Short Term Update

Since my last update this market has bounced twice towards my short term volume average, this happened after the Paypal news about adding bitcoin support. The price zone from $455 to $465 is still working as support, any break below $455 would materialize my bearish scenario down to $420. The current daily cycle is still pointing there, to $420.

Paypal news is just the latest in a long series of positive news for the bitcoin environment but the market hasn’t reacted positively to these bullish news for many months, not to mention the null effect of Dell accepting bitcoins. This is definitely an abnormal behavior and it can only be explained by the low level of those who trade at the main bitcoin exchanges, they lack also of long term view on bitcoin and are here merely for short term speculation.

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45 thoughts on “Short Term Update

  1. Christian

    I wonder if news of large *Chinese* corporations adopting Bitcoin were to have larger effect on the markets. I mean, it’s pretty much a fact that most people who work the Bitcoin markets are Chinese.

    1. Enky

      that’s true, as an european i’m sad that europeans are sleeping about bitcoin, no improvements at bitstamp and the other european exchanges are a joke.

      1. I agree. People i know know the word Bitcoin and know that its somekind of digital money. And think they should stay away from it because its a new internet bubble that can burst. They dont really know how it works or wat the advantages/disadvantages are. This is a pitty because this slows down adoption.

        How it is now BTC best use is to trade and try and make money. The problem is only a few people really profit from trading. And a lot of other lose money and quit never to go back.

  2. Christian

    Noone around here where I live (Austria) knows anything about Bitcoin. It’ll take a long time for people to develop any sort of awareness on Bitcoin around here.

    Using Kraken as exchange primarily, mostly because I prefer trading in EUR. Exchange volumes are ridiculously low, makes it hard to daytrade effectively. I believe that this will change in the next couple years, though. As with all things bitcoin related, patience is a virtue 🙂

    1. I am also from Austria and can just say, that alot of people are ignorant to new things come along. In China its different, they are now in their Golden Years, so they adopt everything. And a big NO to bitcoin is news driven. Thats competely BS, its speculation (profit) driven, because small amount (in relation to Forex) are making highs and lows, not that someone is waiting for news and decide then to buy or sell ????? hello brain??? In forex that are usually HUGE spikes. So thats the proof, 51% are not waiting for news to trade. And who is believing BTC will be at 10.000 is so 2013, so less people buy and hold. more paradigma to talk here would be: btc is NOT a currency. but R.I.P. that topic.

    2. Anathema

      I really don’t see why you would trade on Kraken as an Australian at this time. As you said, the volume is terribly low, but they also have increased their trade fees recently by a significant amount. The only great thing about them right now is IMO their website. Their UI, security and documentation are top notch, the best i’ve ever seen.

      1. Anathema

        Lol, oops. But still. I’m in Europe too and started on Kraken. Left after a short while because of the low volume and later found Bitfinex with its low trade fees. And there’s still the fact that Kraken has increased their fees by a lot.

  3. Peter

    Enky do you think that Apples payment system is spooking investors? It all makes sense as to why they banned Bitcoin earlier in the year. I think Apple is going to be on the wrong side of the payment war. When the Blu-ray vs HD-DVD battle commenced I was on Blu-ray’s side because of its obviously superior backers and technology. Apple has decided to make a war with something it will inevitably will lose to.

    1. Peter

      On a side note, Apple’s new payment system plus Palpal integrating Bitcoin might quicken Google to implement Bitcoin into the Google wallet.

    2. Enky

      I think that bitcoin is not much suitable as a quick payment system for a shop because of block confirmation time and so i don’t see apple payment system a true threat for now. Bitcoin is much better as payment system for online shopping, it will become the internet money.

      1. Elie

        the confirmation of Bitcoin on the network was put on purpose. remember when their will be mass adoption they will lift the cap up and the transactions confirmations will be more like instant.

      2. Peter

        Agree with Elie, the speed of Bitcoin transactions will be faster. Also another reason why transaction time will speed up regardless is that notable wallet providers will allow merchants to accept a payment on less confirmations due to the origins of the coins being trusted.

      3. Peter

        Side note, here is a quote from Reddit ‘Why Bitcoin Still Wins: Try pushing ApplePay in a country with 91% Android and 5% credit card penetration’.

      4. Elie

        yeh Bitcoin is open source another reason why paypal, android and other merchants or companys will use it instead of Apple Pay.

    3. Arthur

      As far as I remember from that guy from sigsafe, his little payment tool is not only very secure and it needs (almost) no energy, but it’s also working offchain and instantly.

