MaiCoin Digital Asset Weekly Mar 6 2020

Commentary

Digital Assets +4% this week to recover back above the 20 day moving average and the US$250B market cap level. Volume was a bit lighter this week, -8% WoW.

BTC price movement this week was largely macro led with the US fed cutting rates, 10 year T Bills falling below 1% for the first time ever, many parts of China returning to work and gold and Chinese equities rallying. In many ways the way the broader macro environment is unfolding going into the May halving of BTC issuance really couldn’t be scripted any better.

In terms of industry specific news, the top stories this week included: 1) India’s supreme court striking down a Central Bank decision to ban digital asset businesses access to banking services, 2) South Korea passing a framework for the regulation and legalization of crytpo, 3) the SEC making efforts to clarify crypto fund raising rules, 4) BTC hashrate hitting a new all time high as parts of China go back to work, 5) HTC launching a privacy focused 5G router that doubles as a BTC node, 6) Tron attempting the first hostile takeover of a public blockchain and 7) the US Treasury sanctioning 113 BTC addresses tied to North Korean hackers.

In a nutshell, news this week was again largely regulatory focused. The overall regulatory trend seems to be generally positive. I wonder with a number of economic stimulus plans rolled out globally recently (Taiwan $2B, Korea $14B, Italy $4B, China $500B) and a recession looming, if lawmakers and regulators globally will be reluctant to curtail economic activity — even crypto based economic activity. Perhaps this could drive a greater degree of regulatory acceptance — particularly in smaller economies with fewer economic levers to pull.

In terms of price action, BTC’s cross back above the 200D MAVG and bounce off the 20W MAVG are tentatively positive moves. The 50D MAVG at $9,300 looks like an important near term level of resistance — especially given how much volume has traded here over the past few months. Failure to break above this level would probably also raise worries of a potential head and shoulders pattern.

Non BTC Crypto also looks interesting, with an ascending triangle pattern playing out just under the 50D MAVG. Given that ascending triangles tend to break higher and generally robust sentiment this week in smaller, higher beta coins and tokens — I think there’s a good chance this breaks higher, which would be near term positive for BTC price action as well.

Coronavirus, Gold and Bitcoin

The Federal Reserve pulled the trigger this week on a weapon that it hasn’t used since 2008 — the emergency rate cut. Previously used during the September 11 terror attacks, the collapse of Lehman Brothers and the the dotcom bubble, this emergency rate cut is targeted at offsetting the economic impacts of the coronavirus.

JP Morgan said this week that there’s a 50% chance we’ll return to 0 this year.

Historically, emergency cuts have been positive for gold. Lower interest rates and, therefore, lower bond yields increase the attraction of holding gold and decrease interest in other safe have assets like US Treasuries. With 10 year yields falling below 1% for the first time ever, the environment looks very supportive of gold.

The timing on this could be very interesting with BTC’s supply issuance set to halve in just 2.5 months. One can imagine a scenario where increased interest in gold could easily spill over into BTC just as the supply of BTC becomes scarcer than ever before. With a current market cap of just US$165B, the price of BTC could be easily influenced by even a small reallocation of assets from the $8T gold or $50T sovereign debt markets.

Media

  • Great interview with Raoul Pal of Real Vision
    – Provides a lot of color around the current macro environment
    – And the value proposition of BTC against this backdrop

Anthony Pompliano @pompLIVESTREAM] Off The Chain #236: Raoul Pal (@RaoulGMI), CEO of Real Vision Groupwww.pscp.tv

News

Charts

  • Chart 1. Weekly % Change — Top 20 by Volume
    – Big moves this week in a lot of smaller, high beta names
  • Chart 2. % vs 50D MAVG— Top 20 by Volume
    – Most major coins and tokens are still below the 50 Day MAVG
    – BTC only about 2% below
  • Chart 3. Position in 52 Week Range— Top 20 by Volume
    – Most coins and tokens still < halfway mark
  • Chart 4. YTD % Change — Top 20 by Volume
    – BTC +26% YTD
  • Chart 5. BTC
    – BTC back above the 200D MAVG this week
    – Both the 50D MAVG and a big volume peak at ~ $9,300
    – Failure at $9,300 could create a head and shoulders pattern
  • Chart 6. Altcoins — Ascending Triangle
    – Higher lows as Altcoins test the 50D MAVG
    – Ascending triangles tend to resolve upwards
  • Chart 7. BTC vs Gold
    – The long term drivers for gold are also the long term drivers for BTC
    – Think demand for gold could spill over into BTC
  • Chart 8. Assets YTD
    – BTC and Gold up YTD
    – Global equities and commodities all lower
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