Bitcoin takes off
Over the weekend Bitcoin continued its ascent to higher pricing. After opening just above $11,000 in the spot market on the BITSTAMP exchange positive gains were achieved on Saturday and Sunday leading to a gap on today’s open in the CME. The CME’s most active October contract opened today at $11,360 almost identical to most spot markets as this month is halfway over. By the end of the trading day BTC would gain another $300 to close around $11,655.
One of the major catalysts for this newfound momentum is a weakening U.S. dollar with further possible downside action in its future. This outlook is based upon the upcoming election as well as a possible second wave of corona virus cases.
The falling of the U.S. dollar could be exacerbated if the United states does not take the lead in digitizing or adopting a digital currency. China has already digitized the Yuan and made it much easier to transfer funds for its citizens. This if not met with a U.S. backed digital currency makes the Chinese Yuan a possible candidate for replacing the dollar in terms of international trade especially in underdeveloped countries.
Just take a look at our daily Heikin Ashi chart (in chart gallery on left) and you will notice that we have had three consecutive white (positive) candles each one bigger than the previous with the last two showing no lower wick. This tells us that the bullish momentum is not only still in play but growing.
For traders of BTC not currently in the market we are recommending that they enter from the long side at current prices and place their stops at $11,050 with a target of $12,000 or higher depending on the events spoken about above and how they affect the U.S. dollar.
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