Bitcoin to the moon?
Since November 1st, 2020, Bitcoin has seen a rise of over 35% and is quickly closing in on the previous all-time high of £19,783 printed in December 2017 after the epic bull run we are sure you all remember. BTC's year to date return for 2020 has been a whopping 162%+.
The google search data for 'Bitcoin' clearly showed a heavy correlation between searches and the digital asset's increasing price during the 2017 bull run. This time around, this correlation has not been present, as displayed in the graph below. We can see interest remains at normal levels despite the bullish run we are experiencing and nowhere near previous levels in December 2017.
This data suggests FOMO has not driven this bull run, unlike December 2017. When FOMO is high, it is safe to say this is usually a sign of an asset approaching the formation of a top, as retail traders will usually be the last to panic buy into a market, so this indicates the bull run has legs left.
In 2020 we have seen institutional capital flow into Bitcoin like never before, with a much higher acceptance of seeing BTC as a mature, safe-haven asset. Microstrategy Inc purchased $425,000,000.00 worth of Bitcoin in August and September 2020, making it their main reserve asset. Their investment has already paid off and is currently worth just shy of $700,000,000.00, three to four months later.
Below is a chart showing publicly traded companies that hold considerable holdings in the coin, demonstrating this institutional acceptance.
Another primary driver of the bullish run is a short-term squeeze in liquidity, driven by BTC's halving in May 2020. As institutional adoption grows, with many seeing Bitcoin as a legitimate hedge against longer-term inflation concerns created from ongoing stimulus packages, the demand continues to increase. We are met with a shrinking supply, and fewer holders willing to sell. The perfect environment is created to propel BTC into unseen heights.
The Lack of FOMO from retail traders that we can assume due to google search data backs up that this bull run has only just started. In the short-term, we may see a pullback as some take profits off the table as we near all-time highs; however, we expect the bullish momentum to continue in the medium-long term.
US$ Index Inflection point?
A couple of weeks back, we spoke about a critical inflection point for the US$ index on the daily time frame.
Price is now sitting at this level on the daily chart, and our eyes are firmly watching what happens next. There are six trading days left in November, and if we get a monthly close similar to the current candle, and we see the daily low we are holding now broken, our overall bias for USD will be bearish.
Another scenario we could see is price on the daily timeframe to hold the previous low, where we are currently decelerating, and form a double bottom (bullish indication), rejecting this strong level of support at 11900. In this instance, if we hold this support, we will expect to see a bullish dollar power up for at least the short term.
USDCAD full breakdown
Out of all the dollar pairs, one that aligns with a bullish dollar thesis is USDCAD. This pair is one of our main watches entering the coming week.
On the weekly timeframe, we can see price appears to have formed a double bottom at a substantial level of support at 1.30 that we haven't closed beneath since October 2018. This indicates to use that in the coming weeks, we should see a bullish run develop.
On the daily chart, we have completed a full-wave five-count Elliot Wave Theory pattern. Price is failing to break and close beneath the zone of support we have between 1.303 - 1.306, and it appears we are forming a higher low. The technicals are aligning with the weekly bias and indicating bullish momentum is set to come in.
What else we have our eyes on
- NZD: The majority of NZD pairs have had 3+ weeks of bullish momentum without a decent pullback. We are now sitting at major support and resistance levels and are watching for quick in and out pullback opportunities this week.
- Equities: Equities are continuing their bullish momentum, sat at all-time highs; however, Weekly timeframes have given some interesting closes, specifically the S&P500 & Dow Jones Industrial that have got us questioning whether Stocks really do only go up. We want to see how price reacts to these new territories next week and wait for deceleration on daily timeframes before looking for short opportunities.
As always, if you want to see our full overall market breakdowns make sure to catch up on the latest Insights episode, 'Lock it down', with Irek Piekarski.
TMC Club - Cameron Baxter full interview!
Cameron is a boss. Back in October, after Cameron closed September banking +16.9% profit, we told you all to keep your eyes peeled for more on this inspiring young man.
Cameron joined us when the world had it's first 2020 lockdown back in March. Eight months have now passed since then, and we wonder how many people vowed to work on improving themselves, learn a new skill, etc in that time but never followed through.
Cameron was not one of these, we've seen the hard work he's put in month upon month, and we should all take inspiration away from how far he has come in 8 months with zero prior experience or knowledge in this industry.
We now have a full interview with Cameron. This isn't one you want to skip on. Check it out here.
We want to leave you with this week to reflect on. Those eight months, the next eight months, will pass whether you're putting in the effort to grow or not. How much you can change your life in a short period, like 24 months, is mind-blowing when you effectively dedicate yourself. Stop sitting on the fence, stop half committing to your development, and start giving it your all. Watch your life change!
What's happening this week?
Monday, November 23, 2020 @ 1pm PT
Market Update - lead by Jonny Godfrey
Tuesday, November 24, 2020 @ 1pm PT
Monthly Coaching Call - lead by Irek Piekarski
*Diamond access required
Wednesday, November 25, 2020 @ 1pm PT
Market Update - lead by Jonny Godfrey
All the best for the week ahead and we'll see you in the club!
Jonny Godfrey & the TMC Team