- Published: Sunday, 18 May 2014 13:15
- Written by Editor
The Bitcoin exchange rate continues its impressive consolidation in a channel between support at $431 and resistance at $452, the last 3 days being in a tight trading range between resistance which has proven to be accurately positioned at $452 and a lower level $444. Most crucially the exchange rate is trading above the medium term down trend line, signalling a potential breakout from the down trend and the beginning of a new up-trend and accordingly the next phase of the long term bull market.
While market performance is impressive, a cautionary note must be added in respect of falling volume on both sides of the market, although bids outnumber asks. This falling volume does not imply that players are losing interest, far from it, but rather reflects the fact that, with a narrowing trading range against falling volume, the market is positioned to break, but traders are not confident about the direction of the break.
There is every reason to be confident that the market, having already broken out of the medium term down-trend will break to the upside. If this is the case the move could well be explosive as the shorts cover and go long, and all those sitting on the sidelines waiting for the next phase of the bull market buy in at these bargain basement prices.
The phrase "the next few days are critical" has become somewhat of a cliche, but the fact of the matter, supported by the charts, is the next few days are critical. If the market can stay above the medium term down trend line and move ahead, the market move could be dramatic, if however this proves to be a false alarm - doubtful considering all the fundamentals - the market could dive to even lower levels to find a level it is comfortable with.
Not much more can be usefully said about the market today - it looks and feels like the "calm before the storm" where something must give sooner rather than later.
If Bitcoin is to grow, move in to the mainstream and reach critical mass with mainstream acceptance, it needs to be robustly represented. Originally the Bitcoin Foundation set itself up as an unofficial organisation to represent the interests of Bitcoin, but sadly Bitcoin Foundation has become much more of a liability, and precisely the sort of representation Bitcoin can do without.
If Bitcoin is to be taken seriously it needs to be fronted by people who can be taken seriously, in stark contrast to those on the board of Bitcoin Foundation. Two of the board, Mark Karpeles and Charlie Shrem resigned due to various criminal allegations, including in the case of Shrem money laundering. To replace one of these another dubious individual, Brock Pierce was appointed, even though he has had allegations of fraud and pedophillia.
Aside from this, Bitcoin Foundation has become everything that Bitcoin is not and simply does not represent by example. Bitcoin foundation looks more like a club and a clique that exists for the benefit and ego of those involved. Despite the fact that members pay fees, apparently Bitcoin Foundation are totally autocratic, acting unilaterally without issuing agendas or minutes of meetings, much less accounts.
In short, Bitcoin Foundation are an accident waiting to happen and the Bitcoin community will not want to be associated with them when it does. Of course the mainstream media would have a field day if the "representative" organisation for Bitcoin fell out of line, causing Bitcoin immense damage close on the heels of Mt. Gox.
One person who has recognised this and voted with his feet is Olivier Janssens who resigned from Bitcoin Foundation and is now offering $100K in Bitcoin to whoever can come up with a software alternative to Bitcoin Foundation that will facilitate the whole Bitcoin community having a say and voting on the future of Bitcoin. As Olivier very eloquently and correctly stated:
We as an internet community, don’t need public figures to decide what’s good for us. We need to stop politicking and start focussing on the projects directly. For example, we need a project to fund the core development of bitcoin, and put our money straight to that. We need a project to have lobbyists in Washington, to fight the anti-bitcoin lobbyists from Mastercard, and to prevent the government from destroying the currency. Basically, we don’t need another intermediary. We can do this ourselves.
Bitcoin Reporter applauds, agrees with and fully supports this effort and hopes it will come to fruition. The sooner the better for Bitcoin.
Bitcoin Market Outlook
The breakout from the medium down trend is remains intact, the only cautionary note being the contracting volume.
The market is clearly set to break and based upon the charts as well as all the fundamentals the most likely direction is upwards unless either very negative news or a large player selling the market happens in the meantime.
Sometimes we simply have to use the cliche "the next few days are critical" because it is true. There is however every reason to be optimistic that the next phase of the long term bull market is about to commence.
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