Bitcoin prices are at a crucial crossroad. During the past week and a half, BTC/USD has been stuck between a high of $630 and a low of $600. Moving in a tight 5 % range is unusual for a high volatility asset class like bitcoin. We think that this will soon change and this may be a crucial juncture for BTC.
Prices are especially vulnerable to the downside. Since failing to gain momentum for a break of $630, BTC/USD fell to retest the weak support at $610. However, the major support that will determine if we go lower stands at $600. A significant break of this round figure, preferably below $590, may exacerbate BTC losses toward $550. If $550 gives way, bitcoin will likely resume its medium term downward trend.
To the upside, the $630 level has proven to be a tough To the upside, the $630 level has proven to be a toughnut to crack during July. If we manage to get a sustained break above, BTC/USD may move up to the July 1st swing high at $654. Further up, a break of the June 3rd swing high at $667 will likely reinvigorate the stalled May rally.
Bitcoin Adoption Continues
Despite the recent setbacks in price, bitcoin adoption continues unabated. Coinbase, a popular bitcoin payment processor and online wallet service, just broke another important milestone of 1,500,000 wallets! While the growth in wallets has been slower compared to the bubble days of December 2013, bitcoin adoption is still very much in exponential territory. The growth in wallets is also constant at popular software wallets like the default Bitcoin-QT client and MultiBit.
On the financial front, the Winklevoss Bitcoin ETF will likely pass the scrutiny of Federal regulators in the States. This may happen as soon as this year, according to experts consulted by the IBTimes (http://www.ibtimes.com/winklevoss-bitcoin-etf-will-likely-pass-federal-scrutiny-eventually-experts-say-1626106). Recent regulatory fillings suggest that the Fund will have the ticker COIN and will be listed on the NASDAQ. While a long ways off, the eventual approval of the ETF will undoubtedly be bullish for bitcoin prices as it will provide an easy and safe way to invest in the cryptocurrency.
A similar project to securitize bitcoin purchases is going on at the Isle of Man. Few days ago, the Global Advisors Bitcoin Investment Fund has been certified by the Jersey Financial Services Commission. The Fund is planned to begin its operation on August 1st this year. Unfortunately the fund will not be open to investments from the general public and is for qualified investors only.