Commentary
Digital Assets +12% this week bringing total BTC gains in January to +32%, the best month since May of last year. Gains were broad based with 66% of the top 100 coins and tokens by volume ending the week higher.
Risk appetite was noticeably better with Alt Coins +13% this week led by big gains in ETC +31%, ZEC +24%, LTC +21% and EOS +18%. LTC and ETH ended north of their 200 day moving averages for the first time since 3Q19.
News flow was light this week. Top stories included: 1) GBTC a top 5 holding for Charles Schwab millennials, 2) OSL raising US$36M via share placement, 3) Bittrex securing an industry high US$300M in insurance coverage, 4) CME reporting US$100B in BTC futures trading since 2017 and 5) Singapore enacting new regulatory requirements.
Despite a 32% rally this month, BTC still looks far from overheating. BTC’s 20 day % change remains pretty tame at just 16% (vs previous price peaks > 50%). The current RSI of 69 isn’t particularly hot and crypto fear and greed has only just stepped north of its midpoint.
Given that Feb has historically been a very strong month for BTC and the relative dearth of volume between the current price and ~ $10,200, I think there’s a good chance that BTC could challenge $10,000 in the next couple of weeks. It’s also worth noting that BTC has tended to show a significant degree of follow through on sudden surges in monthly price performance; meaning that big MoM gains have tended to cluster and large, sudden MoM gains have tended to be followed by further gains.
News
- BTC beats everything but TESLA for Jan 2020
– BTC is on pace to finish Jan +32% vs Tesla +38%
– Seasonality chart below shows Feb is typically an up month for BTC, so maybe BTC can close the gap next month 🙂 - Charles Schwab Millennials hold more GBTC than Microsoft or Netflix
– GBTC is Grayscale’s Bitcoin Investment Trust
– The 5th largest millennial equity holding - Crypto firms in Singapore need to be licensed
– Regulated under the oversight of the Monetary Authority of Singapore - OSL raises US$36M in share placement
– Announcement reports +386% HoH increase in 2H19 revenues
– OSL’s parent company, BC Group is listed in Hong Kong (863 HK) - Bittrex secures insurance coverage up to US$300M
– This is reportedly record high coverage for the industry
– Covers uses in cases of “external theft and internal collusion.” - Andrew Yang wants to prioritize a uniform set of crypto rules
– Yang would like to develop a unified approach to crypto regulations - BCH back backs down from proposed miner tax
– A 12.5% tax on each block mined was previously proposed
– Funds would be used to fund network development - ETH developer Virgil Griffith pleads not guilty in North Korea case
– Griffith has been charged with violating US sanctions against N Korea
– In April 2019, Griffith attended a N Korea crypto conference
– If convicted he could face up to 20 years in prison - CME BTC futures have traded $100B in volume since 2017
- Zcash approves new mining reward distribution scheme
– The new mining reward breakdown will be: 80% for miners, 7% for the Electric Coin Company, 5% for the Zcash Foundation and 8% for grants - Binance US to introduce staking rewards next month
– Starting Jan. 29, staking rewards available for ALGO and ATOM - BCH sees 5 hours of dead time with no blocks mined
– Points to extremely low usage
Charts
- Chart 1. BTC, Before and After Chinese New Year
– BTC is typically weak before CNY and strong after
– That said, this year post CNY performance is especially strong
- Chart 2. BTC Seasonality
– BTC off to a very strong 2020 start
– Feb has historically been a very strong month
– But wonder if that will be somewhat tampered by outperformance in Jan
- Chart 3. BTC MoM %
– Large, sudden MoM gains tend to see follow through
- Chart 4. Weekly % Change
– Top coins and tokens by volume up an average of ~ 10%
– ETC and ZEC the big leaders this week
– LTC and ETH also crossed above their 200D MAVGs this week
- Chart 5. % vs 50D MAVG
– Alt Coins really on a rip this week
– ETC and ZEC 2 of the biggest out performers
- Chart 6. RSI
– RSI’s highish….but these can stay elevated for weeks
– BTC’s RSI not overheated at 69
- Chart 7. 52 Week Range
– ETC and XTZ close to setting new 52 week highs
– BTC still south of its 52 week range mid point
- Table 1. Equity holdings at Charles Schwab, by generation
– 1.84% of Millennial equity holdings are in GBTC
– Making GBTC a top 5 asset for Charles Schwab’s millennial clients
- Chart 8. Fear and Greed
– Crypto Fear and Greed is warming up…but is still pretty neutral
– Still only just slightly north of its midpoint & well south of previous highs
- Chart 9. BTC Price vs Volume
– Volume has relatively little resistance until $10,200
– 20 day rate of change remains pretty tame at just 16%
