Hi Folks,

It has been a bitter week for bitcoin and other digital currencies led by Bitcoin which enter into bear market post dropping below USD4,000 support post a series of negative news.

4Sep17: China announces ban of ICO

12 Sep17: Jamie Dimon took a shot at bitcoin callling it a ‘fraud’ and it will eventually blow up.

14 Sep17: China government announces that top bitcoin exchange BTCC would close down following directives from government

15Sep17: Huobi and Okcoin to follow suit with all trading to stop by 30Oct17 and in the meantime no topup of fiat is allowed on these exchanges.

Our view

In view that China accounts for 23% of BTC trade and 70% of bitcoin mines. These news are detrimental and it seems to be a planned attempt to reduce BTC prices. However, BTC has been performing better than expected despite such harsh negative news. and we believe this shows that it is only bearish on the short term. It will still continue to go up due to its fundamentals

Store of Value, Limited supply There is a real need for it in countries with hyper inflation venezuela, Argentina as people’s money are shrinking Government would not be unanimous in their stand on digital currencies. India and Australia looking to legalize bitcoin. Japan legalize bitcoin as payment currencies Chinese crackdown on cryptocurrency is temporary to prevent cash exodus until they find a way to regulate it and prevent funds outflow. We believe BTC and other digital currencies will eventually be regulated through Centralized exchanges own by the Chinese government

Trading recommendation

Fibonacci Chart below suggest first support at USD3.3k. If this is breached prices may dropped to USD2.8k which in my opinion is a very strong support for BTC and I do not foresee prices dropping below USD2.8k. If support stabilizes between this range with no further negative news. It’s actually a good buying opportunity.

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