Is the New Bitcoin Rally Legit?
Weekend bitcoin traders are putting stock market operators to shame.
As soon as the New York Stock Exchange closed Friday evening, bitcoin staged yet another dramatic breakout, zooming to $11,000 before settling near $10,800 Sunday evening as the futures market opened for business. If you haven’t been paying attention, bitcoin has now tripled off its December lows.
That’s one hell of a rally:
Just one week ago, I alerted you to bitcoin’s dramatic weekend rise above $9,000.
The flagship cryptocurrency had gained more than $1,000 in only a week, breaking above $9,000 in weekend trade. The move was the latest in a series of successive breakouts for bitcoin, which began its rampage with a now modest-looking jump above $5,000 in early April.
But this latest push above $10,000 has quite a few investors uttering the terrifying, magical phrase: This time it’s different.
Maybe they’re right. After all, Facebook Inc. (NASDAQ:FB) has already reeled in big names such as Uber, MasterCard, Visa, and PayPal to help fund the launch of its crypto-venture. You don’t have to be a punch-drunk crypto nerd to see how Facebook’s Libra project is helping fan the flames of bitcoin’s latest rally. One of the biggest tech firms in the world is diving headfirst into crypto — a move that could attract even more institutional money to the space. In fact, it’s already happening.
“It is difficult to find data that shows how much cryptocurrency trading is done by individuals relative to professional investors,” The Wall Street Journal reports. “But there are more institutional investors and hedge funds trading bitcoin now than in 2017. They are also among the prominent players trading futures, which in the U.S. have seen rising trading volume on CME Group Inc.”
Bitcoin continues to dance below $11,000 just before the morning bell. Perhaps we’re entering another brief consolidation period as crypto traders wait to pounce on yet another upcoming weekend rally.
Shifting gears, the fallout over the downed drone near Iran is getting more confusing by the day.
Late last week, Donald Trump decided to call off an air strike on Iran. The president nixed the plan with only 10 minutes to spare when a general told him 150 people would probably die in the attack, the New York Times reports.
Apparently, Trump also thinks the drone attack may have been accidental. I’m not sure how one accidentally shoots down an RQ-4A Global Hawk drone, but Trump says the culprit was “loose and stupid,” per multiple reports.
Either way, all the saber rattling with Iran doesn’t seem to have any effect on the stock market — at least not yet. But the drama has helped the price of oil stabilize following its disastrous late May drop. If today’s modest gains hold, light crude will have settled higher four of the past five trading days. A barrel of black gold is now approaching $58. That’s a jump of more than $7 off its June lows.
Of course, this Iran fiasco isn’t going to disappear from the front page anytime soon. There’s also a nuclear angle to this story. Apparently, Iran could breach a cap on its uranium stockpile this week, according to Bloomberg, violating a central tenant of Iran’s 2015 nuclear deal.
Trump is already talking about imposing additional sanctions, which we could learn about later today. To be continued…
Finally, gold is extending its breakout move today.
Gold futures are pushing to new highs once again this morning, pushing to prices we haven’t seen since 2013. Once ounce of gold now trades for $1,413.
You don’t have to be a master chart conjurer to spot this breakout from gold’s massive, five-year base:
It looks as if we jumped onboard our gold trade just in time. Miss this play? Unlock my next potentially profitable trade by clicking here.