Markets Continue Upward March With Quick Spike

The Dips And Recoveries Are Becoming Faster As Market Sentiment Improves

The market climbed higher today, then shot up in the later hours.

We managed to hit 224 Billion, just shy of where we were earlier this week.

So, what’s causing this sudden rally?

The most likely culprit is the recent outcome of a fraud case, where a US Judge sided with the CFTC, ruling cryptos are commodities for the purpose of the case.

The defendants contended that “My Big Coin”, which the creators marketed as a cryptocurrency that can be mined and traded, did not deal with any “contracts for future delivery.” Therefore, it’s not a commodity under the Commodity Exchange Act (CEA), they argued.

But, the CFTC refuted that contention, stating:

“A ‘commodity’ for purposes of [the CEA definition] is broader than any particular type or brand of that commodity. Pointing to the existence of bitcoin futures contracts, [the CFTC] argues that contracts for future delivery of virtual currencies are ‘dealt in’ and that My Big Coin, as a virtual currency, is therefore a commodity,”

The Judge wrote, “The text of the statute supports plaintiff’s argument. The Act defines ‘commodity’ generally and categorically, ‘not by type, grade, quality, brand, producer, manufacturer, or form.'”

So the takeaway here is that this is not a mind-blowing decision, but it does mean that following her clarification on the commodity status of virtual currencies and bitcoin futures, the CFTC by extension can exercise its oversight function on other virtual currencies.

What’s also important to note is that this decision was already made in another case decided back in March, in which a Judge wrote, “Virtual currencies are ‘goods’ exchanged in a market for a uniform quality and value. … They fall well within the common definition of ‘commodity.’”

What was obvious from this is that the market took the news and ran, leading to a minor short squeeze.

There is also pressure on the market as the CME Bitcoin Futures expire tomorrow.

Additionally, you had permabulls jumping in on the move, such as Mike Novogratz calling for a “big move” in Q1 2019, and a crypto rally within a few weeks, saying:

“You’re seeing new institutions moving in. This building, ICE, their stock exchange is getting involved in a big way. We’re a partner there. That opens, I think, in November – their exchange…

There’s an institutional FOMO going on all of a sudden. You’re going to see big announcements. Goldman Sachs is already talked about how they’re announcing custody. And as you start getting custody and service providers in and around the system, it allows pension funds and endowments to get involved. There’s some big endowments that are already getting involved through the venture space.”

Finally, Coinbase announced and investor-friendly product with Coinbase Bundle. It allows users to buy all five of their available cryptocurrencies with just one purchase.  

Those who choose to buy the Bundle will be buying a mixture of each currency in proportion to their USD market capitalization at purchase time. A Bundle is made up of Bitcoin, Bitcoin Cash, Ethereum, Litecoin, and Ethereum Classic.

Allowing people to invest in cryptocurrency by essentially giving them a mutual fund is a smart idea, and will continue to lower the barrier of entry for new investors.

Clearly, the market is in an interesting place right now. There’s a lot of hopeful sentiment returning to the scene, and we’ve certainly picked ourselves out of the depression we were in two weeks ago.

Importantly, we still have a long way to go before any “recovery” is in effect, but it is fascinating watching how this space continues to endure.

Doc will be doing a live class this Wednesday evening (and repeating it Thursday evening and Friday afternoon) on the topic “Chart Like a Pro: Four Powerful Rules for Crypto Trading.” He’ll boil down his advanced multi-timeframe Fractal analysis into four simple rules which can add structure to any system. Sign up for Wednesday’s session here. 

We’ve started to produce episodes for The ReadySetCrypto Podcast; all of our episodes are posted on our blog (and on iTunes) and Episode Thirteen is now available. Episode Thirteen is our interview with the CEO of Internxt about his upcoming beta of distributed storage services using Xcloud. (like a Dropbox). Look for more episodes shortly as we comb the crypto space for valuable interviews, and create valuable content to keep you in the loop! See you tomorrow!

We will be conducting live presentations of Doc’s “Fractal Energy Trading” class this week. The first presentation will be Wednesday Evening at 8pm ET (New York) and you may register here. Doc will also repeat the class in YouTube Live on Thursday evening at 8pm ET and Friday early afternoon ET; watch this space for details. Doc has also been doing a daily “Trade School” video with links in the Premium Chat room of the Discord page.

New to Cryptocurrencies? Check out our archived classes “Intro to Cryptocurrency Trading”, “How to Find Your Next Big Cryptocurrency: Intro to Fundamental Analysis,” Mav’s  class on “Security and Wallets” and Doc’s classes, “Introduction to Technical Analysis” and “Short Term Trading Strategies” which are now all available for immediate purchase in our Store, and seconds away from viewing in the Premium Member’s Home. View more about them at our online store by CLICKING HERE.

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Defensive Actions for the next trading day: 

• None.