This week on Planet Bitcoin - 10 June 2016

Friday 10 June 2016

TL;DR: up nicely but struggling to break $600

It’s been another good week for bitcoin holders. A week ago the price was down around $540 - still up significantly from around the $450 mark just a couple of weeks earlier, but ready to make another push higher. From there we saw a rapid rise to above $590, before a correction and then recovery over the next few days to $580.

Chart

It has been an impressive rise, and there may well be more to come, but right now bitcoin is struggling to escape from a relatively narrow range around $580. With less than a month to go before the halving of block rewards, anticipation is high, but the closer we get the more unpredictable and volatile trading is likely to be.

As yet, there is no consensus about the likely outcome of the reduction in supply, and the degree to which effects have been priced into the market. Long-term, of course, the drop in supply can realistically only have an upward effect; the question is how much traders have factored in the immediate aftermath of the Halving. Traders will always seek to take profits if their position starts to look risky. It’s a fair bet that at some point, there will be a big sell-off in anticipation of others selling imminently, even if the uptrend resumes shortly afterwards. That’s likely to happen before the Halving, simply because it will almost certainly happen afterwards and some traders will want to front-run that move.

Elsewhere in the crypto world, Lisk has maintained its value, bouncing back from around 0.0006 BTC to above 0.0008. Ethereum, too, has stabilised around 0.025 BTC. WAVES trading is expected to launch within the next week as mainnet launches. Many alt traders have sold to hold their funds in BTC for now, but a few of the larger altcoins have not been so badly affected recently - possibly because the damage has already been done.

Looking ahead and to the regular economy, the possibility of the UK deciding to leave the EU is causing some concern after a string of polls showed a small lead for the Brexit campaign. Whilst it still appears to be an outside chance, it’s not impossible and would have consequences for the global economy. The contest for the US presidency has entered a new phase, too: it’s now a straight fight between Trump and Clinton. Neither are popular, and voters have serious doubts about both. It’s likely that could spill over into economic uncertainty over the coming months. Both of these factors may prompt further interest in ‘safe haven’ assets in the medium-term - mainly gold, but bitcoin too.


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