itBit Bitcoin Market Report: August 2016

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It has been an eventful five weeks for the bitcoin and digital asset markets.  

Following the bitcoin halving event on July 9th, the price of bitcoin stabilized in the mid-600 range and remained there through most of July. Then on August 2nd, the massive Bitfinex hack which saw roughly 120,000 XBT (worth ~$72m USD) stolen sent the bitcoin market spiraling down. The price fell about 20% intraday but has since bounced back and sits just below $600 USD as of this writing.

BITCOIN Price Snapshot

Past Month (July 2016)  -8%
Year-To-Date  +35%


 

Bitcoin Market Moving Events 

MarketMovingEvents-July2016 

BITcoin Market Moving Events summary

7/9 Bitcoin halving, mining reward decreases from 25 XBT to 12.5 XBT  -2% 
7/12 SolidX seeks to launch Bitcoin ETF on NYSE  +2% 
7/20 Ethereum hard fork  -1% 
7/22 RBI (Reserve Bank of India) calls on banks to explore blockchain  -2.5% 
8/2 Bitfinex hacked, 120000 btc or ~$72m USD stolen in largest bitcoin exchange hack since Mt. Gox  -20% 

 

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August Price Outlook

Despite a huge pullback and the price briefly dipping below $500 in the aftermath of the Bitfinex hack, the bullish case for bitcoin lives on. Bitcoin reached a major oversold position during the price drop and its recovery since the incident on August 2nd reinforces the digital asset’s strength moving forward.

The price of bitcoin is still above its 200-day Exponential Moving Average (EMA) and is getting close to breaking back above its 100-day EMA. Further, the Relative Strength Index (RSI) and the Money Flow Index (MFI) are moving higher after becoming deeply oversold. The MACD is also looking to make a bullish crossover.

$600 is a critical resistance level in the short-term. If the price breaks through $600, getting above $615 then $628 could pave the way for a larger upside price move towards the mid-$600 level we saw throughout much of July.

 

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Key Macro Events to Watch in August

Bitfinex fallout

Will traders that lost bitcoins in the hack be made whole? How did this security breach occur? When will Bitfinex reopen for trading? These questions need to be answered sufficiently and in a timely manner to instill renewed confidence in the bitcoin ecosystem.  

 

Blocksize Debate

The longer the stalemate between core devs and miners continues, the more uncertainty that will persist in the markets.


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