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Bitcoin price is pushing toward its three-month resistance ceiling. Technical and sentiment analysis argue for a return to decline, and fundamental analysis shows that Bitcoin’s value is more fragile than many realize.

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Bitcoin Price Analysis

Time of analysis: 15h00 UTC

OKCoin 3Month Futures 4-Hour Chart

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From the analysis pages of xbt.social, earlier today:


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Friday’s technical analysis concluded that the outlook for bitcoin price is bearish while price fails to break above the prevailing resistance ceiling (blue down-sloping line in the chart). Going forward, technical analysis will be informed by the position of price in relation to this ceiling: if the market can successfully trade price above it, we can expect continuing advance. As long as price remains below it, we can expect another series of lower lows.

Should price fall away from overhead resistance, the downside target is the 4hr 200-period moving average (red in the chart above).

Social Mood

Yesterday, sentimental analysis considered wider public interest in Bitcoin as reflected in Google search trends. Assuming that the majority of mainstreet uses Google as their go-to search engine, the frequency of searches for the term ‘bitcoin’ has been declining.

Social mood in the Bitcoin ecosystem, it was concluded, is negative. Factions have polarized on either side of the “blocksize debate” and discord is rife. The contentious actions of a few tear-away developers and exchange owners threatens the security and integrity of Bitcoin and renders the commodity money a risky investment vehicle and potentially dangerous to hold.

Store of Value

An outcome of this fundamental insecurity that surrounds Bitcoin is that speculators and investors concerned with the faltering global economy are reluctant to utilize Bitcoin as a safe haven and store of value.

It can be concluded that Bitcoin does not, currently, enjoy much interest from the general public. Nor does it represent a sound store of value to the majority of investors and large investment institutions. Had there not been uncertainty surrounding the integrity of the blockchain – the prospect of a contentious and potentially borked hardfork – we might have seen Bitcoin’s fundamental value reflected in the price chart. Especially so, during the reeling markets of the past nine months.

Instead, due to negative mood and uncertainty, we see a series of lower lows since late 2015. Yes, we will see a future rally driven by Bitcoin’s fundamental value, but while the block chain and its development is threatened by contention and strife, what motivation does a rational investor have to buy with conviction in the face of evident risks?

Summary

Bitcoin price remains below a resistance ceiling. Public interest in Bitcoin is low. Negative mood and ecosystem discord has resulted in factionalism that threatens the integrity of the block chain. Bitcoin’s fundamental offerings include a convenient payment network with cryptographic security; programmable money; censorship resistance; and independence from central bank and government control. These benefits require only that we follow Bitcoin’s core rules of Consensus and Decentralization.

Satoshi Nakamoto’s sole stipulation is that proposed changes to Bitcoin should have “near-unanimous consensus”, and the protocol’s peer-to-peer design requires constant vigilance around the “degree of decentralization” of the network. Without these two core observances the block chain loses integrity, the protocol benefits become less secure and Bitcoin potentially becomes meaningless.

Bitfinex Depth Chart and Buy/Sell Volume

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Click here for the CCN.LA interactive bitcoin-price chart.

What do readers think? Please comment below.

This analysis is provided by xbt.social with a 3-hour delay. Read the full analysis here. Not a member? Join now and receive a $29 discount using the code CCN29.

Readers can follow Bitcoin price analysis updates every day on CCN.LA. A Global Economic Outlook report is published every Monday.

Disclaimer

The writer trades Bitcoin. Trade and Investment is risky. CCN.LA accepts no liability for losses incurred as a result of anything written in this Bitcoin price analysis report.

Bitcoin price charts from TradingView.
Image from Shutterstock.

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Posted by Venzen Khaosan

Market analyst and Open source developer with a keen interest in blockchain technology, consensus mechanisms and the decentralizing effect. He has found a solution to the PKI mechanism. Email me to discuss.