Mati Greenspan, Senior Market Analyst at FX broker eToro, has provided his daily commentary on traditional and crypto markets for December 6, 2018. Highlights include:
- Locating BTC’s Support: Bloomberg analysts project bitcoin heading for $1,500. While it’s possible to get that low, BTC has key support levels at $3,000 and $1,800 it would have to break through first. Even the light support level at $3,500 has shown resilience so far.
- Volatility Picks Up as End of Cycle Approaches: Some are blaming the arrest of Huawei’s CFO for stocks declining in Asia and Europe. Given the timing of the arrest, a continuation of heightened volatility ahead of the end of the cycle is more likely.
- No BTC ETF, No Problem: Recent remarks from the SEC indicate that a Bitcoin ETF is unlikely to be approved any time soon. However, growing institutional offerings and participation in the crypto space will soon make it easy for any investor to add crypto assets to their portfolio.
- OPEC Hopes to Stop Oil Slide: OPEC leaders will meet in Vienna and attempt to prevent the further slide of crude oil’s price that has occured over the past few weeks.
 Traditional Markets
Shortly after the funeral procession for Bush was over the futures markets opened up with a bad temper. Just about all the major indices experienced a large gap down and are now back near the lows.
Here we can see the Dow Jones. The short-term chart on the top left shows the opening gap and the chart on the top right shows where we are in relation to the beginning of 2018 (white line), the bottom chart, of course, shows the multi-year bull run, which puts things into perspective for us.
The negative session has continued into Asia and Europe this morning. Some are blaming this headline…
However, further inspection shows us that the arrest was actually made on Saturday but that the media reaction was a bit delayed in penetrating the markets.
Of course, others believe that what human beings think about this story might be less important as “80% of daily volume in the US is done by machines.”
In any case, even if that statistic is true it wouldn’t exactly explain the delayed impact of the Huawei news. More likely what we’re seeing is simply a continuation of the volatility as we approach the end of the cycle.
OPEC Day
Leaders of the world’s largest oil producers are meeting today and tomorrow in Vienna to see if they can do something to stop the massive slide of crude oil that’s been happening these last few weeks.
At this point, things aren’t looking too hopeful for them. Saudi Arabia seems to be the most interested to cut production while Russia seems willing but not too eager. We’ll watch for updates closely during this time.
Crypto Bounce from the Lows
It’s no secret that crypto prices have been under pressure lately. Just yesterday, Bloomberg analysts reaffirmed their position that bitcoin could be headed straight for $1,500.
Of course, it’s possible to get that low. Anything is possible but I would say that we have a lot of key levels before that will more than likely support the price.
As you can see, we’re currently testing the light support level at $3,500 (blue). If it breaks through to the downside we will likely encounter heavy support at $3,000 yellow. The red line is set at $1,800. All of these levels have played a significant role during the rise of 2017.
Of course, the first on that list and the level we’re currently testing is $3,500, which I must say has been showing incredible resilience so far. Let’s zoom in….
For institutional investors looking to invest in the assets rather than the infrastructure, there really isn’t much reason to go in strong at the moment. There simply isn’t FOMO.