – for instance, a $ $ 5,000 non-refundable application fee. Still, exchanges such as Bitstamp, itBit, Coinsetter and Gemini are more than happy to comply, if that what it takes to operate in the state.

Kraken CEO Jesse Powell spoke to Coindesk saying

Powell said. “We don’t see the entire NY exchange market being worth the costs associated with compliance with the BitLicense”

Ethereum token trading goes live, market down 80%

As per Inside Bitcoins, Ethereum native token,ether,began trading this week across multiple exchange, after the decay thawing period ie when transactions on the network begin. Gatecoin, Kraken, Poloniex, Yunbi facilitate trades; BitMex, listed a futures contract under the ticker symbol ETH7D. Soon after trading went live, about 1 million ether were dumped, sending the price down 80%. Not exactly a confidence booster

This Week on Bitcoin Markets

This week the price of bitcoin exhibited weakness, and fell to $260. Choppy EMAs and MAs – 52, 100, 200 and 30, could not support the price, which breached all of them on lower time frames (below 6 hours). As of writing this, price is at $ 265, after pulling back from a huge drop from $280. Depending on what you look at (MAs, EMAs), price direction sentiment has seemingly changed, telling from forum discussions on the same. A far cry from prominent ‘moontalk’ and calls of a bottom well behind us from last month.

“I think we are going down and am holding my short from $280.40 on OKcoin weekly futures. However, I think it’s possible we may push up to $275 before heading back down to $260 or below.”

This chart plots the 52 day EMA, as far back as 2012. Back in April 2014 it acted as a strong support for a rally up to $680, but, market broke below it later in August. July’s peak at $ 316 was rejected, all the way down to $260. Considering how long the market has held below it and even longer above it (in the preceding bull run from 2012), this rejection to $260 is reasonable.

The 1 week price chart shows where to expect a bounce back up, off the 30 day MA – at around $250. A triangular formation broke down, similar to December. I am not fully convinced prices moving to higher price territory is off the table. Watch for rebounds back up around $243 – $255 zone.

This chart superimposes multiple fibonacci lines for 3 peak to peak moves – $475 – $166. $166 – $316 and $219 – $316. Market sits just above $ 256; the next level after is $ 240. There remains a case to be made for higher prices, based on whether 2 levels are respected – $255 and $ 243.

“Perhaps surprisingly the overall daily picture remains generally Bullish”

If this bullish trendline is anything to go by. Sideways price action is possible, as long as fibonacci price levels are respected.

Sidenote

In last week’s price analysis, using EW, i projected a final wave 5 after topping at out $ 316 as wave 3. After this week’s price action, the possibility that a 5 th wave already happened surfaced. A truncated 5th wave, not exactly the most common pattern, but do occur and are documented in EW study material.

This would imply the pullback off $273 (4) to $ 298 (5) was the failed 5th wave – a bull market truncation.

Market Outlook

After this week’s market action, I am expect sideways action to slight rise in price – up to $ 273 – $281, after which another move down should follow. Despite this week’s sharp drop in price, I still expect prices of up to $325 at some point. Observing this move down is key. Invalidation of this forecast ($325) would occur if $240 was broken with strong intent. This would mark a return to the bear market, based on some chart visuals like this one.

Safe to say the market is in a decisive zone.

Updated: 2015-08-12