Here are the key factors to keep in mind this week for Bitcoin trades:
- Bitcoin ETF: The first approved Bitcoin ETF is scheduled to launch in 2019. The SEC, the US regulator, may approve the VanEck/Solid X application which is expected to drive a buying frenzy into Bitcoin. David Reischer, Attorney and CEO of LegalAdvice.com, noted that “As an attorney involved in the Bitcoin space the most significant factor to affect Bitcoin price, in the long run, is the proposed Bitcoin ETF. If the SEC approves an ETF for Bitcoin in 2019, specifically the pending VanEck/Solid X application for a Bitcoin ETF, it could revolutionize the banking industry.” The reason many look forward to the VanEck/Solid X Bitcoin ETF is the fact that the fund will be backed by actual Bitcoins in its reserves and on top of that the fund will be insured. Reischer further added that “The risks of Bitcoin price going lower even if the SEC approves the Bitcoin ETF is minimal because many sophisticated investors would accept that risk and rush in head first to buy a Bitcoin ETF if it is granted approval by the SEC. There is a huge appetite right now among sophisticated money managers to allocate capital into crypto-related instruments.”
- Bakkt Launch: Bakkt is a digital exchange which will be launched by The Intercontinental Exchange, the owner of the New York Stock Exchange. The biggest difference between Bakkt and other cryptocurrency exchanges is the physical delivery of future contracts which means that Bitcoin future will be settled. Bakkt is currently awaiting regulatory approval from the Commodities and Futures Trade Commission in order to list Bitcoin futures. This will also create competition with CBOE and CME who were the first to introduce Bitcoin futures. The first day of futures trading marked the all-time high in Bitcoin before it started to collapse.
- NASDAQ Bitcoin Futures: NASDAQ is also rumored to introduce its own futures contract trading. This is expected to further increase demand for Bitcoin as institutional traders are likely to add more Bitcoins to their portfolios. Higher demand usually results in healthy price appreciation.
- Bitcoin Decoupling from Altcoins: 2019 is likely to be the year where Bitcoin further decouples itself from Altcoins. One of the strongest features of Bitcoin is the decentralized nature of it. Bitcoin continues to offer products which are demanded by the market, while many Altcoins offer a hype and fail to deliver. This caused the ICO market to shrink as funds were raised, but few new coins actually hit the market. Jimmy Song, Bitcoin developer, noted that “What we saw in 2018 is that having lots of ‘developer activity’ is not the same thing as producing something the market wants. Bitcoin has distinguished itself by releasing features that are actually used, and not duds that aren’t like so many altcoins.” Bitcoin is very likely to attract institutional clients as well as retail traders in 2019 as positive news flow is on the rise.
Should price action for the BTCUSD remain inside the or breakout above the $3635.85 to $3,842.65 zone the following trade set-up is recommended:
- Timeframe: D1
- Recommendation: Long Position
- Entry Level: Long Position @ $3,720.00
- Take Profit Zone: $5,170.00 – $5,640.45
- Stop Loss Level: $3,391.85
Should price action for the BTCUSD breakdown below $3635.85 the following trade set-up is recommended:
- Timeframe: D1
- Recommendation: Short Position
- Entry Level: Short Position @ $3,520.00
- Take Profit Zone: $3,000.00 – $3,089.50
- Stop Loss Level: $3,720.00
Open your PaxForex Trading Account now and add this cryptocurrency pair to your forex portfolio.