Since the late 1880s, Labour Day (the first Monday in September) has been a national holiday in Canada and the U.S. Its origins can be traced to an 1872 parade to support of the Toronto Typographical Union’s demand for a 58-hour work-week.
Today, September 4 2017, the stock markets in New York, Chicago, Boston and Toronto are closed. The spot price of gold generally freezes over the weekend. If you’re a trading junkie, you’re almost out of luck.
We say, “almost” because there is one commodity you can always buy.
The market for Bitcoin never sleeps. 24 hours a day, 365 days a year – you can buy or sell Bitcoin with the press of a button.
Over the Labour Day Weekend, Bitcoin prices retreated dramatically from $5,000 U.S to sub-$4,500 – decline of more than 10%.
As one Bitcoin advisor warns:
“Investing in cryptocoins or tokens is highly speculative and the market is largely unregulated. Anyone considering it should be prepared to lose their entire investment.”
Good to know.
Following the nasty plunge, Chartists (the investment equivalent of Tarot-card readers) at coindesk pointed out the “long term bull market in Bitcoin is still intact”:
- The rising trend line from the July 16 low is still intact and could offer support at $4,133 levels.
- The chart above shows a bearish price RSI divergence, which is formed when prices form higher highs while the oscillator (in this case an RSI) forms significantly lower highs.
- The bearish price RSI divergence suggests a short-term top in place around $5,000, although only an end-of-day close below $4,133 today would abort the bullish view and signal potential for more losses towards $3,769 (38.2 percent Fibonacci retracement).
- A potential for a revisit to record highs around $5,000 exists if the prices rise above the daily high of $4,611.6.
- Big gains above $5,000 levels cannot be ruled out if we see a sharp rebound over the next few days from the rising trend line support.
Dumbed down, coindesk pundits believe that if the price of Bitcoin goes lower if might go down even more. And if the price of Bitcoin goes up, it could rise higher.
[In related news : the Equity Guru team has determined that breathing regularly may extend your life expectancy, whereas failure to breathe could shorten it.]
Anytime a large group of investors make a shit-tonne of money, it’s going to generate interest and opinions. And yes – Bitcoin has been a fabulous investment – and the Labour Day pull-back doesn’t change that fact.
There has been chatter recently about investors fleeing gold for Bitcoin.
“We believe crypto-currencies are cannibalizing demand for gold,” one analyst wrote, “Based on this premise, we estimate that Bitcoin’s value per unit could be $20,000 to $55,000 by 2022.”
In fact, Bitcoin’s recent price performance has caused some analysts to dub it a Super Commodity.
Here are five reasons why people love Bitcoin:
- Supply is controlled and predictable – There will only ever be 21 million Bitcoins created and they are issued in an orderly fashion.
- The source is transparent – Bitcoin code is fully auditable. You can read the source code yourself here.
- It’s hard to manipulate – all transactions are seen by everyone.
- Resistant to censorship – No one can block transactions that they disagree with.
- Borderless – No country can stop the use of Bitcoin.
On the downside, big governments are hostile toward Bitcoin (it’s a tax-avoidance mechanism). The Chinese government has banned Initial Coin Offerings (ICOs). The Russian government is criminally charging a Bitcoin business, while the Venezuelan government has been arresting Bitcoin miners.
This holiday weekend has illuminated a facet of “investor sentiment” that affects crypto-currency investors: when the shit hits the fan, gold is still the go-to play.
On Sunday, North Korea tested a nuclear weapon. On state television, Leader Kim Jong-un announced that testing of an advanced hydrogen bomb for a long-range missile – was a “perfect success.”
US Defense Secretary James Mattis threatened North Korea with “a massive military response” if a US territory is targeted. South Korea freaked out. China freaked out. Pretty much everyone freaked out.
Gold promptly shot up $20 to $1,340 while major crypto-currencies were lead behind the woodshed and spanked. Echoing Bitcoin’s dramatic loses, Ethereum is down 21%, Litecoin down 24% while BitConnect down 30%.
The crypto-currency Indian-summer plunge yanked a few pundits from their family picnics:
“The technical traders were waiting to take profits at $5,000.” “It’s time to short Bitcoin”. “Temporary pullback as long as the $4,400 support level holds” “Was that a ‘pop’ I just heard?” “Anything lower than $4,000 could trigger a long squeeze” etc.”
Meanwhile, on Monday 3,000 people marched in downtown Toronto to support the labour movement.
“The Labour Day parade is a celebration of all our accomplishments, like a $15 an hour minimum wage” said one member of the OPSEU, which represents 128,000 Ontario government employees.
On January 1, 2011, for $15, you could’ve purchased 50 Bitcoins. Last Friday, your initial investment was worth $250,000. Today it’s worth $225,000.
That’s a lot of profit for zero labour.
Full Disclosure: Lukas Kane does not own Bitcoins.