- The SFOX Multi-Factor Market Index has moved from uncertain to mildly bullish as of July 9th, 2019.
- Facebook’s Project Libra took center stage, highlighting both institutional interest in crypto and the persistent use case of Bitcoin as a decentralized currency.
- Rumors of Bitcoin’s current volatility have been exaggerated: we’re actually experiencing a downward trend in Bitcoin’s volatility peaks since 2017.
- LedgerX and ErisX were approved by the CFTC to offer physically settled Bitcoin futures contracts, indicating crypto’s continued financial maturation.
- Bitcoin’s performance during the Fourth of July appears to provide a further data point for SFOX’s thesis that Bitcoin appears, at least anecdotally, to have a positive relationship with holidays during bull runs.
- Watch for Senate/Congressional hearings, new innovations in futures, and updates to major blockchain protocols to potentially impact the crypto market in the coming month.
In the June 2019 edition of our monthly volatility report, the SFOX research team has collected price, volume, and volatility data from eight major exchanges and liquidity providers to analyze the global performance of 6 leading cryptoassets – BTC, ETH, BCH, LTC, BSV, and ETC.
Note: In order to better report and analyze the entirety of the continued crypto rally, the team at SFOX has extended the period this report covers from the beginning of June through July 9th.
Current Crypto Market Outlook: Mildly Bullish
Based on our calculations and analyses, the SFOX Multi-Factor Market Index, which was set at uncertain at the beginning of June 2019, has been moved to mildly bullish as of July 9th, 2019.
SFOX Multi-Factor Market Index, June 2019
Analysis of June and Early July 2019 Crypto Performance
- Facebook announced the details of its cryptocurrency Project Libra, which signaled the interest of major companies in crypto and coincided with the beginning of the current rally (June 18th).
- Bitcoin’s 30-day historical volatility cleared 80% for the first time since last December – but it’s far from being “more volatile than ever” (June 30th).
- LedgerX and ErisX received approval from the CFTC to offer physically settled Bitcoin futures (June 25th; July 1st).
- The Fourth of July saw a bump in Bitcoin’s price, reinforcing the view that major holidays falling on bull runs may potentially correspond to temporary boosts in Bitcoin’s price.
What to Watch in the Rest of July 2019
Look to these events as potentially moving the volatility indices of BTC, ETH, BCH, LTC, BSV, and ETC in the remainder of July and early August:
- Senate and House meetings on Facebook and Project Libra (July 16th – 17th)
- Bakkt initiating user acceptance testing for physically settled Bitcoin futures via ICE (July 22nd)
- Default block size cap of Bitcoin SV increased to 2 GB (July 24th)
- CME BTC futures last-trade date (July 26th)
- Litecoin block reward size cut in half (August 5th)
The Details: June 2019 Crypto Price, Volatility, and Correlation Data
Price Performance: A Bitcoin-Dominated Rally
Bitcoin is the headline of
As of July 9th, BTC/USD led all asset pairs tracked by our report in month-over-month growth at 57.81%. ETH/USD followed with 26.94% month-over-month growth, with gold in third place at 11.01% – compared with 3.49% for the S&P 500. Ethereum Classic had the distinction of being the only asset tracked by our report with negative month-over-month growth as of the 9th (-5.95%).
Volatility: Riding Bitcoin’s Waves
By looking at the 30-day historical volatilities of BTC, ETH, BCH, LTC, BSV, and ETC, we see that the volatility of most major cryptoassets formed a relatively tight band that saw a sharp uptick on June 26th – the day BTC challenged the $13,000 price barrier. This increase in volatility may be related to the expiration of BTC futures contracts on June 28th, especially because these expirations included BitMEX’s quarterly contract.
The exception to the general volatility trend was Bitcoin SV, whose outsized volatility decreased throughout the month to more closely align with the rest of the market; this may potentially be a consequence of debate over Craig Wright being overshadowed by broader market news such as Facebook’s Project Libra and BTC’s rally.
Volatility of Leading Cryptoassets, Gold, and S&P 500, June 1st – July 9th, 2019
30-Day Historical Volatility of BTC, ETH, BCH, LTC, BSV, ETC, Gold, and S&P 500
By looking at the 30-day historical volatilities of ETH, BCH, LTC, BSV, and ETC as a percentage of BTC’s 30-day historical volatility, we can see more clearly that most altcoin volatility was following BTC’s volatility, with BSV starting to follow BTC near the end of June.
Relative Crypto Volatilities, June 1st – July 9th, 2019
30-Day Historical Volatilities of ETH, BCH, LTC, BSV, and ETC, Divided by the 30-Day Historical Volatility of BTC
Price Correlations: Bitcoin Positivity
BTC’s 30-day price correlations with ETH and BCH were both relatively positive as of July 9th. In contrast, BTC has an unusually negative correlation with Litecoin. This reinforces the narrative that, throughout 2019, Litecoin may be establishing itself as an asset with fundamentals independent of Bitcoin.
For a full crypto correlations matrix, see the following chart.
