Would Bitcoin Find Stability If It Traded As A Commodity?
Ben Myers | Nov 26, 2014 07:35AM ET
Bitcoin (BTC-eUSD) reached a higher-high for the fourth consecutive day, with the price spiking at $395.11. Currently it stands at $379.85, up 1.03% or $3.86 on today’s open. A re-test of the psychological level of $400 looks certain, and if the price remains above this level, the upward trend could intensify. A downward cross-over of the MACD indicator looks imminent at the 4-hour timeframe which would signal the start of a downtrend, andshould cause it to find support at $368.64. However, the MACD at the daily timeframe looks set to make an upward cross-over.
The North American Derivatives Exchanges is set to offer Bitcoin options in early December, conditional on the success of the company’s filing with the Commodity Futures Trading Commission. Other exchanges are expected to offer other Bitcoin related products in the U.S., similar to derivatives traded for commodities. This should make Bitcoin trading easier and see more innovation in the financial services industry.
An official from the Dutch Ministry of Finance suggested that Bitcoin will not be liable for Value-Added Tax (VAT). The Ministry of Finance additionally seems to be considering a VAT exemption for businesses. If the tax authority goes with these remarks, it may very well stimulate the business environment in the Netherlands and produce a clearer road for bitcoin-payments.
The daily chart below shows the price action along with Bollinger® bands, with 1 and 2 standard deviation. The volumes on the BitStamp exchange are additionally featured below. The upper Bollinger band with 1 standard deviation acted as resistance, with the price reversing towards $350. The ‘buy zone’ lies between the 1 and 2 standard deviation upper bands, which is between $396.27 and $418.60. A close above $396.27 would indicate a breakout in the price and confirm an uptrend. Presently, the price lies within the 1 standard deviation Bollinger Band, so neither long or short positions are recommended using these indicators.
Using the 4-hour chart, the technique further indicates an uncertain trend. The price has moved into the neutral zone and if it closes in this area, neither buy nor sell orders will be signaled. However, if the price manages to close above $382, then the price action will be in the ‘buy zone’ and a continuation of the upward move is expected. Sell orders should look to enter below $355, where the ‘sell zone’ lies at the 4-hour timeframe.
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