Bitcoin Trading Alert originally sent to subscribers on December 14, 2015, 10:53 AM.
In short: short speculative positions, target at $153, stop-loss at $515.
The search for Satoshi Nakamoto, the elusive creator of Bitcoin continues, The Australian reports:
The Sydney businessman outed as the possible creator of Bitcoin paid almost $85 million worth of the digital currency to a controversial business figure to buy gold in an attempt to build his business, according to a Federal Court claim.
Craig Wright was last week named by prominent IT magazines Wired and Gizmodo as being the possible creator of the online currency Bitcoin — and therefore potentially worth hundreds of millions of dollars.
In the latest twist to the global cyptocurrency mystery, The Australian can reveal Mr Wright allegedly made a deal with controversial business figure Mark Ferrier in 2013 to buy gold and software with tens of millions of dollars’ worth of Bitcoin.
At that time, in May 2013, Mr Wright claimed he could draw on one “Bitcoin wallet” worth at least $100m, demonstrating huge holdings in the e-currency.
This is yet another entry in the “Who is Satoshi Nakamoto?” saga. Various individuals have been pointed to as the possible designer of Bitcoin, generally with relatively little proof. This time around, there are also many questions regarding the supposed “outing.” Many of the particular details have already been put into question. An e-mail from one of the accounts linked to Satoshi denied that he was Wright. So, there are as many questions as there are supposed answers.
Does this matter? It does as far as the curiosity of the general public is concerned but we don’t think that finding Sathoshi Nakamoto would matter for Bitcoin investors. The price of Bitcoin is not based on whether the identity of the Bitcoin designer is discovered. The one way in which Satoshi could prove extremely helpful would be to offer new and unique solutions for the Bitcoin network but it doesn’t seem likely that he/she or they would be likely to do so, not after leaving the development of the currency to others.
For now, let’s focus on the charts.
On BitStamp, Bitcoin shot up on Friday on relatively significant volume. The move, however, was not continued over the weekend. Actually, Bitcoin went down on similarly significant volume on Saturday and then edged lower on Sunday. Recall our comments from Friday when we hinted at a possibility of more volatility:
Bitcoin moved above $400 (green line in the chart) on Tuesday and stayed above this level on Wednesday. If Bitcoin closes above this level today, we will have a third daily close above $400. This, however, doesn’t necessarily mean that the situation is decidedly bullish. Yes, Bitcoin might be going for a third close above $400 but we still have a possibly more important level ahead of us – in the $450-500 range. It seems that the current move is a correction within the recent decline.
We are of the opinion that Bitcoin might be close to a turnaround. This doesn’t have to be a violent occurrence – Bitcoin might trade sideways before slipping lower.
One way of viewing the recent developments is that Bitcoin closed above $400 for a couple of days. This does indeed seem significant at first sight but a close examination of the situation greatly weakens the bullish implications, basically nullifying them. Yes, Bitcoin is now above $400 but, more importantly, it also is not far from a possible long-term declining trend line based on the 2013 top and the recent November top. The level to observe is $480 which might stop further moves up. Today, we’ve seen a move up but the move has been on volume lower than previously. This has relatively bearish implications.
On the long-term BTC-e chart, we see that Bitcoin is close to the decisive area, $450-500. Bitcoin is now relatively close to the previous local top (around $450). This level alone might stop further appreciation. On top of that, we have a possibly very important long-term declining trend line around $440 (not visible in the chart). Actually, Bitcoin went up above this line on Friday and closed minimally above it before slipping back below it on Saturday. Today, the action has been around this level and Bitcoin is at this level at the moment of writing these words. For the time being, the recent failed move above this line has bearish implications.
The next couple of days might be a critical time in the Bitcoin market. Bitcoin is at a very important crossroads – this might mean that we will see some kind of resolution in the next couple of days. This is not sure but we wouldn’t be surprised by more action. If Bitcoin manages to go up decidedly, we might close the current hypothetical short positions – we are not at this point yet. Actually, Bitcoin is now overbought again, it is at a possibly important trend line, above which it failed to move over the weekend. This combined presents us with a bearish outlook. The situation might change in spin of the wheel now, so stay tuned.
Summing up, in our opinion speculative short positions might be the way to go now.
Trading position (short-term, our opinion): short speculative positions, target at $153, stop-loss at $515.
Thank you.
Regards,
Mike McAra
Bitcoin Trading Strategist
Bitcoin Trading Alerts
