Bitcoin slowly surges

Bitcoin has surged during the past week, breaking above the $10,000 threshold today. Analysts point out that the rise coincides with the surge in the US stock markets, indicative that the cryptocurrency may be influenced by a risk on sentiment. On other news, ECB’s Yves Mersch warned against the cryptocurrency, while ECB’s Draghi stated last week, that it is not his job to regulate Bitcoin. Warnings were also issued by various other authorities. Also computer hacks and cryptocurrency headlines appear frequently on the headlines, however seem to have little impact. We see the case for Bitcoin to continue to surge in the short term however remain quite hesitant to call for a rally.

As mentioned before Bitcoin surged in the past few days, however opened with a negative gap today, below the 8650 USD support level, only to catch up and break the $10,000 threshold. We see the case for bitcoin to continue to be in a bulls market in the next few days. For our opinion to change we would require Bitcoin to break clearly the upwards trend line incepted on the 6th of February. We consider this morning’s break as false, as it lasted only a few minutes and was attributed mostly to the Chinese New Lunar Year festivities. Should the cryptocurrency find fresh buying orders we could see it breaking the $11600 resistance line and aim for the 12365 resistance hurdle. Should it find selling orders, it could break the $8650 support line and aim for the $7425 support zone.

No Bitcoin frenzy at CME yet

Monday was the first full day of trading for the Bitcoin futures market of CME. Volume and volatility was low, moderating any expectations of a new significant surge in the price of the crypto currency. Main reasons cited for the low volume and lack of excitement were high initial margins that are required, Dollar deposits instead of Bitcoin and time limitations set by exchange opening hours. In addition to that, warnings about the crypto currency increase as France’s finance minister is pushing for a debate about regulating the crypto currency at the next G20 meeting and the governor of the National Bank of Denmark states that bitcoin is a dangerous bubble. It remains to be seen whether Bitcoin is a bubble or not and if the warnings consist a self fulfilling prophecy or not.

Bitcoin dropped on Monday during the Asian morning, however it regained some of its losses during the European day and continued to trade in a consolidation manner throughout the day between the 17000 support level and the 19500 resistance level. Should the pair be influenced by the bad press and the low volumes we could see it break the 17000 support level and aim for the 15580 support zone. Should the crypto currency come under buying interest, it could break the 19500 resistance level and aim for the 21000 resistance hurdle.