Bitcoin Is Shaky But Medium-Term Bull Case Intact: On-Chain Analyst

Bitcoin is one of the most known virtual currencies which has gained worldwide publicity. The users or traders of this currency always note that the rate …

Bitcoin is one of the most known virtual currencies which has gained worldwide publicity. The users or traders of this currency always note that the rate is going up with every passing day. This also has attracted the attention of analysts, and they are also quite bullish about the future rate of this currency. One such view has been in trend in the past some days where it is said by an expert that the price of this currency will remain intact in medium-term also which is indeed good news for the virtual currency lovers.

The Bitcoin price is seeing some downside in recent weeks, but analysts are hoping that it will turn around in the near term. Willy Woo, On-chain analyst, says that the mid-term outlook of Bitcoin is bullish even as the price has remained below $10000 for three days consecutively.

The trend for the short term for BTC looks weak as the price slipped from $11462 to about $10000 in a matter of five days. The 12.6% drop was a huge one, and many investors were not anticipating this much volatility in BTC considering its performance in the last few months. Gold has also lost momentum in recent weeks as the US dollar sees some recovery in the market.

Bitcoin price Bitcoin price

How can Bitcoin sustain momentum?

In the opinion of Willy Woo, On-chain local indicators are showing a bullish trend for BTC. This includes Holding activity, network activity and NVT ratio. The NVT signal, for example, identifies the peak value of the market by evaluating the price of BTC against daily transactional value. In the same manner, network activity is also indicating a positive outlook in the medium term for Bitcoin.

As the price of BTC has dropped from $12000, several data points indicate a bullish trend in the midterm. One interesting thing about the market activity is that the network activity has remained pretty stable even as the price of BTC fell nearly 20% from the year high levels.

Willy Woo said that the price of BTC might not have bottomed, but he is bullish about the next few weeks. He says that when you are playing the big swings, this is not a bad time to buy back BTC and go long for the medium term.

Many traders are closely observing the $9650 as this is the gap between CME Bitcoin futures market and other exchanges. This gap forms when CME closes during the weekend, and it has been steady since July. Once this gap is filled, it can lead to further bullish trends in the market, according to many traders.

Willy Woo also has a similar opinion on this gap, and he says that longs can get filled with solid liquidity at such gaps. He added that the big players in the derivatives exchange have the capacity to fill such gaps with strong liquidity and give a further boost to BTC shortly.

However, some traders are concerned with the high NVT ratio of the BTC. When this ratio remained Higher than 70 earlier, it had made a local top. This time around, the NVT is still close to 81.5, and this is a matter of concern for some traders.

Su Zhu, CEO of Three Arrows Capital, says that the probability of BTC moving to $100K is more likely than BTC declining to $5000. The amount of liquidity at $8800 levels on Bitfinex is giving a huge boost to the positive sentiment. Considering such indicators, many people are expecting levels close to $8800 as this can offer huge support for the next bullish trend.

Earlier in March, the price of BTC had declined 50%, and this is unlikely to happen shortly as the BTC has defended $10000 for a long time now. It has added many new investors in the recent past, and most of them are likely to add to their positions if they see any further downside. This can give it good momentum in short to medium term in the market.

Apart from this, even the Fibonacci levels are indicating good support for the BTC in the near term. While the immediate support comes in the range of $9665 levels, the near term support is somewhere around the $8100 mark. On the other hand, if both these levels are broken due to market conditions, the long term support is close to $7000 and most analysts expect that this will be the near term bottom for BTC if it comes to this level in this downtrend.

However, things may not go so bad if the CME gap is filled in the vicinity of $10000. In that situation, most traders expect some near term resistance near the $10400 levels for the BTC. If the price of BTC manages to hold this level for at least a few weeks, there is a good chance that it may even cross the previous high of $12500 in the upcoming months. Once this level is reached, the big bull rally will begin, and not many people are clear about what levels it can reach in the future.

The recent pandemic has triggered huge losses for various economies around the world. Given this situation, the dollar value is likely to get affected due to a stream of stimulus packages announced by the government. After the November presidential elections, the US may announce a host of big stimulus packages to boost the economy. All these conditions are providing a boost to the cryptocurrencies indirectly as they are weakening the currency value by offering stimulus.

