Bitcoin - Forex Combo Strategy: Bitcoin Hodling on the Rise
Welcome fellow followers and new subscribers to this week’s edition of my Bitcoin - Forex Combo Strategy. Cryptocurrencies are testing support levels and I think this could last for a bit longer. Bitcoin is trading at a double support level, but a breakdown below $9,000 is still a viable option as I see the case for a test of the $8,870 mark. Overall, the bullish trend remains intact and I can only reiterate what I have stated during last week’s update “Bitcoin - Forex Combo Strategy: Is Dash Threatening Bitcoin?”, that any drop below $10,000 is a great buying opportunity. I am looking to add to my position of price action drops to its next support level.
I remain very bullish on Bitcoin and this extends to Ripple, despite its recent drop, and I think Litecoin has great potential to close 2019 at a high note. My bearishness in Ethereum remains, unfortunately I closed my short position a bit pre-maturely but I was shoring up capital for my investments in Bitcoin and Ripple. I currently hodl 500 Bitcoin at an average entry price of $8,500, 40,000,000 Ripple at an average entry price of $0.3388 and 20,000 Litecoin which I bought at $77.00. The three charts below show my Bitcoin, Ripple and Litecoin holdings.
Now let’s take a look into hodling Bitcoin which is gaining popularity, or is it? That depends on how you interpret the data. CoinMetrics released data which showed that the untouched Bitcoin supply rose to an all-time high and clocked in at 21.6%. Untouched supply refers to Bitcoins which have not been transferred from wallets and Coin Metrics released data which shows hodling periods between 180 days and two years. This would suggests that Bitcoin is evolving from being used as a way to purchase goods and services in the digital economy to storing value. I have pointed this out last week and stated “ It is great to have Gold in your portfolio, but you will never pay your bills using it. It is more of a store for value and Bitcoin is rightfully labeled Digital Gold in professional circles.”
Some believe that this is a positive development, while others are concerned about it. Die-hard Bitcoin bulls who think we will go to the moon, as far as price action is concerned, will welcome the fact that Bitcoin is being hodled. They will argue that investors are gearing up for a massive bull market which is why untouched supply levels are hitting new all-time highs. Before jumping to conclusions, let’s not forget the scores who bought Bitcoin between $15,000 and $20,000 and who are now simply stuck with them, hoping that it will pay off soon. They are likely to head for the exits as soon as they can turn a profit.
Another fact to consider when looking at the data is that over the past 180 to 360 days, the price of Bitcoin has recovered from the 2018 Crypto Winter and more than triple in value. This would explain why Bitcoin has not been moved out of wallets over a 180 day time period. CoinMetrics stated “Although the size of the BTC supply has been consistently growing, the percent of the overall supply of BTC that has been untouched for at least five years also recently reached a five year high of 21.6%.” A five year period is quite a long time for any asset to remain untouched.
This was picked up by Tuur Demeester who added “I’m not so sure, 5 years without updating your cold storage method is a long time in Bitcoin. IMO most of these coins are likely lost.” This brings up a very valid point. The combination of investors waiting to recover their losses and the potential of lost coins puts the 21.6% untouched supply figure in a different perspective. Finally, institutional investors have entered the space and starting to hodl Bitcoin for the time being. Those position can exit the market as quickly as they entered.
While CoinMetrics look at five year hodl positions, I think that’s a bit stretched. The data over the past two years has plenty of one-off impacts which further distorts the overall picture. Overall, the data we have is not sufficient and leaves plenty of room for interpretation. I do think that Bitcoin should be considered as value storage, just like gold is, and hodling Bitcoin from current levels until we reach new all-time highs above $20,000 makes perfect sense to me. I am sure that in two years the data in regards to untouched positions may paint a different picture.
Let’s move to my forex portfolio now. Last week I finished with a 100 lots short position in the NZDUSD which I took on July 16th 2019 at 0.6730 for a margin requirement of $14,009 with a pip value of $1,000.00 and with a 100 lots long position in the EURCAD which I took on July 17th 2019 at 1.4650 for a margin requirement of $22,437 with a pip value of $765.36. Both positions remain open as price action moved little to warrant an exit or addition. The two charts show both my open forex positions.
On July 18th 2019 I bought 100 lots in the GBPJPY at 134.000 for a margin requirement of $24,957 with a pip value of $925.31. The trading recommendation can be found at “GBPJPY Fundamental Analysis – July 18th 2019”. On July 22nd 2019 I sold 100 lots in the USDCHF at 0.9835 for a margin requirement of $20,000 with a pip value of $1,014.56 according to this trading recommendation “USDCHF Fundamental Analysis – July 22nd 2019”. Finally, earlier this morning, I added a 100 lots log position in the EURAUD at 1.5965 according to this trading recommendation “EURAUD Fundamental Analysis – July 24th 2019”. The margin requirement was $22,285 with a pip value of $698.13. The three charts below show my added forex trades.
Here is the summary of my Bitcoin - Forex Combo portfolio: I hodl 500 Bitcoins worth $4,823,650, 40,000,000 Ripple worth $11,960,000 and 20,000 Litecoin worth $1,784,600 plus a total cash portfolio worth $1,182,404. In addition I have the following forex positions in my portfolio: a 100 lots NZDUSD short position worth $27,009, a 100 lots EURCAD long position worth $23,967, a 100 lots GBPJPY long position worth $102,683, a 100 lots USDCHF short position worth -$2,320 and a 100 lots EURAUD long position worth $22,285. My total Bitcoin - Forex Combo portfolio is worth $19,924,278, down $92,380 from last week’s value of $20,016,658 and further away from my all-time high$22,426,696. As I expect that volatility in cryptocurrencies will stay with us this summer, my balance will gyrate with my hodl positions. At the same time I anticipate that my forex positions will boost my cash balance which I plan to reinvest into cryptocurrencies, especially if we extend down to next support levels. I remain bullish and so should you, ignore stories about collapse in the sector and avoid fake news. Stick to the facts and price action, follow my Bitcoin - Forex Combo Strategy and open your own PaxForex Trading Account. Grow your balance with my guidance and simply comment below with any questions you may have and I will be happy to help you get started with my Bitcoin - Forex Combo Strategy!