CFDs are complex instruments and come with a high risk of losing money rapidly due to leverage. 69% of retail investor accounts lose money when trading CFDs with this provider. You should consider whether you understand how CFDs work and whether you can afford to take the high risk of losing your money.
Open account
☰
CFDs are complex instruments and come with a high risk of losing money rapidly due to leverage. 69% of retail investor accounts lose money when trading CFDs with this provider. You should consider whether you understand how CFDs work and whether you can afford to take the high risk of losing your money.
Open account
✖

Is Bitcoin setting up for another December turn

November 24, 2019 11:10 PM

A wild ride for cryptocurrencies and their headline act, Bitcoin last week. After opening near $8,500, Bitcoin plummeted below $7000 for the first time since May. The overall market cap of the top 100 cryptocurrencies has dropped from more than $350bn in late June to $195bn at the time of writing.

The catalyst for the fall appears to be China-related as the Peoples Bank of China (PBOC) released a statement late last week announcing new steps to uphold its ban of cryptocurrencies and said that  “Investors should be careful not to mix blockchain technology with virtual currency,”. The clarification comes following a Bitcoin rally in late October after Chinese President Xi Jinping said China should “seize the opportunity” of blockchain technology.

Fuelling the price decline last week rumours that Chinese police had raided the offices of cryptocurrency exchanges Binance and Bithumb. Both exchanges have subsequently denied the claims and a spokesman for Binance has since confirmed the exchange doesn’t have “fixed offices in Shanghai or China.”

While it would have been nice to have kept our excellent track record in place in Bitcoin, it wasn’t to be. Bitcoin has gone through the $7,200 stop loss in the long Bitcoin trade recommendation in this article  https://www.cityindex.com.au/market-analysis/china-spurs-bitcoin-revival/.

Technically, we continue to view the sell-off from the 13880 high as corrective pullback and this suggests at some point in time the Bitcoin uptrend will resume. A possible clue as to the timing of the rally, Bitcoin has made medium term highs and lows in December the past two years. Firstly falling from the 19666 high in December 2017 before rallying from the 3122 low in December 2018.

As such, we would allow for the current sell off to continue before looking for some signs of stabilization in December. Potentially this will involve a test of trend channel support $6000 area and should a rally back above the 200-day moving average $9,400 occur, it would suggest the uptrend has returned. Conversely, should Bitcoin fall much below the 200 week moving average at $5000, it would severely jeopardize prospects for a recovery.

Source Tradingview. The figures stated areas of the 25th of November 2019. 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

StoneX Financial Ltd (trading as “City Index”) is an execution-only service provider. This material, whether or not it states any opinions, is for general information purposes only and it does not take into account your personal circumstances or objectives. This material has been prepared using the thoughts and opinions of the author and these may change. However, City Index does not plan to provide further updates to any material once published and it is not under any obligation to keep this material up to date. This material is short term in nature and may only relate to facts and circumstances existing at a specific time or day. Nothing in this material is (or should be considered to be) financial, investment, legal, tax or other advice and no reliance should be placed on it.

No opinion given in this material constitutes a recommendation by City Index or the author that any particular investment, security, transaction or investment strategy is suitable for any specific person. The material has not been prepared in accordance with legal requirements designed to promote the independence of investment research. Although City Index is not specifically prevented from dealing before providing this material, City Index does not seek to take advantage of the material prior to its dissemination. This material is not intended for distribution to, or use by, any person in any country or jurisdiction where such distribution or use would be contrary to local law or regulation.

For further details see our full non-independent research disclaimer and quarterly summary.

CFDs are complex instruments and come with a high risk of losing money rapidly due to leverage. 69% of retail investor accounts lose money when trading CFDs with this provider. You should consider whether you understand how CFDs work and whether you can afford to take the high risk of losing your money. CFD and Forex Trading are leveraged products and your capital is at risk. They may not be suitable for everyone. Please ensure you fully understand the risks involved by reading our full risk warning.

City Index is a trading name of StoneX Financial Ltd. Head and Registered Office: 1st Floor, Moor House, 120 London Wall, London, EC2Y 5ET. StoneX Financial Ltd is a company registered in England and Wales, number: 05616586. Authorised and regulated by the Financial Conduct Authority. FCA Register Number: 446717.

City Index is a trademark of StoneX Financial Ltd.

The information on this website is not targeted at the general public of any particular country. It is not intended for distribution to residents in any country where such distribution or use would contravene any local law or regulatory requirement.

© City Index 2024