Market Pulse: Bitcoin Has Broken Out. Stocks Haven’t


    Momentum followers often focus on stocks that are hitting new highs. Widening that view now yields an interesting insight: Bitcoin has broken out while U.S. stocks haven’t.

    BTCUSD has outperformed since October 12, barely flinching when the S&P 500 had its worst week since March. It remained near 52-week highs and consolidated in an important price zone from June 2019.

    It closed above the important bear-market peak of $13,880 on Tuesday and has continued to progress higher since. This morning it touched prices last seen in January 2018 when the last bull market was deflating.

    Meanwhile the S&P 500 is still below its October high as investors wait for final clarity on the U.S. presidency and prospects for a stimulus bill.

    There’s also been news on Ethereum, the No. 2 cryptocurrency: Ethereum 2.0 will kick off around December 1 (moved forward from January 3). This will prompt “stakers” to lock up blocks of 32 Ether in a deposit contract, potentially reducing supply. ETHUSD rallied shortly after the announcement at 10am ET yesterday. Unlike BTCUSD, ETHUSD has yet to break out.

    See also: Is Bitcoin Decoupling From Stocks?

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    David Russell is Global Head of Market Strategy at TradeStation. Drawing on nearly two decades of experience as a financial journalist and analyst, his background includes equities, emerging markets, fixed-income and derivatives. He previously worked at Bloomberg News, CNBC and E*TRADE Financial. Russell systematically reviews countless global financial headlines and indicators in search of broad tradable trends that present opportunities repeatedly over time. Customers can expect him to keep them appraised of sector leadership, relative strength and the big stories – especially those overlooked by other commentators. He’s also a big fan of generating leverage with options to limit capital at risk.