The ‘Buy Bitcoin: USD/BTC (BTC=X)’ Argument

The ‘Buy Bitcoin: USD/BTC (BTC=X)’ Argument

The ‘Buy Bitcoin: USD/BTC (BTC=X)’ Argument

Whether you’re cheering for its demise or not, the liberal vision of the nation-state is under threat, and that’s sowing chaos. On one side, the Internet has enabled new, transnational groups with loyalties that transcend their countries’ interests. On the other, this dislocation has fostered a backlash from defenders of the pre-liberal order of hardline state power.

This same past week’s images of China’s violent crackdown in Hong Kong, where protesters desperately attempted to neutralize Beijing’s frightening digital surveillance, is a prime example. Another is Trump’s militaristic rhetoric.

But here’s what also wasn’t around 80 years ago: cryptocurrency. People who worried in the 1930s about currency debasements, ethnic conflict or war destroying their wellbeing often turned to gold as a safe haven. Gold represented an ancient, widely recognized store of value whose properties, including its supply, were outside of the influence of turmoil-stoking governments.

But now a citizen seeking a hedge against such threats has a digital alternative, one that’s far more appropriate for the Internet age, a vital bulwark against the centralized control of both banks and large Internet companies and against wayward governments.

That alternative is bitcoin, whose digital properties are similar to those of “hard currencies” like gold: it’s hard to mine, provably scarce, fungible and transferable. Even better, as bitcoin bulls like to point out, the upcoming halving in bitcoin’s supply will put its stock-to-flow ratio above that of gold. (I’d say that should be priced in, however; I don’t see it as a reason, in and of itself, to buy now.)

Why bitcoin and not some more recent, technically superior altcoin? Because, as with gold’s preeminence over silver as a safe haven, bitcoin has by far the biggest community of believers in its capacity to protect a holder’s wealth from political incursions. It’s this shared belief that gives bitcoin its power, a point poorly understood by those who erroneously argue that software forks undermine its digital scarcity. (Exhibit A: Bitcoin Cash’s market cap compared with bitcoin’s.)

Herein lies the “buy bitcoin” argument for this current moment: that, regardless of your own beliefs, a sufficiently large number of other people now believe bitcoin to be the best way to hedge against political-economic turmoil in the global financial system.

It’s tempting to say this mindset helped drive bitcoin’s price higher after Monday’s currency market news. But it’s always been difficult to correlate bitcoin’s day-to-day movements to real-world move.

More important is the fact that bitcoin has not sold off in recent months as other real-world assets have come under pressure – a result that possibly counteracts an argument I made a year ago that global financial market jitters would first spark a selloff, as bitcoin would be lumped into widespread risk aversion, with a recovery only once it had established its credentials as hedge against politics. Perhaps the departure of many newbie speculators who bought in during the crypto mania of 2017 has left the market in the hands of a more die-hard core of true-believing HODLers.

Still, it would be foolish to assume the path from here is straight upwards. One major risk to that view is that of a profound, sweeping regulatory backlash, a jump into what Nic Carter of has labeled the phase of “full criminalization.”

The idea is that governments, seeing investment outflows accompanying the financial turmoil, will worry about bitcoin enabling capital flight and so seek to ban it or at least introduce restrictions on exchanges that make the on- and off-ramps very difficult to use.

For sure, a global regulatory backlash can’t kill the censorship-resistant “Honeybadger of money,” which is these kinds of situations do make a strong case for owning it in the long run.

But for now the best prediction is that market volatility will continue.

Overall, the bias in prices is: Upwards.

By the way, prices are vulnerable to a correction towards 10,397.90.

The projected upper bound is: 13,212.44.

The projected lower bound is: 9,491.41.

The projected closing price is: 11,351.92.

Candlesticks

A black body occurred (because prices closed lower than they opened).
During the past 10 bars, there have been 6 white candles and 4 black candles for a net of 2 white candles. During the past 50 bars, there have been 28 white candles and 22 black candles for a net of 6 white candles.

A spinning top occurred (a spinning top is a candle with a small real body). Spinning tops identify a session in which there is little price action (as defined by the difference between the open and the close). During a rally or near new highs, a spinning top can be a sign that prices are losing momentum and the bulls may be in trouble.

Momentum Indicators

Momentum is a general term used to describe the speed at which prices move over a given time period. Generally, changes in momentum tend to lead to changes in prices. This expert shows the current values of four popular momentum indicators.

Stochastic Oscillator

One method of interpreting the Stochastic Oscillator is looking for overbought areas (above 80) and oversold areas (below 20). The Stochastic Oscillator is 23.3144. This is not an overbought or oversold reading. The last signal was a sell 5 period(s) ago.

Relative Strength Index (RSI)

The RSI shows overbought (above 70) and oversold (below 30) areas. The current value of the RSI is 56.16. This is not a topping or bottoming area. A buy or sell signal is generated when the RSI moves out of an overbought/oversold area. The last signal was a sell 46 period(s) ago.

Commodity Channel Index (CCI)

The CCI shows overbought (above 100) and oversold (below -100) areas. The current value of the CCI is 38. This is not a topping or bottoming area. The last signal was a sell 3 period(s) ago.

MACD

The Moving Average Convergence/Divergence indicator (MACD) gives signals when it crosses its 9 period signal line. The last signal was a buy 11 period(s) ago.

Rex Takasugi – TD Profile

FOREX BTC= closed down -63.570 at 11,347.550. Volume was 60% below average (consolidating) and Bollinger Bands were 18% wider than normal.

Open     High      Low     Close     Volume___
11,378.25011,611.00011,258.20011,347.550 37,017
Technical Outlook 
Short Term: Neutral
Intermediate Term: Bullish
Long Term: Bullish
Moving Averages: 10-period     50-period     200-period
Close: 11,469.36 10,932.58 6,875.20
Volatility: 59 105 78
Volume: 85,107 93,620 80,642

Short-term traders should pay closer attention to buy/sell arrows while intermediate/long-term traders should place greater emphasis on the Bullish or Bearish trend reflected in the lower ribbon.

Summary

FOREX BTC= is currently 65.1% above its 200-period moving average and is in an upward trend. Volatility is extremely low when compared to the average volatility over the last 10 periods. There is a good possibility that there will be an increase in volatility along with sharp price fluctuations in the near future. Our volume indicators reflect volume flowing into and out of BTC= at a relatively equal pace (neutral). Our trend forecasting oscillators are currently bullish on BTC= and have had this outlook for the last 7 periods.

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