EXMO news

Trading analysis №2 by Darren Chu

Bitcoin (BTCUSD) Back Near Highest Level Since August

Bitcoin (BTCUSD) soared higher this past week, breaking above the psychologically key 7000 whole figure level.  Significantly, BTCUSD has reversed losses since the November final leg down of the bear, and is nearing a 9 month high.  However, the overbought weekly and daily RSI and Stochastics suggest a high chance for consolidation near current levels this week after the rejection at the same upchannel's resistance.  With the massive gains over the past 2 months, a deeper slide (this week) on profittaking towards upchannel support (on the daily chart) should not be ruled out.  

Industry Fundamentals

Fidelity's institutional crypto trading offering is expected to be live in the next few weeks, with retail brokerage giants Etrade and TD Ameritrade also preparing to launch trading in a few top coins.  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 1B in its current raise to offset funds frozen by US, Polish and Portuguese authorities.  With liquidity on USDT significantly higher than newer, competing USD-backed, audited stable coins due not in small part to USDT enjoying first mover advantage and the network effects from having the longest established history, the market appears to be largely sticking with using USDT which is listed on more crypto exchanges and offers superior liquidity.  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 launch of BAKKT has been delayed multiple times with no announced target go live date.  A race continues to launch STO exchanges and consultancies ahead of increasingly regulatory clarity on STOs.

Bitcoin Fundamentals

BTCUSD bulls are anticipating the third Bitcoin block reward halving (which will reduce the amount of new BTC supply) 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.  The Bitcoin blockchain itself continues to benefit from Lightning Network-related scalability improvements.

Bitcoin Weekly/Daily

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

Tradable Patterns was launched to demonstrate that the patterns recurring in liquid futures, spot FX and cryptocurrency markets can be analyzed to enhance trading performance. Tradable Patterns’ Crypto Weekly Outlook offers technical analysis on Bitcoin (BTCUSD), Ethereum (ETHUSD) and Ripple (XRPUSD/XRPJPY) and attempts to provide clues as to what might happen in the coming week.  Tradable Patterns also produces a daily newsletter on a subset of three CME/ICE futures (commodities, equity indices) and spot FX markets, which it considers worth monitoring for the day/week for trend reversal or continuation. For less experienced traders, tutorials and workshops are offered online and throughout Southeast Asia.

Tradable Patterns content does not constitute an advisory and does not make recommendations, but can supplement your own analysis.  Please do your own due diligence ahead of any trades.

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