The price of Bitcoin (BTC) has significantly increased in about 50% over the last week following a 60% decline during the beginning of January and February. The most famous digital currency now shows a market capitalization of about US$150 billion, with more than US$3.5 billion traded over the last 24 hours.
The mining industry is growing in popularity in Europe, Asia and North America, bringing more questions of decentralization to the sector that has been traditionally focused in China. Some people compare this process to a gold rush of the 18-19th centuries, but there is an soaring interest in hardware and energy supply.
Nvidia stock is still growing significantly, in part thanks to GPU mining popularity. Jensen Huang, CEO of Nvidia commented that cryptocurrency was a “significant part” of their income in Q4 2017 and that, “crypto is a real thing, it’s not going to go away.” Later in February the Toronto stock exchange will announce the Vancouver-based Hut 8 Mining Corp, a corporation supported by Georgian mining firm Bitfury – one of the main competitors of China-based Bitmain.
In order to make the profit as big as possible, miners traditionally choose the location, where electricity is cheap. These towns or cities normally have renewable or alternative energy sources, just like in the State of Washington and Iceland.
Washington State has been famous among the crypto miners for its very high mining activity. The reason was not expensive hydroelectric power and a big quantity undeveloped space. Mining is told to be a high-profit business in Chelan County, where the US power company, Chelan Public Utility District (PUD), is coping with a big number of applications to construct huge mining courts. The county of 72,400 residents already has 16 cryptocurrency mining operations up and running.
In the case of Iceland, it is possible that the country will be unitizing more power to mine BTC than they use to power homes by the end of 2018. Johann Snorri Sigurbergsson, a representative of the Icelandic energy company HS Orka, commented that there is a lot of interest in BTC mining data places in Iceland. Thus, the Iceland wouldn’t have enough electricity to provide them all were they plan be constructed.
Digital company DMM, located in Japan, also coopted that it wants to build 1,000 mining farms in the Ishikawa Prefecture, which will be a clever step, considering the benefit of low temperatures and not very expensive electricity prices, while Italian utility firm Enel Italy has made a decision not selling power for the purposes of cryptocurrency mining as it is an “unsustainable practice that does not fit with the business model.”
At the time when the mining processes in all possible parts of the world grow, cryptocurrency has started the dominant interest of a number of influential bankers and economists. The previous U.S. chair of the Federal Reserve, Janet Yellen, claimed that Bitcoin is a “highly speculative asset” that “doesn’t constitute legal tender.” The Executive Director of the Oesterreichische Nationalbank, the Central Bank of Austria, was in solidarity with this position. Kurt Pribil commented that “Bitcoin cost is a real fake.” French and German ministers of finance have also discussed the issues of education and risk management, and want to offer limitations on BTC at the Argentinian G20 meeting in March.
The head of International Monetary Fund Christine Lagarde thinks that globalized cryptocurrency regulation will be very important and “inevitable,” towards work in the dark markets rather than crypto itself. President of the European Central Bank (ECB), Mario Draghi, has a more pleasant attitude, saying that “banks will show positive interest” and that the ECB cannot and will not regulate BTC.
Arizona state decision-makers also have better approach towards cryptocurrencies. A bill has passed into legislation that gives an opportunity for taxes to be paid using cryptocurrencies. A number of Libertarian U.S legislators have already agreed with the campaign of the payments in BTC, including; Colorado Democrat Jared Polis in 2014, Kentucky Republican Rand Paul in 2016, and most recently, Missouri Republican Austin Petersen.
The European Union Agency for Law Enforcement Cooperation (Europol) and other police agencies are still concerned more on illegal activities that involve cryptocurrencies. The Executive Director of Europol, Rob Wainwright, comments that around 3-4% of the £100bn in illegal procedures in EU are laundered through cryptocurrencies.
In the U.S., a representative of Ohio states was arrested for using a fake ID ring where US$4.7 million of BTC was confiscated. In Russia, a number of well-known researchers were arrested for utilizing an atomic computer to mine BTC. Computers within nuclear companies are seldom connected to the net as a safety activity against hacking. On the other hand, the researchers came to the idea to connect the laptop and were immediately arrested.
In less nefarious bitcoin adoption this week, real estate sales for BTC transactions also keep growing. A company from Florida finished its third Bitcoin-only activity, selling a cottage in Miami for 41.35 BTC, or US$338,878. A previous bitcoin-only Miami transaction included a cottage, which costed 33 BTC, or US$547,000. 50 splendid flats were purchased with the help of BTC in Dubai as well, with one buyer taking 10 units.
Many financial institutions outside the U.S.A. started to prohibit BTC transactions with plastic cards, including Ireland and UK. Pantera Capital CEO, Dan Moorehead, commented that, “there’s such an institutional appetite to get exposure to this. It’s a half a trillion dollar asset class that nobody owns. That’s a pretty wild circumstance.” Financial and economic traders are earning great money with crypto through CME’s BTC cash-settled futures.
Exchange traded volume this week has been led by U.S. Dollar Tether (USDT), U.S. Dollar (USD), and Japanese Yen (JPY) trading pairs.
Nowadays the BTC financial picture is mainly neutral, backed with high time spent. Technical indicators, like the Ichimoku Cloud, Exponential Moving Averages (EMA), Relative Strength Index (RSI), Pitchfork, and other table trends facilitate to determine entry and exit points, as well as the state of the trend.
The Ichimoku Cloud on the table that is issued once or twice per week is still growing, but its signs do not give any big entry or exit signals. This shows an important soaring trend with a complete momentum reset. Bullish trend is likely to remain if the 50 level on the RSI continues as support. The previous weekly candle formed a dragonfly Doji, a bullish reversal candle, which will be supported as a reversal following a consecutive green candle this week.
The Ichimoku Cloud Although the signs represented on the current chart would normally cause a short entry, the distance of price from the Kijun says that the asset remains heavily oversold. A normal short entry would start when the cost returns to the Kijun. This would indicate bearish continuation.
The following long entry signal indicated by the Ichimoku Cloud in February, will not trigger until all its metrics flip bullish again. This may not happen till the beginning of March. The Kumo twist on March 6th is the zone with the highest probability of the cost overgrowing the Cloud. If price is below the Cloud at that time, it will treat this zone as a magnet for upward momentum. Price is also currently near but below the 200EMA, a litmus test for trend status.
Buying in the current zone comes with the risk of a bearish invalidation of the Pitchfork. A significant break below the lowest diagonal support would invalidate the Pitchfork entirely. The upside potential is a return to the median line, followed by a test of the upper limit.
A bullish reversal pattern, the inverted head and shoulders, with a 1.618 fib extension and measured moves of US$11,500 and US$13,105, continues to form. The horizontal levels of this pattern strongly correlate with support and resistance levels from previous order blocks.
Lastly, market trends are tightly connected with the cryptocurrency exchange OKEX (previously OKcoin) quarterly futures expiration dates. January and July have forecasted the start of relative declining reversal sessions (red), when in April and October the trend has preceded the start of relative bullish reversal periods (green). This has occurred irrespective of the macro trend.