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Trading analysis by Darren Chu

Bitcoin (BTCUSD) Back Near November Breakdown Level

Bitcoin (BTCUSD) continued pushing higher this past week as it reaches the psychologically key 6000 whole figure level on some exchanges.  Significantly, BTCUSD has reversed losses since the November breakdown but will likely need to spend the next week or so consolidating near current levels before working off the overbought weekly and daily Stochastics.  The still bullish weekly and daily MACD suggest that a fair amount of buying on dips will continue during this week's consolidation as BTCUSD attempts a continuation of a bull flag/upchannel (on the daily chart). 

Industry Fundamentals

The market is increasingly shrugging off the fears around Bitfinex covering up losses with funds earmarked for backing Tether (USDT), especially as it has apparently already received commitments for USD 500M in its current raise to offset funds that according to some sources are frozen by US authorities.  With liquidity on USDT significantly higher than competing USD-backed, audited stable coins, the market may stick with using USDT longer than initially expected by its critics.  Longer term industry bulls are increasingly buying on dips as the sector overall gains interest from IBM's use of Stellar Lumens and a USD stablecoin as part of the World Wire blockchain network for regulated financial institutions (announced in March).  Ongoing anticipation is building for the coins being developed by leading messenger apps (i.e. Facebook/Whatsapp, Line, Kakao) and banks (i.e. JP Morgan, Mizuho, Bank of Tokyo-Mitsubishi UFJ), the upcoming launch of BAKKT and Fidelity's institutional offering and increasing regulatory clarity and recognition for STO exchange operators/issuers.

Bitcoin Fundamentals

BTCUSD bulls are increasingly encouraged by scalability improvements from the growth of the Lightning Network and the third Bitcoin block reward halving (which will reduce the amount of new BTC supply) scheduled for May 2020 but which has historically (for the 2 other halving events) seen bull runs begin roughly 1 year in advance of the halving date.

Bitcoin Weekly/Daily

As seen on Bloomberg, Refinitiv (Thomson Reuters), Factset, Interactive Brokers, Inside Futures, Amazon, Liquid (Quoine) and Zerohedge.

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