China is important. It is home to the largest Bitcoin mining companies and their citizens are fast adopters. Therefore, the recent court ruling is bullish and could fast-track Bitcoin loss reversal driving prices back above $7,000 in the process strengthening market confidence. So far, BTC/USD pair is stable and down one percent in the last week as prices trade in tight trade ranges.
Latest Bitcoin News
As reported earlier, Shenzhen Court of International Arbitration has declared Bitcoin property allowing merchants as well as individuals to own and even transfer Bitcoin without conflicts with existing regulations. This is positive and the simple fact that Bitcoin has protection from the law goes on to show how BTC is quickly turning into a globally recognized asset and a store of value. From court translations, it appears as if it considers Bitcoin a property because of decentralization and the economic value behind it. This decentralization and economic benefit give users freedom. Besides, as a store of value businesses and individuals are free to use Bitcoin as a form of payments without contravening any laws. Considering how Chinese are instrumental in Bitcoin and crypto ecosystem, we expect adoption to increase in coming weeks and months as the second largest economy continue to thaw to crypto.
While this news coming out of China could go a long way in steadying and even encouraging market participation, we should note that Bitcoin is generally stable. Many are attributing this to the exit of speculators keen on money minting while some are linking this drop in volatility to a bottoming market. Though speculation of a bottoming market continues to build up, we are yet to see hints as volumes continue to dry up on every low.
BTC/USD Bitcoin Price Analysis
Talk of market stability is best exemplified in the weekly chart. Although we can see fundamental events as recent court ruling from China spurring demand, the lack of activity in the last week is a cause of concern. In fact-as we can see from the chart, last week’s prices were moving inside a $350 range inside week ending Oct 21 high low.
Technically that is positive because the bar itself did close as a bull at the back of high volumes thrusting prices above the all important $7,200 bull trigger line and the main resistance trend line. Thing is, as long as bulls are within week ending Oct 21 bar, we recommend buying small amounts of BTC in lower time frames with first targets at $7,200.
Back in the daily chart, Oct 15 is definitive like it has been in the last 10 days or so. Moving on, our previous BTC/USD trade plan is valid and as long as BTC/USD price is trending inside Oct 15 high low, then we can trade as aforementioned. That mean, we recommend buying on dips with stops just below the three months support trend line anywhere between $6,200 and $6,300.
As per our last iterations, losses below $6,200 will nullify our bullish projections and in that case we might see drops below 2018 lows at $5,800 which inevitably solidify bear momentum.
Disclaimer: Views and opinions expressed are those of the author and aren’t investment advice. Trading of any form involves risk and so do your due diligence before making a trading decision.