Crypto

In my last article, I wrote about the current unique relationship between gold and BTC. This correlation is one where gold leads BTC by four months. It began at the start of the pandemic and continues still. My mid-term forecast for Bitcoin futures using this relationship can be summed up in a quote from the article published September 13th -

The world’s favorite Cryptocurrency and the world’s favorite metal rarely move in synch. If anything, the two are known for having a negative correlation. But when looking at both markets’ historical price action, I found a relationship that is not so black and white.

GLD vs. BTC

Bitcoin as well as their futures on the CME are flirting actively with $50,000 as of 3:30 EST. This is significant because the current rally has been brought to a halt unable as of yet to breach this key phycological resistance area on a closing basis. If BTC can effectively take out resistance and move beyond $50k, then there is not much holding it back from reaching $60k by the end of the month.

Bitcoin broke above the resistance that had been curtailing its move up to $50,000. At approximately 6 PM EST BTC futures are trading up 4.13% or $2,015 at $48,715. All through this week, when alt. coins were rallying, BTC retested its support at $44,000 made up by the 100-day M.A. and the 38% retracement level. Yesterday prices took off from this level and traded right up to resistance, closing at the highest level since May.

Bitcoin’s rally has slowed down in the past few days, consolidating above a key level. Currently Bitcoin futures basis the Comex continuous contract (BTC #F) is trading up $880 or 1.9% at $46,375.

With BTC showing solid strength after yesterday’s gains, it appears as though there is nothing stopping us from getting to $44,000. As of writing, 4:22 PM Eastern standard Time BTC is poised to close near its highs on the day and solidly above resistance at $40,000. However, the next level of minor resistance is $42,000 which was only $500 or so away from today’s high.

As of 5:30 PM, EST BTC futures are trading up 4.68% ($1,775) on the day and trading at $39,740. This puts pricing right up against resistance at $40,000, an area that BTC has yet to solidly close above since falling below it on May 19th. There is also resistance at $42,000 and at $44,000, but a break above $40,000 would be significant and likely signal the start of another rally in Bitcoin.

With the FOMC meeting having concluded today and Chairman Powell signaling that tapering of their monthly purchases of mortgage-backed securities would occur in tandem with the raising of fed funds rates, this means that tapering is most likely not going to occur this year or next. Bitcoin traders took kindly to the news and pumped up the digital currency in the hour after the Fed released their statement.

How After yesterday’s tremendous rise in Bitcoin and Bitcoin futures, today BTC gave up about half of Monday’s gains, and currently, as of 2 PM Eastern Standard Time, the most active August contract of BTC futures is trading down a little over 4% or $1625 on the day at $37,835.