Is Bitcoin in for a Bull Run?

Companies associated with Crypto currency mining, are openly confirming that their revenues are well below the initial expectations and demand is similarly diminishing. Analysts are considering the fast drop in the digitalis coins value as the main reason for the reduced demand, which eventually turned investor attention away.

Here, a comparison could be made between other financial instruments in order to support our opinion of disagreeing with the general public, losing its confidence in coins. In 2011 the most precious and acceptable metal, Gold reached a high of $1,900 and even surpassed that price. From that year then after, Gold has gradually lost most of it value and while having some upswings has not been able to climb so high. Gold is currently trading around $1,200, and even after the strong depreciation it has gone through in the past years, it’s still considered as a safe haven and one of the most liquid financial assets. So we dismiss the general public views and statistical data regarding the crypto coins future development and in antithesis we support our view that these innovative instruments are here to stay, even under huge pressure.
Despite the fact that crypto companies have reduced revenues, some of the world’s largest bitcoin mining equipment manufacturers intend to bust a move with initial public offerings in Hong Kong. Namely, Canaan Inc and Ebang International Holdings are planning moves in Hong Kong by the next May and June respectively, while Bitmain is probable to release its plans next month for an IPO in which it targets to raise at least $3 billion, according to Reuters. Canaan and Ebang are considered as highly developed firms in technology to be applied to other cutting-edge sectors. They offer innovative blockchain applications which are currently being explored by financial institutions as well as artificial intelligence tools and the upcoming build-out of 5G telecoms networks both within and outside China.

On other news the U.S. Securities and Exchange Commission said it would review its prior decision to disqualify nine bitcoin-based exchange-traded funds from actively trading in the market. Furthermore, in the previous days SEC maintained its stance rejecting applications for new funds from three companies, amid concerns on fraud and manipulation. Another important fact on the same matter, is the case of SEC commissioner Hester Peirce who chose to disagree with the rest of the commissioner’s decision not to give license to bitcoin-based exchange-traded funds. According to her sayings SEC applied their review incorrectly as the product is being used and tested by the public and she also felt doing so, blocked innovation.

From Asia, more specifically the Chinese government, is on a mission to prevent more than 120 offshore crypto currency exchanges from further operations in the mainland. The Chinese government is pulling the handbrake on these firms and is aiming for an industry crackdown on activities related to digital money. Chinese authorities will continue to monitor and close down domestic websites promoting crypto activities and initial coin offerings and further banning payments services from accepting crypto coins, including Bitcoin.

As a conclusion, from the above analysis we understand that week by week the world is moving closer to Crypto coins acceptance as a trading instrument and as a measure of payment. While, it is under huge pursue and criticism in China, we believe with protection measures, all the clouds over the subject could disappear.

Bitcoin was in a strong upward trend today in the Asian session which the instrument appreciated by approximately $220. The upward momentum seems to persist however it could also be a sign of stabilizing at higher levels. On a broader view, BTC/USD has been on a steady rise since the 23rd of August, last week.

The RSI indicator in the 1 hour chart is over 70 but seemingly dropping implying and overcrowded long market could be ready to correct.
If the crypto currency continues to trade with a bullish sentiment we could see it breaking the $7,000 resistance level. If that resistance level is broken the digital currency could move even higher and aim for the $7,240.06 resistance barrier.

On the other hand, should the digital currency drop lower, it could break the $6,708.49 support level aiming lower for the $6,431.57 support hurdle.

Other economic highlights for today (8/28/2018)

We get the Goods Trade Balance and the CB consumer confidence indicator, while later on the API weekly crude oil inventories figure will be released (American session).

Bitcoin rose by 220 US dollars and currently seems to be stabilizing (Asian session).

The recent pros and cons of the Crypto market

The crypto market remains merely unchanged since last week as the pros and cons of the industry news reveal a somewhat stable situation of current uncertainty as to the direction the market will move.

First, FCA short for Britain’s Financial Conduct Authority, reposted its warning to Investors about crypto-currency related investment scams. This warning was first issued back in June, but the issue seems to persist, with the scammers finding new ways to trick investors into cash deposits. Making it more direct, the fraud is now enacted through the use of celebrities’ or well-known individuals which are portrayed in advertisements to be involved in crypto currencies activities. These advertisements provide links to websites for investments either using crypto-currencies or traditional cash. The fraudsters deceive potential clients by stating they operate within the UK providing also London based addresses. All the information is false as the UK authorities would have been able to locate the scammers in no time and so they actually operate outside the UK.

On other news, Nvidia Corp a NASDAQ listed company saw its shares tumbling by 5 percent in after-hours trading during past Thursday after the chip maker revealed that crypto-currency fueled demand had dropped adding its sales could be lower than Wall Street predicted. It must be emphasized that during the previous quarter, the sales to so-called miners of digital currencies such as bitcoin and ethereum was equal to $289 million, approximately 1/10 of Nvidia’s revenue. Nvidia previously had estimated that during the fiscal second quarter ending July 29 sales for crypto-currency chips would reach about $100 million. On the contrary, last Thursday it reported actual income of only $18 million.

On another front, Bitmain Technologies Ltd., a leading producer of crypto-currency mining chips, is scheduling a Hong Kong initial public offering with the potential of raising as much as $3 billion, various sources stated. The firm intends to file a listing application with the Hong Kong stock exchange as early as September. Bitmain Tech Ltd., is valued at $15 billion and is expected to control as much as 80 percent of the market for crypto mining. If the IPO progresses as planned, it would represent a major test of investor appetite for digital-currency companies.

The first self-regulatory organization for crypto-currencies is now reality. This organization aims to promote transparency in the crypto world and various crypto-currency exchanges have already signed to it. The organization is under the name of Virtual Commodity Association, with founders the very popular Winklevoss brothers of Gemini Trust Co. The first members include Bittrex Inc bitFlyer USA, Bitstamp, Inc. and Gemini. It was said that they will make a fresh start in a September meeting with clear objectives, rules and guidelines in order to keep all members on the same page. It could be the case that crypto market makers could be impatient with authorities and our now depending on themselves to improve and set standards for the industry. In our humble opinion, this is good news as the choice to rely on oneself, displays confidence and determination for further improvement.

In addition, it seems authorities are still not convinced with the Crypto backed ETFs and are still stalling up on licenses for operations in the field. However Blockchain capital partner Spencer Bogart stated the authorities are now running out of excuses not to provide licenses. Firms are now monitoring markets better and procedures are better implemented with surveillance systems.

Bitcoin against the US Dollar dropped during Tuesday’s early Asian session displaying a bearish appetite. However corrected upwards later and regained strength making up for losses. It is now moving between our $6,470.67 resistance level and the $6,366.09 support level and is approximately trading higher than last week after today’s correction.

If the crypto-currency is undertaken by a bullish sentiment we could see it break the $6,470.67 resistance level and aim higher for the $6,528.20 resistance barrier.

On the other side, should the digital currency drop lower, it could break the $6,366.09 support level aiming lower for the $6,306.16 support hurdle.