Bitcoin Price Analysis – 25 Novemebr 2015

Posted by: pesa_mic

November 25, 2015

Since the 1 year high at $504 on November 4, price has been on a decline, surprising many who expecting an aggressive bull run, however. Corrections are part of market cycles, and necessary, like the current price action.

The past 3 weeks have been a correction of the parabolic move up from $ 240. (3)(4) was a flat sideways level after a breakdown, moving sideways for some days before breaking down again to (1) at $ 300 – a significant support level. Testing this level and holding, forced price sideways, in a triangular fashion while still respecting this level. It closely resembles the triangle at (3) (4), only differing in its magnitude. Price is now at $ 321, as it converges towards a tipping point. Will this triangle break up or down?

This support level is solid, telling from multiple attempts to break it over the whole of 2015. Bitcoin charts have plenty of triangle patterns that are known to be terminal – including this one, it only is a matter of time before a decisive direction. $300 as a firm base may force price to rebound back up. Perhaps,another attempt at reinvigorating bullish sentiment.

Highlighted is how significant this zone is – flanked by 23% fib level (from $1173 peak and $ 152 low) and support at $ 300.

IMF’s Special Drawing Rights on Blockchain?

Reuters reported on comments from an official from People’s Bank of China, on IMF’s SDR ahead of the Yuan’s inlcusion into IMFs basket of currencies. Yao Yudong, head of Research, hinted at China’s interest at reforming the legacy institution, in more inclusive ways as ‘the current system did not reflect the rise of emerging markets’. An eSDR would establish a super sovereign currency and remedy flaws in the traditional monetary system.

Even more interesting, was the mention of bitcoin and blockchain and how both could inspire the design of such a digital currency.

“Technologies such as blockchain – a decentralised public ledger of electronic transactions that underpins digital payment methods such as bitcoin – could be adapted to develop the eSDR”

At a time when emerging economies are asserting their influence, and considering alternatives to the US dollar, Yao’s comments offer a glimpse of the future – increased recognition of the Bitcoin blockchain as a superior network, and bitcoin (neutral) currency as a possible candidate for eSDR inclusion.

BIS: Digital Currencies Could Hurt Central Bank Revenues

Meanwhile, the Bank of International Settlement released a report to tell us what we have all known for a while. BIS admitted it had been looking into Bitcoin as early as November 2013, followed by a working group set up in February 2015 to draft a report. The report can be found here accompanied by a press release on the same.

The report articulated the impact of distributed ledger technology in obviating the need for Central Banks’ role in some functions.

“. . . the BIS paints a possible future in which its ability to conduct monetary policy, assess the flow of money or even generate revenue on the currency it issues becomes limited.”

The Committee on Payments and Market Infrastructures (CPMI) acknowledged bitcoins as ‘assets themselves [which] can have some of the characteristics of a commodity and some of a currency.’

Big Banks Are Hopping on Bitcoin’s Blockchain Bandwagon – Nasdaq Blogs

From being a victim of skepticism and criticism since its debut in 2009, Bitcoin has come a long way [. . .] the same institutions that launched scathing attacks on the concept of cryptocurrency, perceiving it as a threat to the traditional banking ecosystem. Though they haven’t embraced Bitcoin, they are infatuated with the blockchain.

Sentiment and perception of bitcoin and the blockchain is shifting, as banks warm up to both despite not admitting it publicly. Bitcoin as a settlement layer rids banks of the need to trust each other or any central authority. Truth is, ‘systems based on trust work great up until that trust breaks down.’

Bitcoin Weekly Price Forecast

This week I am neutral to bullish. I am expecting a rebound to have another go at $400. Going up, $ 350 is a resistance level to be broken if indeed higher prices are expected. Therefore, watch $ 350 on a move up.

A dip to $ 300 is probable first, to shake off weak hands, and find a strong firm level for a bounce. It could go down to $280. This is the make or break level, if $ 280 fails to hold, then a massive sell off will send the market down to low 200s.

“I maintain my earlier speculation that trading above 300 will be relatively easy, My forecast calls for more volatile, a wider spread, and tones of confusion. I think the trading range is pretty clearly spelled out, 300 is bottom 500 is top.”

Updated: 2015-11-25