CFDs are complex instruments and come with a high risk of losing money rapidly due to leverage. 69% of retail investor accounts lose money when trading CFDs with this provider. You should consider whether you understand how CFDs work and whether you can afford to take the high risk of losing your money.
Open account
☰
CFDs are complex instruments and come with a high risk of losing money rapidly due to leverage. 69% of retail investor accounts lose money when trading CFDs with this provider. You should consider whether you understand how CFDs work and whether you can afford to take the high risk of losing your money.
Open account
✖

Bitcoin finds stability in May

May 25, 2020 1:50 AM

After it’s capitulation in March and subsequent recovery in April, the month of May has brought much-needed stability to the price of Bitcoin, amongst further signs of acceptance and institutional legitimacy.

While the “halving” on May 11 appears to have been factored into the price of Bitcoin in advance, the month of May has been notable for the following reasons.

  • Legendary macro trader Paul Tudor Jones said he bought Bitcoin as a hedge against the inflation that may come as a result of central bank money printing.
  • U.S. bank, JP Morgan Chase has started to accept clients from the crypto space including Bitcoin exchanges Coinbase and Gemini Trust Co. This coming after JP Morgan Chase CEO Jamie Dimon called Bitcoin “a fraud” in September 2017.
  • Goldman Sachs will later this week host a conference call for institutional clients on the Crisis, Crypto, and Inflation.
  • An increase in U.S. - China tensions, including confirmation at China’s annual National People’s Congress last week that there will be a bill establishing “an enforcement mechanism for ensuring national security” for Hong Kong. This comes after U.S. President Trump said he would “react strongly”, if China was to proceed with this plan.

The developments above, add to the already supportive macro reasons for Bitcoin. Since our last update on Bitcoin in early April, the price action has erased much of the technical damage that followed its plunge in March.  

Specifically the rally from the March 3850-low has since late April, started to display more impulsive/bullish characteristics. However two medium-term bullish hurdles remain – a break/close above year to date highs 10500 area and weekly trend channel resistance ~11000 viewed on the Weekly Log chart immediately below.

In the short-term, the view is that Bitcoin is currently tracing out a corrective pullback towards support at 8100/00 (May low and the 200-day ma). Providing signs of a base form in/near this support region, the preference is to be a buyer of Bitcoin, in anticipation of a rally towards medium-term resistance levels 10500/11000 and possibly beyond.

Source Tradingview. The figures stated areas of the 25th of May 2020. Past performance is not a reliable indicator of future performance.  This report does not contain and is not to be taken as containing any financial product advice or financial product recommendation

StoneX Financial Ltd (trading as “City Index”) is an execution-only service provider. This material, whether or not it states any opinions, is for general information purposes only and it does not take into account your personal circumstances or objectives. This material has been prepared using the thoughts and opinions of the author and these may change. However, City Index does not plan to provide further updates to any material once published and it is not under any obligation to keep this material up to date. This material is short term in nature and may only relate to facts and circumstances existing at a specific time or day. Nothing in this material is (or should be considered to be) financial, investment, legal, tax or other advice and no reliance should be placed on it.

No opinion given in this material constitutes a recommendation by City Index or the author that any particular investment, security, transaction or investment strategy is suitable for any specific person. The material has not been prepared in accordance with legal requirements designed to promote the independence of investment research. Although City Index is not specifically prevented from dealing before providing this material, City Index does not seek to take advantage of the material prior to its dissemination. This material is not intended for distribution to, or use by, any person in any country or jurisdiction where such distribution or use would be contrary to local law or regulation.

For further details see our full non-independent research disclaimer and quarterly summary.

CFDs are complex instruments and come with a high risk of losing money rapidly due to leverage. 69% of retail investor accounts lose money when trading CFDs with this provider. You should consider whether you understand how CFDs work and whether you can afford to take the high risk of losing your money. CFD and Forex Trading are leveraged products and your capital is at risk. They may not be suitable for everyone. Please ensure you fully understand the risks involved by reading our full risk warning.

City Index is a trading name of StoneX Financial Ltd. Head and Registered Office: 1st Floor, Moor House, 120 London Wall, London, EC2Y 5ET. StoneX Financial Ltd is a company registered in England and Wales, number: 05616586. Authorised and regulated by the Financial Conduct Authority. FCA Register Number: 446717.

City Index is a trademark of StoneX Financial Ltd.

The information on this website is not targeted at the general public of any particular country. It is not intended for distribution to residents in any country where such distribution or use would contravene any local law or regulatory requirement.

© City Index 2024