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Bill Hubard 04 September ‘17

Bill Hubard 04 September ‘17

Bill Hubard 04 September ‘17

Monday, September 4, 2017 - 09:15
Bill Hubard 04 September ‘17

Bitcoin hits $5,000 mark

New Cryptos highs

*     Recent run ups in Bitcoin, Ethereum, and other altcoins have been substantial. Bitcoin briefly crossed the $5,000 mark on 2 September, followed by an 8.0% pullback (last trade at $4,605.29). Ethereum almost made it to $400 but ran out of steam and promptly dropped 18%. Litecoin also had a great week, but stopped just shy of $100 before reversing course back into the $80s. Dash managed to just make it to $400 before dropping 20%.

Bitcoin

*     Bitcoin crossed the $5,000 mark in trading on Saturday, fulfilling the expectations and predictions of a number of industry insiders. The rise was fuelled by recent news regarding geo-political issues after ANOTHER North Koran ‘incident’ and the search for a safe-haven other than gold. Investors have been removing funds from other stock indices as well as precious metals, and shifting them into crypto currencies, driving prices higher.

*      However, the peak price point was immediately followed by a substantial sell-off, as some large-scale traders sold large blocks in quick succession.  

Bitcoin rallies to $5,000 mark then drops on sell-off

Bitcoin rallies to $5,000 mark then drops on sell-off

*       Prices stabilized near the $4,700 mark after dropping as much as $400 on Saturday. However, more profit-taking ensued on Sunday when it fell as low as $4,579.0. The sell-off may well be linked to some substantial BTC holders selling large blocks. The pullback is to be expected, as many sell-orders likely had $5,000 as a price point, with investors and individuals taking profits at the high point. The advice to ‘buy the dips’ has been much touted, and this may well be just such an example.

Ethereum

*     Ethereum followed a similar pattern, moving lower on large volume, though not having hit an ATH during the course of trading. At one point a block of $730,000 was sold in the space of 5 minutes alone.

Ethereum - $730,000 sold in 5 minutes in crypto sell off

Ethereum - $730,000 sold in 5 minutes

Bitcoin and Cryptocurrencies analysis

*     Crypto currency has been on a tear this year, with the total market cap of all digital currencies soaring from $16bn to over $170bn in just 9 months. Bitcoin’s bull run actually starts a bit earlier, with prices trending upwards since their August 2016 low of $465.

*     Commentators such as Max Keiser and John McAfee had predicted Bitcoin would hit the $5,000 mark this year, though other analysts have sometimes been much more conservative. Many believed that Bitcoin was already in a “bubble” when it cleared $3,000. Although Bitcoin may well be bubbling, it’s worth noting that bubbles often last for longer than anybody might expect.

*     Saturday’s price performance comes as Bitcoin has been getting significantly more mainstream media attention. CNBC-TV, for example, recently aired a segment advising viewers to buy Bitcoin at what the network considered its new price floor - $3,600. Numerous other mainstream media outlets have run stories on Bitcoin, and venerable investment firm Goldman Sachs even began issuing price targets for the currency.

Good news for Bitcoin

*    In recent months, Bitcoin has met with a plethora of good news. Segregated Witness was finally formally locked-in and activated, putting to rest a contentious debate over Bitcoin’s scalability. The currency also survived a hard fork, when Bitcoin Cash forked away from the main network.

*     Additionally, the CFTC made headlines recently when they authorized LedgerX to create a regulated Bitcoin futures market. This increases the odds that the SEC, which had rejected two Bitcoin ETF proposals earlier this year, might reconsider its stance.

*     Further good news came over the weekend when the SEC announced that it was hiring Ropes & Gray attorney Dalia Blass to head up the division which regulates ETFs. Ropes & Gray is the law firm used by the Winklevoss twins to advise them on their Bitcoin ETF proposal. While Blass apparently did NOT work on the twins’ ETF proposal, she is undoubtedly familiar with it and may be more favorable than her predecessor.

*     With $5,000 being such a profoundly important barrier, Bitcoin may find itself rocketing even further. Media outlets will undoubtedly run even more stories, as $5,000 is a much more interesting number than the $3,000 or $4,000. Many traders were concerned about profit-taking once Bitcoin tapped the $5,000 level. If the expected level of selling does not occur, the market may find the confidence to boost prices even higher.

*     Legendary trader Masterluc recently predicted a near-term top of $15,000, followed by a giant bull run to $40,000+. Some have suggested even higher numbers - possibly $1.0m or greater - might be possible in the distant future. Price increases this year have contributed to a snowball effect for consumer adoption, with exchanges announcing surges in user numbers often rising more than 600% since January!!!

Information in this article does not constitute investment advice. Please remember CFD trading is risky, please research and trade wisely.

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