Bitcoin rallies as other safe havens fade
Tony Sycamore January 29, 2020 4:45 AM
After a 12% surge over the past 3 days, Bitcoin closed this morning at $9400, its highest level in almost 12 weeks. As fellow analysts, traders and cryptocurrency commentators debate the most appropriate tag for the December turning point in Bitcoin, a phenomenon we first identified back in November here we would prefer to focus on what lies ahead for the markets leading cryptocurrency.
After a 12% surge over the past 3 days, Bitcoin closed this morning at $9400, its highest level in almost 12 weeks.
As fellow analysts, traders and cryptocurrency commentators debate the most appropriate tag for the December turning point in Bitcoin, a phenomenon we first identified back in November here we would prefer to focus on what lies ahead for the markets leading cryptocurrency.
Common sense would suggest that the rally in Bitcoin is linked to the global spread of the coronavirus. However, the move in Bitcoin overnight was in sharp contrast to a round of profit-taking in more traditional safe-haven assets including gold and the Japanese Yen, following global efforts to contain the coronavirus and a round of solid economic data in the U.S.
Further undermining support for traditional safety havens, scientists believe we are approaching the peak contagion period for coronavirus, thought vaguely to be around the 8th of February. In Hong Kong, researchers have confirmed they have developed a vaccine for the virus. Due to the need for clinical trials, its introduction remains some months away.
Turning to the technical picture, there is evidence of a minor five-wave rally from the 6425 low on the 18th of December to this morning’s 9430 high. This development is significant as it confirms the longer-term uptrend has returned. It also provides another layer of confidence to the long Bitcoin trade idea we outlined in early January here.
Providing a dilemma, following a completed minor five rally, a pullback normally follows. However, in the big picture, we are looking for Bitcoin to retest the 13880 high from June 2019, before a move towards $14,000/$16,000.
In an effort to balance the short term/long term conflict and because I would prefer to not let a winning trade become a losing trade, I will raise the stop loss on my long position up to 8500 (daily closing basis). Please note, I will refrain from adding to the long position again as originally suggested in our article from early January.
Source Tradingview. The figures stated areas of the 24th of January 2020. Past performance is not a reliable indicator of future performance. This report does not contain and is not to be taken as containing any financial product advice or financial product recommendation
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