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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.

Florida to draft a legislation recognizing Bitcoin as a currency

September is turning out to be a positive month for Bitcoin enthusiasts. Widespread mainstream adoption is driving the currency’s prices high. US congress has pretty recently passed a resolution that prompts for an innovation policy supporting cryptocurrencies. More positive news is underway as the state of Florida is planning to treat Bitcoin as currency.  Let’s look into how and why the sunshine state is planning to do this:

Miami-Dade Circuit Court Ruling:

Michell Espinoza’s Miami-Dade trial recently made headlines when the judge ruled that Bitcoin was not money and dismissed the case. Shortly after that, the state appealed the decision. Florida Senator Dorothy Hukill says the state is planning to file legislation about cryptocurrencies. Since Florida law hasn’t defined Bitcoin yet, lawmakers are researching ways to regulate its use.

The senator believes the state needs a law because of Bitcoin’s popularity, and the many Florida court proceedings that involve the currency. After the Espinoza case dismissal by Judge Teresa Pooler, many people are expecting changes in laws to accommodate cryptocurrencies. Hopefully the legislation would be such that the currency grows in an unaffected manner.

Third largest Bitcoin Mining group launches second pool:

BITMAIN's Antminer
BITMAIN’s Antminer

China-based Bitmain announced the launch of its second mining pool on 13th of September. The new offering would be open sourced to its community users. Bitmain’s Antpool platform is popular across community for its 13% share of the network. In an interview, Nisthant Sharma, international marketing manager at Bitmain, explained the goal behind the launch. The software is  to “promote decentralization of the bitcoin mining network”.

Sharma told:

“We hope that this open-source mining pool will set new benchmarks in terms of stability, efficiency, and service for all mining pools.”

By utilizing the global community, the company believes it can set new technical standards for mining.

Romanian Bitcoin Exchange shuts down:

Romania’s first order-book exchange has announced that it is closing down. The BTCXchange website informed users of a possible sale of the service on 18th August. On 4th September, the exchange asked users to withdraw funds ahead of an expected 12th September shut down. According to Romanian news source Bihon, whether the exchange is up for sale is still unclear.


In past statements, owner Horea Vuscan expressed his hope to successfully sell the exchange  as it was “highly profitable”. They would be accepting offers for the platform starting 16th September. While Horea believes that the venture is profitable, he has expressed reservations about security. How successfully would the exchange reincarnate is to be seen.


4 Federal Agencies with Bitcoin Jurisdiction

As a new monetary system with a widening base of users, Bitcoin is highly susceptible to government regulation. Government agencies enact and execute the policies of the federal government. These agencies seek to protect the citizens of the United States from fraud, crime, and duplicity. Consequentially, their intervention can disrupt or alter the existing structures of Bitcoin. Investors in Bitcoin should be aware of the policies and expectations of these agencies, in order to understand the value of Bitcoin and comply with current laws. This article examines the mission statements, developments, and policies of four U.S. government agencies with varying degrees of jurisdiction over Bitcoin.

U.S. Commodity Futures Trading Commission (CFTC)cftc

“The mission of the Commodity Futures Trading Commission (CFTC) is to foster open, transparent, competitive, and financially sound markets, to avoid systemic risk, and to protect the market users and their funds, consumers, and the public from fraud, manipulation, and abusive practices related to derivatives and other products that are subject to the Commodity Exchange Act.” –

The CFTC actively monitors and responds to market failures. In response to the failure of Bitcoin exchange Bitfinex, the CFTC filed and settled charges in June 2016 for failure to register as a commission merchant as mandated in the commodity exchange act and for offering illegal transactions. Given that Bitfinex is a Hong Kong based exchange, this story signals the wide reach of cryptocurrency regulations and the importance of building international regulatory awareness.

U.S. Securities and Exchange Commission (SEC)sec

“The mission of the U.S. Securities and Exchange Commission is to protect investors, maintain fair, orderly, and efficient markets, and facilitate capital formation.” –

The SEC also exists to protect markets, with a greater focus on investor protection than the CFTC. In another piece of recent news, the SEC charged Connecticut-based companies GAW miners and ZenMiners for fraudulent mining activity. The companies were selling shares of their Bitcoin profits, supplied by their Bitcoin mining activities. However, they sold more shares of computing power than they had and were unable to meet their promises to investors. Consequentially, the SEC intervened. This instance demonstrates that Bitcoin investors and business owners alike need to be wary of new business models.

Internal Revenue Service (IRS)irs

[The IRS mission is to] “provide America’s taxpayers top quality service by helping them understand and meet their tax responsibilities and by applying the tax law with integrity and fairness to all.” –

Currently, the IRS treats virtual currency as property for federal tax purposes. More information and FAQs can be found on the IRS website. Investors should consult the IRS website in order to abide by the laws associated with the developing status of Bitcoin.

Financial Crimes Enforcement Network (FinCEN)fincen

“FinCEN’s mission is to safeguard the financial system from illicit use and combat money laundering and promote national security through the collection, analysis, and dissemination of financial intelligence and strategic use of financial authorities.” –

In addition to its services, FinCEN provides a comprehensive list of anti-money laundering laws. In considering transactions, investors and businesses should consult the FinCEN anti-laundering website to help avoid illegal activities.

Government logos sourced from wikipedia.