Bitcoin ‘Pivot Point’ Provides Runway For Bull Run (or roller coaster bear ride)

Bitcoin’s price pathway mid-term holds an important area when it comes to sustaining any sort of potential for a long-term pivot: the 6250 mark. This area currently stands as the last major point of concern as two separate occasions have seen this area hold. The importance of this lies in the fact that this would support a long-term pivot that could give a bullish run for BTC overall. As discussed, the 6k level being sought out once again would likely see the long-term bearish trend line of BTC also achieved again – a likely indicator that new lows would once again be achieved as well.

In a nutshell, the simple form is as follows:
BTC 6k level break will see a challenge of 5800 very quickly. A break of this area will see the 5200 mark. The final stage beyond this would see a low of 4200 – a whopping 1,000 points beyond that break.
The 6250 mark holding fairly well would technically register a longer-term higher low* for BTC allowing the 6800 resistance level to be chased next. If 6800 can be broken to the upside and held as new support, this would allow BTC the chance to easily register a higher low longer-term and breaking through the upper trend line of the long-term bearish channel while overall lowering risk for buying.
The only downside risk currently at bay remains with the retrace move which is marked as 1/3 of the previous leg down*(trend leg)
This risk remains until the 6400 resistance mark as well as 6800 is broken as BTC is still considered in the middle of a retrace move which more risk of downside as a continuation of the trend.
Stochastic mid-term as shown and on the daily scale now remain positive to seek overbought(>80) levels once again.
MACD momentum continues to tick positively on both scales and is attempting to cross to the upside.
BTC is currently a hold. Downside protection remains under the 6250 mark.
Futures Traders – trade the trend. The short-term trend is currently long.

ALMOST DEAD: BITMAIN IPO: Massive Rumored Losses, Investors Jumping Ship, $18 Billion IPO Could Be Shelved

Six months ago, Bitmain was the crypto ‘bell of the ball’ and set to take out the sheer size and scale of even the Facebook IPO. Every exchange was begging to do the deal and set to endear themselves to crypto loyalists everywhere. Not anymore.

Bitmain has effected transacted (principally pivoting away from Bitcoin and into Bitcoin Cash) causing it to lose around $330 million in it’s latest quarter, although some estimates suggest it is closer to half a billion dollars.

A further set of leaked documents exposed by BitMEX exposed an even more worrying concern. In a falling market, only $105 million of Bitmain assets were cash, against $1.17 billion in cryptocurrency. Even ignoring this ‘Sword of Damocles’, there’s a bigger hurdle to Bitmain’s future profitability, as highlighted by Bloomberg today.

The bitcoin mining market directly correlates with the price of the reward. Lower reward values mean less demand for mining rigs. Coupled with other hardware manufacturers producing more competitive hardware, this could mean a whole load of unshiftable stock.

And more from Bloomberg:

“But there are two other items that could make matters worse for Bitmain and others in the crypto-mining ecosystem, adding to pressure on the balance sheet.”

“First is the notion that the startup is losing its technological edge. According to Sanford C. Bernstein analyst Mark Li, Bitmain’s attempt to make a new chip using more advanced manufacturing technology didn’t pan out. Two other projects also failed, which not only puts Bitmain at a competitive disadvantage with rivals such as Canaan Creative Co. but means the company might have burned through several hundred million dollars with little to show for the effort.”

“A second area is one I think many investors haven’t even considered – the possibility of a massive stock of rigs being operated by unprofitable crypto mining companies that are racking up debts they may be unable to pay.”

“MGT Capital Investments Inc., for example, owned or operated 6,800 Bitmain Antminer S9 rigs at the end of June. The North Carolina company, which was once planning to change its name to John McAfee Global Technologies Inc., posted a $6.5 million loss for the June quarter on revenue of a mere $409,000.”

The entirety of Bitmain’s IPO appeal is based on those two issues. Being beyond its startup rivals in the area of technical expertise, and it’s ability to efficiently mine Bitcoin. It is clear that the edge is gone, and so could it’s ability to effectively execute an IPO.

And now, there are serious rumors about early investor lawsuits – notwithstanding any ongoing IPO talk. A clear recipe for NOT doing an IPO.