However, governments have little choice in this situation. In this situation, most people look forward to investing in BTC and other cryptocurrencies that are not controlled by governments. This will be the future of international currency, and Bitcoin has a good chance of becoming the leader in the race. Once the previous high of $12500 is taken out, a new bull rally is likely to get triggered that can further boost the demand for BTC in the market.

Intercontinental Exchange Stock Is Quite Expensive

Its stock is in sync with the S&P 500 index, as the company has profited from higher trading volumes in the securities market due to the Covid-19 crisis.

After a 50% rise since the March 23 lows of this year, at the current price of around $100 per share we believe Intercontinental Exchange’s stock (NYSE: ICE) looks fully valued based on its historic P/E multiples. Intercontinental Exchange, one of the largest exchange operators and clearing houses in the world, has seen its stock rally from $67 to $101 off the recent bottom compared to the S&P which also moved around 50%. Its stock is in sync with the S&P 500 index, as the company has profited from higher trading volumes in the securities market due to the Covid-19 crisis. Notably, its revenues grew by 7% y-o-y in the second quarter, mainly driven by 33% growth in total transaction and clearing revenues. Further, its stock is still 10% above the levels seen in late 2019.

Intercontinental Exchange’s stock has bested the level it was at before the drop in February due to the coronavirus outbreak becoming a pandemic. This seems to make it fully valued as, in reality, trading volumes in the securities market are likely to normalize over the next few months.

Some of the rise of the last 3 years is justified by the roughly 15% growth seen in Intercontinental Exchange’srevenues (revenue minus transaction-based expenses) from 2016 to 2019, which translated into a 35% growth in Net Income. The Net income figure was higher in 2017 due to the one-time effect of the U.S Tax Act.

While the company has had stable revenue and earnings growth over recent years, its P/E multiple has seen some increase. We believe the stock is unlikely to see an upside after the recent rally and the potential weakness from a recession-driven by the Covid outbreak. Our dashboard Why Intercontinental Exchange Stock moved 88% between 2016 and now has the underlying numbers.

Intercontinental Exchange’s P/E multiple has changed from just above 22x in 2016 to about 27x in 2019. While the company’s P/E is around 29x now, there is a downside risk when the current P/E is compared to levels seen in the past years – P/E of close to 27x at the end of 2019 and around 22x as recently as late 2016.

So what’s the likely trigger and timing for the downside?

Intercontinental Exchange (ICE) owns exchanges for financial and commodity markets. It generates more than 62% of its revenues from Transaction and Clearing Fees which are charged on a per-transaction basis for trading in derivatives, cash equities, fixed income, equity options, etc. The Covid-19 crisis and economic uncertainty have resulted in high market volatility, leading to a significant jump in trading volumes. This, in turn, means that the exchange would generate more revenue in terms of transaction and clearing fees. However, as the economic condition improves in the coming months, market volatility is likely to decline, normalizing the trading volumes. This implies that the Intercontinental Exchange’s revenue growth rate is likely to decrease in Q3 on a sequential basis.

Additionally, over the coming weeks, we expect continued improvement in demand and subdued growth in the number of new Covid-19 cases in the U.S. to buoy market expectations. Following the Fed stimulus — which helped to set a floor on fear — the market has been willing to “look through” the current weak period and take a longer-term view, with investors now mainly focusing their attention on 2021 results. Though market sentiment can be fickle, and evidence of a sustained uptick in new cases could spook investors once again.

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Dow Futures, Snowflake, Oracle-TikTok – 5 Things You Must Know Thursday

Dow Futures, Snowflake, Oracle-TikTok – 5 Things You Must Know Thursday. Stock futures tumble after the Federal Reserve says it will keep interest …

Here are five things you must know for Thursday, Sept. 17:

1. — Stock Futures Retreat After Fed Signals Rates to Remain Near Zero

Stock futures tumbled Thursday after the Federal Reserve said it would keep interest rates low through at least 2023 and Fed Chairman Jerome Powell said the U.S. economy would continue struggling without help from Congress.

Contracts linked to the Dow Jones Industrial Average fell 245 points, S&P 500 futures were down 38 points and Nasdaq futures dropped 157 points.

Stocks ended mixed Wednesday, with tech stocks leading the retreat, as the Federal Reserve held interest rates at near zero and indicated they would remain there for the near-term future to assist the economy during the coronavirus pandemic.

