Bitcoin analysis for 05/09/2017:
The recent slide in the Bitcoin price was related to the news from China where in the near future, the Chinese government may decide to regulate the ICO - the ability to raise capital through new ideas based on the Blockchain technology. Despite the fact that the Chinese authorities have not issued any official bill, it is alleged that they perceive the ICO as a violation of the law on fundraising. Citing an anonymous source from the Caixin report, the People's Bank of China conducted research on ICO. As a result, it was concluded that many of the ICO's capital-raising projects violate the law: "more than 90% of ICO projects have violated the law regarding illegal capital collection or fraud. Only 1% of projects participating in ICO actually allocated the capital to develop the idea." Moreover, the source states that the rulers and experts have come to negative conclusions on ICO-related projects. Although most of the projects are trying to prove that they operate legally, they actually collect funds, breaking the letter of the law.
Let's now take a look at the Bitcoin technical picture on the H1 time frame. The price has slid just below the 61%Fibo in order to bounce from the golden trend line support around the level of $3,992. Currently, to get back to the uptrend, the bulls will have to break through the resistance zone between the levels of $4,377 - $4,470 (around the level of old 38% Fibo). This zone is located around the 50% Fibo of the leg down, so this is the main reason, why it is so important. From the Elliott Wave Principle point of view, the level of $3,992 is the bottom of the corrective zig-zag pattern of the wave (a).
