While Ibovespa goes back more than 7% with uncertainties about the future of the economy in Brazil, Bitcoin beat record valuation reaching R$ 80 thousand in the country
In the last week of October Bitcoin price has skyrocketed all over the world and, specially in Brazil, due to the devaluation of the Real against the dollar the main cryptomoeda of the market has registered records of valuation reaching US$ 80 thousand.
However, in the same period, Ibovespa, has registered its worst performance falling more then 7%.
Investor who applied $ 1 thousand in savings has today $ 1,013 if had bought Bitcoin would have $ 2,732
According to iHub Investimentos founder partner, Paulo Cunha, since the beginning of the month the stock market came with a three weeks high sequence, reaching again the 100 thousand points mark.
However, in this last week of October, the scenario changed reaching the score of 93,771.60.
Bitcoin X Ibovespa
The last week of October saw Bitcoin start trading in the range of $ 73,000 on October 26, when BTC went from $ 73,686.
But on Saturday, 31, the cryptomoeda broke another record being traded above $ 80,000 for a short period and closing the day at $ 79,405.
The Ibovespa also fell strongly impacted by the commercial dollar which rose about 2%, with sale at $ 5.74, considered the highest value since May and playing even more uncertainties with the recovery of the economy in the country.
“The external scenario has contributed to the risk aversion increase and a possible new stop of the economy. This resulted, so far, in the worst week since March, besides one of the worst weeks of the second half of 2020”, explains Paulo Cunha.
However, according to Cunha, in the case of Ibovespa, despite the concerns, the drop seems exaggerated and enters in contrast with the good balance sheets of companies that have been releasing results in Q3 (third half of 2020), above market expectations.
“Some investors have taken advantage of the moment to buy some papers at lower prices and the recommendation has been not to sell or alter in a significant way the portfolio,” says Cunha.
The Vix Americano index, which measures the market volatility, has touched 40,00 points and this only happens when the market goes through stress moments. Therefore, it is a very uncertain moment and demands caution.
Falling Real makes Central Bank record dollar remittances to Brazil
On the other hand, the local stock market and the international funds linked to the shares continue to be indicated for investors with a moderate and aggressive profile.
“Some houses of analysis continue to project the stock market above 100 thousand points by the end of 2020. When dealing with the options market, for example, the capture is made in a stronger way the volatility of stocks. Some options have reached more than 500% in a few days amid the strong Ibovespa drop”, explains Paulo Cunha.
In the case of Bitcoin, the expectation is of new highs that can take BTC to its highest historical value against the US dollar.
The charts indicate that the monthly Bitcoin price candle closed in October above US$ 13 thousand.
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This is the first time since December 2017 when BTC reached its historic high of US$20,000
For traders, a break above this mark indicates that there will be no resistance for BTC to reach US$ 20 thousand again.
Cathie Wood from Ark Invest is one of those who believe that the US$ 13 thousand break will be fundamental for a race “on the fly” up to US$ 20 thousand.
“That $13,000 level is important because if we went through that, in technical terms, there would be very little resistance and we’d probably be back to the peaks we saw at the end of 2017 – so about $20,000 . Now, we’re not sure if that’s going to happen. We could be in a new trading range, just a little above the recent six to 10. Maybe we’re in the $10,000 to $13,000 range. However, a leak,” he said.