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Vildana Hajric

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Bitcoin’s starting the week on the right foot after its worst week since November. Now, a number of technical indicators are signaling the potential rally may have further room to run.

On Monday, amid a rally of more than 4% to $8,886, Bitcoin retook its lower band, according to the Trading Envelope Indicator, a gauge that smooths moving averages to map out higher and lower limits. It may potentially test the upper limit, which could bring the coin to around $10,600. Bitcoin posted a similar move in mid-December, when it breached its lower band and rallied more than 10% in the ensuing week.

In addition, Bitcoin’s Stochastic line is nearing the oversold level of 30, potentially further bolstering the chances of a short-term rally. Assets are considered oversold if the gauge drops below 30 and overbought if the it exceeds 70.

The largest cryptocurrency is coming off its worst week since Nov. 24, having dropped almost 14% through Friday. Arguments that the largest digital token acts as a place of shelter during market turmoil diminished last week as Bitcoin slumped amid an intense bout of equity-market selling. Still, many investors are betting it will continue to recover as the coronavirus starts to impact global growth prospects.

“Conversations are resurfacing about Bitcoin being perceived as a safe haven asset during global instability,” said Don Guo, chief executive officer of Broctagon Fintech Group. “You can see why — crypto isn’t bound by international borders or trade relations and, if this continues, we could not only see the price of Bitcoin skyrocket.”

Bitcoin was up 4.1% as of 9:40 a.m. in New York on Monday to trade around $8,863. Other cryptocurrencies also gained, with EOS rising more than 3% and Bitcoin Cash advancing 4.1%.

— With assistance by Kenneth Sexton

Author: Vildana Hajric

Source: Bloomberg: Bitcoin’s Rally May Have More Room to Run, Technicals Suggest

The U.S. Securities and Exchange Commission disapproved the last proposal for a Bitcoin exchange-traded fund, likely destroying any remnants of hope from digital currency fans that a fund would get the green light this year.

The SEC denied an application Wednesday by Wilshire Phoenix and NYSE Arca Inc. to list a fund that wanted to mix Bitcoin and short-term Treasuries, according to an order posted on the regulator’s website. Bitcoin dropped more than 6% to about $8,819 as of 4:13 p.m. in New York.

“The Commission concludes that NYSE Arca has not established that the relevant Bitcoin market possesses a resistance to manipulation that is unique beyond that of traditional security or commodity markets such that it is inherently resistant to manipulation,” the regulator said. A Wilshire representative didn’t immediately reply to a request for comment.

The SEC has long urged issuers to address a wide array of risks and concerns associated with a potential crypto fund, including manipulation, liquidity and custody issues.

In a dissenting statement, Commissioner Hester Peirce, who is a proponent of cryptocurrency products, said the disapproval leads her “to conclude that this Commission is unwilling to approve the listing of any product that would provide access to the market for Bitcoin and that no filing will meet the ever-shifting standards that this Commission insists on applying to Bitcoin-related products—and only to Bitcoin-related products.”

Wilshire’s proposal to mix Bitcoin with T-bills was meant, in part, to cushion against crypto volatility. The firm’s proposal was the last seeking approval from the U.S. regulator after a number of others were rejected or withdrawn. It’s a far cry from two years ago, when a mass of would-be issuers were duking it out to be the first to market.

“I didn’t see any viable reason why this would be accepted when others were denied,” said James Seyffart, an analyst with Bloomberg Intelligence.

Here’s what other market-watchers are saying:

“Bitcoin ETFs make sense based on the efficiency of the ETF investment wrapper, but we understand the regulators stance on surveillance and market manipulation concerns,” said Frank Koudelka, global ETF product specialist at State Street. “We are excited about the prospects for ETFs leveraging the blockchain, regardless of if they are digital currency or traditional asset classes. This ultimately provides the ability to broaden distribution and enhance efficiency.”

— With assistance by Benjamin Bain, and Jesse Westbrook

Author: Vildana Hajric

Source: Bloomberg: SEC Quashes Dreams of Bitcoin ETF With Another Rejection

Bitcoin’s trading around $9,000 once again but technical indicators show it may have gone up too far, too fast.

Based on the GTI Vera Band Indicator, which tracks upward and downward trends, Bitcoin’s last price is far above the upper-band limit, signaling the coin is in an positive trend. However, similar instances in the past — including twice so far this month — have led to a mean reversion, which could push the coin back to the $8,500 level.

This week, Bitcoin rose to its highest level since early November, reaching as high as $9,182. Since Friday, its gained more than 7%. Some analysts and crypto enthusiasts suggest the digital currency has benefited as a safe-haven play amid ongoing concern over the spread of the Wuhan virus, which has killed more than 100 people. Anxiety over the spread of the virus on Monday saw the S&P 500 post its worst decline in nearly four months.

“The Bitcoin bid, fueled by declining equity prices amid coronavirus concerns, is indicative of crypto’s growing acceptance as a risk-off diversifier,” Mike McGlone, an analyst with Bloomberg Intelligence, wrote in a note Tuesday. “If the stock market has a more enduring decline, Bitcoin is poised to be a prime beneficiary.”

Bitcoin extended its rally on Tuesday, rising as much as 2.7% to trade at $9,182 in New York. Peer coins, including XRP and Bitcoin Cash, each gained more than 2%, while the Bloomberg Galaxy Crypto Index rose 2.2%.

Author: Vildana Hajric

Source: Bloomberg: Bitcoin Technicals Suggest Monster Rally Went Too Far, Too Fast

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