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Bitcoin Price Analysis: End of the Sideway Movement and Bitcoin All Set for the Next Big Launch

Anyone who has followed the Bitcoin price closely in recently would see a pattern Bitcoin prices have been following.  From the second half of 2016, the month over month price of Bitcoin has been increasing steadily, irrespective of the type of negative fundamentals the currency had to deal with. Momentary price dips have been countered effectively to keep the Bull Run going up until the start of the New Year. However, the scenario changed from the start of 2017 with Bitcoin prices remaining predominantly sideways in between the $1000-$1250 range. Irrespective of the fundamental reasons, Bitcoin has consolidated enough in terms of volumes to prepare for a good run. Let’s look into how fundamentally and technically Bitcoin stands in terms of an impending run.

Fundamental Analysis

Bitcoin has been contained between $1000-$1250 by various fundamental factors which include the consecutive ETF rejection and the scalability debate. Now that the Bitcoin community seems to have come to some kind of compromise over the block size, the prices have stabilized. More importantly, the block size increase would now accelerate the transactions and increase the Bitcoin’s utility by a great margin. Things look more favorable now for a Bitcoin bull run owing to the dynamics in Japan and Mexico. Japan has legalized Bitcoin as a digital asset and a valid way of transfer starting from April 1st. With 260,000 Japanese vendors all set to accept the digital currency, things are looking very bullish for Bitcoin.

In the western part of the world, Mexico has introduced a bill to legalize Bitcoin which would in turn fire up the remittance market and increase cross-border Bitcoin transactions. With strong adoptive fundamental factors driving the prices, Bitcoin looks charged up for the run.

Technical Analysis:

Technically, Bitcoin has been in a trend and has fallen into a temporary sideways pattern. While the market players are testing the $1200 psychological barrier (at the time of writing this article), the Bollinger bands suggest that a breakout can be expected, and, given the trend it can very well be in an upward direction. While the market still has the potential to drop till $1,100 before making a final launch, it would be wise not to short in such a market.  Even the RSI Indicator is in the mid region showing that there is still buying potential in the market and it’s not advisable to short recklessly in the market.

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Week in Review: Bitcoin has Positive Start for the Month, Scalability Tackled

The last couple of weeks towards March’s end saw Bitcoin fighting off scalability issues and ETF rejections that staggered prices. Just when things picked up from the Winklevoss ETF rejection and prices were looking optimistic, the blocksize debate has slipped up the prices again bringing the price to just under $1000 levels. However, in the first week of April, things look very optimistic for the cryptocurrency as Bitcoin prices have increased by 8% with the digital asset trading over $1,100. (Read more reviews about Bitcoin investments here.) Fundamentally there have been many positive re-enforcers during the week for the change in the winds. Let’s dive deep into the most significant positives for the week.

Mexico recognizes Bitcoin as a digital asset

Mexico has had problems arising due to unstructured economic planning. Added to that, it is also the 4th highest country for inflow of remittances. These characteristics have created an ideal environment for Bitcoin to step up and thrive constructively on these positives. While the idea is certainly positive, the Mexican Government has signed a bill that classifies Bitcoin as a ‘Digital Asset’ and sets forth rules for Bitcoin exchanges. The wide consensus has been noticed in support of the bill among disparate political parties with an eye towards benefits for the economy triggering more foreign investment to help local industries and businesses grow.

Bitfinex redeems its tokens


On August 2nd, 2016, the leading bitcoin exchange by USD volume Bitfinex has suffered a major hack where 119,756 bitcoins were stolen. This forced the exchange to issue “Recovery Rights Tokens” as an IOU to customers. These tokens were set to be traded as BFX tokens and are to be paid back as soon as they hit $1 which is their underlying value. Bitfinex has made good on their promise and as of 4th of April, the exchange announced that it is now paying off debts in full. Redemption started late last year with BFX tokens trading well below the $1 value and being termed as a scam to buy more time. However, the exchange intermittently reimbursed hacked customers, proving their commitment towards the services they provide.

Forking has reached consensus

After two years of heavy debating, the scalability issue that has plagued Bitcoin in phases has finally found a solution. Bitcoin developers both from Core and Unlimited will merge within two weeks to a maximum block size increase to 4MB.  This will then further increase by 25% yearly until 32MB. 4th of July is the designated date on which Bitcoin will hard fork and any node left on the original Bitcoin network would be cut off. All the nodes are expected to upgrade by this date with the requisite hardware that makes this possible set in place. Since the debate has now become harmless, bitcoin prices are now soaring high and look good for weeks to come.

