Rivemont Crypto Fund on Bitcoin: Any Price Above $6,000 Support Level ‘Remains Positive to Our Eyes for Future Price Action’

Siamak Masnavi

On 10 August 2018, Rivemont Investments, which manages the Rivemont Crypto Fund (the "only actively managed cryptocurrency fund in Canada"), in a note to investors posted on Facebook, discussed Bitcoin's recent price action, and stressed the importance of the BTC price staying above the $6,000 support level.

The fund, which launched in December 2017, currently invests in the following cryptocurrencies: Bitcoin (BTC), Ethereum (ETH), Litecoin (LTC), XRP, Bitcoin Cash (BCH) and Ethereum Classic (ETC). 

In its update for the week ending 10 August 2018, Rivemont explained that "the correction initiated two weeks ago" was due to market players' overly negative reaction to the news of the U.S. Securities and Exchange Commission (SEC) rejecting (for the second time) the Winklevoss Bitcoin ETF application (i.e. proposed rule change by the Batz BZX Exchange):

"The market is particularly sensitive to any news related to the introduction of a bitcoin-based ETF. As Dan Morehead, CEO of the Pantera Cryptocurrency Fund, says, one could even call the market players' reactions exaggerated. This reality may be due to a lack of understanding of the complexity of introducing such a financial product, or to the large number of projects currently under study by SEC."

Next, Rivemont noted that a lot of positive news, such as the Bakkt announcement by Intercontinental Exchange (ICE), seemed to be getting ignored due to the cryptocurrency market's obsession with Bitcoin ETFs:

"Much more positive news was virtually ignored in comparison to the reaction created by these ETF projects. Indeed, ICE, the parent company of the New York Stock Exchange, announced the creation of its cryptocurrency platform named Bakkt last Friday. The company is working with Microsoft to put this new ecosystem for digital assets in place. Strategic partnerships with BCG and Starbucks have already been signed."

Finally, Rivemont moved to its prediction for the movement of the BTC price in the short term:

"After the rapid correction of the last two weeks, a rebound that could be described as technical rather than fundamental is predictable. This is also the action we can observe since Thursday. It is too early to know if this will translate into a rebound on the strong support around $ 6,000, or if it is only a temporary relief from the current trend... It goes without saying that the support around $ 6,000 is crucial. A period of consolidation is normal and even desirable after the incredible rise seen in 2017. Any price above this threshold remains positive to our eyes for future price action."

The "technical" rebound Rivemont talked about seems to be in progress, with Bitcoin currently well above that "crucial" $6,000 support level; at press time, BTC is trading at $6,475, up 2.17% in the past 24-hour period, according to data from CryptoCompare.


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Notable Bitcoin Trader and Whale Not Bullish on the Hyperinflation Narrative

Colin Muller

Highly regarded Bitfinex trader and crypto whale J0E007 is not banking on the hyperinflation narrative, which is a highly popular notion in the cryptoasset industry, implying it's a fairy tale.

Screenshot from 2020-05-26 13-23-22.png(source: Bitfinex pulse)

This narrative, exhibited for example here, proposes that the aggressive fiscal and monetary intervention on the part of many central banks around the world will eventually lead to sharp devaluations in the values of many fiat currencies—and most importantly of the U.S. dollar.

Propagation of this concept of rampant fiat inflation in the cryptoasset space is generally tied to predictions of a huge increase in the price and/or market capitalization of Bitcoin and other cryptos, although most focus on the flagship cryptocurrency.

A Little More Complicated

In his post, JOE007 linked to a recent report from Alhambra Investments, an asset management and financial research outfit.

The report details lead analyst Jeffrey Snider’s view that the dollar is not going anywhere in terms of demand, although definitely not by virtue of the competence of the U.S. Federal Reserve in handling the unfolding economic crisis lit by COVID-19.

Conceptually, first, any strong desire to hold expensive dollar liquidity buffers is drawn from serious mistrust of systemic conditions – including the central bank’s place in them. If you thought Jay Powell well prepared in advance with effective countermeasures standing at the ready, buffers of any size need not apply.

Jeffrey P. Snider

In short, Snider contends that the Fed under chair Jay Powell has not responded appropriately to the emerging crisis with “effective countermeasures at the ready”; and this bungling in turn has led to a higher international demand for US dollars in order to sit on a larger and safer cushion of “expensive dollar liquidity buffers.”

A complicated subject, to say the least. The upshot for J0E007 being that the dollar-collapsing narrative may have some big holes in it—removing the keystone of that popular Bitcoin use-case narrative.

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