A Short-term look at BTCUSD

taken from tradingview.com

Bullish Scenario.
Bounce off ~$660–670.
Followed by retest of $700 then $740.
Continuation of major uptrend.

Bearish scenario.
Support @ $670 fails.
Retest of $640–650, then possibly $610, $580.
Below $580 would be ideal buying opp. but <$640 is not bad either
(we might see brief long-squeeze back to levels mentioned above).
<$500 = almost total retracement (unlikely).

Things to keep in mind

Block halving for BTC occurs ~ July 10, 2016 which is a very crucial moment for Bitcoin. Value of Bitcoin will have to increase by double since annual inflation will decrease by half. Keep in mind, in January 2016, Bitcoin was ~$350 so up double since then (currently almost $700), showing the possibility of block halving being already priced in to a degree. However, still a very important transition moment for Bitcoin. Significant number of miners will be faced with decision to continue to mine or stop mining. A significant decrease in hash power would be highly detrimental to Bitcoin since security is one of Bitcoin’s most valued aspects. In order to retain or increase security for Bitcoin, its value would have to remain the same or continue to increase.

Bitcoin’s hash rate over time (since creation).

Two other important aspects to keep in mind regarding block halving:

• increased efficiency for mining equipment could negate some of block halving price effects.
• since majority of BTC hash power currently comes from China, what is actual cost of operations for those mining farms? We already know that electricity rates is phenomenally cheap in China so the break even rate for a mining farm in China could be ridiculously low. Let’s assume $200/BTC . Even after block halving, break even rate would be $400/BTC which is significantly lower than current value of ~ $700/BTC. Solving this would give everyone a much more accurate assessment of Bitcoin’s floor/minimum value.

Update (June 17, 2016):

We saw a bounce off of $680 and then bullish scenario played out as expected.

Expecting another retest of $700 to squeeze out some longs.

• If $700 support holds, we will see uptrend resume.
• If $700 support fails, back to bearish scenario specified above.