Yesterday night bitcoin finally broke two month strong upwards support in Chinese exchanges. It didn't fall further at that time because movement was stopped by Microsoft acceptance of bitcoin, so instead it rallied +10%, after doing the first lower low in the 4H chart.
While this news are good for longterm bitcoin adoption, it means nothing else than a Pump&Dump in the short term as it happened with Paypal and Dell adoption news. As this is a way to cashout bitcoin, not to buy them.
It will give more bitcoin awareness, but potential buyers won't be tempted to buy any time soon until it finish this long bear trend.
We also need to add that Bitcoin fundamentals are quite bad at the moment for the short/mid term:
- 94k bitcoin will be auctioned in the next months by US Marshalls.
- 30k extra bitcoins also auctioned by Australia soon.
- 200k recovered frozen bitcoins from MtGox could be returned to their owners at any time.
- Less bidders in the recently 50k auction, was also really bearish sign.
- Localbitcoin closing their services in Germany.
- Bitstamp running out of liquidity and with an extremely thin orderbook.
- Big bottleneck in the fiat entries. Won't be resolved until proper regulated bitcoin exchanges or ETFs hit the market.
- Finally, as I mentioned before 2 month support was strongly broken yesterday night, plus it did the first lower low.
So, overall I think it is a really great entry point to short, taking advantage of the Pump&Dump.
First target should be around 2000 CNY and 1900 CNY, but as bitcoin is breaking down again strong support we could see more potential dumps, down to 1800 CNY or even 1500 CNY. Of course this last targets could take 1-3 months to develop as bitcoin movements are slowing down.
Good luck!
While this news are good for longterm bitcoin adoption, it means nothing else than a Pump&Dump in the short term as it happened with Paypal and Dell adoption news. As this is a way to cashout bitcoin, not to buy them.
It will give more bitcoin awareness, but potential buyers won't be tempted to buy any time soon until it finish this long bear trend.
We also need to add that Bitcoin fundamentals are quite bad at the moment for the short/mid term:
- 94k bitcoin will be auctioned in the next months by US Marshalls.
- 30k extra bitcoins also auctioned by Australia soon.
- 200k recovered frozen bitcoins from MtGox could be returned to their owners at any time.
- Less bidders in the recently 50k auction, was also really bearish sign.
- Localbitcoin closing their services in Germany.
- Bitstamp running out of liquidity and with an extremely thin orderbook.
- Big bottleneck in the fiat entries. Won't be resolved until proper regulated bitcoin exchanges or ETFs hit the market.
- Finally, as I mentioned before 2 month support was strongly broken yesterday night, plus it did the first lower low.
So, overall I think it is a really great entry point to short, taking advantage of the Pump&Dump.
First target should be around 2000 CNY and 1900 CNY, but as bitcoin is breaking down again strong support we could see more potential dumps, down to 1800 CNY or even 1500 CNY. Of course this last targets could take 1-3 months to develop as bitcoin movements are slowing down.
Good luck!