When It Comes to Peak Volatility, the VIX has Bitcoin Beat

Hope you’re having a fantastic day so far. All the markets went up yesterday for a special Valentines Day miracle.

The FOMO is back with a vengeance and though we’re nowhere near the peak FOMO levels seen in November we can clearly see that the FUD is fading fast and markets are getting excited once again.

Bitcoin is looking ready and willing to bust through 10k, possibly today. If it does indeed manage to do that, we may never look back.

That said, the usual disclaimers apply. These are super high-risk assets so any cryptocurrency should not take up more than a small part of your overall portfolio.

Today’s Highlights

• Inflation is Coming
• Chikun Leading the Way
• XRP on Western Union

Please note: All data, figures & graphs are valid as of February 15th. All trading carries risk. Only risk capital you can afford to lose.

Traditional Markets

There are two types of FOMO in this world. Healthy and unhealthy.

I must say that the FOMO in the stock markets yesterday was more than a bit concerning. The inflation numbers that every analyst and their brother were so hyper-focused on came out way above expectations showing that inflation is coming to the United States at a rapid pace.

The initial reaction in the stock markets was down as expected, but what happened next was a total surprise. Once the lows were in, things started rising as Wall Street moved in to buy the dip.

Even more confusing is the reaction from the US Dollar. The conventional thinking is that higher inflation would cause the Fed to hike rates faster, which in turn would strengthen the Buck.

Just like the stocks, the initial response was as expected and the Dollar rose sharply on the announcement. However, just a few short minutes later the Dollar started falling and continued to fall all the way until this morning.

Here’s the USDJPY. The announcement is circled in yellow.

The only reaction that really made sense was in the bond market. Here we can see the yield on the US 10 Year surging at the market open and rising until the close.

So now the question becomes… If the markets are skyrocketing after this huge inflation data came out, then what the heck really caused the sell-off over the last two weeks?

Chikun Leading the Cryptos

All the cryptos are firmly in the green today but none quite as much as Litecoin. The world’s first and most established bitcoin spinoff is up almost 60% over the last 7 days, half of which happened in the last 24 hours.

Here we can see a nice clean breakout in both the long term (blue) and short term (yellow) trendlines…

Though some are still speculating over the reasons for this massive rally, we can point to three main factors.

1. A scam hard fork called Litecoin Cash seems to have duped some. The founder of Litecoin himself has denounced this fork on Twitter but that may not have stopped some from trying to get in anyhow.

2. A new service called Litepay is planning to launch a product that will make it easier for business to accept the altcoin. Though this announcement is a bit old, it may still be spurring speculation.
3. The FOMO is friggen back in the market!

Crypto investors have been sitting on their hands for weeks waiting for a rally, so as soon as they saw one starting they jumped on and and are currently riding it for all it’s worth.

XRP Strikes Back

One more neat announcement that’s adding to crypto-enthusiasm today is a new pilot by the global fund transfer powerhouse Western Union.

Whilst many new pilots announced by Ripple Labs lately do not use the XRP tokens, this one will.

That means both Moneygram and Western Union are now testing out XRP to do their cash settlements and currency transfers.

Imagine the possibilities. I’ll let you guys draw the lines on this chart but I’d like to see a moon in there somewhere.

More Fun

Yesterday, my counterpart in the UK and I had a fun hangout live on YouTube. You can catch the recording here: https://youtu.be/d2N08RCB788

If you’d like to see more of this type of stuff or if you’d like to participate in one, let me know!!

Let’s have an awesome day ahead!

This content is provided for information and educational purposes only and should not be considered to be investment advice or recommendation. The outlook presented is a personal opinion of the analyst and does not represent an official position of eToro. Past performance is not an indication of future results. All trading involves risk; only risk capital you are prepared to lose. Cryptocurrencies can widely fluctuate in prices and are not appropriate for all investors. Trading cryptocurrencies is not supervised by any EU regulatory framework.

eToro (EU) Ltd, authorized and regulated by the Cyprus Securities Exchange Commission (CySEC)

Best regards,

Mati Greenspan

Senior Market Analyst

eToro: @MatiGreenspan | Twitter: @MatiGreenspan | LinkedIn: MatiGreenspan | Facebook: MatiGreenspan

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