Many investors have been questioning why Bitmain is not releasing its Q2 figures— even though 60 days have elapsed since the start of Q3. These questions have been further compounded by the fact that Bitmain’s executive team has been rushing to raise a quick $1 bln for its Pre-IPO round before Wu ‘reportedly’ decides to disclose the company’s ‘catastrophic Q2 numbers’.

Given the drama here and the serious issues with execution, tech team losses, the Bitcoin to Bitcoin Cash ugly pivot, don’t bet on a Bitmain IPO anytime soon, if at all.

 

BAKKT CEO: Kelly Loeffler Pens Medium Post Explaining Bakkt Ambitions; ‘What Bakkt Aims To Solve…’

In a Medium post earlier today Bakkt CEO, Kelly Loeffler, took to virtual pen and paper and described exactly what Bakkt planned on doing with its vast exchange architecture on behalf of institutional clients.

The results of the post should give goosebumps of Bitcoin joy to anyone who believes that the next crypto bull run could be just around the corner.

Here are some highlights from the blog post via Medium earlier today:

Loeffler describes the use of existing infrastructure to create new products.

“That’s why Bakkt’s foundation uses the existing, time-tested, regulated futures market infrastructure to introduce physically delivered Bitcoin and warehousing to global markets. All aspects of the existing futures market, including institutional-grade onboarding and compliance, will, for the first time, be part of physical delivery and warehousing of Bitcoin. This includes consistent standards for compliance, with anti-money laundering and know-your-customer rules, market surveillance, and reporting standards at the federal regulation level, subject to final review and approval by the U.S. CFTC.”

“By virtue of passporting ICE Futures U.S. and ICE Clear U.S. into other jurisdictions outside the U.S., institutions operating on a global scale can better serve their customers. Bakkt’s first contracts will be physically delivered Bitcoin futures contracts versus fiat currencies, including USD, GBP, and EUR. For example, buying one USD/BTC futures contract will result in next-day delivery of one Bitcoin into the customer’s account. This aspect of physically delivery adds to the utility of Bitcoin, beyond simply trading.”

Loeffler then describes the depths to which Bakkt has gone to ensure security around Bitcoin and its foray into oft-hacked digital assets.

“To meet institutional standards for market integrity and asset security, our trading, clearing and warehousing infrastructure will offer a new level of technology and financial security built on a resilient technology backbone — key parts of which are inaccessible from the internet. This secure network will enable firms to safely connect to our market and warehouse, where Bitcoin deposits will be maintained largely offline.”

“Bakkt’s warehouse design, which we’ve been building since the inception of our initiative, will incorporate high levels of physical, technology and information security. Safeguarding digital assets is an emerging area of expertise, and things like signing ceremonies, biometric scans, sharding, and multi-sig are the new virtual combinations on the vault.”

All of this (Bakkt’s thesis/work/infrastructure) leads to increased access to a growing Bitcoin ecosystem and markets.

“The connectivity and participation requirements of large financial institutions necessarily differ from retail participants on unregulated cash-market crypto-exchanges. These include things like access to FIX API’s, consolidated ticker feeds, regulatory reporting features, and participation agreements. Notably, Bakkt will not rely upon ISDA agreements — which are used in the over-the-counter swaps markets. The existing futures ecosystem, which has a broad range of trading and risk management applications, will serve as a second layer on the blockchain to facilitate more seamless access for institutions. The existing cash crypto market is highly fragmented, which creates inefficiencies and makes market access and information more costly. The availability of Bakkt’s regulated physical delivery market price is designed to offer more information in real-time and greater transaction efficiency.”

Loeffler is as accomplished an exchange executive as there is in the space and brings incredible integrity and gravitas to digital assets and the emerging finance world. Bakkt is an initiative that we have continued to highlight as a catalyst of scale that could leap adoption forward in ways that many have yet to envision.

In Bakkt’s initial announcement they partnered with Microsoft, Starbucks and the NYSE. Names that are synonymous with industries of scale and trust.

This latest post further explains and develops the thesis that Bakkt is set to dominate the coming wave of institutional Bitcoin trading, and send volumes parabolic.

No wonder JP Morgan thinks it wise to make friends with Bakkt.

