Bitcoin’s Improving Fundamentals Indicate a New Bull Market is in the Making, Weiss Ratings
January 19th, 2019
Martin D. Weiss of Weiss Ratings says Bitcoin shares resemblance with Gold and with gold already bottomed and on its new bull cycle, Bitcoin is not far behind with its fundamentals strong. Meanwhile, he also talks about the upcoming bears in the stock market and if it will affect the “risk-on asset” crypto as well.
Bitcoin Shares Similarities with Gold
In its newest blog, Weiss Ratings’ Martin D. Weiss talks about Bitcoin bull market in the making and its resemblance with Gold.
Weiss talks about how Bitcoin’s primary use case is becoming a store of value that has earned it the title of “digital gold” and “gold 2.0.”
“Like gold, Bitcoin and other cryptocurrencies could become a haven for investors who flee from fiat currency devaluations. In fact, in one key aspect, it may be even better than gold: It cannot be confiscated by any government.”
Over the years, Bitcoin market movement shares resemblance to gold as at major highs, both make sharp U-turns called “pinpoint tops” and at major lows, both form long bottoming patterns called “rounded bottoms.”
Talking about gold hitting its bottom in August of last year, Weiss says gold is currently in a new 3-year cycle with its upswing in early stages. Gold is further expected to make new five year highs by surging through $1,400-per-ounce zone that means a new peak could be in order.
“Bitcoin is not far behind. The charts tell us it’s currently still in a bear market, but improving fundamentals tell us a new bull market is in the making”
First, while the market is falling, more advanced and newer cryptos like EOS and TRON have enjoyed a surge in usage. Another point presented is altcoins with a large market cap like Ethereum and XRP have “shown signs of escaping the bear” and halt its decline. The important point according to Weiss is that “Distributed Ledger Technology continues to advance by leaps and bounds.”
But Stock Market Bears are Coming, Will Crypto Drop More
With bear signalingan incoming for US stock market that could begin to decline in April, will it affect the cryptos as well?
For the starters, history gives us no context as S&P 500 has been in its nine-year-long bull market right from the day Bitcoin began trading.
“Whether looking at the daily, weekly or monthly fluctuations, there’s virtually zero statistical correlation between stocks and crypto.”
However, the biggest concern is Cryptos is a risk-on asset like stocks and speculative real estate. So, will investors rush to sell anything they associate with risk such as cryptos if their stock portfolios sink in a bear market? The answer Weiss says is “Sure” and it could put downward pressure on crypto prices.
However, he says, “We can’t imagine too many investors waking up one morning and saying: “Oops! Big losses in my stocks! I’ll sell my crypto to raise the cash.” And we doubt this factor will be the primary driver of Bitcoin prices.”
He concludes by advising not to let bear market in stock distract you from crypto investment and until, “Bitcoin signals its own bear market is over, prudence dictates caution.”