The MBA by Bastien Muster, Head of Data (30.8.2019)

MONTHLY BITCOIN ANALYSIS

July-August 2019

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Bitcoin Technical Analysis

Key technical indicators and observations.

Don’t miss our article on technical analysis that will give you the necessary information to enlighten you.

Current price (30.8.2019) $9’488

Closest Support / Resistance level $9’100 / $10’000

Change in price (monthly) -5.8%

Change in volume (monthly) -22%

BTC/USD (weekly): Price, 20-weeks moving average, Bollinger Bands, MACD lines, and volume. (Source: tradingview.com)

Last month, we had reviewed the market just before the price exploded to test the $14’000 resistance, the highest level recorded in 2019. This was followed by an extremely violent correction that saw the Bitcoin lose nearly $4’000 in a few hours.

As we mentioned in the last Monthly Report, when we move too far from the average, it is more and more likely to see a return to an equilibrium position like a spring that is stretched too much. Thus, the last two months have seen a significant return to the average with a downward trend followed by a sideways market.

When the key psychological support of the $10,000 failed, the price dropped sharply to $9’000 where a strong demand was found. During August, Bitcoin has held above $9’000 and has built a large support at $10’000. However, a downward triangle has formed in the last two months with a downward trend despite some significant recoveries.

For now, Bitcoin has held above $9000 and seems to have built larger support at $10,000 again. However, a downward triangle has formed in the last two months with a downward trend despite some significant recoveries.

One of these recoveries was induced by Bakkt’s announcement that it will propose physically-delivered future contracts. This expected announcement is bullish news for the bitcoin price because, for the first time, regulated and compliant futures contracts will be offered with delivered bitcoin and not cash. This will potentially increase the demand for Bitcoin as Bakkt will have to hold a large number of them.

Recently, the price has also reacted to announcements related to the trade war between the United States and China, which tends to show that Bitcoin is increasingly considered a safe haven.

At the time of writing, The price of Bitcoin dropped sharply by more than $600. To reach its lowest level this month. This has been probably partially induced by the expiration of the CME futures expiring this week. Indeed, these futures require a significant amount of cash to settle them.

2019 is still the year of Bitcoin. The altcoin market suffered and fell sharply compared to Bitcoin, which reached a level of nearly 70% in terms of dominance, a level equivalent to the beginning of 2017.What could we expect for the future?

In mid-August, we exceeded the number of days above $10,000 compared to 2018. However, a bearish trend signal has just been triggered: the MACD lines have crossed on the graph above indicating a probable change in momentum over the long term. Even if this indicator offers false signals, it is likely that we will enter a downtrend or consolidate above $9,000 in a sideways market if there is no significant catalyst in the medium term. Most of the time, when a triangle forms, a breakout is often observed when the support level and the trend line converge. The more often the support is tested, the greater the chance of a fall. Thus, after the drop observed this week, the level to follow is 9000–9100: if this support does not hold, it is likely that the $8000 mark will be rapidly approaching.

However, Bitcoin remains an exceptional currency in terms of its behaviour and it is possible that the opposite may be true. If the price can consolidate above $9,000-$10,000 for a long enough period of time with reduced volatility, it is likely that altcoins will resume their forward march at the end of the year. But for the time being, investors are focused on Bitcoin.

The coming weeks and the end of the year will be exciting to follow!

Don’t miss the free daily analyses provided by our experts in the SwissBorg Community application!

Glossary

Moving Average (MA): Trend-following indicator derived from the simple average of the prices on a given time period (for example 20 days).

Support/Resistance: Levels where the prices will tend to stop and could probably reverse its trend. A support level will likely tend to stop the prices dropping while resistance is a level where the selling pressure is higher and will likely stop the price rising. Once a support or resistance level are reached, the price will bounce back or break through the level and continue his actual trend.

MACD: The Moving Average Convergence Divergence is a trend-following momentum indicator that compares a short period and a longer period moving average. From these comparisons, a “signal line” and a “MACD” line are constructed. Multiple information can be extracted from this indicator. In particular, when the “Signal” and the “MACD” are crossing, this indicates a probable momentum change between “bulls” and “bears”.

Alex Fazel, Head of Communications, Reports

One of the primary focuses in the U.K. was to create a communications strategy and execution plan to effectively build momentum ahead of the Wealth App launch in Q4, 2019.

The timing of the marketing campaign will be critical, and we will focus on delivering one key update a week, gradually increasing the intensity and importance of the news.

Japan Update

It is not without regret that we have to announce the down-sizing of our Tokyo branch. This is in no way a reflection of our relations with our wonderful Japan team in Tokyo, but rather because of legal obstacles that make it difficult for us to engage in business in Japan at the present time.

We want to reassure you by sharing some information so that you can better understand the benefits of this decision for the community.

In terms of output, we have managed to build an active community across Japan and have made strong relationships with many wonderful people, not only in Japan but across Asia. So, we have no regrets.

The primary concern that forced us to decide on closing our Japan office is the high level of uncertainty in terms of acquiring the virtual currency exchange license and our ability to promote our SwissBorg Wealth App.

In terms of costs, the budget, just for growing the team, would at least double to be eligible for a license that we are not likely to receive for another year.

Our Wealth App does not operate as a regular exchange. The business model, the sophisticated technology and the cybersecurity do not fit the general requirements set by the FSA, and for those reasons, we will not be able to receive a license in Japan the near future.

The cost of the VC license, as well as the time-consuming nature of it, made it an economically non-viable venture at this moment in time.

This does not mean that we have abandoned our Japanese token holders, we hold them dear and hope to deliver the promises we outlined at our ICO.

This budget can be allocated more strategically and awarded in zones like Switzerland and Malta, where we are a member of VQF (the biggest Swiss SRO) and applying for the VFA License under the transitionary period granted to us on October 2018. We want to focus on zones where we are confident that we have high chances of getting a broker/dealer license by the time we release the Wealth App. At the moment we are concentrating efforts on hiring in these regions and have found some great talent in the past two months. We also have recently found a very competent multilingual customer support team to ensure excellent user experience for our future app users and community members.

We will also allocate this budget to marketing and ensure the right timing to build a powerful momentum before the launch of the Wealth App. Many community members have complained about the lack of marketing, and in fact, they were correct. We only spent roughly $50K in marketing for the entire year, and most of the downloads of our Community App were organic. The good news is we will be able to take advantage of this unused budget with the right timing to generate sustainable growth and not use the pump and dump and short-term schemes before we release the Wealth App.

So now that the strategic decision and budget allocation has been clarified, it is important to understand what is the vision for Japan:

Find a way for Japanese community members to benefit from our Wealth App and products. Bring the price of CHSB back to ICO levels and eventually help people make gains.

How?

Although v.1 will initially be available for community members outside of Japan and mainly in the EU zone, in terms of technology, we can already integrate a Japanese Yen fiat currency gateway on the Wealth App, and we are very actively looking to find solutions for v.2. We also have opened conversations with licensed exchanges in Japan interested in seeing demos of our tech and will update you accordingly.

For 2) We will be announcing the latest CHSB token utility with a robust ‘go-to’ market strategy. We have never been more confident with our high-level strategy and believe it could potentially push the buy-side of the CHSB quite heavily.

We want to show profound gratitude to the 3000+ Japanese CHSB token holders for trusting SwissBorg’s vision and mission. We are very close to Q4 and expect a bright future.

We want to assure all of you that we are working very hard to build the best products for you and we are currently seeking new ways to make sure that all our Japanese contributors get access to our products.