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BTC China Returns to Full Trading

BTC China had gone dark, at least as far as most people were considered back in December when the company / exchange decided to stop allowing bank transfers due to the fear of the Chinese Government clamping down and halting any sort of ingress of capital. This led to a general sort of fear mongering and as BTC China was believed to be behind the enormous price hike up to nearly $1,200. This is excellent news particularly in the face of all the doomsday predictors that were out there shouting that as soon as January 31st rolled around we’d all see a major crash and BTC price would drop heavily.

Here’s the Reaction on the Exchanges

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As you can see not much of a reaction at all, people are still waiting until the 2nd of February for reasons unknown but the 31st was supposed to be when China’s Regulatory ruling went into effect. What this means is that like normal the market is slow to take into account the recent news. This is good for investors and for people who hope BTC to go higher alike.

What This Means for BTC

BTC China was the largest exchange with the highest volume, it’s chilled significantly since then and has lost a lot of volume but only just today did many people realize they could deposit yuan and buy BTC. A lot of the Chinese have an incredibly difficult time getting their own currency out of the country for any reason they want without being tightly scrutinized or regulated. BTC’s unregulated nature meant that they could buy BTC and then hold it for value or sell it elsewhere and get USD, Euro or any other currency they wanted. This was a huge thing for them and it’ll take a few days to weeks to get them to come back into the game but rest assured that the BTC China is far from over. It’s going to continue growing its user base and the price of BTC as a result of this is going to climb up.

But for now, we’re seeing a slight movement upwards, so very slight that most people might miss it if they didn’t watch for the signs. There’s good news abounding for BTC and its Investors and Miners alike. A recent discussion by the US Treasure confirmed today that BTC Investors and Miners will NOT be regulated (link: http://www.theverge.com/2014/1/31/5364406/bitcoin-miners-investors-not-regulated-fincen-ruling ) With so much good news coming to BTC and the ultimate wait that everybody was holding for now coming to a close, BTC’s pressure is going to erupt very shortly.

Pressure? What Pressure?

For weeks now BTC has been at a constant struggle of around 800 USD on exchanges that matter (Mt. Gox is having big trouble w/ withdrawals again and that’s causing an inflationary price to their BTC, but since people can’t withdrawal it’s a moot point which is why they don’t count). This is excellent news for people who have been on the sidelines just waiting to get in, the news of the CEO being brought up on money laundering charges that I wrote about here: Bitinstant Ceo Arrested and Its Effect On BTCs Price

As we can see the price dropped to around 750 USD at the lowest but it quickly rebouned up to 812 USD and then settled around 800 where it is hovering right now. This is important to note that the longer a price stays at a certain area the more pressure it builds. The buy and sell orders are matching each other but without any sort of catalyst there’s no way for the pressure to be released, either up or down. The CEO news hit and dropped the price but there was still so much positive pressure that the lowered price was quickly built back up due to positive pressure, but only so much that it kept it stable at 800 USD.

With news of China back in the game and the fear of China’s BTC being regulated and people being unable to use BTC to move money or sell it for other currencies (as many had predicted would happen and a huge price crash on BTC to happen as a result) the news is overwhelmingly good. People were waiting in the wings for the Chinese to start selling all their BTC due to not being able to get more or move it out of the exchange due to the regulations, but in effect Bobby Lee, CEO of BTC China stated that it’s like the government never issued any regulations now. All the exchanges were meant to do it turns out, is register with the Ministry of Information Technology (MIT) which would recognize the companies as legitimate businesses.

What This Means for Traders

With the pressure building and no more fear of the floor dropping out beneath BTC, get ready for a steady climb back up to 1,200 USD. It will take some time and it won’t be a massive spike, but as buyers come back into BTC China and the price on Bitstamp hits 820 USD we’ll see the Buy Signal triggered (currently hovering at 820 USD) which lead to a quick but short spurt of buying (both from bots and people alike as the bot trigger is around 820 USD as well).

