≈ Bitcoin is all grown up! ≈
After a rough patch during the months of May through August, the Bitcoin futures have made a startling recovery. There are lots of folks that would say they always knew that Bitcoin would rebound and maybe they had the foresight or maybe they were just trading their hopes and potentially their book. Regardless of what folks were thinking the king of cryptos has made some serious moves in the last three weeks. The only question that comes to mind is this a self-fulfilling prophecy or perhaps there are other forces at work? Let’s explore!
The answer to the above question, in my humble opinion, is probably a combination of both the prophecy and some other forces as well. First the prophecy, I have heard an old wall street saying many times and it goes a little something like this… the cure for low prices is low prices. Essentially this means that if the price is low enough it will bring the buyers running in to bid it up and this, I believe is part of why the /BTC has made a decent move to the upside recently.
The other forces at work could be the anticipation of developments in the Bitcoin universe. One of the issues with trading the cryptos is that there are only really two instruments to trade directly on a regulated exchange. One can trade /BTC or /ETH on an actual exchange. Of course, there are many other ways to get involved with the cryptos through coin wallets or surrogates like MARA or RIOT. The problem with trading crypto through /BTC or /ETH is the margin requirements required to trade. This can be problematic for smaller trading accounts or those who don’t have permission to trade futures contracts.
We can always expect the market to step up to any demand when that demand comes strong enough. With institutional investors getting into the crypto space, it was only a matter of time before a trading product came along that would open the barrier to entry for more folks to get involved. That problem was solved this week with the creation of a Bitcoin ETF. BITO opened this week but its effects have been felt for the last few weeks, the anticipation of the SEC approval of this ETF could be part of the reason why the Bitcoin prices have been flying.
It sure seems like Bitcoin is quickly becoming mainstream and this can only help with the boosting of the price point.
Trade Well,
#TeamTackle.
Chart of the Day
/BTC Chart with RSI
This chart of the /BTC shows the dramatic reversal from August and the current extension of the gains potentially due in part to the approval of the new bitcoin ETF ($BITO).
Video of the day
How to use the Heat Maps to Analyze the Stock Market
Are you staring blankly at all of those charts wondering where to start your daily/weekly market analysis? We all have been there.
Today’s line up
Tales of a Technician
How I Trade Bitcoin
I first heard about Bitcoin years ago while listening to the Trading Justice podcast. I was intrigued enough to try opening a Coinbase account but had issues linking my bank account so I abandoned the idea. I think at the time bitcoin prices were sub-$1,000.
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Trading Justice Podcast Episode 447: The Bull Put Spread
In this episode, Tim and Matt discuss the vertical options strategy of the Bull Put Spread. Before that, the coaches analyze the current market conditions during the weekly skyline. Listen to the episode in the player below:
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