Originally published in The Bitcoin BullBear Report released on 7/22/2015. Partial excerpt only. Written by @AKWAnalytics.
Technically speaking, bitcoin has shown a surprising amount of strength and stability as it consolidates gains off of the 316 $ local high. Additionally, the fundamental picture has improved from just a few weeks ago. While we are still neutral for now, things are looking pretty good.
The double bottom off of the 166.45 $ low (Finex) remains intact, and in fact is looking even more bullish as this current consolidation plays out. Throughout the recent rally from the low 200’s $, price has been following a strict trend of resistance turning to strong support. Now this is not, in and of itself, an interesting development seeing as though this is typically how bull markets operate, but what is surprising is that this trend is still intact even after price hit a juicy sell zone right at critical long term resistance (320 $). If indeed we are slowly entering a new bull phase in bitcoin, then this pattern should continue.
Another thing to note is that as gold has sold off to its lowest level in five years, bitcoin has remained relatively strong compared to its corporeal counterpart. While we are unsure whether this decoupling is due to a broader realization that gold as money is becoming antiquated in the digital age, or is simply a byproduct of central bank action (which operates in the metals markets, but not bitcoin as far as we know), we suspect that it is a little of both.
The last thing we want to touch on is more fundamental. The recent spam attack on the bitcoin blockchain by large-block proponents did nothing but exhibit how resilient the fee market for bitcoin transactions currently is. There are no two ways about it, if bitcoin is going to survive for the long term (centuries) then there will have to be a way to compensate miners for network security, and the only way we see that happening is if there is a vibrant fee market for on-chain txs.
Cheers,
@AKWAnalytics
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