At times, Bitcoin can be quite boring, if and when volatility drops and price points move about a significant psychological level for a few weeks at a time. This situation seems to be the case at the moment, but analysts are trying awfully hard to read more into short-term charts to determine the next possible movement by this digital asset. Yes, Bitcoin is still recovering from an onslaught of negative press regarding Facebook’s Libra project, but, if you peruse longer termed timeframes, the current pattern fits expectations.
As a case in point, one analyst chose to annotate the 3-Day chart shown below, an odd selection of a timeframe to be sure, to demonstrate that Bitcoin had broken a recent losing streak (note the “losing streak snapped” notation about the gold circle to the right hand portion of the chart). Omkar Godbole over at Coindesk is the author of this BTC depiction, which also tracks back to December, the acknowledged point where “Crypto Winter” ended and, in some respects, “Crypto Spring” began. A wide majority of analysts have reached consensus that Bitcoin then finally formed a “bottom” at $3,122.
There is also a rhythm to this pricing behavior, almost musical in a way… “a little bit up, then flatten away… a little bit up, then flatten away” and so on. The chorus has already played four times, since last December. Perhaps, another chorus will drone on for the next month or so, if the past is any indication of future pricing behavior.
Analysts would like to join in with song, as well, but the slope of the diagonal line from April to July is worrisome. History has always shown that a 45-degree angle of any run up in prices is never a sustainable one. Something has to give at some point, just as with Sisyphus of Greek lore. You might recall that his punishment was to push a rock up a steep slope, only to have it roll back down. One could argue that the “flatten away” section in July and supposedly August will serve to bring the depicted “slope” back to the realms of possibility, more in keeping with a 20 to 30-degree rate of change. Even poor Sisyphus might be able to endure that level of attack.
Will Bitcoin “flatten out” for the next month or so, preferably around the $10,000 mark? It is still anyone’s guess. As always, the past is no guarantee of future results, but there remain a number of favorable fundamental factors that can and will put gasoline in the Bitcoin tank. The much-heralded Bakkt exchange is in testing mode and will soon go live. The there is always Fidelity Investments, TD Ameritrade, and e*Trade in the near-term mix, but the recent rebuke of Libra by global government officials will take time to assimilate.
Analysts had expected a larger “bump” from the Bakkt announcement, but it did not take long for them to discover an offsetting fundamental. India is about to ban all things crypto. The Suprem Court had demanded that an inter-departmental recommendation regading cryptos be forthcoming and soon. It appears from first glance that the banking regulators held the real power during the active debate that has raged for months. As reported:
In a setback for cryptocurrency enthusiasts and startups, India seems all set to ban private cryptocurrencies after an inter-ministerial committee (IMC) suggested outlawing private cryptocurrencies.
Across the globe, another story was also hitting the airways in Chicago, which some analysts viewed as negative. Baker, Tilly, Virchow, and Krause (BTVK), a leading accounting forensics and advisory firm, published a report, suggesting that regulators were getting the upper hand:
If cryptocurrency markets were like the ‘wild west’ in their early years, that period may be coming to a close as lawmakers look to toughen up how markets are policed.
The report also made it clear that regulators and lawmakers, who preach that cryptos are all about lawlessness and allowing criminals to hide, would be well advised to modify their current storylines:
In the meantime, it would be wrong to assume that investigators are powerless in the world of virtual currencies. They have many tools, old and new, at their disposal which mean that cryptocurrency markets should not be seen as a safe hiding place.
In any event, the recent 5% fall in Bitcoin fortunes was also accompanied by similar falls across the board in Crypto-Land. Confidence has been shaken, and speculation has it that the lower $9,000 area will be pivotal in the week ahead. What will it take to restore “confidence lost”? There is general agreement that Bitcoin must return to $11,100 and close above it to produce the “higher highs and higher lows” theme, once again. In any event, the week is still young, and anything is possible at this stage.