EQUOS — Morning Update — December 7th
While crypto markets seem to — finally — stagnate a bit; traditional markets look more active.
On Friday, the S&P was up 0.8%, at a new high of 3,699. The Nasdaq also rose to record levels. The dollar made a meager attempt at a bounce back, after an abysmal descent. Gold, probably as a result of the dollar move, edged down, unable to break above the $1,860 resistance.
BTC is currently at $19,380, around 4.5% up from Friday’s close at $18,450. The RSI still points to some downward action and, as mentioned in earlier briefings, the longer we stay below $20K, the more impatient profitable traders will become, pushing them to eventually cash out.
Two technical factors are worth looking at as well:
- The commitments of traders (COT) which shows hedge funds net shorts levels have reached all-time high, meaning that they’ve doubled down and added to their bearish view.
- The whale deposit ratio on spot exchanges (so actual coins to be traded) is at the highest level in the past three months, suggesting coins are ready to be sold.
Another dynamic to notice is that prices have been relatively steady even in light of positive news.
Over the weekend we heard that MicroStrategy bought an additional $50 million worth of BTC at an average price of $19,427=renewed vows from an already invested company, this time at a higher price.
Much bigger news, from my perspective, is JD.com, the Chinese online platform, accepting China’s digital currency. This is not Bitcoin nor altcoins, but instead a blockchain-based yuan — which is still a major advancement in the adoption of blockchain technology.
We also took note of a Glassnode report showing about 10% of the BTC supply moving at a price above $18,000 (this suggests that investors are valuing BTC at that very price).
At the end of the day, I’m very bullish on the future price action of BTC but always wary of potential — and often unexpected — retracements. If and when they do come, it’ll be an opportunity to load up further.