Image for post
Image for post

Yesterday’s price move was courtesy of a Tweet from Donald Trump. Apparently there will be no agreement on new stimulus package until after the election. Stocks didn’t like this, and as is the way with recent macro themed announcements, neither did Bitcoin.

Don’t be alarmed, Bitcoin retraced immediately to its favorite level, $10,619, and has spent much of today tucked in the middle of the recent trading range. A range which, with the absence of external shocks, is becoming tighter and tighter as the days pass by.

We know from experience that when volatility is suppressed, prices eventually break out. The previous bout of low volatility ended on July 26th, as Bitcoin broke up through $9,750 and marched up to this year’s high at $12,486 on August 17th.

In another 20 days, we will be just 7 days away from the US elections. Trump’s thumbs will no doubt add some volatility between now and then, so best be alert and follow him on Twitter!

While we wait for Bitcoin to break out from its recent trading channel, it’s worth taking a glance at the market cap to thermocap ratio.

Image for post
Image for post

As the above chart clearly shows, previous tops in Bitcoin have been accompanied by spikes in this data point. The market cap to thermocap ratio is obtained by dividing the market cap (Bitcoins x price) and the thermocap, which is the total value earned by miners from block rewards and transaction fees. From this vantage point, it would appear that Bitcoin at $10,619 is in no danger of being marked as a top.

Want more? Subscribe to receive the full report every day in your inbox→

Image for post
Image for post

Copyright © 2020 Diginex Ltd. All rights reserved.

I, Matt Blom, hereby certify that all of the views expressed in this communication accurately reflect my personal views, which have not been influenced by considerations of Diginex’s business or client relationships.

This communication is not a research report and has been prepared by sales and trading personnel at Diginex Limited and/or its subsidiaries (Diginex) as general information about market conditions and recent events. Any views expressed are those of the author(s), and may differ from Diginex’s views, or other individuals within Diginex. This information is not intended for anyone other than the direct recipient of the email and may not be reproduced or further distributed to any person or entity, whether in whole or in part, for any purpose.

Unless otherwise stated, the Diginex entities issuing this information is not authorized or licensed by any authorities. This material is not directed to any person in any jurisdiction where (by reason of that person’s nationality, residence or otherwise) the publication or availability of this material is prohibited. Persons in respect of whom such prohibitions apply must return this material to Diginex immediately. It is the responsibility of any persons who requested to receive the information contained herein to observe all applicable laws and regulations of their relevant jurisdiction. By continuing to receive and read this material, you are representing and warranting that the applicable laws and regulations of your jurisdiction allow you to receive this information.

This material is based on a number of estimates and assumptions and is inherently subject to significant uncertainties and contingencies and will not be updated, amended, withdrawn or supplemented in light of any new events which makes information herein incomplete, superseded or out of date. Diginex makes no representation or warranty as to the accuracy or completeness of such information and shall not be held liable for any consequences (including without limitation, direct or indirect, special, incidental, consequential damages, losses or liabilities and any claims for loss of profit) arising out of any reliance thereupon. Where there is a reference to any third-party data, information or services, no warranty, responsibility or endorsement of such third party or its data is made. Diginex and its affiliates, officers, directors, and employees or members of their household, may invest or hold positions in any assets mentioned, or provide other services to other market participants of such assets, and any pricing information provided herein is indicative only and does not reflect a level where Diginex is prepared to execute a trade. Diginex employees or representatives may provide oral or written market commentary or trading strategies to our clients and principal trading desks that reflect opinions that are contrary to the opinions expressed in this material. Our asset management area, principal trading desks and investing businesses may make investment decisions that are inconsistent with the recommendations or views expressed in this material.

This communication does not represent a recommendation, advice, offer or solicitation for the purchase or sale of any digital assets, or an official confirmation or official valuation of any transaction mentioned herein. Transactions in digital assets gives rise to substantial risks and may not be available to nor suitable for any particular recipient of this email, and this communication is intended for sophisticated investors who qualify as professional or accredited investors (or similar term) for the purposes of their regulatory regime. You should not rely on the opinion and information expressed herein and it is your responsibility to ascertain your own investment objectives, risk tolerance, seek independent professional advice and ensure that any appropriate tax or regulatory disclosures are made within any relevant jurisdiction that may apply to you. The price and value of digital assets referred to in this material are not backed by physical assets or guaranteed, they have no intrinsic value. Prices on the secondary market are driven by supply and demand and are short-term and volatile by nature. The volatility faced by investors may be further magnified where liquidity pools for virtual assets are small and fragmented. The value of digital asset may be derived from the continued willingness of market participants to exchange fiat currency for a digital asset, which means that the value of a particular digital asset may be completely and permanently lost should the market for that digital asset disappears. The volatility and unpredictability of the price of a digital asset relative to fiat currencies may result in significant losses over a short period of time. Cyber-attacks resulting in the hacking of digital asset trading platforms and thefts of digital assets are common. Victims may have difficulty recovering losses from hackers or trading platforms.

Any digital assets mentioned herein are not intended to fall within the meaning of “securities”, “futures contracts” or other regulated instruments under the laws of any jurisdiction. The author(s) of this material do not hold themselves as being licensed to carry on regulated activities in any jurisdiction.

You have received this email because you have previously expressed to the individual sender that you are interested in receiving such communications. If you no longer wish to receive such communications, please respond to the individual sender with “Unsubscribe” in the email title and you will be removed from the distribution list within ten (10) working days.

Get the Medium app

A button that says 'Download on the App Store', and if clicked it will lead you to the iOS App store
A button that says 'Get it on, Google Play', and if clicked it will lead you to the Google Play store