Fundamentals: Massive incoming wave
Intercontinental Exchange announces Bakkt, a global platform, ecosystem, and cold storage “custody” solution for digital assets. By Business Wire, August 03, 2018, 08:30:00 AM EDT. Launch of regulated, physical Bitcoin futures contract and warehouse planned for November 2018.
What is BAKKT?
The owner of the New York Stock Exchange is launching this product/service, offering a federally regulated market for digital assets like cryptocurrencies.
“Bakkt is designed to enable consumers and institutions to seamlessly buy, sell, store, and spend digital assets. Formed with the purpose of bringing trust, efficiency, and commerce to digital assets, Bakkt seeks to develop open technology to connect existing market and merchant infrastructure to the blockchain.”
Unlike having to wait for ETF approval, and much more significant than ETF’s, BAKKT fundamentally is MASS ADOPTION. Think of BAKKT as NYSE’s version for Cryptocurrency.
Canada First Block Capital, Mutual Fund
First Block Capital Inc. (First Block) announced that investors in its flagship product the FBC Bitcoin Trust — available for accredited investors only — can now put their holdings in such accounts as a Registered Retirement Savings Plan (RRSP) and a Tax-Free Savings Account (TFSA).
Mutual Funds trade in one direction- long- whereas hedge funds hedge short positions against longs. This will enable Canadian accredited investors to buy, and long Bitcoin, in a regulated environment, that’s also tax-free.
There are several types of accredited investors in Canada which include but are not limited to: an individual registered as an adviser or dealer by securities regulators; a person who beneficially owns financial assets in the amount that exceeds $1,000,000 before taxes; or a person whose net income before taxes exceeded $200,000 or $300,000 in each of the 2 most recent calendar years.
First Block reportedly expects the majority of investors to start moving funds within the first month. Marc van der Chijs, Co-founder and Chief Investment Officer of First Block, said:
“Our goal is to make investments in the digital currency asset class more accessible and we are one step closer to achieving this goal by allowing unit holders to place units in government sponsored tax-efficient vehicles, and by providing daily liquidity through NEO Connect, a fund distribution platform with a rapidly growing dealer network.”
ETF and SEC:
BAKKT and First Block Capital Mutual Fund act as “investment vehicles” and are making Bitcoin and other digital assets more accessible while paving the path to mass adoption.
Pressure isn’t only coming in the form of US domestic BAKKT and the neighboring Canadian Mutual Fund. Just last week on September 10, the SEC released an official statement regarding its decision to suspend the Bitcoin Tracker One ETN by ten days, until Sept. 20th. The statement, released on the SEC website, explicitly stated that the two ETN’s of XBT Provider caused confusion among investors.
What exactly are ETN’s? They’re the Swedish version of an ETF which had been trading for only a few days before suspension on US regulated exchanges. By suspending their trading the SEC disallowed only US investors from trading these products.
While much of the market viewed this as FUD, and BTC experienced a small pullback after the announcement on Sunday, Bitcoin’s price did recover once the dust settled.
Suspension of a product is typically viewed as a trading halt. When a security is halted from trading, that’s typically because of major incoming announcement.
As pressures mount on the SEC to approve a US based ETF product, we expect an ETF approval sooner than BAKKT launching. As the race for adoption and a regulated product is on the way.
Technicals: Dip, Tether, and The Fractal
Since 9/5 our team has been tracking a Compound Fulcrum bottom fractal.
Price moved to the downside of the fractal, and for good reason.
USDT, Tether’s chain, went offline for some 12 hours and this caused all transactions between wallets to freeze until the OMNI system could recover.
Recovery was swift, and once the chain was back in full swing, all transactions cleared the system.
The chart below depicts our current projection for Bitcoin.
Implications of the move outside the fractal channel:
So long as price resumes trading in the channel, our projection for a strong end of month close for BTC is intact.
Let’s maintain perspective.. The currency has been under tremendous selling pressure, more specifically leveraged short-selling pressure for months, while Bitcoin’s price has refused to make lower lows, and has not re-tested the yearly low during the 2 previous swing lows.
The Chart below demonstrates the 3 previous swing lows, labeled Swing Low, Higher Low 1 (HL1), and Higher Low 2 (HL2)
The red indicator is Leveraged Short Selling Pressure.
The Green indicator, Leveraged Long Buying Pressure.
Higher lows during selling climaxes indicate that bears are losing momentum, and failing to push the price lower, hence failing to create a lower low.
All this while leveraged longs (green line) are relatively decreasing?
Implications of the above question:
Buying pressure to support price above previous lows has been “spot” buying. As in cash buyers. This is extremely bullish, as longs are using CASH to counter “borrowing short sellers”.
Once longs start leveraging their BTC we can expect a massive surge.
Currently our fractal is halfway through phase 5, with an 80% completion rate.
We’re expecting upside volatility by 9/29/18 for a strong end of month close. And are gearing up our portfolios to benefit from the incoming boom.
If this article has helped you gain perspective and to better understand the current market climate, please give us a clap and share our writing! To connect with our team, and learn how we are preparing ourselves to profit from this move, visit us at https://coinobservatory.com
Check out our BlockDelta profile for full contact details.
Author: George Saber
Editor: Matthew Pink