The news had an immediate effect on trading sending the price into recovery mood after a recent crash. This morning the price had moved above $10,500. As the Coindesk article reporting this went to press bitcoin had risen 11 percent over the last 24 hours. The article notes that bitcoin could again hit $11,000 but thinks that over the longer term their should be some consolidation.
The article notes that the development may have been largely factored in as the CME Group talked about their plans as far back as November 1st. Since then the price of bitcoin (BTC) has risen 69 percent.
Institutional funds may want in on the bitcoin via derivatives
This may be one of the main reasons by bitcoin has risen so high recently,
The article suggests that a close above $10,850 with stronger volume could result in a more sustainable rally. However, now the futures trading is a fact many may “sell the fact” profiting on the high.
Bitcoin could move sideways over the weekend
Some price action analysis suggests that the price of bitcoin could simply go sideways over the weekend.
Bitcoin was able to avoid plunging below the $9,000 level from its recent record high of $11,300. Some thought the bubble was bursting but it was not to be.
Some commentators on social media suggest that bitcoin’s top price of over $11,000 will not be breached for now. They think a correction would be healthy and pave the way for another rally. In the short run they see the price as likely consolidating.
The article claims the odds are high that the bitcoin price holds at around $10,000
Bullish and bearish scenarios
The coin desk article suggests two possible scenarios for the price of bitcoin after a consolidation around $10,000 give or take a thousand over the next 24 to 36 hours: Bullish scenario: Consolidation around $10,000 for the next 24 to 36 hours, followed by 1-hour close above $10,850 on the back of stronger volumes would open doors for a rally to fresh record highs.
Bearish scenario: A close below the rising trend line could yield a deeper sell-off to $7,800, although the upward sloping 10-day MA indicates the dip could be short-lived.
Bitcoin value a consensual hallucination?
An article in the Atlantic by Derek Thompson points out: “A bar of gold… A chain of beads. A card of plastic. A slip of cotton-linen paper. These things are worthless. …Their value comes from the simplest thing. People believe they are money, and so they are.”
Derek describes money as a type of consensual delusion. He says that digital cryptocurrency “feels more like a consensual hallucination on psychedelic drugs”.
In 2013 one bitcoin was worth $12 but as Thompson wrote the article it was worth over $10,000. In just over 8 weeks its value had doubled. For any currency to do that Thompson describes as bonkers. While this does cause problems in using bitcoin as money in exchange once bitcoin prices are less volatile more will use it as such. Even now people are sending money to some states such as Zimbabwe where the actual fiat currency suffers from inflation. Better to have a currency in an upward bubble than one losing all its value.
As I write this the price of bitcoin was closing in on $11,000 again at $10,896 up 9.88 percent on the day.
