- A discrepancy between Bitcoin (BTCUSD on xStation5) and the USDJPY has widened of late
- Chinese National Internet Finance Association calls into question safety of coin offerings
- Litecoin (LTCUSD) keeps on rising with market capitalization exceeding $4 billion
We mention from time to time that Bitcoin could be treated as a safe haven asset as it’s tended to correlate to the USDJPY (inversely). Although, it could seem to be quite a bizarre relationship, it’s actually worked so far. Thus, it’s worth mentioning that both assets have decoupled lately which might create a trade opportunity if the gap is to be closed.
As the chart above shows, the Bitcoin price has almost uninterruptedly risen while the USDJPY has stopped declining (notice the currency pair has been equipped with an inverted axis). In effect, quite a noticeable divergence has been drawn. Once that relationship (a negative correlation) is to be retained going forward, lower levels on Bitcoin or a resumption of falls in the USDJPY could occur. Finally, joint closing of the gap might be considered as well, it would demand going short on both.
The story which came from China could act in favor of a slowdown in the Bitcoin’s price action. Namely, according to China’s National Internet Finance Association, launches of new digital currencies, known as initial coin offerings (ICOs), have shaken up social and economic order, created hidden financial risks, and in some cases may amount to fraud. That kind of comments could halt broadening of virtual currencies across the country acting against their prices.
At the end, let’s take a look at Litecoin which has been thriving of late. As a result, the digital currency has struck an amazing $4 billion in terms of market capitalization which places the coin as the fourth largest market among all crytpocurrencies.