Bitcoin Outlook- July 16, 2014

By DailyForex | Updated July 30, 2014 AAA

Another day has gone by but neither the bulls nor the bears have been able to make any significant impact. As can be seen from the BTC/USD hourly chart, the pair is still trapped inside the price range between support S1 and resistance R1 and seems to be in mood to break out in near term. As soon as BTC/USD reaches either of the ends, it consolidates for some time, but eventually loses its momentum and reverses.

The recent correction from 638 to near-615 levels and the subsequent consolidation provides a great opportunity to build positions in this counter. Since the consolidation has arrested the downslide and the price is comfortably placed above S1, long positions should be considered at current levels. These trades should be made keeping in mind a target of 630 and a stop-loss just below S1. Since the current value of BTC/USD is 619.55, hence the P/L ratio at the current level would be 2.5:1 (10:4), which makes it a highly rewarding trade with a very low risk. Short positions should be avoided until S1 is breached.

Citing price volatility and mismatch in the demand and supply as the major factors hindering the overall growth of Bitcoin, Netherlands-based multinational banking company ING has suggested that the digital currency could one day be supplanted by an improved protocol that functions in a way similar to the government-backed central banks. Accepting that the digital currencies are gaining ground across the globe, the Japanese e-commerce giant Rakuten has hinted at accepting Bitcoin as a form of payment in the future. The company’s CEO Hiroshi Mikitani went on to say that “Bitcoin offered a more stable option to some countries even over their own national currencies.” Polish law firm Wardyński & Partners have cited lack of safeguards for Bitcoin consumers to bring new and stricter regulations in place.

Bitcoin Analysis

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