Quite the rollercoaster in the world of finance these last two weeks.
It started with a prolonged Bitcoin rally, continued with invasive political commentary, and came to a head with a rescue for equities. Yesterday, the S&P 500 climbed a record 4.96 percent, and the Nasdaq 100 put up +5.84 percent, numbers not seen since the generational-bottom of March 2009.
Gains took hold across all sectors of the market, following the worst ever Christmas Eve trading on record.
Everyone's favorite topic of discussion this time of year, the Santa Claus rally, was feared to have evanesced in the face of a Presidential administration that waded into the markets in an untoward fashion. Investors were still trying to digest the motivation behind a Treasury Secretary who reached out to CEOs of the top U.S. banks to ensure them of liquidity in the system.
Concurrently, President Trump took to the public to remind them that now was a "tremendous opportunity to buy stocks." Though he may be correct in his financial analysis – with the S&P now trading at an attractive 13x price-to-earnings ratio – his administration's untenable and unprecedented behavior spooked a market used to politicians who take a hands-off approach to markets and the decisions of the Federal Reserve.
Before equities regained their footing, crypto markets fell victim to enthused buyers stepping in to bargain hunt. Mid-December saw Bitcoin crash to a low of the $3100 area, levels not seen since September 2017, when the coin abruptly reversed upward to attack $4k.
As reported by BLOCKTV yesterday, Bitcoin is printing a bullish bottoming-pattern – an Inverse Head and Shoulders. Crypto traders will be watching to see how this pattern plays out over the coming weeks as the year turns. The icing on the cake might be the attractive volume profile clearing the skies for the coin all the way to the $6k level. Stay tuned for more on this next week.
Stepping away from the precipice, hope has been injected back into financial markets of all kinds. In a risk-off environment, in which all risky assets fall in tandem – including cryptocurrencies – traders and investors alike will be watching closely to see who blinks first, the bulls or the bears.