Bitcoin Technical Analysis
We finally have a technical entry in Bitcoin (BTC/USD), suggesting moderate gains in the cryptocurrency. It has been a long time since we have an entry in the digital currencies markets. To recap, Bitcoin has suffered from moderate selling in recent months, trading around $370 at the time of this writing. We believe the news of ‘Circle,’ a type of a Bitcoin bank that offers a cloud wallet in which Bitcoins can be sent and received in a secured environment will be the fundamental trigger for the expected rally in Bitcoin. Circle innovation is enabling a direct link to your bank account where you can transfer money into your personal Bicoin cloud wallet and the funds will be converted into Bitcoins. The company promises no fees for the bank transfers. At any point you may transfer the Bitcoins directly to your bank account and they will converted back into real money. To eliminate any security concerns (as seen in MTGox) Circle says all deposits are 100% insured by the company.
This innovative approach is likely to spark a great demand for Bitcoins in the next 14 days, which we believe will boost Bitcoin prices across the exchanges. Bearing Circle in mind, we are also combing technical analysis for our long (buy) trade in Bitcoin.
Bitcoin Weekly Chart
Please click on the chart to enlarge:
An inverted hammer was painted on the weekly chart, the first sign of imminent gains. A strong support is noted at $330, which is expected to contain any further weakness in the digital currency. We are setting $510 for our bullish target for the long trade. It is very possible Bitcoin may trade over $600 but we believe it is a far-fetched target at the time of this writing. Should it be found relevant we will update the target based on the price movements.
Our entry is at current price, protective stop loss order (exiting the trade with a loss) is at $314, targeting $510.
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