The pressure has to go somewhere and without anything to propel it downwards the only direction left is up. No longer are people worrying over January 31st as they were before and slowly but surely all the bears who had been waiting cautiously in the wings are going to come back in and invest again once they realize the price isn’t going to be able to go down and the positive pressure is going to propel the price upwards. This is going to be nothing short of a game changer, everybody was waiting until January 31st and the Chinese New Year (which people get back to work around the 2nd of February so give it some time to effect exchanges) to see which way the ruling would fall. If the ruling had fallen to cut off BTC China and deposits, we’d be seeing a drop in the BTC price, not much mind you, but enough that people would likely panic sell it down to nearly 600 USD before the price could rebound back up, but it would be a long time in recovering.

Instead what we have is an enormous amount of building buy pressure that isn’t going anywhere and people who were selling at the 800 USD range realizing they can sell much higher now that the news broke and that said news is overwhelmingly positive. This will lead to a slow but sure cascading effect where sellers continually list a bit higher each time and the buyers fulfill those prices until we reach the Buy Signal of 820 USD where the bots and automated trades will quickly fulfill the prices up to around 900 USD and even beyond if there is enough volume and support. We’ve seen a large amount of volume the past few days with today and yesterday tapering off in expectation of the news. We’ll see those volumes return in full force and when we do we can expect the price to rise steadily towards it’s ATH of 1,200 USD and possibly beyond now that the Chinese markets with BTC China no longer have to fear the regulatory control of China or that they’ll be forced to stop deposits and the like because of the government cracking down on BTC. This ruling is effectively like nothing happened to BTC in China, the government has allowed it to operate on its own volition which is surprisingly progressive for the Chinese Government which tends to prefer its own proprietary systems than those that are open and free. We’re going to see a quick upswing in a few days and the sooner people get in before the pressure breaks upwards the more profits they’ll be able to reap.

It is my analytical opinion then that anybody looking to invest would be wise to get in now before the news hits the exchanges. Remember that as a rule of thumb it takes 3-5 days for the exchanges to recognize “good news” bad news usually travels faster but often doesn’t have the same impact as good news does which is a steadier climb. With no more fear of BTC falling and the fear mongering over BTC China’s demise and the exclusion of Chinese BTC Traders, Investors and Miners being over we can expect a bright new year for BTC. I don’t mean to sound overly flippant or positive, but the truth is that there is no more negativity for BTC China and we can expect the price to reach ATH (All Time High) in a couple short months from now. That would put BTC back to about 50% higher growth than it currently is.

Bear Market or Bull Market?

The market right now is overwhelmingly Bullish, the Bears had their predictions and their beliefs but they were all proven false or inconsequential besides. The Bulls are going to be running the show until the next stint of bad news or until a bubble forms and bursts. I don’t think we’re going to see a fast run up like we saw before, this is going to be a slower more steady gain that truly changes BTC’s price and value, not a bubble forming that’s ready to pop at any moment. Keep in mind that because of this people are going to be diving in quick to snatch up the cheap BTC now and once the price is driven up to 820 USD a “Buy Signal” is going to go off and we’ll see the price do a short, but swift run up to nearly 900 USD before it tapers off again and people find the next floor. Don’t expect to see 800 USD for a while unless something catastrophic happens, those who invested back in early December or before and bought when the price of BTC was nearly 1,000 USD will be able to finally get a return on their investments in a month or two from now.

And all those that wished they had sold back then but held and accrued more, cheap BTC in the meantime will get their chance to sell again and be able to make an even larger profit than they thought they could make. The only people who have truly lost here are those hoping to scoop up even cheaper coins by fear mongering or predicting a crash of sorts due to the Chinese Regulation that is now not happening which is going to cause the price to climb upward rather than spiral downward. These people who sold or have nearly no BTC are going to be the ones hurting if they aren’t able to buy back in, or they’re waiting for a sheer drop in price to be able to get in. They’ll eventually get in but likely after the price has risen when they held fast to the dated belief that BTC will drop again back to a level they are comfortable with, which will continually rise in relation to BTC’s rising price until they cannot stand to let the profits run away from them any longer and they buy well past the point that it is now where a hefty 50% or higher profit margin awaited them.


Article By: Penguin Writer


Investing | E-Currency | Economics | Bitcoin


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