Before we get to the point, it is worth explaining one concept. Cryptocurrency or virtual money (coin) is a decentralized accounting system coded in a cryptographic system. The system itself is based on nodes – wallets in which users store private keys to their resources. The last ones are responsible for security and preventing re-use of the unit.
Cryptocurrencies, due to their characteristics, are not considered as payment units and therefore escape the control of central banks. This is a great advantage because it cannot be artificially created and its resources are strictly limited (in the case of BTC it is 21 000 000). Cryptocurrencies are not subject to inflation because they are not exchangeable or based on resources such as gold or silver. Bitcoin is the first in cryptocurrency to be invented.
Bitcoin price in the last 3 months
BTC or XBT was created in 2009 by a person or a group of persons named Satoshi Nakamoto. So far, it is not entirely clear who the creator is – most likely because of his safety. The name Bitcoin is a reference to open source software and P2P (peer-to-peer) network. Bit currency (as well as other currencies) is stored in the form of cryptographic keys, which are used to authorize transactions. The advantage of this is high security and speed of funds transfer to the other side of the world. Like any decent coin, bitcoin is divided into 1 BTC = 1,000,000,000 Satoshi. This allows to make transactions of smaller values.
The essence of Bitcoin is transparency – all transactions are public and stored in dispersed databases called blockchain, i.e. a chain of blocks. In other words, it can be called a distributed infrastructure and a decentralized transaction platform. Despite the transparency of the concluded transaction, its authors are fully anonymous. Each of the actions must be digitally signed with a public cryptographic key.
Bitcoin can be obtained (excavated, extracted) from the system by any user, although this is very unlikely. It is the greater the user’s contribution of computing power to the network in relation to the power contributed by the nodes.
Bitcoin technical analysis through the macro-prism
Bitcoin in a longer period of time > D1, W1 immediately shows its weakness for speculation. The largest bubble took place in December 2017 as a result of a huge revaluation on the stock exchanges. Because of this feature, it makes sense to stick to short and medium term analysis, but I will give you an example of long-term analysis below.
BTC retains extremely high liquidity and volume, which perfectly reflects the real behavior on traditional stock exchanges. From the point of view of technical analysis theory, Bitcoin follows the lines of support and resistance perfectly, but these are not the most common psychological barriers, i.e. full round values. This assumption is confirmed by regular “checking” of previously achieved prices, which is perfectly visible in the M5/15 time frame. Confirmation can also be searched by using Fibonacci tools.
XBT keeps quite well with the trend channels, although it has a greater tendency to break out than to subtle changes. An example of long-term analysis can be 14 November 2018, when the bottom of a declining triangle that has been forming over the last 11 months was strongly knocked out. This is a confirmation that the currency is strongly correlated with the value of USD and reacts strongly to macroeconomic data. An excellent example to analyze is the publication of data on employment in the non-agricultural sector, published on the first Friday of the month for the opening of the session in the USA.
Bitcoin reacts with a 2-3 minute delay, which for some may be a starting point. Just before the data is released, there is also a decrease in turnover and price volatility. Bitcoin is also characterized by the formation of price gaps – the biggest ones are created on weekends and are not always closed in a short time by the price return.
Cryptocurrency Bitcoin price and exchange rate
In the last 6 months (since November 18) the BTC price has oscillated around $4000-$5500 and in this price range, it can be considered to be in a horizontal trend. This is the aftermath of the very strong turbulence at the end of 2017 when the BTC price reached a giant value of $20,089.00. The average daily Bitcoin turnover is 12.7-13.5 billion USD, which is a huge value, noting that this is mostly a leveraged market.