Global & Local Concerns Weigh on Bitcoin Prices

Aug 14, 2015 --- (ARCHIVED) Free Reports


It should come as no surprise that over the past week bitcoin has returned to consolidation mode. While we are not expecting large moves in either direction in the near term, we do think a test of 250 $ is reasonable (and buyable).

Before we get to the technicals, we want to talk a little bit about the global macro environment, as well as the block size debate. First, regarding the global macro picture as we see it, the outlook has never been so murky and unpredictable. China’s currency moves this week exemplify this unpredictability, as well as the untrustworthiness of government actors. The PBOC indicated that these are one time moves to get the market back aligned with fundamentals. Yeah right! As asset price volatility (downside) continues to pick up with traders returning from summer vacation, unforeseen moves by global financial actors will become more and more common, and more and more disruptive to the status quo. We can’t help but think this will generally be a good thing over the long term for an uncorrelated asset like bitcoin.

As far as the block size, it seems that Gavin and Mike are stepping it up a notch given they are calling for an XT hardfork which would pit Bitcoin Core, libbitcoin, and XT all against each other. While we have no particularly unique insight into what protocol market participants might choose to run, we do know that until this issue is resolved it is highly unlikely that bitcoin’s price will be able to break above resistance at 320 $ (which is what must happen for a new bull market). We are still firmly in the smaller blocks camp, but are willing to compromise on a slight increase or dynamic system given the data is supportive of such a move. Until then, we are sticking with Core.

Lastly, bitcoin prices technically speaking remain in a corrective consolidation off of the 316 $ high. While the market continues to look weak in the near term, we think a buying opportunity is coming around the 250 $ level. We will make sure you are ready for it 


​Disclaimer: Please always do your own due diligence, and consult your financial advisor.  Author owns and trades bitcoins and other financial markets mentioned in this communication.  We never provide actual trading recommendations. Trading remains at your own risk.  Never invest unless you can afford to lose your entire investment.