Below Kathleen Brooks, Research Director at City Index, provides commentary on the latest bitcoin affairs.

Bitcoin is recovering from one almighty correction last week where it dropped from a high of $7,882 to a low of $5,605 in just three days. That is a drop of nearly 30%, which is technically bear market territory. However, this is Bitcoin and due to this it doesn’t react the way other asset classes do. At the start of this week Bitcoin is up $1,000, and has retraced nearly 50% of last week’s decline.

Factors that drove last week’s decline in Bitcoin included:

• The cancellation of the upcoming Bitcoin fork, Segwit2x. This may have weighed on the price as pre-fork buyers who were looking to benefit from another upsurge in price, as we saw with the fork that created Bitcoin cash back in August. This impact should be temporary.
• The European Securities and Markets Authority issued a warning on the risks of initial coin offerings, saying that they were highly risky and very speculative. They are not the first authority to warn over ICOs, in fact China banned them, with little effect on the Bitcoin price, and thus we expect Europe’s warning on ICOs to be mostly brushed off by Bitcoin traders.
• The technical signals showed bitcoin deep in overbought territory, thus there may have been some hesitation when Bitcoin approached the $8,000 mark, which may have led to a rush to the exits.

Looking at the factors that may have driven Bitcoin’s sell off, most appear short term, and indeed, the sharp bounce back on Monday suggests that traders are using any dip as a buying opportunity.

So, where could Bitcoin go next?

This is a tough one to answer as Bitcoin appears to be a runaway train overcoming any obstacle thrown in its path. From a technical perspective, there is nothing to stop Bitcoin hitting $10,000 per USD (see chart 1), as long as we close above $6,500 today. Usually when a price moves through a big psychological level it continues to move higher rather than pausing or reversing course, thus $10,000 could the start of life above 5-figures for Bitcoin bulls. Thus, any future sell offs, and we warn you that they can be severe, could be used as further buying opportunities.

Perhaps the biggest challenge for Bitcoin will come when volatility elsewhere starts to rise. If the Vix was to surge like it did back in late 2015/ early 2016, then traders may lose interest in Bitcoin and pile into other fast-moving asset prices. However, for pure speed and adrenalin, nothing beats bitcoin’s price movements right now. It’s great if you can pick up on the dip and ride the wave higher, but it is not for the faint-hearted.

Source: City Index and Bloomberg

Following this week’s news on a two year high for the Brent crude oil, Richard King, Trading Manager for Inprova Energy, discusses the current impact of oil price volatility on company energy bills worldwide.

Brent crude oil prices hit a two-year high of more than $58 a barrel on Monday 25 September. Although prices have since reduced slightly, analysts don't expect prices to fall back.

Outlook for oil prices

Oil price increases have been largely driven by cutbacks in supply from the oil exporting cartel OPEC. Market experts predict that OPEC will continue its deal to cut production beyond March 2018 as part of its strategy to rebalance oversupply in the global oil market. Market analysts expect the oil price to be within the range of $55 to $60 a barrel for the remainder of the year, with potential for higher levels in 2018.

In a further boost to recovering oil prices, US producers are struggling to fill the supply gap, and the independence referendum in Kurdistan has the potential to disrupt Middle East oil supplies due to the Iraqi government's call to boycott Kurdish supplies. Mounting political tensions between North Korea and the USA could also be a bullish force.

Impact on energy prices

This is having a knock-on effect on UK business energy market prices. Both gas and electricity contracts for delivery in the next few months have posted significant gains of 2-3%. This has reversed recent decreases in energy prices, linked to the currency improvements for Sterling against both the US dollar and the Euro.

Energy market volatility

Oil prices are firmly linked to wholesale energy prices, which will, undoubtedly, increase energy market volatility in future months. In addition, as we head into winter and uncertain weather conditions, and continue to face energy supply reliability problems from continental Europe, further price swings are inevitable.

Such volatility is becoming the new norm. During the past 12 months there was a 45% price swing in the wholesale power market, which was more than twice as volatile as the average movement of the five years prior.

Smarter energy purchasing

While overall electricity and gas commodity prices remain well below the levels reached in 2014, the sizeable commodity price movements underline the imperative of getting timing right when purchasing energy.

Flexible procurement strategies can be less risky than fixed purchasing because there is the facility to buy energy little and often when wholesale prices are favourable, rather than gambling that the prices are best on the day that you fix your purchase. There is also the facility to take advantage of forward prices, which are currently very attractive beyond 2018.

Above all, it is imperative for energy buyers to manage their energy purchasing within a robust risk management strategy, which will set price limits and guard against buying at the top of the market - helping to counter market uncertainty.

ONS figures show that the typical home in the UK cost £220,100 in April, with a rise of £3,500 on the previous month.

This equates to a £12,000 increase from the same month a year ago, the Office for National Statistics (ONS) says, despite banks and lenders reporting a stagnant property market period.

This does however oppose figures from Nationwide Building Society and Halifax Bank, which have proved a stalling housing market over the past few months.

