Forex Looks for a Strong Direction

Welcome again to this week’s edition of Overbit.com News. We will be back to regularly-scheduled programming this week - focusing on the biggest news stories of the week - after last week’s massive attention on price action.

We start off this week with a story about the rapidly-growing scarcity of Bitcoin’s supply. In a tweet on Saturday, 26th September, the prominent bitcoin account ChartBTC reported that Bitcoin has recently passed the 18.5 million mark for the total circulating supply. This means that there’s less than 2.5 million BTC left to be mined. As ChartBTC also pointed out, half of this remaining supply will be mined within the next four years. Speaking in terms of percentages, Bitcoin has under 12% of its total supply left to be mined. Though we’ll continue to see Bitcoin being mined through 2140, this is just yet another reminder on why it’s so important to be in Bitcoin sooner rather than later: at a certain point, there won’t be any left.

Moving forward with the topic of Bitcoin, we’ll now pivot towards covering a more price-related story, albeit framed in a macro viewpoint. According to a recent report by CoinDesk, Bitcoin’s recent close at $10,793 on Sunday, 27th September set a new record of 63 consecutive daily closes above $10,000.

This new daily streak of 63 days is quite a significant one, as the previous streak of 62 days was during Bitcoin’s all-time-high runup in December of 2017, back when we were seeing 50% and 100% gains in a day. This new record means that for the first time since the last Bitcoin ‘bubble’, we are finally seeing higher, sustained prices. Though some traders may miss the insane volatility in the previous runup, I think most of us can agree that this level of stability for Bitcoin above the $10k mark is a highly-welcomed sign. It seems this recent stability can be quantified, as well: According to Coin Metrics, 180-day returns volatility for Bitcoin have plummeted 41% in September.

As we’ve seen in the past, this gradually flattening volatility seems to be a feature and not a bug for Bitcoin. Once enough investor interest has been garnered at a certain level, volatility appears to flatline, creating what traders would call a new bottom, also known as a new support. Though time will tell about the potential of $10,000 as a bottom, it definitely seems to us that volatility and price action are pointing in that direction.

Moving on with our last story of today’s edition, we close out how we usually do - with a report on traditional finance markets. In this case, we’ll take a look at the forex markets, specifically the recent downturn of USD. To kick off the trading week, we saw rallies across the board in stocks, forex pairs, and even commodities on 28th September - all rallying in spite (or as we see it, because of) the intraday decline of USD.

Though this rally for assets that aren’t the US dollar is surely welcome by many investors in traders, we see this as a mere correction for the greenback with no changes in the macro perspective. EURUSD remained below its major resistance of 1.1700 after European Central Bank (ECB) President, Christine Lagade, made a few less-than-reassuring comments about the ECB’s involvement and attention on the Forex markets. On the other side of the channel, GBPUSD also saw a massive resurgence to kickstart the trading session, although most of these gains were erased before the daily close right below the 1.30 level.

These gains did not stop at the forex markets, either: Gold managed to gain $30 on the day, closing at $1,880 per troy ounce. Crude oil prices followed the lead, with WTI retaking the 40.00 level. As we said, these gains have to be appreciated by traders and investors across the globe. However, with the presidential debate looming, it seems clear to us that USD will continue on as it has for the better part of 2020: once again moving into centre stage, taking all attention (and perhaps price gains) with it. As always you can trade the pairs mentioned in this report on easily at Overbit.com

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