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Bitcoin Price Analysis: Could rising interest rates threaten the uptrend?

After riding high on fundamentals during September, Bitcoin has had a positive start for October. The price remained fairly over $600 in September with the fag end of the month testing heavy support around $595. After the rebound from $595, the price has now rallied to over $610 over the weekend. While the setup looks bullish, let’s look into the price analysis for October:

Fundamental Key Points:

The adoption of the cryptocurrency and its underlying technology has always been the fundamental positive for the Bitcoin ecosystem. Here are few highlights of the past month fundamentals that might continue to have a prolonged effect on the prices:

  • Blockchain Firms Axoni and R3CEV’s Data Management Trial for 6 Major Financial Institutions
  • Winklevoss Bros’ introduction of daily Bitcoin auctions and Gemini’s expansion to Hong Kong and Singapore
  • US Congress calling for a legislation to regulate Bitcoin and Blockchain Technology
  • Deloitte coming into the Bitcoin scene with the launch of a Bitcoin ATM
  • UK to amend laws to accommodate Digital Currency Exchanges

Any continued activity pertaining to the above key points is sure to have an impact on the prices. Adding to the above, from a macro perspective, rise in interest rates might boost the prices of Bitcoin. Nevertheless it would also depend on the timing of the news release and the trading prices at that point.

Technical Analysis:

Long Term Trades:

The Long Term prices have been in an uptrend from the start of this year, with the 200 SMA (in Yellow) getting breached only once during this duration. The $595 level has been a good buy zone and can slowly become the change point for a long term trend. With previous swing lows at $560 as a stop, one can enter into a long term trade at $595. The previous swing high at $778.71 can be a target.

If the market is unable to breach the 100 SMA on the upside at $620, the market can turn bearish. It can crash back all the way to the 200 SMA breaking the support at $560. For this to happen there has to be a strong fundamental factor driving the prices down.

Short Term Trades:

On a daily chart, the Bollinger bands are narrowed out and expanding indicating an impending break out. Given the technical setup, a break out on the bullish side looks more feasible. There is a zone of heavy support around $600, with the middle Bolligner band, 9,13 and 34 SMAs supporting the prices. Good short term trades would be to take positions targeting the 100 SMA.

To get apt entry positions, let’s look into lower time frame:

On shorter time frame (4 Hrs), the setup is trending with parallel Bollinger bands indicating the trend. 34 SMA has been the line of constant support after the test of the support zone. Entering into short term trades at 34 SMA targeting higher Bollinger band can turn out to be profitable. With the setup being bullish, short term trades from the bearish side might be a risky affair.

While taking long term positions, factoring in the news pertaining to US movement for legislation and Fed announcements would be advisable.

Goldman Sachs Files Blockchain Patent for Foreign Exchange Trading

With the launch of bitcoin and blockchain technology, it is evident that the world is open to adopting disruptive technologies. Major financial institutions are adopting the ledger based technology for simplifying their financial operations. Let’s look into how these organizations are leveraging blockchain for their operations:

Goldman Sachs’s Patent Application:

Goldman Sachs has submitted a patent application focusing on how blockchain could cut out the middle man with transaction costs. The patent claims that the technology could change the current process.  U.S. Patent and Trademark Office (USPTO) published the patent on September 8th. Filed in March 2015,  it was Goldman Sach’s first blockchain focused patent.

The patent said:

“These systems suffer from significant disadvantages in terms of privacy, because they maintain balances and transaction records in publicly accessible ledgers  on distributed servers.”

This means that if a bank blockchain is transparent, it gives competitors the ability to place opposing suitable trades. This thereby reduces the competitive nature of foreign exchange trading. By submitting the patent, Goldman Sachs is aiming to combine the advantages of blockchain with technologies. These technologies primarily focus on delivering security, privacy, and comply with regulations.

Financial Firms back Blockchain for Data Management:

Axoni has integrated the financial firms for the blockchain trial
Axoni has integrated the financial firms for the blockchain trial

Blockchain firms Axoni and R3CEV have announced a Blockchain Trial to test Data Management of the ledger system. Among the major financial firms to participate in the trial Credit Suisse, Citi and HSBC are prominent ones.

Featuring buy-side and sell-side firms, the effort envisioned how a distributed ledger prototype helps the industry. Key factors taken into consideration are to enhance risk management, cost and efficiency issues when managing financial reference data. Also involved was the Securities Industry and Financial Markets Association (SIFMA), a trade group representing US securities firms.

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According to the companies involved, the project demonstrated how regulators and network participants can use the technology. It shows how one can see which parties on a ledger created, issued and proposed amendments to a data record.



JP Morgan seeks faster settlement time through Blockchain:


In spite of massive investment in financial technology, JPMorgan still has some distance ahead to meet its blockchain objectives. Abhijit Gupta, multinational bank’s head of science and technology told he had concerns about “speed” of blockchain settlement. The details come months after the bank first began disclosing its blockchain work. In February, JPMorgan conducted internal test moving money between London and Tokyo as part of a trial. This trial involved 2,200 of its clients, according to a Wall Street Journal report. A month later JPMorgan unveiled its work on Juno, a distributed ledger project published with the Linux Foundation-led Hyperledger initiative.

If JPMorgan still has long way to go before meeting its blockchain objectives, reports show the bank is financially committed to the course, along with other areas of technology.