Bitcoin Rally Continues

The CME/fork inspired rally in bitcoin continues. Its little brother Litecoin is not participating this time around, however.

Bitcoin Rally Continues

Bitcoin is currently quoted at $7,130 dollars per coin, up by close to 12 percent since last Tuesday. As reported back then, the Chicago Mercantile Exchange announced that they will offer BTC futures by the end of this year, pending regulatory approval. This, along with the coming bitcoin fork (Segwit2x) on November 16th, is pushing prices higher.

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The gains in BTC and the selling of alts at the same time suggests that traders are again positioning to take advantage of what they perceive as ‘free money’. Unlike previous forks, however, during this one, both sides refuse to add replay protection. This means that it will be harder to safely split the two chains and sell the ‘losing’ fork.

Right now the future segwit2x coins (BT2) are trading at 0.12 BTC on Okex. However note that in case of no fork, the terms suggest that BT2 will expire worthlessly. This includes the scenario where Core developers ‘surrender’ and decide to implement 2mb blocks themselves.  So a bet on BT2 on Okex is a bet on a fork occurring, in addition to it being a bet on segwit2x ‘winning’. Currently, around 83% of mining hash is still signalling support for segwit2x.

Back to technicals! The rally in BTC/USD continues and we are trading 11.7 percent higher compared to seven days ago. We need to see a break of the $5,622 swing low before we can call an end to the bullish trend. A new downtrend may commence if prices fall below the $5,355 swing low. On the longer-term weekly and monthly charts bitcoin is looking bullish as well.

Litecoin Doesn’t Follow Big Brother

Like we saw during previous pre-fork periods, LTC/USD refuses to follow BTC/USD higher. Traders are liquidating altcoins in order to buy BTC for the upcoming fork. The altcoin is quoted at $55.12 dollars right now, down by 51 cents (-0.7 %) since our last update. Note that the fork is not a certainty and there are non-negligible odds that it may not occur if either side ‘surrenders’. No fork could lead to unwinding of previous trades and a recovery in altcoins.

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Litecoin is now in a range on the daily charts. A new uptrend requires a breakout above the $61.90 swing high. A new downtrend needs a decisive clearing of the support area around the $50 round figure, which now includes the most recent swing low at $49.01. Similarly to the daily, the weekly is range-bound but the monthly is keeping the bullish bias.

Petar Kotevski

Petar is a forex trader and writer with 9 years of experience in financial markets. He has been following bitcoin since 2010. A year ago, as the BTC market matured, he started getting more involved by writing articles on bitcoin and other alternative currencies.

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