SOURCE: JP MORGAN AND BAKKT: Global Investment Bank Making Big Bet On Bakkt Execution In November; Will Handle Banks Crypto Initiatives

JP Morgan, and specifically Jamie Dimon, has been anti-crypto and anti-Bitcoin for over a year. Mr. Dimon has even gone so far as to say that Bitcoin is a bubble, a fraud, and not worth his commentary. But actions speak louder than words. And the institutional on-ramp that Bakkt is providing every Tier 1 financial institution is proving to win over the lieutenants at JP Morgan charged with satisfying clients that are demanding access to the digital asset.

We spoke to two staffers at the firms’ global headquarters who have been working on the relationship between Bakkt and JP Morgan. Let’s just say they didn’t disappoint and their comments just may represent how every global investment bank is planning to engage with Bakkt.

The first source, who has worked at JP Morgan for more than a decade said the following:

“Bakkt provides a clear and clean regulatory construct to engage with Bitcoin. No smoke and mirrors. No regulatory risk. No outsized legal risk. Our compliance and legal team have done a deep dive on Bakkt and our integration/execution protocols. It all works and it all works better than what we expected. The custody solution is the real story there and is ultimately what has provided us the bandwidth (legally) to offer options to clients. If I was forced to disclose where we are headed, take a look at the products that Goldman has become comfortable with and that is what we seem to be comfortable with at this time. Not confirming any product or offering, but I can speculate that we will have a trading desk and that clients will be able to access Bitcoin, via Bakkt, in some way shape or form.”

A second source, new to JP Morgan via a competitor late last year made similar comments:

“There are two digital asset teams internally and the focus has been on what Bakkt has proposed and how to adequately leverage it for institutional clients. I think we are a long way from offering anything to retail clients. That would clearly be in direct competition to Jamie’s (Dimon) public statements. But Bakkt offers an easy pathway to offer institutional clients access that gives us legal and risk comfort. My very educated guess is that we offer trading capabilities within our commodities and forex space that includes Bitcoin via Bakkt. Given that all of the legal and compliance due diligence is all but done, we should see volumes begin and increase here (with respect to Bitcoin trading) as Bakkt ramps up. Where products and services go in the digital asset space from there will take on a life of its own. You can imagine that we aren’t necessarily considered ‘first movers’ in banking. But that’s because we don’t have to be. Still, our leadership likes Bakkt and are comfortable with what they are set to bring to market.”

These comments square with several other conversations connected to competing firms like Goldman Sachs, Morgan Stanley, Barclays, etc. All firms that have immense and robust commodities trading operations and annual trade volumes on ICE’s (Intercontinental Exchange and the NYSE) vast exchange network. As Bakkt attaches itself to an institutional network that has long-standing and trusted infrastructure it makes the digital asset (specific to Bitcoin at the moment) conversation much, much easier for the biggest financial institutions.

Derivatives, NDF’s (non-deliverable forward), futures, ETF’s, and every manner of structured product that is to follow will essentially start with the launch of Bakkt via ICE. That is the narrative among the banking and digital asset Illuminati.

Just do a google search on Bakkt and begin counting the institutions and banking luminaries that are either direct equity holders in the firm or publicly claiming it’s coming utility connected to Bitcoin adoption within mainstream finance.

Any and all crypto hedge funds, family offices, and those ‘of means’ are privately pointing to the November Bakkt launch as the beginning of the next leg up in crypto.

Look at these quotes as a backdrop:

“Here is what you should know. Every single serious crypto investor, personality, institution, and hedge fund is talking about Bakkt. Almost exclusively. They don’t care about a Bitcoin ETF. They care about the Bakkt launch in November and the enormous volume of trading that will ensue connected to the penultimate digital asset across the globe.”

**A reminder of what Bakkt is and what it will actually launch in November of this year, via Forbes’ excellent article in early August: “Bakkt plans to offer a full package combining a major CFTC-regulated exchange with CFTC-regulated clearing and custody, pending the approval from the commission and other regulators. Bakkt will provide access to a new Bitcoin trading platform on the ICE Futures U.S. exchange. And it will also offer full warehousing services, a business that ICE doesn’t have. “Bakkt’s revenue will come from two sources,” says Loeffler, “the trading fees on the ICE Futures U.S. exchange, and warehouse fees paid by the customers that buy Bitcoin and store with Bakkt.”

