Bitcoin Price Technical Analysis for 7/12/2015 – Where Will Bulls Take This Next?

Bitcoin Price Key Highlights

Bitcoin price is currently on an uptrend, with bulls coming out to play after the corrective wave was completed.As noted in the previous article, the area of interest around $350 held as support and bitcoin price was able to make its way past the previous highs at $380.

Using the Fibonacci extension on the latest impulse wave suggests that bitcoin price has enough room to go north, possibly beyond the $400 mark.

Another Pullback?

So far, the moving averages have been holding as pretty strong dynamic support areas. In addition, an upward crossover appears to be underway, with the 100 SMA moving closer to the 200 SMA to indicate a pickup in bullish momentum.

However, if profit-taking continues to take place around the current levels, bitcoin price might decide to retreat to the trend line connecting the latest lows since mid-November. Stochastic is already indicating overbought conditions after all and is turning lower, which suggests that buyers might need to take a break right now.

Aside from that, RSI is showing a bit of bearish divergence from its lower highs in early December to the higher highs in bitcoin price. This adds another layer to the potential return in selling pressure, likely taking price down to the area of interest around the previous swing high to $380.

The average directional index may have dipped lower last week but it is starting to turn higher again, which indicates a return to trending market conditions. This supports the idea that the ongoing uptrend might carry on, provided that the indicator is able to stay above the 50.0 level.

Instead of spurring dollar strength, stronger than expected jobs data from the US economy actually allowed risk appetite to return to the financial markets, spurring demand for higher-yielding and riskier assets like bitcoin.

Why Bitcoin Makes an Ideal Reserve Currency

From its inception in 2009, Bitcoin spent its first five years in obscurity before coming to light. Seven years down the line, it is the most sought after digital currency. Even though Bitcoin is now a widely recognized cryptocurrency, it is still an alternate currency used by less than one percent of the world population.

Bitcoin is currently facing the uphill task of fighting against established monetary systems and fiat currencies, which have been around for hundreds of years or more. The main advantage of Bitcoin over existing fiat currencies is its decentralized nature: it is a truly global currency with no one country claiming ownership over it. Even though the current market capitalization of Bitcoin is a small fraction of the current world economy, it has made a huge dent on the established financial sector.

Bitcoin is a promising contender when it comes to creating a new international standard of currency. Currently the United States dollar is considered as the reserve currency of the world, but using the currency belonging to one particular country in the world carries dangers. It creates an imbalance in the global economy, with one country (the US in this case) having the power to influence the global economy, politics, etc. to their benefit.

One doesn’t have to go further than current geo-political and military conditions to understand the influence of a strong reserve currency belonging to one nation. As most of the international trade is conducted using reserve currency, the undue power imparted to the United States because of its currency is unimaginable.

Having a truly global currency which is not owned by any country, bank or financial institution will create a leveled playing ground, giving equal opportunity for all countries to pursue trade and bilateral relations with the country of their choice. The Cuban trade embargo, economic sanctions against Iran, Russia and even India at one time are good examples of how countries can misuse a reserve currency to influence change for their benefit while putting the development of other countries in jeopardy. The only way it can be countered is by redistributing the power evenly across the world, which Bitcoin is perfectly capable of doing.

The speed at which Bitcoin transactions happen makes it an ideal currency for cross border trades, as well. Bitcoin–along with blockchain-based smart contracts–has the potential to streamline international trade. In the coming years, Bitcoin may replace the US dollar as the reserve currency, overtaking Chinese yuan and other potential contenders.

The Rising Trend of Bitcoin in 2015

Bitcoin has had one of its best years since its birth in 2008 by various criteria, including the number of daily transactions and the number of newly registered wallets. According to the statistics provided by leading Bitcoin wallet service provider and blockchain data analytic platform Blockchain.info, the number of daily transactions has increased by around 2.6 times since January of 2015.

This is because of the growing number of Bitcoin merchants and increasing adoption of the digital currency in developing or financially unstable countries such as Argentina, the Philippines and India. Previously reported by NewsBTC, institutional investors and corporations in India have begun to recognize Bitcoin as a valuable international asset, as more merchants and medium-sized businesses started to accept Bitcoin.

Using various analytics tools and platforms, investors in developing countries are actually trying to profit from the volatility of the price of Bitcoin. The number of daily transactions began to spike since the surge of Bitcoin prices during the first week of November, when investors and traders on leading Chinese Bitcoin exchanges including Huobi, OKCoin and BTCChina traded Bitcoin at around US$500. Since the beginning of 2015, the number of registered wallets on blockchain.info alone has almost doubled, recording a staggering 2.5 million new registrations.

