After the initial flurry of excitement around Bitcoin when it first hit the scene, things have slowed down a little. However, recent analysis shows that bitcoin may well be ready to resume its rise, and those in the market should be paying attention.

Broken Resistance
While bitcoin was experiencing major resistance at around the $660 mark, it has recently broken out from this resistance, and the implications could be significant. More importantly, after breaking the resistance bitcoin has been showing support at new levels, meaning that underlying confidence is relatively high. This could provide the perfect platform for a steady boost in bitcoin’s value.

Long Term Picture
Longer term technical analysis shows that there are some qualifications that investors should take note of. Looking at the graph in a long term sense shows that bitcoin is still stabilizing from earlier volatility, and that this trend is likely to continue for a while. Investors should therefore be cautious, while paying attention to a short term uptick in bitcoins fortunes.

Global Markets

One of the main reasons to pay attention to bitcoin at a time like this is the high levels of volatility in global markets, and especially in global currency markets. The UK’s decision to leave the EU, brexit, cost investors $2 trillion dollars in one day, and the markets remain highly unstable as a result. The massive drop in the pound sterling, the biggest drop for decades, has left confidence in the currency at an all time low. This is fertile ground for a renewed interest in currency alternatives like bitcoin. Furthermore lack of confidence is also growing in Chinese currency, especially given the unclear role of government in moderating the intrinsic value of the currency. This will only intensify short term interest in bitcoin.

This instability is only likely to intensify in the near and medium term future, a presidential election in the US is likely to have broad impacts on the global economy. And the fear that this might cripple global markets is driving a move towards assets like bitcoin, that can allow investors to unshackle themselves from the conventional economy.

A Good Year
2016 has been good for bitcoin so far, and the currency has reached unprecedented levels in the last 2 years. What is most encouraging about this year as that the relative volatility of the asset has reduced, and there are more clearly defined levels of support than they have been in the past. This period of relative tranquility often suggests the possibility of a major breakout, and investors would do well to pay attention.

Given the increasing instability of global politics, it is clear that world markets and economic systems are going to take some time to return to normalcy. The possibility of stabilization looks increasingly distant, and at least in the short to medium term, political events are only going to intensify the sense of risk in conventional markets. Bitcoin provides a possibility to escape these negative trends, and to hedge against mainstream currency markets. The charts suggest that this places it right in line for a potentially big breakout, especially as it becomes more clear to investors that the risk does not lie in the alternative currency market but instead in the mainstream one.