Bitcoin is tipping the scales in the Remittance Industry: Mexico and Philippines experience heavy adoption

‘Borderless’, ‘Peer to Peer’ and ‘Low transactional charges’- prime attributes of Bitcoin that has made its adoption conceivable. Interestingly these are the factors that helped the cryptocurrency to find its place in Remittances Industry. The fact that transactions of high orders are executed within no time at very low transactional costs has caught the attention of many remittance providers. Banking on the same many cryptocurrency based remittance startups have popped up especially in Eastern part of the world. Let’s look into how Bitcoin is disrupting remittance industry:

Remittance Industry Overview:


A remittance is a transfer of money by a foreign worker to an individual in his or her home country. Money sent home by migrants competes with international aid as one of the largest financial inflows to developing countries. Workers’ remittances are a significant part of international capital flows, especially with regard to labour-exporting countries. From the start of this decade India, China, Mexico and Philippines have been the top countries in terms of remittance inflows. Owing to this the remittance startup scenario in South East Asia and Mexico has improved significantly with a touch of cryptocurrencies.

Existing players in fiat currencies:


When it comes to cross border transfer of fiat currencies, there is a standard transaction fee which varies with different countries to carry out the transaction. Most notable companies in this space include Western Union, Money Gram, Ria, TransferWise and World Remit. These companies are pretty old and exist in more than 110 countries making Remittances easy with short processing hours. The volume of transfers of these companies is estimated to be around $750 million per month.

Upcoming Bitcoin based remittances startups:


To capture the remittances market, many Bitcoin startups have come into existence locally in these countries with varied services. FlexM, Fastacash, Sendah, Rebit, Bitspark and Toast are notable startups in South East Asia that have been actively facilitating Bitcoin remittances. Few of these startups also provide facilities of storage in the form of Gold tokens, precious metals and other assets.  When it comes to Mexico, chunk of these remittances are estimated to come from US across the border. Bitso and Vogel are two mainstream Bitcoin exchanges in Mexico that offer wallet and merchant services in addition to Bitcoin Trading. They have reported a significant rise in Bitcoin transactions and cross border payments. How Mexican Government would react to the growing popularity of Bitcoin through remittances is to be seen.

Can Trump’s NAFTA renegotiation pump up Bitcoin prices?

President elect Donald Trump has had renegotiating NAFTA agreement in his agenda right from the start of his campaign. He has been very vocal about how USA has had an unfair position in the agreement and renegotiating it to US’s advantage. The focus of the renegotiation is to provide better employment opportunities in the country, thereby improving the employment rate. Let’s look into how Trump presidency and changes in NAFTA will affect the cryptocurrency world:

NAFTA and its significance:


The North American Free Trade Agreement is an agreement signed by Canada, Mexico, and the United States. This led to the creation of a trilateral trade bloc in North American continent. For over 30 out of the 50 States, Canada or Mexico rank as the first or second largest export market. Many American small business exporters first foreign customers are in Canada or Mexico. NAFTA and U.S. trade with Canada and Mexico have supported over 140,000 small and medium-sized businesses. U.S. manufacturing exports to NAFTA have increased 258% and maintain a growing manufacturing trade surplus with Canada and Mexico.

Trump’s plans and early allegiance:


From the onset of his campaign, Trump has addressed NAFTA a few times, calling it “the single worst trade deal ever approved in United States”. He also added that if elected president he will either renegotiate it, or we will break it. A range of trade experts have said that pulling out of NAFTA as Trump proposed would have a range of unintended consequences for the U.S. This includes reduced access to the U.S.’s biggest export markets, a reduction in economic growth, and increased prices.

Nevertheless just after a couple of days of being elected, Trump was able to get Canada on board for renegotiations. Canadian Prime Minister Justin Trudeau, a staunch proponent of trade, announced his willingness to head back to the negotiating table.

Trudeau said:

“I think it’s important that we be open to talking about trade deals. If the Americans want to talk about NAFTA, I’m more than happy to talk about it.”

How would this affect Bitcoin:


Any renegotiation in the favor of USA would mean increased trade and job opportunities. Most of the economists predicted recession and obliteration of US jobs because of the negativity around the campaign. But while the markets haven’t really been that shaken up with the news of Trump’s presidency. Moving forward with negotiation would create more jobs and create opportunities better trades. Exporters always look to cut down on the transaction charges for their trade deals. Hence with increased trade deals, there can be significant increase in the volumes and price of Bitcoin.