Bitcoin is pushing on the lower bound of the trading range mentioned in our Thursday article. In the past five days, BTC/USD has remained well inside the $460 – $483 bounds that mark this congestion area. Still, as can be seen on the chart below, bitcoin has consistently pushed on the lower bound. Today, prices got as low as $460.90 before rebounding. One coin is currently selling for $462.10.
Taking into account the price action of the past few days, a break below $460 is the more likely scenario. Right below this level, the $450 mark may provide some support, followed by the round psychological $400 figure. But keep in mind that both of these two levels are relatively untested and it is possible that falling prices will just cut through them like knife through butter. Lower still, the $330 to $350 area will likely be strong support for BTC/USD. This was the stopping point for bitcoin’s fall in August.
On the top side, a break above $483 may stall the downward momentum. But BTC prices will need to both break and stay above the important $500 level before a true rally can commence. Above $500, the first possible resistance for the bulls will be the August 21st swing high at $530 ($528.92 to be exact). Further up, the $550 figure may prove to be a crucial milestone. The level was important support on the way down and will now likely turn into strong resistance to higher prices. Above $550, we have the $600 round figure. Higher still, June 1st swing high at $667 may be another important line in the sand for the cryptocurrency. This was the high reached during a short three week bitcoin rally in May of this year. Breakout traders may be looking at this level as a marker to determine the resumption of the rally higher.
Russia to Ban Cryptocurrencies, BOE Praises Blockchain Technology
Things have been slow on the news front as well. A new law proposed by the Russian Finance Ministry will introduce an all-encompassing cryptocurrencies ban. The law will allegedly (according to people who have seen the draft) criminalize mining bitcoins as well as transacting in BTC. To top it all of, the Ministry asked regulators to ban access to exchanges and online stores that accept bitcoin. This news will have limited impact on the price as no major bitcoin exchanges are located in Russia.
Western jurisdictions have shown a more permissive attitude toward cryptocurrencies. For example, a recent paper published by the Bank of England praised the technology behind bitcoin. According to the Bank, an open and decentralized payment ledger may eliminate the credit and the liquidity risks present in today’s financial system.