Will U.K. Regulation End Bitcoin’s Volatility Woes?
Ben Myers | Nov 23, 2014 04:50AM ET
The downward momentum in the market seems to be holding, however Bitcoin's (BTC-eUSD) price is currently flat, standing at $356.39 on the BitStamp exchange, down 0.02% ($0.08). The price action has drifted away from the mean of the last 100 periods and usually returns to the mean of the previous 100 days, which lies at $324. The price attempted to breach the second weekly support level, pushing as low as $342.05, but has bid higher. If the price fails to break above $369.00, a previous low, then the momentum is expected to continue downwards. Volumes have been declining on the exchange in recent days, with Chinese exchanges making most of the volume of Bitcoin trades.
Chi Onwurah has highlighted that Bitcoin and crypto-currencies are an opportunity for currency to be fair and trustworthy. The U.K. Shadow Cabinet Minister additionally sees the potential to reduce reliance on giant banks and other financial institutions. Payday lenders, customer checking accounts and savings accounts of big banks will have to compete with new ways of sharing, distributing and lending money. A wait and see approach to regulation is the most favoured in the UK and could turn into a potential competitive advantage for the London and the rest of the country.
The 4-hour price action is shown below with the Ichimoku cloud indicator, with it indicating resistance at $368. The lagging line pushed below the cloud and indicates the formation of a downwards trend, but a small recovery has taken place, which should be limited by the conversion line at $359. The cloud should act as significant resistance going forward, below the most recent high of $415. Furthermore, notice the base line (red) is above the conversion line (blue), indicating downwards momentum. However, this could potentially reverse considering these two lines diverged further. A break above the base line will indicate bullish momentum and a move towards the lower part of the cloud projected ahead.
Looking at the hourly chart below, there is indication of a bullish move, which may temporarily reverse the momentum. The conversion line has moved above the base line, giving a weak bullish signal,while the lagging line appears set to move above the previous price action. This in fact is another weak bullish signal, as the price is below the cloud. Upward moves are likely to be limited by the Red Span or the Green Span of the Ichimoku cloud. Therefore, the expected price range is $360-$370. Complications
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