30-Day Correlations of BTC, ETH, BCH, LTC, the S&P 500, and Gold
July 9th, 2019
You can check out the full SFOX Crypto Market Volatility Report: June 2019 here.
BITCOIN VOLATILITY DWINDLING, HAS BTC TAKEN AN EARLY VACATION?
Bitcoin and cryptocurrency markets are slowing down. There has been very little activity over the past week as volumes and volatility decline. Technical indicators are also lining up which could indicate a larger move is imminent or is BTC on vacation for the rest of the year?
BITCOIN SLOWING DOWN
This may not be such a bad thing. One of the points bitcoin detractors always make is that it is too volatile to be used as a daily currency. This much is true if a cup of coffee is going to be 20% cheaper ten minutes later you’re not going to buy one in BTC right now.
Over the past year or so these massive price swings have decreased in amplitude and it appears that bitcoin has entered a low volatility regime.
Day traders seeking quick bucks have had to take a break as movements are minimal at the
This type of action often preludes a bigger move and technical indicators such as Bollinger bands squeezing are also indicative of such.
This slowing of momentum has happened across the board, not just on bitcoin markets. Ethereum volatility is also at low ebb, falling to levels not experienced since 2016 as noted by Coin Metrics.
It could just be that time of year when traders take a break and FOMO is as thin as the first fall of winter snow. If this is the case then markets will remain flaccid until sometime next month.
Bitcoin News Today – Headlines for December 14
- Investor believes round numbers are very important in BTC markets
- BTC crossing $10k is important says investors and analysts
- Crossing the $10k mark in the near-term will ensure that Bitcoin’s price action is positive.
Bitcoin News Today – Bitcoin investors have always gravitated towards round figures. According to one top crypto investor and commentator, the importance of round numbers can’t be overstated especially in a nascent market. This implies that after reclaiming the $10,000 mark, the macro price scales will ensure that Bitcoin can go higher and higher until it reaches a new round number.
The Importance of Round Number Prices in Crypto
During a recent interview with Luke Martin, Three Arrows Capital Su Zhu said gave his opinion on why round numbers are essential. According to Zhu round numbers are important in the crypto market because the leading crypto topping the $10,000 mark will be an important time in terms of forcing a good price action. It isn’t only Zhu who is of the view that $10,000 is of great importance for Bitcoin and the entire crypto space.
Earlier in the year, Tom Lee, Fundstrat Global Advisors’ resident crypto analyst released his analysis for BTC by his firm. His analysis implies that if the price of BTC reaches and crosses the $10,000 level it could mean
Another platform that agrees with Zhu’s view is Bloomberg. Bloomberg wrote in November of this year about the importance of the $10k barrier and how essential round figures with four and five digits are. The platform said Bitcoin faces a solid resistance point at the $10,000 area. The coin will have to break this barrier if there is to be a confirmation and continuation of meaningful gains.
Is the $10k Mark Attainable for Bitcoin?
Speaking about Bloomberg and BTC getting to the $10,000 mark, one analyst at Bloomberg believes that it’s just a matter of time before the number one crypto tops that key position. The analyst, Mike McGlone, who is the senior commodities strategist at Bloomberg, revealed in his monthly market update that he believes that Bitcoin will top the essential $10,000 resistance point. He said as gold rallies, Bitcoin should rally. While Gold is currently trending below BTC amidst the trade war, the macro picture may begin to favor gold and Bitcoin as we head into 2020.
Stratis Will Increase Rapidly If It Moves Above 4500 Satoshis, Predicts Trader
Stratis has been trading in a range since August 2019. This movement has the characteristics of the consolidation phase, after which a new bullish market cycle is expected to begin.
The trading range of this consolidation has a magnitude of 40%, and the price has tested both the resistance and support areas several times. At the time of writing, it was moving upward towards the resistance area.
Additionally, he suggested that a breakout above the 4500 satoshi resistance area would probably accelerate the rate of increase.
Let’s take a closer look at the price and see how likely this is to happen.
First, the Stratis price reached the long-term support area at 3000 satoshis in August 2019.
This was almost an all-time low, coinciding with the lows reached in 2016, which was the bottom before the 2017 upward move.
Additionally, the RSI reached an all-time low value of 23 during this time and created bullish
This suggests that this is a very suitable level to make a low and initiate a reversal, as we have suggested in our previous article.
Looking closer at the movement, we can see the trading range, consisting of two support and one resistance area.
The main support area is at 3250 satoshis, where the double bottom was created. This is followed by the minor support area at 3850 satoshis. The minor support coincides with the 100-day moving average (MA). The price has flipped it as support. The price fell inside it twice and began an upward move each time.
The resistance area is found at 4500 satoshis and the price has not reached it since November 30.
On December 11, the Stratis price broke out above the descending resistance line that had been in place since the beginning of December.
The breakout transpired with significant volume, increasing the validity of the movement. Afterward, the price returned to validate the descending resistance line, a common movement after breakouts.
To conclude, the Stratis price is likely consolidating before beginning a new market cycle. A decisive breakout above 4500 satoshis is expected, confirming that the new cycle has begun.