Bitcoin (BTC) and China A (ASHR): Crazy 8’s

By March 5, 2019Bitcoin Business
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China A shares (ASHR) represent domestic Chinese stocks that trade on the mainland. What makes China A unique is that it is the trading index of choice in mainland China.

China A ($ASHR) and Bitcoin (BTC) have one thing in common: They are both highly speculative assets.

Since Chinese investors never met a speculative play or gamble they didn’t like, when $ASHR starts rallying crypto-like, FOMO can kick in. After Donald Trump embarrassed the Chinese by making fun of their declining market, the Chinese government announced in October that it was going to engineer a stock market rally to prevent that from happening again.

Nobody paid attention back then, but people and CNBC are paying attention now as A-shares have been ripping higher despite weakening Chinese data. When the Chinese want to make something happen, they mean business.

Fortunately, we noticed that speculative fever in ASHR can be a leading indicator of sorts for future FOMO in Bitcoin (BTC).

The last massive rally in ASHR early 2015 unfolded about 8 months before the bottom in Bitcoin (BTC). The bottom and subsequent rally in Bitcoin (BTC) started in August of 2015 (Figure 1).

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Figure 1

Looking at the major rally in ASHR vs. Bitcoin (BTC) now, we noticed that the ASHR rally started roughly eight weeks before a possible take off in Bitcoin (BTC, Figure 2).

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Figure 2

With Bitcoin (BTC) practically mainstream, it seems appropriate that an eight-month lead time in 2015 is equivalent to an eight week lead time in 2019.

Bottom Line: Like the common cold in a kindergarten classroom, speculative fever can be contagious. If people like ASHR, then they almost have to love crypto even more. ASHR is propped up by a government. Bitcoin (BTC) is driven by the idea of a store of wealth based on computer code that can’t be changed without consensus.

To FOMO or not to FOMO? That is the question. The Crypto.IQ Trading Desk always has a good answer.

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