BTC Update Sunday 6th October
Sunday 06 October 2013
Well, since the plunge provoked by news of Silk Road's shutdown, bitcoin has done nothing but rally and this is a clear indication that the majority of market participants viewed the news driven sell-off as an opportunity to pick up bitcoin at bargain prices.
This is how it looks on a chart:
That the shutdown of bitcoin's biggest illicit marketplace should manifest itself as nothing more than a speed-bump is, in our opinion significant, as it underlines the fact that the bitcoin ecosphere is ready to shed the darker of its roots and reach for the next stage in its path to global adoption.
Also, from a technical standpoint, the market has cleared out all of the weaker trading hands and recharged itself for a move higher. Like a bow that has been pulled taut again, the market is setting itself up for a surge through resistance (at $150) and territory that hasn't been seen since the blow-off top of the Spring.
As we write, $135 looks like it is shaping to be the springboard for the next buying surge, although a leakage back to the $130 area is possible. Whatever, it is only a matter of time before the next tranche of buying propels us up to re-challenge and quite possibly pierce the $150 top.
While a trader should always consider the counter-thesis that's a struggle in this particular scenario, so we will continue to monitor the situation closely and would, on reflection, re-consider our strongly bullish sentiment if the market stalls in place for an extended period.
But for the time being, when one considers this latest potential set-back in the context of the regulatory assault that has beset bitcoin since the first quarter of 2013, the only conclusion to be drawn is that the bitcoin ecosphere has become incredibly resistant to bad news - and this price resilience is proof positive that new demand is entering this market every day.
For holders of bitcoin and anyone building a business in this young economy this is, of course, great news. And for those continuing to watch from the side-lines, our advice would be to get off the fence before you miss a new buying wave that might well be parabolic in nature.
Rob @ BitScan
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