Bolivia bans Bitcoin

The Bolivian government banned Bitcoin in May, CoinDesk announced yesterday:

El Banco Central de Bolivia, the central bank of the South American nation, has officially banned any currency or coins not issued or regulated by the government, including bitcoin and a list of other cryptocurrencies including namecoin, peercoin, Quark, primecoin and feathercoin.

The decision to fully ban bitcoin puts Bolivia in unique standing in the international community, as other nations previously believed to be embracing restrictive policies – including China, Thailand and Russia – have since backed away from implementing similar measures.

Bolivia’s announcement is also unique within the context of decisions made by its South American neighbors. For example, earlier this March, a report suggested that The Superintendencia Financiera de Colombia (SFC), Colombia’s central bank, may have been seeking to implement a bitcoin ban.

However, despite worries from the local community, such fears did not come to pass. Colombia stopped short of the expected announcement, choosing instead to bar banks from working with digital currency companies.

Elsewhere in South America, central banks in Argentina and Brazil are permissive to digital currencies (…).

This is a major setback for investors in Bolivia but it doesn’t change much as far as the international picture is concerned. It is possible the country will follow in the footsteps of those countries which previously had banned Bitcoins but have since reneged. It’s too early to see this coming but we’ll be keeping an eye on more info about Bitcoin and Bolivia. 

For now, let’s move on to the analysis of charts.
 

On the BitStamp chart, we see that Bitcoin declined back below $600 yesterday. This means the next move up is not confirmed at this time. On Wednesday, we said:

We saw a move above $600 (solid green line in the chart) yesterday. This seems extremely bullish for the short-term if we look at the price action only. The volume is slightly more worrying since it was actually lower than on Monday. Because of that, we don’t think this is a signal to jump into the market right away.

This caution turned out to be warranted as Bitcoin has come down since then. The move yesterday took place on relatively low volume which doesn’t indicate that the move is lasting.

Today, we saw Bitcoin move down, but it has returned since then (this is written before 10:30 a.m. EDT). The volume is increased compared to yesterday but neither the action nor the volume confirms a move up. The fact that Bitcoin is dancing around $600 seems to indicate that moves in both directions are possible.

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