Bitcoin markets are soaring today, fresh off after shrugging off yesterdays temporary slide below USD 7,000, and is currently en route to recording new highs as bulls attempt to retrace a way back to USD 8,000 territory before the month is over.
Our own BitcoinNews.com Technical Analysis also believes that we should be aiming for a price recovery to USD 8,500 before we can say that the bearish trend is broken. Whether or not that can happen depends heavily on how traders and bulls will take action over the Friday carrying off into the weekend.
Thanksgiving Day in America and Canada is, so far, giving a lot of relief to crypto holders and bulls! Bitcoin now trades at USD 7,600 in early hours Eastern Time (CoinDesk). Most analysts are hoping for a traditional repeat of the Thanksgiving cycle that has seen Bitcoin and crypto gain in past years during the fourth Thursday of November.
— ₿itDealer (@Bitdealer_) November 28, 2019
Twitter analyst Bitdealer shows that there has only been one Thanksgiving in the entire history where the next day returns were negative. However, the next three days’ returns were not as optimistic, with last year’s bear year giving the deepest losses at 11.43%.
On average, however, Thanksgiving has been a positive period, with a most common (median) return for a day and 3 days after the holiday around and above 1.5%. Maximum returns have been above 10%, though, and this gives hope that we could see the same this year since Thanksgiving returns today so far are above 5%.
CNBC analyst Melissa Lee is saying that it’s “ok to discuss Bitcoin at the Thanksgiving table”, indicating that Americans should discard familiar topics of politics and sports over turkey dinner, and talk instead about the world’s most recognized digital asset.
Bitcoiners who did talk about Bitcoin in 2017 Thanksgiving will probably not be trying to recall the following year’s conversation when Bitcoin was trading at USD 4,479 in 2018 Thanksgiving. On the other hand, those who brought Bitcoin up last year will probably be sharing secret smiles with others who listened to the advice and bought in, as today’s price puts them at well over 60% in profit.
Now as crypto markets see a resurgence, the opposite is happening for traditional money, as the US Federal Reserve once more expanded its balance sheet, prompting once more economic experts to say that Bitcoin’s long term future is looking brighter with every balance sheet gain.
As of now, assets on the balance sheet, which include a huge number of distinct assets and liabilities, grew by over USD 162 billion last month. Now that interest rates are rising, the central bank is pumping more cash into the system by buying up treasuries, giving banks more money to lend out, at lower interest rates. This was the biggest monthly rise in 11 years, prompting crypto analysts to ask if the writing was already on the wall for a fiat collapse and a Bitcoin revival.
As of 15 November, US Federal Reserve total assets stood at over USD 4.04 trillion, according to the Federal Reserve Bank of St Louis.
Even though denials are forthcoming that these are all quantitative easing measures, Daniel Lacalle, the celebrated author of ‘Escape from the Central Bank Trap’, told mises.org:
“The burst in the repo market is telling us that risk and debt accumulation are much higher than estimated and it has taken a disguised QE program to mildly contain it.”
No more down weeks since the Fed introduced "not QE" and started bloating up its balance sheet again.
"We don't target asset prices" – Fed
*We don't believe you pic.twitter.com/bffgBxV130
— Sven Henrich (@NorthmanTrader) November 18, 2019
Stock markets in the US have also been in a huge rally, suggesting even investors aren’t believing the official word of the US Fed and taking the signs as clear quantitative easing. And new findings show that this year, Bitcoin price has shown a 70% correlation with worldwide rising turbulence based on the Global Economic Policy Uncertainty Index. So is uncertainty in economic policy uncertainty going to continue to boost Bitcoin’s position as a hedge and a store of value?
And although there is only a weaker correlation with the index of global geopolitical risk, the potential macro factor still mirrors Bitcoin behavior. The most recent example was the last Fed interventions for overnight liquidity.
Something to think about for December? Probably. But don’t put everything on one hedge!
Image Courtesy: Pixabay