This week Finance Monthly has heard Your Thoughts on the housing market and gathered some insight from the experts below.

John Eastgate, Sales and Marketing Director, OneSavings Bank:

House prices have been galloping upwards for the past five years, but it seems that softening demand might be starting to rein-in the pace of that growth. Mortgage approvals fell once again in April, reflecting falling consumer confidence that will hardly have been helped by the election outcome.

Until we get some clarity around how the political landscape will unfold, it is difficult to envisage a material change in consumer confidence, so we should expect the pattern of reducing house price growth to continue.  Falling real incomes will remain a challenge for affordability although we should expect to see mortgage rates remaining at record lows for some time to come and this will no doubt support a core level of demand and ensure a modest level of house price growth in the medium term.

Luke Somerset, Business Development Director, Contractor Mortgages Made Easy:

Whist housing sales are reported to have dropped by 19% across the UK since this time last year, there remains an overwhelming sentiment that we remain in a sellers’ market.  House prices remain incredibly resilient despite of Brexit uncertainty and the stamp duty levy introduced in April 2016. This has led to a substantial increase in the cost of an average house in the UK putting further pressure on first time buyers and next time movers. However, it is not all doom and gloom.

The number of mortgages that require just a 5% deposit have increased by 14% over the last 12 months and there are now 287 mortgage products available to these borrowers with minimal deposit. With increased competition amongst lenders, interest rates for younger borrowers are starting to fall, so in spite of an increase in house prices, the actual cost of funding a mortgage hasn’t increased proportionally, thanks to the drop in mortgage rates. This doesn’t however help young borrowers when it comes to saving a deposit and more should be done to assist young borrowers onto the property ladder.

Mark Noble, Managing Director, Castles Residential Sales and Lettings:

If you listen to media coverage, believe everything you read in the papers and listen to some local estate agents, you could be fooled into thinking that the housing market is in the doldrums and there seems to be surprise that house prices have risen fairly dramatically over the last 24 months.

However, if you are in the housing sector or scratch under the surface, you will quickly realise that the lack of good property inventory coming to the market in the right numbers has created a huge supply and demand problem, creating a situation of more buyers than property and ultimately, pushing house prices upwards.

At Castles we have sold 2 properties in the last few weeks at over the asking price, one came to the market at £189,995 and sold (stc) for £197,000 and the other came to the market at £200,000 and eventually sold (stc) at £212,000, this was as a result of mini open houses and best and final offers.

The simple facts remain, if you put your house on the market with the wrong agent, at the wrong price the property will remain on the market for weeks, if not months, creating the false impression of a stagnant market place.

Should you decide to employ the services of an agent with a proven track record in selling property in your area and price your home correctly, then a sale can be achieved in a reasonable timescale, some properties are still selling within days and before reaching the internet.

There is always a period of reflection before and after events like the recent election but we envisage the market will continue in the same vein for the foreseeable future, so if you are thinking of selling, chose your agent wisely as they really can make the difference to the price you achieve for your property and in some cases, whether your property sells at all.

Mark Homer, Co-Founder, Progressive Property:

Despite stories of a recent cooling in the UK property market the longer-term trend for U.K. Property prices is rosier. As the typical house price has increased by £12,000 in a year (ONS) it is clear that a lack of supply and continued population increases are still pushing prices higher.

As 2017 has developed it has become clear that a 2-step market has materialised as a result of government policy.

Coming off the back of seeds that were Sewn in 2016 when the government increased stamp duty on more expensive and buy to let properties sales of these types of properties have stalled. Many properties over £937k (on which stamp duty has increased with some now attracting 12%) are now sitting on the market and sellers are having to reduce the prices by up to 20% to get a sale. As interest rates are low however many are choosing to just sit on them hoping for a buyer to come along making this part of the market “gummed up”.

At the same time big incentives for first time buyers through the help to buy scheme coupled with low interest rates is fuelling demand from those looking to get on the first rung of the ladder. Small new build houses and flats are selling well because of this and have provided support to the lower end of the market. As these types of purchases are making up an increasing large proportion of sales they are contributing increasingly to transaction volumes which have faltered in many other parts of the market.

We expect once Britain’s place in Europe becomes clearer and uncertainty around a lack of government majority subsides the market will grow around 5% per annum overall once again.

David Martin, Chief Operating Officer, Hatched.co.uk:

Understandably, people casting an eye over the UK property market in recent months would be forgiven for being somewhat confused. Conflicting news stories are released on what seems like a daily basis. The difficulties start when we all compare house prices around the UK. When you look at a regional level, many parts of the north of England are still showing steady growth – Rightmove reported in their June 2017 House Price Index a 3% annual price change in Yorkshire and the Humber, compared with a 1.8% increase in the South East and an overall decline in London of -1.4%.

Here at Hatched, we cover the whole of England and Wales and we’ve seen recent figures more comparative with the banks and building societies, rather than many of the ONS. For year-on-year activity to the end of May, we’ve seen a 18.5% increase in viewings booked, a 27.4% increase in the number of offers made and our average house price at point of sale-agreed is up 3% to £271,632.