“Step back and consider what you just read. A CFTC-regulated exchange, clearing, and custody. Some have often called Bitcoin ‘digital gold’. The infrastructure that Bakkt has built and is set to unleash takes the term ‘digital gold’ and makes it a reality.”

To sum it up, and to give color to why a famously anti-crypto firm like JP Morgan is making friends with Bakkt, the profits associated with exploding trading volumes in a new asset class is the only language that matters in finance. Even the most conservative of firms won’t stay away from a golden opportunity to make money.

Such is the story of Bakkt and JP Morgan becoming BFF’s.

NOVOGRATZ AND DRAPER: Bitcoin Bulls Double Down With Market Moving Predictions

Michael Novogratz and Tim Draper have become the faces most associated with serious and institutional money connected to Bitcoin. Both men have long and distinguished careers in traditional finance and have pivoted in the past three years to Bitcoin and cryptocurrencies with a religious fervor fueled by personal conviction.

That conviction is rooted in a belief system that Bitcoin, in particular, will continue to emerge as an ecosystem and architecture that can revolutionize finance – and very possibly, several other industries.

Those convictions were on display this past week as both men made bold predictions connected to the current price of Bitcoin (Novogratz) and the long-term value of the crypt markets (Draper).

Novogratz ‘called a bottom’ in current Bitcoin pricing, and by extension, the overall crypto markets when he tweeted the following:

On the day of Novogratz’ tweet, Bitcoin’s value began at $6337.46 before rising to $6589.32. This week’s trading will likely prove or disprove Novogratz and Bloomberg’s theories.

Novogratz isn’t the only confident bull. Tim Draper, speaking at a DealStreetAsia summit in Singapore last week predicted the total market capitalization for cryptocurrencies will reach a whopping $80 trillion by 2023. As of today, Bitcoin is still dominating the cryptocurrency markets, with 55% of the total market capitalization invested in Bitcoin alone.

Speaking to a source who knows both men and who shares their Bitcoin bullish bent there isn’t a surprise that each of them spoke up last week given the developments set to hit the market by year’s end.

“Both Tim and Michael are smart guys and are acutely aware of developments within the ecosystem that most investors and traders just don’t see yet. Whether it is news that has yet to hit the tape or their own initiatives that they are developing, these guys are as connected as you are going to find. Sure, Tim’s prediction is a bit over the top, but he’s talking about 15 – 25 years down the road when we could potentially be looking at a world that is dominated by tokenization. Global financial institutions not only having fully integrated cryptocurrencies but have actually issued tokens of their own. That is the world Tim is talking about – to say nothing of what they believe Bakkt, ETF’s, and a slew of other structured products and architecture will do to the markets.”

Draper compares the potential of cryptocurrencies to the internet boom back in the 1990s. The internet, in return, was compared to the telegraph, the railroad, and the automobile industries at the time. No one thought that industries as diverse as agriculture, for example, would embrace the internet.

Similarly, cryptocurrencies will likely revolutionize some unexpected trillion dollar markets, such as finance, healthcare, or governance. And the likes of agriculture will likely follow. Thus, Draper’s thesis finds its footing.

Draper pressed his narrative at the DealStreetAsia PE-VC Summit in Singapore last Wednesday, when he announced his prediction. As is typical when Tim makes these sort of predictions, it got immediate press coverage and moved through the markets quickly.

And as it relates to the growth of the internet over a 15 year period, consider this: According to the data shared by Internet World Stats, the world internet usage increased by more than 100 times within the same timeframe of 15 years, between 1995 and 2010. While you can’t exactly adapt this number to make an economic prediction if cryptocurrency adoption should grow by 100 times within 15 years — considering that approximately 4 million use Bitcoin at present — one can only imagine what the cryptocurrency market would look like.

Draper and Novogratz are on to something – in the short term and long term.

