This Week: Watching the Dragon
BTC/USD is currently trading just a little bit under $300, at $294.12. We’ve seen an incredible decline in the Shanghai Composite Index – a leading exchange China’s stock market – in recent days and Bloomberg’s leading story today is comparing their market to that of the United States in 1929 during the advent of the Great Depression.
Yesterday, the Shanghai Composite fell 8.5%, it’s worst single day loss in over a decade. This recent decline now brings the Chinese market loss in the last six weeks to approximately -38%, with approximately four-trillion dollars evaporating from the market. To get an idea of the scale of this market decline – Bitcoin, with a market cap of approximately four-billion dollars, would have to become worthless and evaporate to zero dollars 1000 times before it would equal how much money has been lost recently in the Chinese Market.
This week we continue to watch the Chinese exchanges, as many analysts continue to predict further declines in the coming weeks and days. Bitcoin, has been trading inversely to Chinese declines and is up 6.5% in the last four days.
Summary: In the last week we seem to have established support at $275. Recent volatility to the upside makes $300 a threshold to watch in the coming trading days as a potential new support level.
Month to Date
We opened this month at $261.48, and are now up approximately 12.5% at $294.13, with only a few trading days remaining. Market capitalization also continues to rise. On July 1 the market capitalization was approximately $3.7 billion and we are now riding at $4.25 billion, an increase of 14.9%.
Year to Date
In recent months BTC/USD has remained negative for the year, however, due to recent gains we are now only down 6.6% for the year. This is now doubt aided by the 6.7% increase we have seen in price in just the last four trading days.
Lastly, with regard to market capitlization year to date, we are now only -3.3% lower than we were on January 1. Bitcoin is very close to reaching parity with where it began the year and is only approximately $140 million dollars shy of reaching positive capitalization.
This concludes our market outlook and update for this week of Jul. 26 – Aug. 2.