Bitcoin Looks Bullish, Break of $500 Needed to Confirm

NEW YORK (TheStreet) -- The bitcoin downward trendline connecting the highs on April 16, April 25, and May 1 has been broken.

Looking from a long-term perspective, the latest move up is just a blip in a downward spiral. The medium-term trend down, which started after bitcoin prices hit a high of $1090.01 on Nov. 30, is still intact. To consider the latest bullish move as anything more than a "dead cat bounce," a sustained break above the important psychological level of $500 would be needed. To the downside, a break of the swing low at $342.79 would invalidate the latest rally.

The China crackdown continues

The pressure by the People's Bank of China aimed at cutting off Chinese bitcoin exchanges from the country's financial system continues unabated. The latest move came from the Bank of China.

The bank stopped Chinese yuan deposits to BTC/China, leaving vouchers and cash as the only remaining sources of funding for the exchange. However, after weeks of these types of news, the market is paying less and less attention to each new report. The latest bank ban, on May 6, took prices down to only $12 and BTC/USD was quick to rebound, regaining all losses by the end of the day.

New survey finds that 66% of respondents plan to purchase bitcoins in 2014

A new survey by Second Market's public investment fund, Bitcoin Investment Trust, finds that 66% of respondents plan to purchase bitcoins in 2014. A larger 74% believe that bitcoin will become an alternative currency. The survey also found that as people learned more about bitcoin, they started to have a more positive view of the currency.

While 30% of people who first learned about bitcoin thought it was confusing and would never be adopted, upon learning more, 83% changed their mind to a more favorable view.

45% of respondents first heard about bitcoin in 2013. This number dropped to 22% from 2012. Social media and blogs were the primary source where people first heard of the fledging cryptocurrency, accounting for 35% of the total share. Family and friends were number two at 19%, followed by newspapers and magazines.

From a trading perspective, the most important section of the survey deals with the respondents purchasing plans. 53% said they have purchased bitcoins before. This is a very large figure and probably not representative of the general population as a whole. The survey was done on 1,000 individuals and focused on Wall Street, Silicon Valley, and bitcoin communities.

84% of the people who bought bitcoins in 2013, plan to buy more this year. This figure dropped somewhat for the population that was on the fence last year. The overall total is that 66% of respondents plan to purchase bitcoins in 2014.

This article represents the opinion of a contributor and not necessarily that of TheStreet or its editorial staff.

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