Trading Crypto: **Sunday Afternoon: Bitcoin Holds Up, But Price Action Is ‘Snooze Worthy’

Bitcoin overnight trading(US CST) sees the formation of a mid-scale pennant formed as the lower trend line allows the price to hold the 6400 support level. Going from about 6100 to 6600 as shown, the 500 point upshot gives one issue to the bull case for BTC with the fact that this is currently considered a retrace move by taking back about 1/3 of the previous leg down. Considering the long-term trend is still bearish, the case for BTC to continue higher must come in the form of a consistent pattern showing higher highs and higher lows taking back more than 1/2 of that same leg. This comes with BTC seeking out the 6800 resistance level and beyond – a hard feat at the moment.

Rogue* Analysis shows that as the mid-scale pennant has formed, there are two concrete angles to look at BTC. The downside sees a break at 6340 which will seek out the lows and beyond at the 6100 mark. The danger lies in the fact that as we discussed before if BTC is to seek out the 6k mark, this could spell trouble with the lower 5k region being sought out. The upside break would occur with price action going above 6560 to seek out the next resistance point.
Stochastic readings remain in the upper region.
MACD now crosses negatively giving downward momentum to price action but does so lightly.
BTC is currently a hold – downside protection at break point.

Resistance Is Futile; Bitcoin Continues To Bounce Between Tight Support And Resistance Bands

Bitcoin overnight trading(US CST) continues higher. The overall uptrend continues with higher highs and higher lows – a promising sign for the bulls. The low pivot at 6355 confirms the support pivot at 6360 in Rogue* Wave Analysis. This is an important note to make as this holds less than 1/2 of the previous leg up. The continuation of the trend also maintains through another minor pattern: a flag that was created hourly over the last day. BTC upside is to seek 6600 before hitting some form of resistance. However, keep in mind that the next true resistance point up lies at 6800. Support now stands firm at 6400.

Stochastic levels continue to seek higher areas as the mid-term and daily scale show buying power entering the market strong. MACD readings also remain positive, even if only slightly at this time.
BTC is currently a buy/hold.

EXCLUSIVE: BANK OF AMERICA/MERRILL LYNCH: Preparing Bitcoin Trading Product, Similar To Goldman Sachs And Morgan Stanley

In a note that was passed to us in the late afternoon yesterday, it seems that the institutional rush to offer Bitcoin products to it clamoring clients has found its way into the hallowed halls of Bank of America and their investment banking and wealth management division, Merrill Lynch.

Yes, Bank of America and Merrill Lynch is set to produce a Bitcoin product that will be tradeable for clients and based on the futures markets in aggregate. As Goldman Sachs and Morgan Stanley rush into the market, Bank of America seems to be having a ‘don’t forget about us’ moment and following the same roadmap (a Bitcoin derivative connected to an NDF).

**A reminder concerning the use of an NDF for these firms and the purposes of Bitcoin: ‘In finance, a non-deliverable forward (NDF) is an outright forward or futures contract in which counterparties settle the difference between the contracted NDF price or rate and the prevailing spot price or rate on an agreed notional amount. It is used in various markets such as foreign exchange and commodities.’

Earlier this week it was revealed that Citigroup was chasing Goldman Sachs down this same road and preparing a like-minded Bitcoin derivative:

“Citigroup is rushing to leap ahead of its Tier I banking rivals across the globe by getting a Bitcoin trading product to market. Based on sources inside Citigroup and in and around crypto hedge funds it has become apparent that Citigroup is getting legally ‘creative’ to serve its customers with a tradeable, physical (digital/custody/warehouse’d) Bitcoin asset.

The intelligence that we’ve been passed sheds light on the strategy that has been proposed within the hallways of Citigroup and shown to a select few institutional clients. As per sources inside Citigroup, the product is being discussed as a ‘digital’ ADR. Effectively functioning as a foreign security product.”

And then just 48 hours ago Morgan Stanley floated smoke signals to the media that they were doing nearly the exact same thing:

Morgan Stanley plans to offer trading in complex derivatives tied to the largest cryptocurrency, according to a person familiar with the matter, joining other Wall Street firms in creating ways for clients to play the digital currency market.”

“The U.S. bank will deal in contracts that give investors synthetic exposure to the performance of Bitcoin, said the person, who asked not to be identified because the information is private. Investors will be able to go long or short using the so-called price return swaps, and Morgan Stanley will charge a spread for each transaction, the person said.”

“The bank is already technically prepared to offer the Bitcoin swap trading, and will launch once there is proven institutional client demand and after the completion of an internal approval process, the person said. A spokesman for Morgan Stanley declined to comment on the initiative.”

