TOP 3 Indicators Suggest Bitcoin Price Is Ready for a Massive Move
Bitcoin continues to bounce between $9,000 and $12,000…
But there are signs that change is on the way. Actually, there are three:
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the crypto Fear and Greed Index,
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the MACD and the Bollinger Bands Indicators on the weekly timeframe, and
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the formation of a pennant converging on the Bakkt Bitcoin futures launch day.
There’s also Bitcoin’s growing reputation as a safe haven, and a peak in Bitcoin’s rapidly growing hash rate.
So what do these indicators say about future changes?
Overall, it looks pretty bearish. The crypto Fear and Greed Index, a survey of investor sentiment on crypto, currently sits at 41, in the ‘Fear’ range, and a clear bear signal. Same goes for the weekly Moving Average Convergence Divergence, which has gone down into bear territory, signaling a loss of momentum. And, the bounds of the Bollinger Bands indicator, are tightening as sell volume overtakes purchase volume.
So, we’re in for further price drops?
Not exactly - after all, the $9,400 support has been tested at least seven times since June, and it hasn’t been broken - so there’s good reason to assume that for the time being, $9,000 is a hard floor. Add that to the fact the longer trade tensions (including the US-China trade war and Brexit uncertainty) continue, the more Bitcoin’s rep as a safe haven will grow.
How long will this "new normal" continue?
So the signals are pointing at the bears, but the fact that there’s a pennant consolidation on Bakkt’s launch day means that Bitcoin might just be on the cusp of rapid movement - but it does require a bit of patience to get there. Once the futures are launched - a historic first as the futures will be settled in physical Bitcoins instead of fiat - Bitcoin will be attracting a lot more institutional money and internets.
What We Think
While it is entirely probable that we’re going into a bear phase in the short term (which, by the by, indicates a great time to buy), there are too many things lining up for Bitcoin on a longer term perspective that makes any case involving a hard fall to $7,500 or below hard to believe. And miners, arguably the actors most invested in Bitcoin’s success, seem to agree - the fundamentals just keep getting stronger, and the hash rate has reached an all-time peak. So patience is the watch-word - and in the meantime, Buying into relatively cheap bitcoins seems like a good bet.
Facebook’s Libra Rouses EU Antitrust Interest
The EU isn’t mincing words when it comes to their distaste for Libra…
Judging by the comments made by Yves Mersch, a member of the Executive Board of the European Central Bank, who called Libra "beguiling but treacherous". Mr. Mersch made the comments at an ECB conference in Frankfurt, claiming that the digital currency planned to be released by social media giant Facebook has a ‘cartel-like’ structure .
Isn’t fiat also a cartel?
Not quite. While fiat money (or legal tender) is also issued by centralized authorities, like Libra, it’s issued in the name of a sovereign government - hypothetically answerable to its populace and subject, in many places, to democratic pressures. But as Mr. Mersch points out, Libra lacks even this hypothetical accountability - it is instead wholly answerable and subject to investor and shareholder pressure comprising the membership of the Libra association.
But crypto isn’t secured by sovereignty either?
Which is true, but a true crypto (unlike Libra, which isn’t) is also decentralized, solving the problem of trust by cryptographic equation instead of relying on a central authority. And the data revealed by crypto trading - purchase patterns, sentiment, and so on - isn’t usually private (though it can be obfuscated as with Zcash and Monero), while only the Libra Association will have access to the same for Libra, leaving it open to abusive monetization, in the words of Mr. Mersch.
Doesn’t private data give Facebook a lot more influence?
That’s a potential worry shared by the EU Competition Commission, which has opened a probe into the Libra project. Another big fear is that Facebook will leverage Libra to cut out other, smaller payment processors - though most of the biggest payment processors are already part of the Libra Association, including the two big names of Visa and Mastercard.
What We Think
The EU’s fears aren’t entirely unfounded. After all, there's a pretty good reason to think that Facebook, through Libra, has the potential of becoming a major banking player overnight. But it’s also clear that a lot of that fear stems from the perceived loss of authority that the ECB and other central banks will suffer, which may or may not be a good thing depending on point of view.
Crypto lobbies are working hard to disassociate themselves from Libra after the blowback, pointing out that Libra and cryptocurrencies like Bitcoin have entirely different philosophies behind them. At least one thing is certain for now - Facebook definitely won’t be making their Libra launch date.
China Plays Down Latest Trump Tariffs With Path to Talks Unclear. Bitcoin Surges Above $10K.
There’s no light at the end of the tunnel this time…
If you’re an equity with exposure to China, that is. The pain will continue, it seems, for the foreseeable future, after Chinese officials refused to confirm a planned meeting in Washington this month. This comes on the heels of new tariffs of 15% on $125 billion worth of good taking effect on Monday, causing a drop in Asian markets, with the Hang Seng Index losing 0.8% on yesterday’s open.
What’s China’s response to these latest tariffs?
They’ve been pretty proactive, opening a World Trade Organization case against the United States, claiming that the US has violated the terms of a consensus reached in Japan. This is the latest addition to two additional lawsuits opened at the WTO, which could ultimately result in sanctions against the US if its found to have violated WTO rules.
China has also applied tariffs of its own, while passing laws meant to strengthen Intellectual Property protection in China in an effort to address some of the US’ concerns.
Are there more tariffs on the horizon?
As it turns out, yes! Another 15% tariff on electronic products - mostly laptops and phones - is slated to hit on December 15th. And US President Donald Trump hasn’t ruled out escalating even further, as it seems increasingly likely that a deal won’t be reached by the US 2020 presidential election - in which case Trump may raise tariffs to boost his domestic image of ‘tough on China.’
What effects does the trade war continuation have?
Nothing positive if you’re a company that does business in China - even if you’re not a US one. Global growth has already taken a hit due to the trade war, and manufacturing across Europe and Asia has shown a contraction of activity, with major European manufacturers like Daimler and Renault cutting earnings forecasts.
What We Think
There’s only turmoil in the global markets as the trade war marches on, with all major US indexes down in pre-market trading, and European and Asian markets aren’t doing better.
Oil futures have lost 1.87%, as investors fled to safe-haven Bitcoin and Gold, with both gaining +10.28% and 1.1% over the past 5 days, respectively.
A big thing to watch will be the unfolding WTO cases against the US, as its result will have a huge impact on US trade relations and consequently, markets. But there is at least one asset isolated from all of that - Bitcoin may be well on its way to surging up as investors look for ways to diversify their safe-haven assets away from just Treasuries and Gold, and continue to increase their positions in cryptocurrencies.