Inflight inflation
Bitcoin futures are trading up today although today's candle shows increased volatility with its range and looks like a possible dead cat bounce at the moment. BTC futures on the CME’s October contract are trading up $205 posting a 1.8% gain on the day. For trader’s that took our latest call, this is exactly the entry point they got long from and should still be long BTC as our protective stops were not hit. However, looking at the lower intra-day high as well as lower intra-day low tells us this is not the pivotal trading session, we were looking for to confirm that the October rally is still 100% intact.
With all things considered mainly the two primary factors that prompted us to recommend this trade; a second wave of covid-19, as well as recent dollar weakness seemingly, have not worked out in our favor. We indeed have seen a resurgence of covid-19 in Europe and certain parts of the United States and investors are flocking to safe-haven assets as such we have seen a rise in gold, the U.S. dollar and yes, Bitcoin too.
Today Bitcoin’s gain was in light of a very strong dollar up almost 0.5% today. This is helping to fill the void of some soft-footed investors as traders as well as institutions increasingly see Bitcoin as a way to hedge against inflation.
According to Cointelegraph, “MicroStrategy, a publicly-listed U.S. company on the Nasdaq, said it invested $425 million in Bitcoin. The company said it would treat BTC as its primary treasury asset, essentially as a hedge against inflation.”
With the stock market in both the U.S. and abroad are looking exceedingly eager for a correction this trend of a flight to safe-havens is likely to continue, and with the U.S. economy likely to continue contracting Bitcoin as well as gold I believe will likely be the benefactors of this.
If things continue to worsen on the pandemic front going into winter it will add up to a perfect storm for even stricter shutdowns and rising casualties. For those lucky enough to be unaffected are flying over ghost towns and for that onboard smart enough to invest wisely have been able to fly over this terrible storm and these last few days have simply been inflight turbulence.