A former member of the Monetary Policy Committee at the People’s Bank of China believes the ban on China should be reconsidered.
Last week’s Bitcoin performance included good news and bad news.
Good news – We found support slightly below the $6000 mark when there was a real threat of breaking to the downside which would have been very nasty (shaded green support zone ). We instead broke the resistance trendline to the upside.
Bad news – After breaking said trendline it would have been fair to expect a subsequent rally of some substance. We did get a few impulsive legs up to be fair, but as a whole it has been underwhelming – a “limping”, rather than a “charging” bull. The price may still surprise to the upside, but for now the recovery has been mediocre at best.
Put into context, this is the fourth break of a significant resistance trendline (pink lines) since the all-time high (ATH 1.81% ) in December last year. As can be seen below each breakout has been less impulsive:
- 1st – 26% in 4 days
- 2nd – 39% in 8 days
- 3rd – 39% in 16 days
- 4th (current) – 8.5% in 8 days
Each breakout holds the promise that the Bitcoin bull of 2017 will return – however, as can be seen every rally has resulted in a lower high (LH). Furthermore, every down trend has resulted in a marginally lower low (LL) with respect to the daily close price. Only once we see a higher high and higher low on the daily chart will the current bear trend be invalidated – this appears to be a long way off!
It is also clear that the Bitcoin price has become considerably less volatile which is not an attractive scenario from a traders perspective, however it does give rise to some interesting fundamental questions.
Is low Bitcoin volatility the sign of a maturing market or merely the result of a loss of faith in cryptocurrency Is low volatility the new normal or are we winding up for a big move? Should low volatility be celeb ated as it makes Bitcoin -3.01% more suitable to be used as a transactional currency?
As a trader, I say bring back the volatility! However, perhaps a more stable, less speculative, dare I say – more boring Bitcoin – is in fact better for the crypto industry as a whole.