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Bitcoin Price Analysis March 15. 2016

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This week, the price of bitcoin continued its retracement from March 5th’s $382 low. Price action was limited to a $10 range flanked by $420 on the upper and $410 on the lower end. Breaking above the $410 resistance was necessary, after two attempts at breaking, it finally caved on March 8. On the days that followed, $410 held strong as support, enough for a firm launch base. Price shot up to $421, where another resistance level lies at $420. It pushed back on it, down to $410, but again, this support proved resilient. As at writing this, price is at $416 and seems to be headed back up to have a second go at $420.

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Since 2015’s November $504 high, price action has respected the rising and sloping trendlines on the above converging symmetrical triangle on the 3 day chart. It is a pattern that a lot of trades are closely monitoring, as a high probability upside breakout. If it persists, a mid- an April break out deadline is in the offing.

But there are alternative possibilities, such as a breakdown to $352. Or failing this level, down to $250 (in red) on this chart from bitcointalk illustrated an Elliott Wave perspective.

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“Still time for a false break, triggering stops in the process. As long as the C wave low holds (352.5), triangle is still valid. The 390 hit was lacking a completed structure, so I am still looking at the possibility of more down, even if truncated, to complete the triangle.”

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A trendline stretching back to $152 low in January 12, 2015 has held  as support, twice at (1) $300 and (2) $352. Up top (4) at $450 is a significant upper resistance wall that dates back to September 2015. The past 4 months of trying to break above it have been rejected, as recent as 2 weeks ago. (3) is where the coming weeks of market movement will be key. Another failure to break (4) will most certainly lead to a sell off.

“The big triangle held at 390$, but time is running out for the bulls, so this time if 400$ will be broken, it should clearly break the triangle down and cause a massive selloff.”

Japanese Mega Corporations Prototype Bitcoin blockchain settlements

This week,  Mizuho Bank, Ltd.,Fujitsu Limited, and Fujitsu Laboratories Ltd. put out a joint statement on their 3 month collaborative trial. Occurring between December 2015 – February 2016, the trial incorporated the Blockchain in a low cost, low risk, cross border securities transactions system, using the Open Assets Protocol pictured below.

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This coincides with Japan’s intentions to introduce virtual currency regulation, elevating bitcoin to the same status as fiat currency payment methods.

The press release on Fujitsu’s website summarized the system

“Using the blockchain Open Assets Protocol the three companies built a blockchain-forming system in Fujitsu’s cloud environment, recording the information from a confirmation (matched trade information: securities name, quantity of securities, currency code, amount, country of settlement, settlement type, settlement date) as one linked block”

Japanese Bitcoin Exchange handles 3 Billion Yen a Month

Japan is the flavour of the month, as more good news streams out of the island. Brave New Coin reported the Yen is the 3rd largest fiat market for Bitcoin, right behind CNY and USD. 4 exchanges based out of Japan are driving this demand collectively, despite a tainted image from Mt. Gox’s collapse in 2013.

“BtcBox and bitFlyer appear to have the lion’s share of that volume, collectively accounting for 67% of Yen trades. Not Far behind are Quoine, with 15%, and Coincheck, with 11%”

Coincheck’s CEO, claimed they have handled over $27 million in 18 months, about 3.13 billion Yen.

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With a set of bills in the pipeline to recognize virtual currencies like bitcoin, Japan is carving out a place for itself next to the US and China and bitcoin trading centres.

Ethereum Breaks $ 1 billion market cap

On saturday March 12, Ethereum set a new milestone, shooting up to a billion dollar market cap and trading volumes second only to Bitcoin. As at writing this, ETH is trading at $13.11 and a $ 1,019,646,450 market cap on coinmarket.com

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Speculation suggests bitcoin’s protocol uncertainties have stimulated attention on alternatives, such as ETH. Whether this interest is real, or an intentional attempt at an empty mega pump, traders, money flow and mainstream coverage is stirring up Ethereum as a serious threat; which in my opinion, is completely misguided. Bitcoin’s fundamental core is a completely different value proposition, a censorship resistant digital asset.

Bitcoin Weekly Price Forecast

This week I am neutral on bitcoin. I expect a second attempt at breaking $420, this time successful. But, it will not hold and price will drag sideways before breaking back below to $400. Beyond this short term forecast, I am bullish. I see a second dip at the low as necessary for a proper attempt to break $450, with targets of $650+.

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One comment

  1. I normally do not reply, just want to say that i find the readings very interesting and follow them weekly. Hope that the dip and the breakout will happen soon :)

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