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BTCUSD – 300 Days – $1000 to $7447

Market Analysis

BTCUSD, Daily

Its official, the CME group “the world’s leading and most diverse derivatives marketplace” in a press release last week announced that it  “intends to launch bitcoin futures in the fourth quarter of 2017, pending all relevant regulatory review periods. The headline was sufficient to propel the original crypto currency (BTC) to over $7,000 and on Friday it registered a new all time high at $7447.00.  BTCUSD has had an astonishing 2017, especially the last few months and weeks. Since the July low at $1808, a level at the time, many were saying was a break point and prices would move lower, the opposite has occurred, a strong double bottom ensued and price has gone exponential. Demand has skyrocketed on increased acceptance, initial establishment indifference mellowing and a wave of “me too” ICO’s. (Initial Coin Offerings).

The traditional technical analysis tools are somewhat irrelevant, Friday’s high pushes the RSI to over 80 (again), but each time this year the oscillator has screamed overbought the dip down is bought and the rally has continued. It took 136 days to double in value from $1,000 to $2,000, but it then doubled in value again in 86 days to $4000, before adding another 86% in value in another 80 days.

 

Exponential charts are never great, and it reminds me of the last great tech boom of 20 years ago, which peaked in Q4 1999, before abruptly bursting before the end of Q1 2000.  Star start-up technology companies were being valued at eye watering multiples, having never delivered a profit or any cash flow and making established companies like IBM, and even Microsoft and Oracle look positively pedestrian. As with all new technology, the early adopters and supporters remain bullish throughout and “this time its different”. The establishment, save the CME and some leading banks and regulators (notably New York) remain scepitical. The next key date is Monday November 13 when a major software upgrade known as SegWit2x takes place, more interesting and potential volatile trading ahead this week, no doubt.

 

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Stuart Cowell

Senior Market Analyst

HotForex

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