      On a related sidenote, it looks like the market is slowly waking up to all the good news. We are back in the 480s! (a small hurray only, because for the moment I’m like: for how long it lasts…;) )

      1. croll83

        Elie, the scalability of the network can increase the number of trx per second, but not the confirmation speed. The 10min blocktime will never change for security reason… the real security of bitcoin network is that 10min required to mine the correct nonce… the protocol can change of course, but lowering it to 30 sec will make the network vulnerable to forks…

        Instant BTC payments can be done only offchain, soback again to a private ledger (Coinbase, Blockchain.info, Paypal, who knows)…

  4. Mike

    Yes, the the divergence between Bitcoin news and price in the last 5 or so months is very telling of the fact that the market is lacking any big money. But all indications point to the clear interest in Bitcoin among American traders and the Wall Street. What’s left in terms of an explanation is the fact no big money is going to risk putting tens of millions of money into these Mickey Mouse Bitcoin exchanges …. In Slovenia? Until the market opens up in the USA, I don’t see any major moves in the Bitcoin price. There is an enormous capital on Wall Street. In the meantime, miners are steadily selling Bitcoin negating the demand by individual buyers and traders. What is curious though is that the last year’s run up did have more volume than than any other time before or since.

    1. Christian

      Re – miners selling Bitcoins: isn’t this a problem that will fix itself eventually? Doesn’t it get progressively more difficult and less efficient to mine new Bitcoins?

    2. Anathema

      “no big money is going to risk putting tens of millions of money into these Mickey Mouse Bitcoin exchanges …. In Slovenia?”

      Why would an exchange be less trustworthy if it’s based in slovenia? If you mean Bitstamp by the way, they’re based in the UK. I’m sorry but i get a bit tired of people not trusting any exchange unless it’s “US based”. If anything, US based exchanges should be called Mickey Mouse exchanges since Mickey Mouse is American 😉

      Anyway, even if an exchange couldn’t be trusted in the long term, you can still buy large amounts of BTC without much risk if you do it in small increments. Just buy a small amount, withdraw to your own wallet, rinse and repeat. IMO the main reason why big investors don’t do this is because of the very thin order books. They would rather buy OTC through a broker for a fixed price.

      1. George

        +1
        Although I also agree that there is lack of new features or inovations existing exchanges are offering.
        That’s why I was asking above whether anybody tried trading with Coinfloor.

  5. Enky you need to take into consideration the effects of big merchants accepting bitcoins. A lot of holders now find that they can buy through Dell, NewEgg, etc and are spending bitcoins they would have otherwise held. These coins are instantly getting dumped on the market and converted to cash. In the short / medium term, merchant adoption puts more selling pressure on bitcoin. In the long term it will create more demand as it becomes more useful to more people. I consider whats happening now a distribution phase. The news has been so good that there will most definitely be another considerable accumulation phase. Enjoy the ride. 🙂

  6. vanen

    pure speculation, but i always knew that it was not the beginning of the bull run a few months back, and that a big drop would come sooner or later. now i feel it’s going to be a gigantic one

      1. Peter

        Me da bull too lol.. At this point I would sleep with my eyes open..Paypal accepting Bitcoin means further significant merchant adoption. Surely all these payment gateways and merchants accepting Bitcoin will increase volume. Once we get volume up its going to be even more valuable as an asset. Also since you need an equal amount of buying as you do selling downward pressure on the price from merchant adoption false. I think the price drops have been coming from amateurs. I read of a lot of kids selling their Bitcoin at $15, $30 and $100 thinking Bitcoin hit some kind of peak.. Its limited in its supply and this means that when we hit the climax of user adoption sometime in the future say 2020 Bitcoin will be worth millions. There is no denying now that it will go mainstream, there should be no shadow of a doubt.

      2. “Also since you need an equal amount of buying as you do selling downward pressure on the price from merchant adoption false.”

        Based on that logic then the BTC price should never change. Increased merchant adoption tends to increase BTC supply on the markets. Sure, you will find an “equal amount of buying”, just at lower prices.

  7. croll83

    Enky, what do you think about this world wide war against ISIS? What if comes out the news that ISIS uses Bitcoin to finance terrorists cells in the world? I remeber some months ago news like this was coming out… does it will influence price? (I know that it should not be a news since ISIS and terrorism are already backed by dollars, but we know how it works for Bitcoin: you sell some fresh weed for Bitcoin and it will become drugs money…)

    1. George

      IMHO I think it would be worse if Enky would stop continuing doing a great job here with this blog than this.
      Whatever news would connect XBT with ISIS in terms of lowering it’s value and/or image I would call it “looking for sensational slander”. I also believe that it could slow down the wider adoption by the “sheep” people but nothing more.

      1. Mike

        This accusation about Bitcoin being vulnerable for use by terrorists, money launderers, tax evaders, etc is not a fair one. We know, for example, that terrorists have used Youtube. Has the US government threatened to shut it down? What about the Internet itself, which is a haven for terrorist recruitment, propaganda, and activity coordination? I rest my case. The name of the game is weighing the benefits vs the costs. Bitcoin is just like the Internet. The benefits of Bitcoin far outweighs the costs of use by bad actors. Personally, I think the very reason for this unfair scrutiny for Bitcoin is a testament to the massive power that Bitcoin represents.

      1. Mike

        Looks like someone placed a ceiling at 400, which generally means the price is being supressed for a particular purpose, and generally has meant that the buying pressure is strong…

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