After shooting up in price to near $500 USD late last year, the price of Bitcoin has been consolidating in the $400’s for the past two months. Technical analysis shows a near term neutral stance on Bitcoin’s price, while the medium and longer term fundamentals remain decidedly Bullish.
Friday’s technical analysis concluded that the outlook for bitcoin price is bearish while price fails to break above the prevailing resistance ceiling (blue down-sloping line in the chart). Going forward, technical analysis will be informed by the position of price in relation to this ceiling: if the market can successfully trade price above it, we can expect continuing advance. As long as price remains below it, we can expect another series of lower lows.
Should price fall away from overhead resistance, the downside target is the 4hr 200-period moving average (red in the chart above).
Yesterday, sentimental analysis considered wider public interest in Bitcoin as reflected in Google search trends. Assuming that the majority of mainstreet uses Google as their go-to search engine, the frequency of searches for the term ‘bitcoin’ has been declining.
Social mood in the Bitcoin ecosystem, it was concluded, is negative. Factions have polarized on either side of the “blocksize debate” and discord is rife. The contentious actions of a few tear-away developers and exchange owners threatens the security and integrity of Bitcoin and renders the commodity money a risky investment vehicle and potentially dangerous to hold.
Store of Value
An outcome of this fundamental insecurity that surrounds Bitcoin is that speculators and investors concerned with the faltering global economy are reluctant to utilize Bitcoin as a safe haven and store of value.
It can be concluded that Bitcoin does not, currently, enjoy much interest from the general public. Nor does it represent a sound store of value to the majority of investors and large investment institutions. Had there not been uncertainty surrounding the integrity of the blockchain – the prospect of a contentious and potentially borked hardfork – we might have seen Bitcoin’s fundamental value reflected in the price chart. Especially so, during the reeling markets of the past nine months.
While CCN correctly points out that the majority of mainstream investors do not currently consider Bitcoin a safe-haven asset, slowly and steadily that viewpoint is eroding. Longer term, when the opposite is true, and the majority of mainstream investors do view Bitcoin as a safe-haven asset, the price will be many, many, many multiples higher than it currently is.
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