Bitcoin Tests Retracement

IMG Auteur
Published : July 12th, 2017
916 words - Reading time : 2 - 3 minutes
( 0 vote, 0/5 )
Print article
  Article Comments Comment this article Rating All Articles  
0
Send
0
comment
Our Newsletter...
Category : Opinions and Analysis

The CFTC is moving to grant another license to a cryptocurrency derivative exchange. On Business Insider, we read:

While most federal regulators in the US have taken a sluggish approach to cryptocurrencies, the Commodity Futures Trading Commission (CFTC) has been an exception. In September 2015, the body designated cryptocurrencies as commodities, rather than currencies.

Then, in May 2016, it gave TeraExchange, a cryptocurrency clearing platform, full authorization to trade digital currency derivatives, making it the first company in the US to receive such permission. Now, the CFTC has granted the same permission to another player, LedgerX, a cryptocurrency trading and clearing platform for institutional investors. The CFTC's decision to approve a second such company suggests it may license more players going forward.

It's worth noting the CFTC may find it easier than other federal agencies to deal with cryptocurrencies. The CFTC's mandate covers all forms of trades and bets made on the future performance of a commodity, regardless of what it may be, so by classifying cryptocurrencies under this umbrella term, it can apply its existing regulatory framework to the asset class. The CFTC is therefore in a position to license firms like LedgerX because they handle only trades, swaps, and derivatives based on cryptocurrency movements, rather than the assets directly. In contrast, regulators that actually handle the purchase and sale of assets, such as the Securities and Exchange Commission (SEC), may find it harder to fit cryptocurrencies into their current taxonomy.

This is a sign that there’s a lot of interest in Bitcoin. It might make it easier for investors and traders to short Bitcoin, which hasn’t been very easy so far. At the same time, we don’t expect this trend to change. It is quite possible that other Bitcoin derivatives exchanges are going to apply to the CFTC for such permission. So, in our opinion, we are likely to see more derivatives exchanges in the years to come. On a tangent, the fact that new Bitcoin-related exchanges are approved might be a sign of a peak in the interest.

Bitcoin Declines

24hGold - Bitcoin Tests Retrac...

On BitStamp, we saw Bitcoin fluctuate in the last couple of days on relatively thin volume. In our previous commentary, we wrote:

The general comment here is that we have basically seen no change in the short-term situation. Most importantly, Bitcoin is above the 23.6% and (obviously) 38.2% retracement levels. The second level is mentioned here as it is most likely the level at which we would consider the situation to tilt to bearish (unless we see a strong move above the all-time high earlier, that is).

This remains unchanged. Bitcoin is still very close to $2,500, slightly above this level on several major exchanges. So, we have neither seen a substantial move down, nor up. Bitcoin has been consolidating for some time now and the next move might have major implications but we simply haven’t seen this yet.

Bitcoin is still above $2,500, closer to $2,600 but the volume hasn’t been particularly strong. In this light, the situation is still very much the way it was when we sent out our previous alert. Bitcoin is in a consolidation mode. It is totally conceivable that the currency could move to the recent all-time high from here. At the same time, we’re not seeing this move just now.

The only change we have seen so far (this is written around 11:30a.m. ET) is the decline today. So far, Bitcoin hasn’t decisively broken down below the $2,400 level. However, we’ve seen a move below the 23.6% retracement level (at $2,487). What might this mean? Our take is that this might be the first part of the beginning of a decline. The move hasn’t been confirmed yet, though.

More Bearish Picture

24hGold - Bitcoin Tests Retrac...

On the long-term BTC-e chart, we see that Bitcoin has come down from the all-time high around $2,900. In our previous alert, we wrote:

The 23.6% retracement level hasn’t been broken. Actually, since the all-time high we have seen about three serious attempts to break below this level (depending on how you count). All of them have failed. This suggests that there might be more strength in the market. At the same time, the 23.6% level is still very close which makes the situation risky as only a relatively small move down could turn the situation on its head. (…)

We see a move below the 23.6% retracement level ($2,415). This is the first level that might trigger a much more serious decline, in our opinion. At the same time, the breakdown is not confirmed at the moment of writing these words and the volume on which the move has been unwinding hasn’t been particularly strong. All this means that we might actually be in the first stage of a significant slump. On the other hand, the risk of a bounce back to the upside is quite considerable. If we see a confirmed move down below 23.6%, we might have a shorting opportunity on our hands. This is not automatic.

If you have enjoyed the above analysis and would like to receive free follow-ups, we encourage you to sign up for our daily newsletter – it’s free and if you don’t like it, you can unsubscribe with just 2 clicks. If you sign up today, you’ll also get 7 days of free access to our premium daily Gold & Silver Trading Alerts. Sign up now.

Thank you.

Regards,

Mike McAra
Bitcoin Trading Strategist
Bitcoin Trading Alerts

Did you enjoy the article? Share it with the others!

Data and Statistics for these countries : Georgia | All
Gold and Silver Prices for these countries : Georgia | All
<< Previous article
Rate : Average note :0 (0 vote)
>> Next article
Przemyslaw Radomski is the founder, owner and the main editor of www.SunshineProfits.com. Being passionately curious about the market’s behavior he uses his statistical and financial background to question the common views and profit on the misconceptions. “Don’t fight the emotionality on the market – take advantage of it!” is one of his favorite mottos. His time is divided mainly to analyzing various markets with emphasis on the precious metals, managing his own portfolio, writing commentaries, essays and developing financial software. Most of the time he’s got left is spent on reading everything he can about the markets, psychology, philosophy and statistics. Mr. Radomski has started investigating the markets for his private use well before starting his professional career. He used to work as an informatics consultant, but this time-consuming profession left him little time for his true passion – the interdisciplinary market analysis. Establishing www.SunshineProfits.com gave him the opportunity to put his thoughts, ideas, and experience into form available to other investors.
WebsiteSubscribe to his services
Comments closed
Latest comment posted for this article
Be the first to comment
Add your comment
Top articles
Latest Comments
Another One Bites the Dust
03:31Doom
Shallow it may be, but it's frickin' hilarious to laugh at all the hypocritical jerks who gave Trump ("I'm no angel") endless grief for his "when y...
Brexit, Gold and Harold Wilson's 'Pound in Your Pocket', 50 Years On
20 NovThemis
Good points, however Brexit is not entirely about the value of the pound or the cost of living. Many of those who voted in favour of leaving the U...
Another One Bites the Dust
20 NovThe Recusant0
Seems rather shallow to fault Franken for a tasteless comedic prank after electing the "grab them by the p*ssy" adulterer to the presidency.
Another One Bites the Dust
18 Novdennyc1
I happened to read one of Franken's book about all of the hypocrites in office, business,etc. his sanctimonious air notwithstanding I thought the g...
Brexit, Gold and Harold Wilson's 'Pound in Your Pocket', 50 Years On
18 Novkevthorne
A well informed article, giving the insight into what Brexit will really mean for the UK.
What Now?
14 NovThemis
Kunstler has a talent for summarizing complex situations in a pithy and entertaining way. The Middle East is being reduced to a drawn out proxy wa...
Spanking the Monkey
14 Novprljr
They wonder why Russia Today has such a big following. Real news is much more interesting than the MSM circus. Especially when you question more.
Spanking the Monkey
12 NovGypsy
James, I've been wondering about the Hollywood Spank the Monkey thing ever since the advertising firms came out with their "Can't Wait to Get Their...
Most commented articlesFavoritesMore...
World PM Newsflow
ALL
GOLD
SILVER
PGM & DIAMONDS
OIL & GAS
OTHER METALS