Our source on this intel comes from inside Merrill Lynch and closes the loop connected to Bakkt as well:

“The same structures (as Morgan Stanley and Goldman Sachs) are being built here as well. And if we are being as transparent as we can be at the moment – it is in direct response to what we believe Bakkt is going to provide and the liquidity with which these things are going to trade. Liquidity and custody make this a much easier conversation and dampens the risk for the firm and the bank. That is more important than being a half-step slow compared to Goldman or Morgan Stanley. But Bakkt is filling that gap for all of us. Expect this type of product to be a Bitcoin staple by the middle of 2019.”

Bakkt is playing a serious role with these developments and the following quote may be why:

“**A reminder of what Bakkt is and what it will actually launch in November of this year, via Forbes’ excellent article in early August: “Bakkt plans to offer a full package combining a major CFTC-regulated exchange with CFTC-regulated clearing and custody, pending the approval from the commission and other regulators. Bakkt will provide access to a new Bitcoin trading platform on the ICE Futures U.S. exchange. And it will also offer full warehousing services, a business that ICE doesn’t have. “Bakkt’s revenue will come from two sources,” says Loeffler, “the trading fees on the ICE Futures U.S. exchange, and warehouse fees paid by the customers that buy Bitcoin and store with Bakkt.”

“Step back and consider what you just read. A CFTC-regulated exchange, clearing, and custody. Some have often called Bitcoin ‘digital gold’. The infrastructure that Bakkt has built and is set to unleash takes the term ‘digital gold’ and makes it a reality.”

As these plans turn into actual products the scale of trading connected to Bitcoin and it’s derivatives will explode. 2019 could be a year that Bitcoin, and the crypt ecosystem takes off in a way that even the most bullish among us can’t envision.

Bitcoin Trading Range Remains Frustrating; Technical Patience Is Key To Capitalizing On Big Move Up Or Down

Bitcoin continues to stay in the mid 6k region as overnight (US CST) trading keeps the 6400 support mark somewhat intact, the 6250 mark fully intact, and of course, the major 6k level held firmly. This is good news for the bullish cause at the moment with uptrend continuation risk lowering as higher supports hold. Currently, a new Rogue* Wave track is prevalent. There is some form of retracement taking place as two tracks are sought out – the first already being achieved at 6400 support. Overnight trading touched the second as the 6360 level was achieved with almost perfect accuracy at 6355 – a mere 5 points away. However, what truly counts at this time will be the candle close*. Over the next 12 hours, this indicator alone will give a proper reading of where the wave analysis stands and therefore slight breakage of the pivot area at 6360 should be expected.

Stochastic levels now seek the oversold region(<20) and will justly bring price along to attain a higher low* which is what is needed for not only the continuation of the uptrend but two levels of lowered market risk. MACD readings are now negative hourly as well, however, this just confirms that the sell signal issued early yesterday was correct. Look for a flattening of the hourly MACD signal along with bottoming and pivot in stochastic to plan entry right above support in the uptrend. Support break and mid-term(4-hour) stochastic pivot lower will cause for BTC to break new lows – so watch the 6250 area carefully.
BTC is currently a watch.
Futures Traders – Trade the Trend. The short-term trend is currently short.

Ethereum Price Action Is All Anyone Wants To Talk About; Are More Lower Lows Ahead?

Ethereum played out exactly how we projected the PA to perform after tapping into the M1 supply zone. After a quick consolidation in the zone, we had heavy bull volume come flooding in as America woke up to near 200 prices and a little FOMO kicked in. In the charts, however, it was shown in PA. As a previously resistance line turned support as well as increase in volume plus the pull flag that was formed all were clues for continued upside after initial bull break. How far will we run is the real question.
Diving into the m30 charts we notice bearish divergence forming as well as price entering D1 supply zone. These two factors lead me to believe profit taking will be made and a sell-off may ensue. According to wave analysis, we cannot break 224 or else we invalidate this bearish setup and will also most likely break the bear divergence shown here.
Short targets are shown and we can look to long after support is found. Look for H2-H6 STOCH to reset while price sustaining higher lows to keep upward momentum intact.