Is The Bitcoin Market Saturated?
Ben Myers | Nov 18, 2014 04:58AM ET
The price action has drifted above and below $400 in recent days and Bitcoin (BTC-eUSD) saw large selling pressure that pushed the price to a low of $375.00, slightly above the low posted last week at $369.00. The price action tested the first daily support today at $378.24, but was rejected. The second daily support lies at $366.62, while the first daily resistance level lies at $398.24. Trading volumes surged last week as the price extended above $400, with the Chinese exchanges experiencing the largest volume. Many exchanges experienced a rise in volumes in excess of 100%, such as BitStamp and Bitfinex, with larger percentage increases in the Chinese exchanges.
The U.S. Marshals Service has announced that it will auction 50,000 Bitcoins, worth around $20 million that were seized from Ross Ulbricht, accused of running the Silk Road dark net market. The deadline for bids ends on Monday December 1st, with the auction taking place over two rounds. The Bitcoins being auctioned have been confiscated by computers owned by Ulbricht, according to the US Marshals service. The large amount of Bitcoins available may supress the price, increasing supply on the markets.
Bankiter, a Spanish bank, has invested in a Bitcoin start-up, known as Coinffeine, which aims to create a new distributed exchange platform. Coinffeine is developing a distributed platform for the exchange of fiat money for crypto-currencies in an anonymous way. The design allows users to send money (fiat or crypto-currency) without the use of banks in a peer-to-peer fashion. Bankiter will lend support to the start-up and may become a client of Coinffeine in the future. Low fees are another advantage provided by this platform for users.
The chart below shows the 2-hour price action on the BitStamp exchange, along with the Ichimoku cloud indicator. The price action has closed below the cloud and the lagging line is now below the cloud, indicating the start of a downward move. The price additionally looks set to close below the base line, signalling bearish momentum. The cloud will act as resistance going forward at around the $386-$395 level for the next couple of days. The price action attempted to break above the cloud earlier today but was rejected, therefore the price should remain below the $395 level for the time being.
The daily chart shown below is not convincing with respect to the formation of an upward trend. The price action has moved back into the cloud and the lagging line still lies beneath the cloud. The price currently stands at just above $383, slightly below the base line for today, which is around $385. If today’s close is below the base line, this will indicate bearish momentum and could see further declines over the course of this week. The next significant support lies at the lower base of the cloud at $360-$370. If the price-action falls further, this will act as confirmation of a new downward trend. However, if the lagging line and price action break above the cloud, this will signal an upward move.
Get The News You Want
Trading in financial instruments and/or cryptocurrencies involves high risks including the risk of losing some, or all, of your investment amount, and may not be suitable for all investors. Prices of cryptocurrencies are extremely volatile and may be affected by external factors such as financial, regulatory or political events. Trading on margin increases the financial risks.
Before deciding to trade in financial instrument or cryptocurrencies you should be fully informed of the risks and costs associated with trading the financial markets, carefully consider your investment objectives, level of experience, and risk appetite, and seek professional advice where needed.
Fusion Media would like to remind you that the data contained in this website is not necessarily real-time nor accurate. The data and prices on the website are not necessarily provided by any market or exchange, but may be provided by market makers, and so prices may not be accurate and may differ from the actual price at any given market, meaning prices are indicative and not appropriate for trading purposes. Fusion Media and any provider of the data contained in this website will not accept liability for any loss or damage as a result of your trading, or your reliance on the information contained within this website.
It is prohibited to use, store, reproduce, display, modify, transmit or distribute the data contained in this website without the explicit prior written permission of Fusion Media and/or the data provider. All intellectual property rights are reserved by the providers and/or the exchange providing the data contained in this website.
Fusion Media may be compensated by the advertisers that appear on the website, based on your interaction with the advertisements or advertisers.