Currently, blockchain.info supports more than 5 million users, and leading Bitcoin wallet service provider and exchange Coinbase support around 2.9 million registered Bitcoin wallets. Overall, there have been more wallets created in 2015 than the last 6 years, since 2008 to 2014.

Price

Despite the volatility of bitcoins, the price of the digital currency has increased by around 22% since the beginning of the year.

Bitcoin was traded at around US$307 on January 1 on major Bitcoin exchanges including Bitfinex, and currently Bitcoin is worth around US$394.6.

Is the Time Ever Right to Invest in Bitcoins?

The Bitcoin price has been showing considerable improvement since the beginning of November. The currency–which was holding steady in the two hundreds mark until then–broke free to the $500 mark before stabilizing around $350.

Bitcoin is known for its volatility, which is keeping many people away from it at the moment. However, many people across the world are aware of Bitcoin’s potential, and they are interested in having a piece of the pie early on. “When is the right time to invest in Bitcoin?” is now one of the common questions asked by scores of people across the world. Bitcoin price volatility, uncertainty concerning regulations, etc. make it hard to identify the right time to buy, however.

Jeffrey Tucker, the director of digital development at the Foundation for Economic Education, might have an answer to those who are wondering how to invest in Bitcoin. In a recent interview on Russia Today, Jeffrey discusses about the right and the wrong ways to go about investing in Bitcoin, and he shares the same opinion as many others about bitcoin’s maturity at this point.

Bitcoin hasn’t been around for long and it is still in the discovery phase. The number of Bitcoin users across the world is roughly around 4-5 million at the moment. The age of Bitcoin and the relatively small number of Bitcoin users influence Bitcoin volatility to a great extent.

Investing in Bitcoin at an early stage is a good opportunity, as the value of bitcoins is bound to go up in the near future. Adoption of Bitcoin technology and payment options by banks, financial institutions, and data management solutions makes sure of it. However, making profitable investments into Bitcoin is a completely different trick altogether; according to Jeffrey Tucker, it is not a good idea to follow the bandwagon and resort to panic buying when Bitcoin’s price is exhibiting an increasingly upward trend.

Buying Bitcoin when its price is going up is one of the common mistakes most people make. The best way to invest in Bitcoin is by waiting for the price to stabilize before making a purchase; it is better for people to closely observe the price for a couple of days before buying it. This way, the chances of losing money are smaller. If one buys while the price is going up, they will end up losing more money when the price comes down and stabilizes.

He explains that the difference between smart and dumb investors is the time they choose to invest in the cryptocurrency. According to Jeffery Tucker, ones who buy going by the reports of Bitcoin value going up are dumb investors, whereas those who wait until the discussion about Bitcoin price dies down and makes a purchase when nobody is looking are the smart ones.

If anybody is looking for an opportunity to invest in Bitcoin, don’t hurry! It is better to have some patience to be a smart investor than to be a dumb one.

Indian Reserve Bank: Virtual Currencies Will Get “Much Better And Much Safer”

One of India’s largest TV networks, New Delhi Television Limited, aired a special program with the Governor of Reserve Bank of India (RBI), Raghuram Rajan. The show which was titled, “India Forecast”, gathered students from several local universities to ask the head of India’s central bank various questions about the economy.

The hour long show started with the host, Dr Prannoy Roy, asking about Rajan’s long career – from being an academic, to becoming the chief economist for the International Monetary Fund, and now the head of RBI. The conversation then opened up to questions about e-commerce from the audience, until one student asked him about bitcoin.

“My question is not exactly related to e-commerce, but to a more important topic of bitcoins. Being from the Chicago School of Thought, you propagate more free markets. So, I want to know, what is your view as a regulator on free banking, and having more of equitable currencies floating in the market?”.

“I have no doubt that down the line, we will be moving towards primarily a cashless society and we’ll have some kind of currencies like this which will be at work. For us at the Reserve Bank, this may happen in 10 to 20 years from now,”-Raghuram Rajan, Governor of the Indian Reserve Bank.

He continued on the topic and shared his opinion on digital-currencies, “See, I think we’re still watching the evolution of these kinds of currencies. One of the problems that we envisaged with bitcoin, one of course was security issues and you’ve seen that they’re not as secure as people thought they were and there have been stolen bitcoins and so on. But the second issue was the fluctuation in value. For money, you require something called a stable store of value and something that fluctuates so much is less effective in use as money. There are some lessons to be learned from the technologies that bitcoin has employed, some of them are useful, some of them are worrisome. We have to see how we take on board such technologies.But I think these virtual currencies will certainly get much better, much safer and over time will be the form of transaction, and that’s for sure”.

