The past week in the crypto markets was a tumultuous one to say the least. We saw BTC’s price action, on intraday Friday, experience a 7% drop from about $10,946 down to $10,205, swinging back up to around $10,500 as of the time of this writing, while ending the week up 10%. If we were to refer back to the Chart of the Week from the September 1st article, prices are still consolidating near the end of the symmetrical triangle formation with no immediate confirmation of a breakout or breakdown. So to all you traders out there, be careful. Expect some choppy waters ahead as we head deeper into the month of September, which historically is always a down month for the traditional financial markets.

As for the rest of the alt coin markets, the top 10 alt coins, besides BTC, had a positive week with gains in the mid to high single digit range. EOS experienced a late week surge with the highest gain of around 10%, possibly due to its announcement of Upland, a blockchain collectible game, leveraging the EOSIO platform. Stellar (XLM) finished the week in the red down about 2.7%. And as we continue to see BTC’s dominance rise, currently at 70% (a level last seen two years ago), speculators wonder when the tide will turn again, bolstering another alt season that occurred back during the same time which saw alt coin’s dominance go from 15% to 60% within four months. Although some may say 2017 was truly a one of a kind type of year in the crypto world, who’s to say it can’t happen again?

Likewise in 2006, who’s to say that the housing market will never crash? Who’s to say we would never repeat another recession like what we experienced in 2009? And who’s to say that a digital code, borne from the depths of that same recessions, would spark a new wave of currency (or currencies for that matter) payments. As we already cross the 10-year mark of this phenomenal bull run in the equity markets, sustainability has become a mere fragile thought rather than a possibility. There are economic indicators that suggest a slowdown is looming, while there are other indicators that defy the historical average length of a bull market. And when you have a respected investor such as Michael Burry, one of the “heroes” of the Big Short, come out and declare passive index funds to toxic subprime CDOs, the horizon may not be too bright. This could be a reason why we have seen safe haven assets such as gold and BTC rise in value. Investors are worried. Portfolio managers are worried. Short term stimulus such as cutting interest rates may just be putting a band-aid on a broken leg. Something’s going to give and who will be there to take the blame? We shall see…

chart of the week 9.9.19.jpg

Chart Analysis

This past summer, we have seen BTC bounce off the Fibonacci 0.382 level (which is around $9,400) four different times acting as a support level from the bottom of the market back last year. The bottom half of the chart shows where BTC bounced off (purple colored circles) this support level (neon green line) and the top half of the chart shows how the most recent fourth bounce has been playing out. If this last fourth bounce is any indication of what’s to come and if the price does not return to this level, look to see BTC rise even higher in the coming months. Fibonacci lines can be powerful indicators of where support and resistance lays. And when multiple “bounces” or “rejections” occur, usually we can expect a drastic price movement soon.

3 Things you should know about the Cryptocurrency Market

ONE
Last week, the large US asset manager VanEck Securities, along with SolidX Management, have used an SEC exemption, that will allow their long anticipated VanEck SolidX Bitcoin Trust ETF to be available for large institutional investors. VanEck, along with a few other names, have been in limbo from the SEC as to whether a Bitcoin ETF could ever be made available to retail investors. Although this isn’t a true ETF product, it sure is a step in the right direction allowing institutional investors access to this product through traditional and prime brokerage accounts.

TWO
The Bank of Denmark introduces the first negative 10-year fixed rate mortgage. Now this is not merely as important as the fact that negative interest rates are becoming the norm globally. And the US Fed has also contemplated whether or not it should go negative. A sight that has never been seen by the US.

THREE
Changchun Mu, the Chinese central bank’s new digital currency chief came out to state that the upcoming digital yuan will have features that trump Facebook’s Libra. Boasting about how the digital yuan will not need a bank account to be used and how it can be transferred to another person by placing two phones in physical contact.

 

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