Bitcoin Defies Gravity, Again

Today marks one of the most auspicious days yet for Bitcoin. The long-awaited launch of Bitcoin futures on the Chicago Board of Exchange. Millions of pages of free publicity, tons of press commentary, and plenty of resultant interest. FOMO, or “fear of missing out” will drive the market higher, as investors new to cryptocurrencies, race to get onboard before the train leaves the station.

At around $17,000, Bitcoin has surged over 1,500% since the start of 2017. That means that the combined value of every bitcoin currently in existence is around $274bn or more than most major companies (it overtook JP Morgan – ironically, its biggest detractor – last week, for example). The attraction of these kinds of gains is not hard to see.

The chart here is from yesterday, Sunday, deliberately so to give an idea of what to expect on the downside, without the influence of today’s launch.

At 1), Bitcoin reached the end of its momentum and fell back on profit-taking – and having reached one of those “thousand” levels we have spoken of – in this case, $17,000. Even within the falls, you can see the fluctuations in price were measured in thousands. Volatility is ever present with this crypto – and this is something to bear in mind at all times.

With the 21-day EMA (blue line) at 2,) as the first level of support and the 55-day SMA (green line) as the “backup” level, the level of fall would be limited to around £11,500-$8,000. If it did fall to the $8,000 mark, it has a further support level at the 100-day SMA (orange line) at 3). So there is quite a safety net in place.

There was a previous example of these supports working back in mid-November. Here, at 4) you can see Bitcoin hit $6,500, but bounced right off of it, to rally again, even higher. Once it had cleared the 21-day EMA it went on to consolidate at one of the “thousand” levels – in this case, $8,000 before rallying once again.

We think that Bitcoin will gain from the interest in the futures launch, and this could see a surge to the $20,000 dollar level. At this point, it may well retrace again – back to the 21-day EMA or 55-day SMA.These are the key levels to watch in the coming days. We would use them as buying opportunities – as we see the upside for Bitcoin looking better and better for the moment.

The “crash” which has been predicted since Bitcoin hit $3,000 still seems to be some way off. Drops of 10-15% are becoming the norm with this crypto and need to be factored into your trading plan.

Bitcoin futures are currently trading at $17,900, up 15% while bitcoin is trading at $16,340, up 9.80%

Noble Gold specializes in IRAs and 401(k) rollovers through precious metals and cryptocurrencies investments.