He then touched on how currencies in India could affect RBI, “We’ll have to figure out how we make money because the way we generate most of our revenue is through forms of Seigniorage. People are willing to hold currency free of interest and that’s how we make money, but we’ll figure that out”.

Dr. Roy asked the head of the central bank to clarify that he saw virtual currency as part of India’s future he, “You know, in a sense, credit cards are already performing some of that role. The amount of rupees that flow through your hands I presume are far less than used to before credit cards. Yes, we want to permit. I mean we’re not saying we’re going to lose money therefore we won’t do it, we’ll find some other way of getting money, maybe the government will fund us eventually”.

India’s adoption of bitcoin, like many other places in the world, has been greatly affected by an uncertain regulatory schemes for the new currency. The RBI released their first guidance on digital currency shortly after Bitcoin’s price rose above $1,000 in December of 2013. They cautioned users about its use and highlighting how the currency was not banked by a central issuer and could be used for illicit means.

Several Indian exchanges were either raided by police or voluntarily shut down shortly after the announcement. “When the Bitcoin price skyrocketed, there were many Ponzi schemes and butcher shops around trying to loot the Indian investors. Hence RBI warned the Bitcoin usage and shutter down the butcher shops and seized the Ponzi houses but RBI never said bitcoin was illegal,” said Mupparaju Siva Kameswara Rao, CEO of BTCXIndia, speaking to BNC News. “Real players and start-ups like us have come across since and are working together with the Indian Bitcoin community to influence authorities to ensure appropriate regulation will be in place”.

Unocoin is an Indian bitcoin exchange founded in early December, while regulatory waters in India were still very uncertain. The exchange has since grown to be one of the largest in India and received a 250k investment from chairmen of SecondMarket and founder of Bitcoin Investment Fund, Barry Silbert.

Speaking to BNC News, Unocoin CEO Sathvik Vishwanath says he sees the position the governor of RBI improving since their first guidance on bitcoin, “It looks like there has been some change in the opinion in a good way. Last warning was more about the financial risks associated due to fluctuations and legal risks due to AML and Funding of Terrorism Act. This time it is about security of bitcoin which logically the next concern from a regulatory body like RBI. As they are expressing this concern, I believe their understanding about bitcoin has improved since an year as in such financial risk is inevitable in such a disruptive technology and bitcoin is a not the best choice for doing illegal activities.”

RBI said they were investigating how bitcoin would fit in India’s existing laws in their last guidance, but to this date bitcoin remains an unregulated industry in India.Rao feels that will eventually change, “I am certain, RBI/Indian regulatory bodies will regulate the Bitcoin within 4 years down the line. The main challenge will be to adapt current legislation to make it workable for crypto currency; a process that will take time to get right. It will have be implemented on such a level that it manages the risks of a decentralized currency, but are allows for India to draw the benefits of bitcoins potential and unique features”.

Bitcoin assets attract HNIs, companies in India Nupur Anand | Mumbai

Crypto currency bitcoin is gaining popularity in India, especially among companies and high-net worth individuals, for buying and selling, or as an asset.

There are now online wallets that allow one to trade, buy vouchers of e-commerce companies, and even recharge one’s phone in bitcoin. Ahmedabad-based mobile wallet Zebpay allows one to buy, store, send and spend bitcoins through cell phone numbers.

“One can park money in the wallet in the hope that the value of bitcoins would go up. So in a way, it is like an asset class,” said Sandeep Goenka, co-founder and chief operating officer, Zebpay.

He added that companies and wealthy individuals have expressed interest in buying bitcoin as an asset class.

According to the Zebpay website, one bitcoin was valued at Rs 23,019.

Goenka said investments in bitcoin were fairly liquid. Investors had the option of selling them and getting out at any time.

Bitcoins’ attractiveness as an investment is high because the number of bitcoins that can be produced has been limited to 21 million, according to Satoshi Nakamoto, its founder.

Nakamoto is a pseudonym, of a person or group. Sources said 14.5 million bitcoins had been “mined” already.

As a result, the value will keep going up as the end of the supply nears. According to reports, one bitcoin is issued every 10 minutes; its supply is expected to reduce by 50 per cent every four years.

Recently, Ratan Tata, the former Tata Sons chairman, invested in Abra, a Silicon Valley bitcoin start-up.

Bitcoin is a virtual currency, or crypto-currency, used only for online transactions. They are not backed by any central bank in the world but are traded on a number of exchanges or swapped privately.

However, the Reserve Bank of India is not been very comfortable with bitcoins and has raised warning signals. The first red flag was raised in December 2013 when the central bank highlighted various shortcomings in the transactions of these currencies.

