• 50-week and 100-week MA crossovers due next week, suggesting incoming bull run
  • Swiss stock exchange SIX lists physically-settled Bitcoin exchange-traded product
  • Bitfinex announces Lightning Network exchange transactions

Bitcoin refuses to give up in mid-week trading, retesting yesterday’s low again at about USD 7,238 (CoinDesk) but generally staying at healthy levels above USD 7,300 to stave off selling pressure in Asian markets.

One of the indicators slowly emerging amid this crypto market stagnant action is that Bitcoin looks to be welcoming the reappearance of a price indicator not seen since the start of the last bull market in 2017.

This is Bitcoin’s 50-week moving average (MA), which is well on track to cross above the 100-week MA sometime next week. If this happens, then the resulting crossover would be a decidedly bullish one, not seen since May 2016, some three and a half years ago.

When looking at MA crossovers, some technical analysts tend to use this as a gauge of momentum that could swing market trends. Bullish crosses are not a guarantee of a bull but at least suggests that bulls could be gathering energy for a distinct rally. MA crossovers, especially longer duration ones like the 50-MA and 100-MA, tend to show a lag in prices, the longer the duration, the bigger the lag. 50-week MA uses data that is a year old, and 100-week one is almost two years old, so traders should be cautious in using history to judge the future.

Nevertheless, there is a lot of excitement in certain circles who remember what happened after the last bullish crossover happened. But it is worth noting that this crossover also has been helped by the intense growth from December 2018 to June 2019, in which price rose four-fold from a USD 3,100 low to almost USD 14,000.

While waiting for next week, it could be worth looking into the new physically-backed Bitcoin exchange-traded product that the Switzerland SIX Swiss Exchange has not listed. Launched by WisdomTree (also listed on Nasdaq), this new product says it will be listed under the WBTC ticker with a total expense ratio of 0.95% and that online Swiss bank Swissquote will serve as a custody partner for it.

The new ETP is catered towards institutional investors: they can invest in Bitcoin without going through the hassle of keeping private keys or even knowing how to use a blockchain-based digital asset. Unlike cash-settled products, this is backed by actual Bitcoin, though this coin will be in the custody of a trusted third party.

WisdomTree purchases actual Bitcoin and creates smaller shares of them for investors, who then trade and redeem the contracts on SIX exchange. It hopes to centralize liquidity for the world’s most popular digital asset. The issuer’s head of Europe Alexis Marinof stated:

“[The company has] seen enough to believe that digital assets, like Bitcoin, are not a passing trend and can play a role in portfolios.”

If trading contracts on Bitcoin are not your thing, you’ll still be very pleased to read about bullish news on Bitcoin’s second-layer settlement network, Lightning. Crypto exchange Bitfinex released on social media an announcement that would have excited Bitcoiners, saying that it is making major upgrades on its platform to bring user payments and spending habits into the next gear.

Bitfinex CTO Paolo Ardoino confirmed in a Tweet that Bitcoin transactions would work on Bitfinex via Lightning Network, making it the first exchange to adopt the off-chain scalability solution.

The most obvious change for users will be the instant transactions at almost zero fees, ignoring block confirmations on the Bitcoin network. Bitfinex claims:

“Once this feature is unlocked, crypto transactions will never be the same again.”

There is a second “mystery” improvement that is promised by Bitfinex, and it is suggested that this will tackle the issue of spending, rather than exchanging. As the rather forward promise says: “When this feature is live, the way you spend crypto will change forever.”

This is a huge step forward for the Lightning Network, which continues to be tested by adopters. The next step in scalability after Segregated Witness (SegWit), Lightning has been endorsed by the likes of Twitter CEO Jack Dorsey. Ardoino couldn’t be more enthused:

“LN and LN assets are not only the best P2P micro-payments solution, but an impressive settlement layer for B2B.”

 

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