There was a clear and untouchable superior performance across the risk spectrum in the previous session: Bitcoin. The cryptocurrency may find justification for launching the futures contract next week, but this crazy rate of rise is clearly motivated by speculation.
- Bitcoin has gone up 7 consecutive sessions covering an incredible 60 percent increase
- Where the cryptocurrency hit the headlines by about $ 20,000 – the move was specific to change in Coinbase while others exceeded 16,000
- While there are particular points of value for Bitcoin, its wide divergence with other cryptocurrencies speaks of the speculative bubble
See how retail CFD operators position themselves in Bitcoin intraday using the DailyFX speculative positioning data  on the opinion page.
Already running at an incredible rate, Bitcoin managed to find a team that would be extreme even in the most volatile universal conditions. And, what we are experiencing throughout the financial system is far from even moderate levels of activity. It would be hard to say that the preferred cryptocurrency touched a record in the last session or even that it moved more than 10 percent intraday. But, the statistics on Bitcoin activity in this past session are extreme. After clearing $ 14,000 with a modest pace in progress, the market went on to outperform the next $ 1,000 in a few hours. With this eighth consecutive daily advance that coincides with the longest race until October 2015, we have also seen the biggest recovery in that same period in at least three years.
Understanding what is driving this epic rise must be crucial to our conviction in its persistence as a trend. I firmly believe that this race is being driven clearly by the speculative appetite. We can establish this through a variety of considerations. Beyond the great intensity of the race that we have seen so far that tends to break the logical evaluation of the reasonable risk / reward search of reasonable investors, we have a great disparity between the exchanges. The incumbents announced the rebound of the currency a few centimeters from Thursday's intraday of $ 20,000, but the exchange rates and aggregate prices of Bitfinex register a maximum of only $ 16,000 through the maximum intensity of the session. This disparity reflects a speed that points to the impulse over value. Naturally, industrious traders would try to arbitrate through exchanges, but the reliability of prices along with tariffs and access are probably not reliable to find price stability.
Another factor that points to the speculative motivation on the value in this last session was the fact that the incredible recovery of Bitcoin was the total contrast with the other main cryptocurrencies. Ethereum, Ripple, Litecoin and others remained in range or even fell until Thursday, apparently finding little indirect benefit from Bitcoin. That is a sign that the appetite is not in the digital currencies that will redefine the financial system and should have a price consistent. Some of the Bitcoin pairs are much better for facilitating daily transactions, which is what all the space seeks to achieve to obtain its foothold in the world of finance. There is considerable evidence to suggest that what we are seeing is a bubble. However, just because a bubble – prices that are unsustainable in traditional valuations without the express contribution of external forces such as blind speculation – is present, does not mean that its explosion is imminent. From the technology stocks of the late 1990s to housing prices in 2007, there have been many extended markets that have come to challenge even the highest extremes that a reasonable mind could project. However, we must be aware of what we intend to be involved with. Let's take a look at the extreme acceleration of Bitcoin in today's Quick Take Video.
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