Welcome back everyone to another exciting edition of the Bitcoin - Forex Combo Strategy. I am glad to see that support levels, not just for Bitcoin, came through and pushed price action higher over the past four trading sessions. The crypto-winter, as many have called the last few months, appears to be coming to an end as prices are thawing and expanding. Back on December 5th 2018 I have talked about the rise in fundamentals despite all the negative attention which was fixed solely on price. You can read up on that post at “Bitcoin - Forex Combo Strategy: Fundamentals Stronger Than Ever” and familiarize yourself with my thinking roughly two months ago.
Prices across the cryptocurrency sector remain depressed and have not priced in the overall rise in positive fundamental news flow, but I think it will changes slowly. One of the key reasons for this is outlined in my post “Bitcoin - Forex Combo Strategy: Cryptocurrency Acceptance Grows” and there have been more developments like that since I posted it on January 23rd 2019. During the bursting of the 2018 bubble, cryptocurrencies experienced a major shit in its composition which has been very important and ensures a healthy future for everyone involved in a series capacity.
As the bubble formed, retail traders with little to know knowledge chased headlines in social media and drove higher prices. As support levels were confirmed once again, cryptocurrencies are on track to undergo another revolution backed and led by institutions which will provide the necessary capital inflow. I don’t think that we will create another bubble or that we will revisit the 2018 highs, but from current levels in Bitcoin I believe we can quickly advance above $6,000 and later this year we may test the $10,000 level.
Galaxy Digital Founder Mike Novogratz reiterated his call that Bitcoin will become the digital gold of our financial system. He stated that “There’s 118 elements on the periodic table, and only one gold. Bitcoin is going to be digital gold, a place where you have sovereign money, it’s not US money, it’s not Chinese money, it’s sovereign. Sovereignty costs a lot, it should.” More and more financial institutions get comfortable with the blockchain and start implementing it into their operations. I have highlighted one such case in “Bitcoin - Forex Combo Strategy: Blockchain Enters FX”.
As more institutional clients get on board, volume rises and while the use of blockchain doesn’t mean that the price of cryptocurrencies automatically increases, it highlights a positive trend which does attract new capital and eventually price action follows suits. KPMG, the Dutch auditor, added that “Institutionalization is a necessary next step for crypto to create trust and scale.” I believe we will see this trend continue and accelerate later in 2019. As more and more market participants search for an alternative to store value, Bitcoin may carve out a spot as digital gold. This could mean more stable prices moving forward as many seek to buy and hold.
I am very comfortable with my current cryptocurrency portfolio. This includes my 200 Bitcoin with an average entry price of $4,315, my 4,500 Ethers with an average entry price of $131.22 and my 600,000 Ripple with an average entry price of $0.3250. I do not expect prices to advance in one straight line, but I do expect to see gradually higher prices before the end of the year. You can see my multiple entries into each of the three digital assets I currently hold in the images below.
Gold has paused after its breakout above the psychophysically important $1,300 mark and I am glad it did. The reason being, this ensures that a healthy uptrend may continue and price action has entered a sideways trend well above $1,300 as technical indicators recover. I continue to look for a move into the $1,500 level. The image below shows my entry level to the 100 lots of Gold which I bought at $1,195 for a margin requirement of $123,179 where each pip carries a value of $100. Gold has not only added plenty of value to my portfolio, but also acted as a great hedge when cryptocurrencies were pushed lower. This ensured that despite the drop in one asset class, my portfolio remained balanced and healthy. Another great benefit is that I have the option to close my Gold position partially if an attractive crypto trading opportunity arises. I prefer to use my forex balance for this, but having an additional option is very vauable. The image below shows my Gold trade.
At the end of last week’s update, I had three open forex positions. All three were closed for a profit since then. On February 8th 2019, my adjusted take profit in my GBPAUD long position was triggered at 1.8315. My 40 lots were closed for a profit of 300 pips or $85,623. Also on that day, the stop loss in my 40 lots long position in the EURCAD was triggered at 1.5090. I closed this trade for a profit of 100 pips or $30,355. Yesterday, February 12th 2019, my take profit in my 40 lots short EURUSD position was triggered at 1.1275. This resulted in a profit of 150 pips or $60,000. The three images show my entry as well as exit levels.
On February 7th 2019 I bought 50 lots in the GBPNZD at 1.9100 according to this trading recommendation “GBPNZD Fundamental Analysis – February 7th 2019”. The margin requirement was $12,966 and each pip is worth $340.48. The next day my stop loss was triggered and I closed this position for a profit of 100 pips or $34,048. On February 8th 2019 I added a 50 lots long position in the CADJPY at 82.350 for a margin requirement of $7,589 according to this trading recommendation “CADJPY Fundamental Analysis – February 8th 2019”. Each pip is worth $450.82 and I have moved my stop loss to 83.350 for a guaranteed profit of $45,082. The two images below show my closed trade for a profit and my open trade for a guaranteed profit from last week.
On February 11th 2019 I purchased 50 lots long in the GBPCHF at 1.2915. The margin requirement was $12,966 with a pip value of $495.79. You can read the original recommendation at “GBPCHF Fundamental Analysis – February 11th 2019”. I added a 50 lots long position in the AUDNZD at 1.0515 for a margin requirement of $7,135 with a pip value of $340.48 according to this recommendation “AUDNZD Fundamental Analysis – February 12th 2019”. Earlier today my stop loss was triggered at 1.0450 and I exited this trade for a loss of 65 pips or $22,131. I also bought 50 lots in the GBPUSD at 1.2860 according to this trading recommendation which I modified slightly “GBPUSD Fundamental Analysis – February 13th 2019”. The margin requirement was $12,966 and each pip is worth $500.00. The three images show my trades in the order I mentioned them.
Here is my portfolio update: I hold 200 Bitcoins worth $705,670, 4,500 Ethers worth $522,135 and 600,000 Ripple worth $175,380. My 100 lots of Gold are worth $1,284,979 and I have $317,981. I also have three open forex positions, all with a lot size of 50 each: one CADJPY long position worth $72,507, one GBPCHF long position worth $37,747 and one GBPUSD long position worth $11,466. My total portfolio is worth $3,127,865, up $297,692 as compared to last week and at a new all-time high. This is the first time we breached the $3M mark and I am very proud of the performance. Open you PaxForex Trading Account now and start growing your own trading account with my Bitcoin - Forex Combo Strategy!