May 28, 2014: Bitcoin Market Consolidates Near Rally Highs
May 28, 2014 --- (ARCHIVED) Free Reports
BTC/USD continues to look healthy following a nice rally out of the downtrend wedge which sent prices up 30+% since the breakout. The market is now consolidating around the recent highs, which we view as healthy bull market activity. This pause should set the market up nicely for the next push above 600 $.
The major news over the past 7 days was most certainly the controversy surrounding the Willy Report, however as this point the market has pretty much brushed that off and moved forward. Despite the need for a corrective pullback following the powerful rally, the absence of major news, either postive or negative, has also had something to do with the languishing prices this week.
On another note, we did find out this week that there are now 5mil+ bitcoin wallets which is growing exponentially, and BitPay is now processing 1mil+$ everyday! With this kind of growth of the ecosystem, once new apps and services come online for BTC there should be a rapid increase in demand for coins. Supply is already getting tighter after the recent move, so watch out for market moving news as it could REALLY move the market.
One more thing, it is becoming more obvious to us how important bitcoin could become as a small part of any portolio management strategy. It should correlate closely with gold, but it doesn’t, and if that is the case it should be seen as a risk asset (like the S&P500), but its not. We think this is an underappreciated characterstic of the asset from an institutional perspective. Just another reason we still think BTC is undervalued.
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Happy trading and have a great BITday!
Disclaimer: Please always do your own due diligence, and consult your financial advisor. Author owns and trades bitcoins and other financial markets mentioned in this communication. We never provide actual trading recommendations. Trading remains at your own risk. Never invest unless you can afford to lose your entire investment.