Bitcoin price keeps on rising as market’s interest for futures vanishes
Many market participants expected that the introduction of Bitcoin futures trading would trigger a sharp correction, as it would be finally possible to take short positions. In fact, the opposite happened, the price soared more than 20% and returned above the $17,000 threshold. Over the last 24 hours, the price has been moving sideways between $16,200 and $17,500.
When we look at the numbers, the market’s interest for Bitcoin futures seems to be quite limited. The trading activity was quite limited at market opening on Monday. During the first hours, the average hourly volume was around 300 Bitcoin but it quickly declined as the future’s price exploded, climbing as high as $18,850. After that, trading activity declined continuously with around 50 contracts traded hourly.
The figures suggest that investors are not keen to go short Bitcoin, which suggests that further gains are expected. Bitcoin is currently going through a period of accumulation at around $16,000-$17,000. Regarding the price outlook, we remain bullish Bitcoin and expect that the price will pick-up soon as money continue to flow into crypto-assets. It is reasonable to target the $20,000 level by year-end.
Japan: weak inflation to weigh on the yen
The USDJPY has been increasing since the last week of November and is now monitoring stronger levels below 114 yen for one single dollar note. The yen is getting weaker but remains way too strong for the Bank of Japan to start normalizing its monetary policy. The central bank is in all-in mode and the effect on the yen is still mixed. One very important thing needs to be said. It is that the day when the BoJ will even hint at a possible normalization of the monetary policy, the yen will likely spike disrupting all the strategy from the Japanese Central Bank.
We then believe that, the BoJ will remain in a “dovish mode” until inflation will have killed part of its debt. This can take years even decades. Hence, the BoJ is condemned to follow the path of the Fed or the ECB. Inflation is what BoJ officials are running for. Shinzo Habe recently declared that wages increase of 3% in order to boost consumer prices which in the end will have a positive impact on the debt. BoJ knows that inflation is now mandatory to kill the massive debt. It is still a long way to go. And the BoJ knows looks towards the US hoping for several Fed rate hike next years.
