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Tuesday Inferno market report

Tuesday Inferno market report

Analysis

BTC has been extremely stable – almost too stable. Yesterday that changed, at least a little.

 

The past two weeks have seen exceptionally low volatility. In fact, given the critical narrative over the course of 2018 that bitcoin is too volatile to have any meaningful use case, it is ironic that it has been more stable than the Dow Jones or Nasdaq, both of which have posted corrections recently. We have not seen such a period of stability since 2016, and the last weekly candle had less than a 2% range. Price has been confined to within $100 or so.

 

That changed somewhat yesterday, as sellers took over and BTC dropped sharply from $6,400 (Stamp) to just over $6,200, where it found its customary resistance and bounced back. It is currently trading around $6,250. This does not represent any significant development, since we’ve been here before already – many times.

 

Price has been bumping up against the daily 50MA for some time, but now sits below it; right now that 50DMA coincides with resistance at $6,400. It is also pushing right against the descending resistance line that has held since February, while the $6,000 floor established over the course of this year stays intact.

 

Of course, this situation cannot continue indefinitely – as we have noted repeatedly – and we must be reaching an endgame. Right now the most likely outcome appears to be more sideways, on low volume, with the market ‘breaking’ that down-sloping resistance level merely by drifting through it. $6k+ is the price the market has accepted for a bitcoin for a long time now, and it looks like further consolidation is on the cards. Smart players are picking up BTC at a price that has proven robust for many months.

 

Fundamentals haven’t changed and news isn’t making much difference. A bitcoin ETF still remains tantalisingly out of reach as the SEC’s process rumbles on. ICE/Bakkt will start trading BTC futures on 12 December. And the issues with Tether’s banking and the price of USDT seem to have been resolved. In all, the market is in ‘Wait’ mode. For what it’s worth, we believe this is where substantial opportunities lie – but don’t consider this trading advice.

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