Bitcoin analysis for 18/12/2017

The Financial Stability Oversight Council (FSOC), claims that Bitcoin and other cryptocurrencies do not pose a threat to existing financial systems around the world. In its 152-page report, FSOC has declared that virtual currencies are used only by a small number of consumers, and Blockchain technology offers potential in a variety of industrial applications. They said in the report: "Virtual currencies are used by a small number of consumers. We give slightly more loans of trust for much wider applications of the so-called technology of a dispersed book, which is the basis for innovation. It is worth noting that this wave is also a regulatory challenge because data storage is decentralized."

The opinion on digital currencies is somewhat surprising due to the negative attitude of several personalities from the financial industry. An example is the recent claim of the president of JPMorgan Chase, Jamie Dimon, about which I have written many times. The report also cites various monetary, geopolitical and cybernetic risks that are confronted with the global financial system. Bitcoin, however, has not been mentioned as a threat.

The virtual currency market has seen significant growth throughout 2017. However, despite phenomenal statistics, the total market value is still well below $ 1 trillion and is probably too small to be a systemic threat to the global financial sector. At the same time, the potential that can be released by cryptocurrencies is extreme.

Let's now take a look at the Bitcoin technical picture at the H4 time frame. The price has made a new high at the level of $19,661, which can be labeled as the top for the wave (5). The local support at the level of $17,894 has been tested and together with a weekly pivot at the level of $18.062 will now act as a strong support zone for the price. Please notice a strong bearish divergence between the price and momentum indicator, which clearly favors the downside correction scenario.


The material has been provided by InstaForex Company -