(Bitcoin) markets have seen lower volatility in the past few days in relation to previous weeks; the price fluctuated in a narrow range yesterday, between $358 and $348. At present, the Bitcoin price on the BitStamp exchange stands at $355.95, with $357.43 being today’s high so far. The price action has recently been pushed below the first daily resistance level, which lies at $356.03. If the price manages to sustain itself above this level, it should be bullish and the next resistance will be found at $362.06. However, if a downward move is realized, then $346.59 will act as the first support level for today.
Trading in Bitcoin is quietly making a comeback in China, where modern technology and financial innovation has allowed new businesses in the Bitcoin space to emerge, including companies mining the currency for investors. Several companies in China have bought equipment designed to mine Bitcoin more efficiently and utilize cloud computing technology. However, an unnamed official told Guangzhou’s 21st Century Business Herald that the government is very likely to intervene if investment in bitcoin continues to grow.
In contrast, Taiwan’s government has not put any pressure on Bitcoin entrepreneurs, but are still cautious. Bitcoin purchases have recently been made available at over 3,000 convenience stores in Taiwan. Family Mart and Bitcoin exchange Bitoex have partnered, enabling bitcoin purchases through the stores’ digital kiosks. Convenience stores in Taiwan offer many extra-services, such as laundry, paying bills and now bitcoin purchases. The founder of Bitoex remains optimistic toward crypto-currency adoption in Taiwan and plans to strike a similar deal with other convenience stores chains in Taiwan, such as 7-11 and smaller chains such as Hi-Life.
The Financial Crimes Enforcement Network (FinCEN) in the US has released new guidance for Bitcoin exchanges and payment processors, ruling that such companies may be considered money services businesses under US law. The Securities and Exchange Commission (SEC) in the US has sent letters to Bitcoin companies asking them to voluntarily hand over any documentation they have in regards to their unregistered securities. Many companies have been anticipating such action and have the necessary information prepared, while others may choose to argue that their counter-party tokens are not securities. The SEC is reportedly employing researchers that track down the people and the companies behind domains and Bitcointalk accounts associated with certain IPO’s.
The 4-hour chart below shows the price action from the BitStamp exchange. A bottom may have been formed by the recent lows, as the base line has moved below the conversion line indicating bullish momentum and the price action is headed toward the Ichimoku cloud. The cloud will act as resistance going forward, at the $360-$370 level. Additionally, the price closed above the base line earlier this morning, indicating bullish momentum. It is expected that the price will continue to rise until bouncing off the lower part of the Ichimoku cloud or move into the Ichimoku cloud region.
At the 2-hour timeframe, the price action is in the cloud, suggesting uncertainty over the future course of price action. The formation of a green Ichimoku cloud serves as a bullish signal and this will be further confirmed if the price action moves out of the cloud in the upward direction, i.e. if a break above $364 is sustained. However, this is quite unlikely and the downward direction seems to show less resistance. If the price breaks below the Ichimoku cloud at the low $350 level, then this will act as confirmation of a downward trend. If the price stays within the cloud, then this will signal sideways behaviour of the price in the sessions ahead.
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