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U.S. equity index futures rally: Nasdaq 100 up >1%
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U.S. initial jobless claims 196k vs 190k estimate
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Euro STOXX 600 index up ~0.9%
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Dollar, crude, bitcoin decline; gold up
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U.S. 10-Year Treasury yield falls to ~3.58%
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BITCOIN: READY FOR ANOTHER RUMBLE? (0900 EST/1400 GMT)
Early in the new year, it appeared something big was brewing
on the bitcoin chart. A similar setup may once again developing:
Indeed, on January 4, using Refinitiv data back to 2014,
bitcoin's daily Bollinger Band (BB) width, a historical
volatility measure, collapsed to 0.027, or its lowest reading
ever.
Low BB width does not in itself predict direction, but it
can indicate a market especially ripe for much more spirited
action, or its next significant trend.
From January 4, bitcoin surged as much as 44% into its Feb 2
high, while the Nasdaq Composite advanced more than 17%
into its Feb 2 high. Both BTC= and the IXIC have seen modest
pull backs since those highs.
With this, bitcoin's daily BB width has now collapsed again
to around 0.056, which is not as tight as in early January, but
still a respectably low reading.
Currently, bitcoin resides around $22,750 which puts its
below its 20-day moving average (DMA) around $23,135, suggesting
a weakening stance. A close below the lower daily BB, now just
shy of $22,500, will have the potential to spark another sharp
band-width rise, leading to a renewed slide.
Reclaiming the 20-DMA, can tilt back toward an upside
breakout. A close above the upper daily BB, now just shy of
$23,800, will have potential to also spark a sharp band-width
rise, and kickoff another advance.
In late January-early February, bitcoin's rolling 10-week
correlation with the Nasdaq hit 0.89 (1.00 is a perfect
positive correlation). Even though it has since weakened to
0.69, stock traders may want to keep a close eye on how bitcoin
resolves its current range, as it could signal another risk-on
charge, or bout of panic.
(Terence Gabriel)
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(Terence Gabriel is a Reuters market analyst. The views
expressed are his own)
