We use a range of cookies to give you the best possible browsing experience. By continuing to use this website, you agree to our use of cookies.
You can learn more about our cookie policy here, or by following the link at the bottom of any page on our site.

Free Trading Guides
Oil - US Crude
More View more
Real Time News
  • Join @JWagnerFXTrader 's #webinar at 9:30 AM ET/1:30 PM GMT at the US market opening bell. Register here: https://t.co/9pXwJzGj54 https://t.co/fv1BPC7j4n
  • IG Client Sentiment Update: Our data shows the vast majority of traders in Ripple are long at 96.05%, while traders in US 500 are at opposite extremes with 76.29%. See the summary chart below and full details and charts on DailyFX: https://www.dailyfx.com/sentiment https://t.co/o62p1BdjzF
  • LIVE NOW: Join Technical Strategist @MBForex as he hosts his Weekly Strategy Webinar on the setups we're tracking into the open! https://t.co/dFw88WP8eH
  • RT @chigrl: ICYMI overnight >#China seeks $2.4 billion in sanctions against U.S. in Obama-era case: WTO https://t.co/p7O1taMbsO https://t.…
  • Forex Update: As of 12:00, these are your best and worst performers based on the London trading schedule: 🇳🇿NZD: 0.35% 🇦🇺AUD: 0.33% 🇬🇧GBP: 0.26% 🇪🇺EUR: 0.02% 🇨🇭CHF: -0.04% 🇯🇵JPY: -0.13% View the performance of all markets via https://www.dailyfx.com/forex-rates#currencies https://t.co/yNdPOvkwdE
  • Weekly Strategy Webinar starting in 15mins on DailyFX! https://t.co/RgnsklZ2Gl
  • Currency Wars: Tools that are used in a currency war https://www.dailyfx.com/forex/fundamental/article/special_report/2019/10/16/Currency-Wars-What-to-Expect-if-a-Currency-War-Breaks-Out.html?CHID=9&QPID=917713
  • CFTC update - Surprisingly, $GBP net shorts were relatively unchanged, despite the 5% rally. Adds further fuel to an extended rise - Weak demand for safe havens as speculators flip to net short in $JPY - $NZD bearish positions still very extreme https://www.dailyfx.com/forex/technical/article/cot/2019/10/21/GBPUSD-Shorts-Unchanged-Despite-Rally-Japenese-Yen-Flips-to-Short---COT-Report.html?CHID=9&QPID=917713 https://t.co/PxKOjjXjS4
  • RT @JMahony_IG: Useful graphic from @ING_Economics 'Where it could go wrong for UK prime minister Boris Johnson' #Brexit #BrexitVote https…
  • Join @MBForex 's at 8:30 AM ET/12:30 PM GMT for his weekly #scalping #webinar Register here: https://t.co/VAnAfZU02T https://t.co/MDGLWr8s3Z
Bitcoin Manages to Accelerate an Already Neck-breaking Pace

Bitcoin Manages to Accelerate an Already Neck-breaking Pace

2017-12-08 04:43:00
John Kicklighter, Chief Currency Strategist

There was a clear and untouchable outperformance across the risk spectrum this past session: Bitcoin. The cryptocurrency may find next week's futures contract launch justification, but this crazy pace of climb is clearly speculatively motivated.

Talking Points:

  • Bitcoin is up 7 consecutive sessions covering an incredible 60 percent-plus rally
  • Where the cryptocurrency hit headlines for nearing $20,000 - the move was exchange specific at Coinbase as others topped near 16,000
  • While there are particular points of value to Bitcoin, its wide divergence to other cryptocurrencies speaks to speculative bubble

See how retail CFD traders are positioning in Bitcoin intraday using theDailyFX speculative positioning data on the sentiment page.

Already running at an incredible pace, Bitcoin managed to find a gear that would be extreme even in more universally volatile conditions. And, what we are experiencing across the financial system is far from even moderate levels of activity. It would be barely turn heads to state that the favored cryptocurrency hit a record high this past session or even that it moved more than 10 percent intraday. But, the stats on Bitcoin's activity this past session are extreme. After clearing $14,000 with a modest pace in progress, the market went on to surpass the next few $1,000 marks within hours. With this eighth consecutive daily advance matching the longest run back to October 2015, we have also seen the biggest rally over that same period in at least three years.

Understanding what is driving this epic climb should be crucial to our conviction in its persistence as a trend. I believe strongly that this run is being clearly driven by speculative appetite. We can establish this via a range of considerations. Beyond the sheer intensity of the run we have seen thus far that tends to break the logical assessment of reasonable investors' search for balanced risk/reward, we have an extreme disparity between exchanges. The headlines were trumpeting the currency's rally to within inches of $20,000 intraday Thursday, but the Bitfinex exchange and aggregate pricing indexes register a topped out just shy of $16,000 through the session's peak intensity. That disparity reflects a haste that targets momentum over value. Naturally, industrious traders would attempt to arbitrage across exchanges, but the reliability of pricing along with fees and access are likely too unreliable to find price stability.

Another factor that points to speculative over value motivation this past session was the fact that Bitcoin's incredible rally was the complete contrast to the other major cryptocurrencies. Ethereum, Ripple, Litecoin and others were holding range or even falling through Thursday seemingly finding little spillover benefit from Bitcoin. That is a sign that the appetite is not for digital currencies that will redefine the financial system and should be priced accordingly. Some of Bitcoin's peers are far better for facilitating day-to-day transactions which is what the entire space is looking to accomplish to gain its foothold in the world of finance. There is considerable evidence to suggest what we are seeing is a bubble. However, just because a bubble - prices that are unsustainable on traditional valuations without the express contribution of outside forces such as blind speculation - is present, doesn't mean that its pop is imminent. From tech shares in the late 1990's to housing prices in 2007, there have been plenty of extended markets that have gone to defy even the most lofty extremes a reasonable mind would project. Nevertheless, we should be mindful of what we intend to get involved with. We take a look at Bitcoin's extreme acceleration in today's Quick Take Video.

Bitcoin Manages to Accelerate an Already Neck-breaking Pace

Bitcoin Manages to Accelerate an Already Neck-breaking Pace

Bitcoin Manages to Accelerate an Already Neck-breaking Pace

Bitcoin Manages to Accelerate an Already Neck-breaking Pace

To receive John’s analysis directly via email, please SIGN UP HERE

DailyFX provides forex news and technical analysis on the trends that influence the global currency markets.


News & Analysis at your fingertips.