BTC At Highs
Bitcoin continues to draw plenty of attention this week following a breakout to fresh record highs yesterday. The futures market surged to new highs above $127k following the breakout above the $121,500 level last week. The leading crypto coin has been a firm favourite amidst the fallout from the US government shutdown which began last week. Alongside the rally we’ve seen in gold and equities, Bitcoin (and the broader crypto space) has been a key beneficiary of bullish sentiment.
Shutdown Impact
Much of this is attributed to the view that the shutdown will increases the pressure on the Fed to ease further. While the market was already pricing in a furtehr .5% of cuts ahead of year end, pricing for a deeper cut by year end is now rising. While this narrative remains, BTC looks poised to continue higher near-term, in line with general improvement in risk assets we’re seeing.
Institutional Demand
Institutional inflows clearly reflect the bullish optimism in BCT at the moment. Last week saw the second largest net weekly inflows for BTC ETFs. Given that seasonally, BTC tends to see its strongest performance over Q4, it is likely that institutional names are looking to capitalise on this trend with BTC averaging Q4 returns of more than 85% since 2013. As such, there is plenty of reason to stay bullish BTC for now with only an unexpected solution (and end) to the shutdown likely to rock the boat here.
Technical Views
BTC
The rally in BTC has stalled just ahead of a fresh test of the bull channel highs. With strong bearish divergence in momentum studies, the risks of a correction lower cannot be avoided. For now, the bullish outlook remains while price holds above $121,500 with $136,395 the next target. If we break below that level, however, $108,855 will be the next downside marker to watch.
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With 10 years of experience as a private trader and professional market analyst under his belt, James has carved out an impressive industry reputation. Able to both dissect and explain the key fundamental developments in the market, he communicates their importance and relevance in a succinct and straight forward manner.