The Dow ended higher by 36 points, or 0.13%, to 28,032. The S&P 500 finished down 0.46%, ending its three-day winning streak, and the Nasdaq dropped 1.25%.

Powell said Wednesday a U.S. economic recovery would depend largely on how well the country controls the coronavirus pandemic.

“A full economic recovery is unlikely until people are confident that it is safe to re-engage in a wide variety of activities,” Powell said.

The Fed chairman reiterated that further fiscal stimulus was needed after  additional unemployment benefits expired.

Congress has been deadlocked on the size of the next coronavirus aid bill.

“When I look at where the stimulus talks are, the odds of something getting done are very, very slim,” said Joyce Chang, JPMorgan Chase’s global head of research. “Both sides are far apart.”

2. — Thursday’s Calendar: Jobless Claims and Housing Starts

The economic calendar in the U.S. Thursday includes weekly Jobless Claims at 8:30 a.m. ET, Housing Starts and Permits for August at 8:30 a.m. and the Philadelphia Fed Manufacturing Index for September at 8:30 a.m.

Economists put the number of Americans filing for first-time unemployment benefits at 850,000 for the week ended Sept. 12. Claims came in at 884,000 in each of the prior two reports.

3. — Oracle Reportedly Will Get Access to TikTok Code

Oracle  (ORCL) – Get Report will get full access to review TikTok’s source code to ensure there are no back doors used by TikTok’s Chinese parent ByteDance to gather data on the video-sharing app’s American users, Bloomberg reported, citing people familiar with the matter.

ByteDance and Oracle submitted these details in their proposal to the Trump administration with a goal of averting a sale of the app or a shutdown of its U.S. operations by the Sept. 20 deadline.

However, Bloomberg reported, the terms of the agreement seem to fall short of meeting national security concerns expressed by administration officials.

President Donald Trump said Wednesday he wasn’t happy with terms of the agreement that would allow ByteDance to retain a majority of TikTok’s assets, with Oracle acquiring a minority stake.

“Just conceptually, I can tell you I don’t like that,” Trump said.

“I’m not prepared to sign off of anything,” Trump said. “I have to see the deal.”

4. — Snowflake Cools Off After Blockbuster Debut

Snowflake  (SNOW) – Get Report shares were down 6.15% to $238.32 in premarket trading Thursday after the stock soared as much as 166% in its stock market debut.

Snowflake closed at $253.93 on Thursday after beginning trading Wednesday at $245 a share, well above its already increased initial public offering price of $120. The stock reached a high of $319 on Wednesday.

Snowflake’s initial public offering of $3.36 billion was the largest software-focused IPO ever and the biggest IPO in the U.S. this year.

According to TheStreet’s Eric Jhonsa, Snowflake is worth about $95 billion after accounting for outstanding stock options, restricted stock units and warrants. After backing out the roughly $4.5 billion in cash Snowflake possesses following its IPO and share sales to Berkshire Hathaway  (BRK.A) – Get Report and Salesforce  (CRM) – Get Report, the company has an enterprise value of around $91.5 billion.

Snowflake’s Extraordinary Post-IPO Valuation Warrants Some Caution

Such an enterprise value spells a valuation of 227 times Snowflake’s revenue of $403 million during its last four quarters. This valuation also is more than seven times higher than the $12.4 billion valuation Snowflake received in a February funding round.

5. — Southwest Grounds 130 Boeing 737-800 Jets

Southwest Airlines  (LUV) – Get Report temporarily has grounded 130 Boeing  (BA) – Get Report 737-800 aircraft after it discovered discrepancies in aircraft weight data.

Southwest said in a statement that “out of an abundance of caution, we have temporarily ceased flying the respective aircraft to enter the correct weights of the aircraft in question into the system and reset the program.”

Southwest said the discrepancy in weight data was 75 pounds, according to a report from Reuters.

The airline said the temporary halt to flights would “cause some delays and/or cancellations; however, we anticipate the impact to our operation to be minimal.”

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  • One of the largest derivatives exchanges in the world, CME Group, said that the institutional interest in bitcoin (BTC) futures is growing. Per their tweet on July 29, a new open interest record of 13,104 contracts has been set.

    Institutional interest in #bitcoin futures is growing, setting a new open interest record of 13,104 contracts. Lear…

    — CME Group (@CMEGroup)

  • How Commodities and Other Alternative Investments Can Help Diversify Portfolios

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