BTC Hitting Oct 2017 Support, GBTC Hitting Sept Support

BTC is hitting Oct 2017 support. That support has been holding well since Feb 2018. GBTC is hitting Sept 2017 support. That support hasn’t been tested since Sept 2017.

What does this mean? Well at a glance it means:

  1. GBTC’s premium is lower than it was in October 2017.
  2. GBTC is hitting a range that should logically be a strong horizontal support (a place where the price consolidated previously and thus where the price would logically be more likely to resist dropping now; that range on the chart is roughly between $6.88 and $8.20, as you can see by eyeing the chart).
  3. GBTC is typically a better buy when its premium goes down, and sometimes GBTC losing its premium can even act as an indicator of a coming rally.
  4. There is a chance GBTC’s support will hold even if BTC stagnates or drops a bit… but if it doesn’t, then logically the price of GBTC and BTC will converge or approach convergence. If GBTC loses its premium, it could even start tracking BTC. Or it could, you know, rebound like crazy like we saw on Sept 17, 2017.

In short, although we don’t offer investing advice on this site, and even if we did my first bit of advice would be “not only is crypto risky, but GBTC is even more risky due to its premium,” there is a lot that I find interesting about the current state of GBTC.

The most interesting and notable thing here being that, from some measures, one could argue that the next support for GBTC isn’t on its own chart… it is Bitcoin’s actual price.

My logic behind the above statement is this: if GBTC had no premium it would be trading at roughly $6.55 today October 2nd, 2018 (1/100th of BTC’s current price). Instead, GBTC was trading at a low of $6.65 (about $1 higher; a “premium” resulting from traders paying more for GBTC than it is worth on the open market). We can see on GBTC’s chart that its next strong horizontal support below this one is around $4.30… in other words, although there are a few minor horizontal supports in between, the next substantial horizontal support is well below a fair value for GBTC, and thus BTC’s own value could end up being the next major support for GBTC (assuming BTC doesn’t drop, but instead mostly stagnates as GBTC loses value against it).

There is a lot of “ifs” there, but so be it. The point here isn’t predicting the future, it is showing an interesting series of events to watch play out.

GBTC hasn’t been in a state like this since 2017, so it is simply interesting.

What exactly this all means is in question, what exactly you should do with that information is far outside the scope of what our sites about, but man is it interesting. Very odd in terms of what GBTC had done since the second half of 2017 when that premium started growing.

Author: Thomas DeMichele

Thomas DeMichele has been working in the cryptocurrency information space since 2015 when was created. He has contributed to MakerDAO, Alpha Bot (the number one crypto bot on Discord),...

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