GSX Commodity Market Blast

While Bitcoin sits outside our usual focus of soft commodities, its status has changed in a way that matters. In March this year, the SEC and CFTC issued a joint interpretive release classifying Bitcoin, along with 15 other crypto assets, as a digital commodity under US federal law, with the CFTC confirming it will administer the Commodity Exchange Act on that basis.

Bitcoin has no physical supply chain, weather risk or seasonal demand. Its price is driven by network adoption, liquidity and investor sentiment – especially in relation to USDDXY, and it remains far more volatile than traditional commodities. With a clearer regulatory home now established, we think it's worth keeping on our radar.

So, this week our chart of the week focus’ on Bitcoin. The current view is that the rally from the July low may be close to finished, with a meaningful pullback expected before any further advance.

Markets love to wrong foot the herd and Bitcoin is no exception. With all the hardcore 4-year cycle influencers adamant that BTC would strike 40k in October, it was a pretty safe bet that the thesis was precisely what would not happen. And Elliott Wave, the apex contrarian, gave us a clue with an impulsive wave i off the July bear market low of 57k. Once the wave ii was in place, we could project Fib extensions to determine a price target between 83-91k. The 2.236 extension at 86,400 is the most commonly observed termination point for wave v, to complete wave (i). Therefore, we're switching bearish for a sell off in wave (ii). Once price delivers the a and b waves, we can project a Fib target for wave (ii), likely at least 50% lower from here. There is also reversion likely back to the
200 DMA, which will act as support.