No doubt that the topic du jour for financial market participants is the successful Brexit vote and what the potential implications are for all assets, including bitcoin. While this could have had a small near term effect on price, we think it is a stretch to proclaim causation.

The Brexit vote and subsequent price action in the bitcoin markets is exemplary of what is becoming a common misperception on the part of bitcoin traders and investors. Fundamental global macro events might indeed cause very short term perturbations in the markets, however we think it is spurious to say that these events are directly influencing supply and demand in the nascent cryptocurrency. 
We think that what appear to be catalyzed moves in bitcoin are more likely indirect influences exerted by shifts in perception regarding legacy currencies and commodities. We also think that a contributing factor to the apparently correlated moves is speculators attempting to anticipate the market’s reaction to these events, which in turn makes the price action somewhat of a self-fulfilling prophecy. 

We think this is not only the case with regard to Brexit, but also as far as moves relating to China, the FED, stock markets, and precious metals. This postulation is supported by statistical evidence that bitcoin remains highly uncorrelated to all other traditional asset classes over time, something that should come as no surprise seeing as though this is still a highly misunderstood financial instrument. Having said that, the misunderstanding also creates opportunity for those of us that do “get it”, which is another reason we want to remain in BTFD mode...

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Market Commentary (BTC): 

The bitcoin markets are under some pressure this morning as traders take profits on long positions on speculation that the Brexit campaign will not win the vote this Wednesday.  This is also causing a bit of a rally in global stock indices, however we question the sustainability and longevity of the moves in all of these markets.  That said, the bitcoin price is actually hold up fairly well given a weak near term technical picture and some growing uncertainty surrounding the halving and Brexit.  

Yet another bearish candle probed down into support last night before getting rejected once again near what was our short term ProTrade buy zone between 715 and 720 $ (the local low was 721 $).  We can see on the 4-hour chart below that SCMR painted a red candle once the near term uptrend line was breached, however it is already painting a potential bullish reversal candle now just a few hours later...

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Market Commentary (BTC):  

Following a relatively scary day for the bulls yesterday, today things are stabilizing nicely as buyers have moved back in.  Fortunately we were able to sneak into a position under 660 $ during the panic, and although it looked dicey for awhile it now appears as though a local low may be in at 656.51 $.

Although we were partially hoping price would correct more pre-halving in order to catalyze the uber-bullish scenario discussed in the BBB Weekly Report, a sideways consolidation between 650 - 700 $ would most certainly set us up for a having rally likely well up into the 800's $.

Seeing as though we have covered the medium to long term forecast quite thoroughly this week already in the BBB Weekly Report, we now turn back to the short term timeframe to get more granularity.  We can see on the always important 4-hour chart below that the selloff yesterday stopped right on SCMR dynamic support and ended up holding the 18 EMA.  You'll also notice that we left the Fibonacci retracement levels on the chart, which we rarely do, in order to illustrate the bounce off of the 38.2% level (typically a very bullish sign)...

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Disclaimer: Please always do your own due diligence, and consult your financial advisor.  Author owns and trades bitcoins and other financial markets mentioned in this communication.  We never provide actual trading recommendations. Trading remains at your own risk.  Never invest unless you can afford to lose your entire investment.  Please read our full terms of service and disclaimer at BullBearAnalytics.com.