One major concern was that bitcoins were used for peer-to-peer transactions, and were not backed by any regulator or payments agency. Therefore, in case of a crisis or default, consumers will not have any recourse. Another major concern that remains is that, the value being traded is speculative and therefore investors can end up burning their fingers.

However, Zebpay COO Goenka tried to allay these concerns saying that there is no regulation in the country making bitcoins illegal.

“In fact, the law firm headed by Nishith Desai who is also an advisor to several big companies, and to us, has published a white paper on it explaining that no regulation in the country point out that it is illegal.”

Goenka added that the warning signals from RBI were raised at a time when several other regulators across the world were also perplexed with the sudden rise in the value of bitcoins.

“December 2013 was a time when few people knew about bitcoins and the price went from about $100 to $1,100 in a month. It was unprecedented. So people started seeing it as a quick way to get rich. They started seeing it as a bubble and that is why regulators raised an eyebrow. However, things have changes since then. Moreover, they are trying to warn people that it is a risky investment and people who are not tech-savvy or don’t know about it shouldn’t get into it.”

The fluctuation in the value of bitcoins is another area of concern for the regulators across the world.

Apart from Zebpay there are other players as well that are gaining ground in this space. Coinsecure is a bitcoin trading platform that allows one to buy and sell these virtual currencies. The company was set up in June 2014 and offers mock trading services to familiarise new users with the crypto currency. Another player that has been active in this space in India is Unocoin, the first Indian bitcoin start-up to be funded internationally in August 2014. It allows consumers to buy, sell and store their bitcoin in a wallet.

The supporters of virtual currencies argue that these are a much secure option as compared to bank transfers, debit or credit cards. This is because the bitcoin transaction involves a private code which is set to be nearly impossible to crack.

However, there has been a security breach around a bitcoin exchange in the past which the supporters argue was an exception and also a lapse on the part of the individual and not a system error. In February 2014, Mt. Gox located in Tokyo, which at that time was the largest bitcoin exchange in the world lost 850,000 bitcoins, valued at over $400 million.

Goenka agreed that it will take time for bitcoin wallets in India to reach a significant proportion but they are surely seeing increased interest.

At present, Zebpay has about 25,000 users in the country and the platform is adding about 3,000-4,000 new users every month.

“The trading volume has jumped from Rs 10 lakh a month a few months ago to Rs 10 crore a month whereas the non-trade volume which includes recharges, shopping vouchers etc has also jumped growing 40 per cent month on month. Our ambition is to become a global wallet player powered by bitcoin,” said Goenka.
POPULAR CYBER COINS

What is bitcoin?
A bitcoin is a virtual currency, used only for online transactions. They are not backed by any central bank in the world but are traded on a number of exchanges or swapped privately

How to buy and sell them?
You can “mine” Bitcoins — or generate new coins — through complicated software procedures. Or you can buy and sell them on exchanges from companies like Zebpay

What are the RBI guidelines on bitcoins?
RBI has raised concerns about the use of bitcoins, but has’t come out with a regulation yet

Bitcoin Price Technical Analysis for 4/12/2015 – When Will Bulls Come Back?

By 2015, cash could be looking like an endangered species

Bitcoin Price Key Highlights

• Bitcoin price is still retreating from its recent rally, possibly gearing up for another test of the Fibonacci retracement levels seen on the 4-hour time frame.
• A bounce off the Fib levels or rising trend line connecting the latest lows of price action could put bitcoin price on track towards the previous highs at $380.

Bulls could return on a test of the area of interest at $340, which lines up with the 61.8% Fib, trend line, 100 SMA, and former resistance.

Potential Reversal?

Stochastic is on the move up, suggesting that buyers are gaining more energy to push bitcoin price back up. RSI is treading slightly sideways but appears to be on its way up as well.

The 100 SMA is below the longer-term 200 SMA, indicating that the path of least resistance is to the downside. A break below the 61.8% Fibonacci retracement level might be enough to confirm the potential selloff.

In addition, a head and shoulders pattern appears to be forming, with the neckline around $350. A long red candle closing below this might also serve as a signal for a looming downtrend.

The average directional index is starting to point lower, which suggests that momentum is fading. This could also be a sign that bitcoin price is about to return to ranging market conditions, bouncing off support around $340 and finding resistance around the previous highs of $380.

A big event risk for this bitcoin price setup is the upcoming non-farm payrolls release from the US, which might spur a lot of volatility for the US dollar. A 201K increase in hiring is expected, a slower pace of growth compared to the previous 271K rise but still enough to keep the Fed on track towards hiking interest rates in this month’s meeting.

Intraday support level – $340

Intraday resistance level – $380