Bitcoin Price Analysis 16 Apr 2018

16 April 2018 | Ricki Allardice

The top stories in crypto-related news over the weekend are: Bitcoin continues upside rally, breaking bear trend over the short term. Mastercard patents another blockchain solution and hires more blockchain developers. Bermuda seeks to create enabling blockchain regulatory environment, to attract business.

Towards the end of last week, we saw Bitcoin breakout to the upside, shooting through $8000. The rally has continued through the weekend, reaching a high of $8450 last night. Up from $6400 last week.

Mastercard has received its second patent for a blockchain solution to payment processing. This following the increase in its development workforce by another 150 people. Of these developers are blockchain specific staff, who are working on various blockchain projects that are being tested by the Mastercard. For now, it seems that Mastercard will be utilizing its own blockchain, as no partnerships with existing projects have been announced.

The island banking haven of Bermuda is positioning itself as a blockchain friendly jurisdiction, in a similar fashion to Malta. The island is creating a regulatory framework designed to promote stability and clarity for blockchain start-ups, with the intent of establishing Bermuda as a preferred jurisdiction to incorporate. This is in stark contrast to the clamp down on cryptocurrencies that is taking place in more authoritarian jurisdictions such as India, Pakistan and most recently, Kenya.

On to market news.

The 1-week chart indicates that BTC price has closed the week breaking through and closing above the descending trendline (red line). Price action encountered resistance at the 8-week exponential moving average (EMA 8 - blue line) and is currently trading just below it. In order for a bull trend to resume on the long-term chart we would need to see price rise above the 20-week moving average (MA 20 - green line) and see a crossover of the EMA8 and MA20 to the upside.

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The 1-day chart shows how BTC broke out 4 days ago, before price action encountered resistance at the 50-day moving average (MA 50 – black line). This morning, price is dropping again and may find support around $8000. Over the weekend we saw a bullish crossover of the EMA8 and MA20, a bullish indicator. However, in order for the 1-day chart to turn bullish we would need to see price action break through the MA 50 and see both the EMA8 and MA20 cross over the MA50 to the upside.

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On the 4-hour chart we can see how strong the breakout and uptrend over the weekend was. Blasting through the primary resistance zones of $7000 and $7600. Resistance was finally found at the 1.272 Fib level around $8450. The short term (4 hour) chart is bullish, and price action could find support at $8000. However, we could see momentum drop off as price consolidates around the support zone and a drop back down to $7800 is likely as traders take profits. What remains to be seen over the next few days is if this breakout is a trend reversal, or just another fake breakout on the way to below $6000?

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Ricki Allardice

Ricki specializes in the field of wealth management with a focus on holistic financial planning. He has a keen interest in the investment fields of property, technology, precious metals and cryptocurrencies. Ricki also holds a Masters degree in Science from the University of Stellenbosch.

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