Bitcoin Technicals And Possible New Ecosystem
Ben Myers | Oct 27, 2014 10:30AM ET
Over the course of the weekend, the Bitcoin price fluctuated between $340 and $360. As we now enter a new week, the price continues to trade in this range, with the current price at $356.83, up 0.46% on today’s open. The price has closed above the daily pivot point this morning, which suggests further price rises towards the first resistance level, which lies at $363.95. In the event of a move in the opposite direction, $345.45 should act as strong support. If either these levels are broken, it is expected that the price will follow a sharp downward/upward move.
Possible New Environment
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Side-chains have been popular in the Bitcoin news this week and the concept was first proposed earlier in 2014. Side-chains have the potential to replace alt-coins and Bitcoin 2.0 platforms and additionally make it possible to combine all the unique features of various alt-coins and place them under one Bitcoin ecosystem. One reason there are not more features added to Bitcoin is that a bug may take down the entire system. Innovation is allowed to take place through side-chains without putting the whole system at risk.
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InPay has launched an equity crowdfunding campaign making it feasible to buy company stock with Bitcoin. InPay is a Poland based bitcoin payment solutions provider and the public offering has gained the approval of Poland’s Financial Supervisory Authority. Polish authorities are still debating the stance the country should take on the crypto-currency. Under the country’s existing financial regulations, bitcoin can be considered as a financial instrument, but also indicates that it is not an officially recognized currency as of yet.
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The chart below shows the 4-hour price action on the Bitstamp exchange. Buyers have held the price up during the start of today and the price looks set to close above the base line, which indicates bullish momentum. Additionally, if the conversion line moves above the base line, this will further confirm bullish momentum. In this case, the price will find resistance at the lower Ichimoku cloud at the $370-$360 level. However, the cloud is still red, indicating that the current downward trend is not over yet.
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Possible Up Trend
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Interestingly, when using the hourly price action, the price is currently situated above the Ichimoku cloud, which acts a signal that an upward trend is forming. Furthermore, the cloud has turned green today, indicating further upward moves. However, the cloud is horizontal in the periods ahead, which could suggest that the price will trade sideways. If this sideway price action materializes, it is suggested that traders sell on upward dips near the daily resistance level and buy on downward dips near the daily support level. The Ichimoku cloud indicates that support will be found at $354-$352. If the price closes below $352, then this will be bearish and could signal a continuation of the current downward trend.
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