Bitcoin officially the best and worst performing asset of 2019
Bitcoin ends December with another bearish month, extending the losses in the current corrective move to seven months – but still up for 2019.
2019 showed Bitcoin lead every investment – sort of
While the news and pundits may rally behind the fantastic performance of the stock market (and indeed, it is an amazing feat), all of the tradition US Indexes fail to perform as powerfully as Bitcoin has. And even though Bitcoin has fallen as much as -53.64% from the June 2019 highs, as well as being in a downtrend for the past seven months, Bitcoin is nonetheless the best performing asset of 2019. Let’s compare Bitcoin’s yearly results against some indexes and commodities.
S&P 500: +29.09%
Russel 2000: +23.72
NIKKEI (Japan): +17.96%
DAX (Germany): +23.43%
FTSE 100 (Great Britain): +12.34%
CAC 40 (France): +26.61%
Oil (WTI): +33.97%
Natural Gas: -27.27%
DXY (Dollar Index): +0.53%
It’s clear that by looking at the percentage gains, Bitcoin is in a class of its own. But there are other considerations to take. If we look at the NASDAQ’s yearly candlestick (yes, candlesticks can be plotted as yearly candles!), we get a very, very bullish looking candle. Why is the NASDAQ’s yearly candlestick bullish? Look at where the close is relative to the high – they’re nearly neck and neck. When the close of a candlestick is at or near the high of the candlestick, that suggests extremely positive momentum, it means buyers are overwhelmingly in control. What does Bitcoin look like? Ugly – that’s what Bitcoin’s yearly chart looks like. Just look at the chart below.
The chart on the left is the NASDAQ’s yearly candlestick; the chart on the right is Bitcoin’s yearly candlestick. The difference between the NASDAQ’s 2019 high to the 2019 close is a negligible -0.78%. It’s not even a rounding error. Then we look at the difference between Bitcoin’s 2019 high and 2019 close – it’s laughable. The difference between Bitcoin’s 2019 high and 2019 close is a shocking -48.33%. So while Bitcoin did close 2019 with an overwhelmingly net percentage gain over any other asset, it’s performance was decidedly bearish. On an exciting note, though, Bitcoin’s yearly chart is showing a dominant bullish continuation pattern.
The close of 2018’s yearly candlestick was decidedly bearish, but it was also an inside bar. 2019’s yearly candlestick is also an inside bar. This has only occurred once before in Bitcoin’s history and that was the double yearly inside bar setup that occurred in 2014 and 2015. What was the net result of that setup? A near-immediate bull run that lasted for two years and saw Bitcoin create an all-time high near the $20,000 value area. Will it happen again? That remains to be seen. I don’t put a lot of stock into the formation of what a yearly candlestick dictates. I believe the individual candlestick pattern on a yearly chart for Bitcoin is as easy to interpret as a one-minute candlestick for Bitcoin: the one-minute candlesticks are to fast to be relevant and the one-year candlesticks are too few. What I find is important is where the close is relative to the highs and lows. If Bitcoin’s yearly chart were a monthly candlestick, I would be leaning ever so slightly towards a bearish move and creating new five to six-year lows. But that kind of scenario would mean a total change in the structure and movement of the aggregate cryptocurrency market, something that does not seem very likely.