world banksThe Bitcoin price hit $400 in the Bitstamp exchange chart. Price is currently trading in the $390s and looks set to establish trade above $400 in the coming days. Meanwhile, delving further into yesterday’s special IMF report, a message to the banking sector emerges: Manage Perceptions.

Also read: Banking Elite Meet In Washington to Discuss Bitcoin Threat

IMF: Banks Should Manage Perceptions
Global Economy
Bitcoin Price Analysis
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IMF: Banks Should Manage Perceptions

In part three of the IMF’s Global Financial Stability Report entitled Risk Taking By Banks: The Role of Governance and Executive Pay, the IMF implores banks to manage public perception of their excesses:

…conflicts of interest between bank managers, shareholders, and debt holders can lead to excessive bank risk taking from society’s point of view.

The operative clause in the above quote – “society’s point of view” – is the true concern, and the excessive risk taking is not directly addressed in the report. Instead, policies to “limit risk” are suggested, now, five years into the crisis.

That the IMF’s suggested policies have not been in place, as a banking sector standard, since the dawn of the modern financial era is clear.

The current crisis is a banking crisis. It is the doing of the banks and therefore their responsibility. By asking banks to at least create the impression of responsible behavior, here at the mouth of the spinning vortex, the IMF is preparing for the post-crisis fall-out when public commissions of inquiry will demand answers.

The sensible thing for individuals and businesses to do is to move their funds and banking to the Bitcoin blockchain. The sooner, the better. The start of a rally in the Bitcoin price and IMF warnings of a coming liquidity crisis in banking and shadow banking should be reason enough. Bitcoin’s design is based on sound principles of computer science and the blockchain is a disruptive innovation precisely because it represents the solution to the out-dated, ineffective and centralized banking model of yesteryear.

Global Economy

Gold

Gold is not wasting time in getting to its target near $1,340. The wave structure to target should be a three-wave zigzag to complete Gold’s long-term corrective triangle. It is currently trading at $1,234 and looks set to achieve $1,247 or even $1,250 in the next day or two.

Gold bitcoin 14oct2014

S&P500

The S&P500 is tumbling down in the absence of QE. Life-support had kept the patient going for five years but now it looks like the market has wheeled its bed out the fifth-floor window.

S&P500 bitcoin 14oct2014

Selected Economic Data

  • UK Inflation Rate (CPI) year-on-year
    • expected: 1.4% (previous: 1.5%)

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Bitcoin Price Analysis

Asian Session

Time of analysis: 03h00 UTC
Price has reached the 200MA on the 4-hour Bitstamp chart. It looks set to push higher, although how much higher remains to be seen – there is overhead resistance in the form of two intersecting trendlines near $410.

Bitstamp 4-Hourly Chart

Bitstamp bitcoin chart h4 14oct2014

European Session

Time of analysis: 12h30 UTC
Price advanced above $400 to the rising trendline (grey) at $415 and is currently retesting the psych level ($400) before moving on.

Bitstamp 15-Minute Chart

Bitstamp bitcoin chart 15m 14oct2014

The 15-minute Bitstamp chart shows that reverse divergence has us going higher. Additional Fib extensions have been projected and there is an overlap level at $434, as well as multiple overlaps in the vicinity of $460. An update will be made once we reach $430 to assess the implication of correction there and if price is still underway to the major target at $460.

US Session

Time of analysis: 15h10 UTC
Still on the 15-minute chart here, we have an indication of another move higher.

Bitstamp 15-Minute Chart

Bitstamp bitcoin chart 15m 14oct2014 2

The magenta lines are showing regular divergence in MACD, but on the corrective move down the MACD formed reverse divergence in relation to the previous swing low – annotated with blue lines. Should price decline even further then additional reverse divergence is bound to occur in relation to the swing low marked with a red ‘X’.

Bullish view persists. Going higher to our defined targets.

Summary

No change to the bullish outlook: expect price to climb above $400 and to react to the rising support and resistance line now near $410. Upside targets remain:

  • 2.618 Fibonacci extension target at $460
  • potential target at the significant $500 level.

Once the current wave 1 is complete, expect corrective wave 2 to the downside. Analysis will alert readers to the onset of wave 2.

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CCN hosts a summarized Economic Calendar showing the week’s main data releases.

Readers can follow Bitcoin price analysis updates each weekday on CCN. In-depth analysis articles are published every Sunday.

Disclaimer

The writer is fully invested in Bitcoin via BTC-e and Bitfinex. Trade and Investment is risky but not as risky as some other things out there. Take care only to take action in the market when you are 100% sure of the outcome. CCN accepts no liability whatsoever for losses incurred as a result of anything written in this Bitcoin price analysis report.

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Bitcoin price charts from TradingView.
Images from Shutterstock.