Bitcoin: Where Are We Going From Here?

The contest article by Petar Kotevski

It has been a largely uneventful week for everyone’s favorite cryptocurrency. The high reached earlier on Monday at $667.53 stands unbroken. On Wednesday we matched that high when prices got to $667. On Thursday, BTC/USD traded to a low of $605. Since then, it has been a slow slash back and forth around the $650 level.

The Technical Picture

Where are prices going from here? Taking into account the previous surge up, a continuation of the rally that started back in May is the most likely outcome. A break above the $667 high will push BTC prices to the March 4th swing high at $700 ($698 to be exact). Beyond this, the $800 figure will provide some resistance, followed by the January 6th high at $989.99. High above, a break above the all-time high of $1090 will trigger a major bull run. As usual, you should also pay attention to the round numbers, the 050 and 000 figures in between the levels I noted above ($750, $800, $850 etc…). Here’s a BTC/USD chart that has all potential resistance levels marked.

It’s important to note that bitcoin has yet to have a sizeable retracement during the current rally that started back on May 20th. To the downside, a break of $600 may trigger larger losses to the 38% Fib Retracement near $579. Below this, the 50% Fib at $552, followed by the April 16th high at $545 will provide strong support. A clearing of these levels will expose the virtual currency to $500. A strong break below the $500 round figure is likely to bury the latest rally and lead to a resumption of the medium-term bearish trend.

Venture Capital Up 30% from 2013

Above we explored the technical picture, but how are the fundamentals shaping up? Venture capital investments in bitcoin related projects this year are already 30% higher than the entire 2013 total. VC money in Bitcoin amounted to $2 Million in 2012, $88 Million in 2013 and $113 Million in 2014. And we haven’t even passed the half year mark yet! The category that raised the most was payment processors, with a total of $31 Million.

Speaking of payment processors, US-based bitcoin processor Coinbase just signed up its biggest client yet DISH! The DISH network has 13 million customers across the United States and offers a range of local and national programming. DISH is the largest company to date that will accept bitcoins for payment. The total market cap of DISH is a jaw dropping $26 Billion.

Not good enough for you? Read on!

On June 5th, the CEO of Ebay John Donahoe told CNBC that Paypal ‘’will have to integrate digital currencies into our wallet’’. While Donahoe didn’t provide a specific timeline for the move, he did say that he owns some bitcoins himself and is learning how to use the cryptocurrency. In addition, the Ebay CEO showed us a glimpse behind the curtain when he told CNBC that: ‘’everybody that I talk to out here, and you sort of get into it, really does talk about bitcoin as the next big thing. And they believe it. And they mean it.’’

The fundamental picture for bitcoin looks stronger than ever. Will this translate into price gains on the charts remains to be seen? Keep an eye on the levels I outlined in the first part of this article for possible entry/exit points. Good luck!

The article is written by Petar Kotevski and is participating in the Forex Article Contest. Good luck!

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