Our number of house completions is up by 19.7% for the same period, with the average house price of those completions being £236,801 in 2016. Interestingly our average sale-agreed price in the same time period this year is £271,632, an increase of nearly 15%.

In June, we’ve continued to see a steady stream of viewing requests, in-line with the year so far. Ultimately if a property is priced correctly, presented in the best way possible and shown to as many buyers as possible, the best price for the client will be achieved more often than not.

We would also love to hear more of Your Thoughts on this, so feel free to comment below and tell us what you think!

According to ATTOM Data Solutions’ Q1 2017 US Home Sales Report, which shows that homeowners who sold in the first quarter realized an average price gain of $44,000 since purchase, representing an average 24% return on the purchase price — the highest average price gain for home sellers in terms of both dollars and percentage returns since Q3 2007.

Meanwhile, the report also shows that homeowners who sold in the first quarter had owned an average of 7.97 years, down slightly from a record-high average homeownership tenure of 8.00 years in Q4 2016 but still up from 7.68 years in Q1 2016. Homeownership tenure averaged 4.26 years nationwide between Q1 2000 and Q3 2007, prior to the Great Recession.

"The first quarter of 2017 was the most profitable time to be a home seller in nearly a decade, and yet homeowners are continuing to stay put in their homes longer before selling," said Daren Blomquist, senior vice president with ATTOM Data Solutions. "This counterintuitive combination is in part the result of the low inventory of move-up homes available for current homeowners, while also perpetuating the scarcity of starter homes available for first-time homebuyers.

"The average homeownership tenure was down from a year ago in nine of the 66 markets we analyzed, including Memphis, Dallas, Boston, Portland and Tampa," Blomquist added.

Markets with biggest home seller price gains
Among 97 metropolitan statistical areas with at least 1,000 home sales in Q1 2017 (and with previous sales price information available), those with the highest average price gain since purchase realized by home sellers during the quarter were San Jose, California ($356,500 average price gain); San Francisco, California ($276,750 average price gain) and Los Angeles, California ($187,000 average price gain).

"Across our Southern California markets, low listing inventory has continued to drive multiple-offer scenarios," said Michael Mahon, president at First Team Real Estate covering the Southern California market. "We have noticed many buyers now leveraging investment accounts, as well as some leverage of reverse mortgages, to enable their ability to negotiate in competitive multiple-offer scenarios. This level of competition, as well as continued signals of a growth economy, has created momentum particularly in the luxury market of over $1 million in sales price."

Metro areas with the highest% return on the previous purchase price were San Jose, California (71% average ROI); San Francisco, California (65%); and Seattle, Washington (56%);

"Thanks to Seattle's robust economic and job growth, home prices continue to rise at well above average rates and have now surpassed their pre-housing bubble peak. Because of this, it's no surprise that distressed sales continue to fall," said Matthew Gardner, chief economist at Windermere Real Estate, covering the Seattle market. "The increase in all-cash home sales in Seattle is likely not a result of investors, but rather all-cash buyers who are using this tactic to win homes in what it is a hyper-competitive housing market."

Cash sales share down from a year ago, still above pre-recession levels
All-cash sales represented 30.0% of all single family and condo sales in Q1 2017, up from 29.1% in the previous quarter but down from 32.1% in Q1 2016. The 30.0% share in the first quarter was well below the peak of 44.7% in Q1 2011 but was still above the pre-recession average of 20.4% from Q1 2000 to Q3 2007.

"With a stronger market and overall sales increasing, we are seeing a decrease in foreclosure sales across the markets we serve, as well as seeing a decrease in institutional investors purchasing homes," said Matthew Watercutter, senior regional vice president and broker of record for HER Realtors, covering the Dayton, Columbus and Cincinnati markets in Ohio. "With the stronger market and availability of money from institutional lenders such as mortgage companies and credit unions, we are seeing a decrease in cash purchases, as more properties are being sold to owner occupants and fewer to investors."

(Source: ATTOM Data Solutions)

As the prices on energy continue to rise in the UK, Business and Energy Secretary Greg Clark wants to press hard on energy firms and mitigate the damages of energy pricing, claiming they are milking loyal customers in light of inflation.

In the last few months, most UK energy providers raise their default tariffs to consumers, blaming investment requirements, government demands and the falling value of the pound.

Finance Monthly heard Your Thoughts on the price spike this week, and below are a few comments from experts on the matter.

Magnus Walker, Director of Trading and Risk, Inprova Energy:

Nothing's ever certain in the highly volatile energy markets, but the general wisdom is that prices are rising - driven both by a return to more bullish wholesale commodity market conditions and sharp increases in non-commodity charges.

According to the latest analysis from energy market tracking company ICIS, the cost of power in the first quarter of 2017 was almost a third higher than the same period in 2016, while forward gas commodity prices were up by 42% year on year.  This market level has since softened, but we're unlikely to witness the very low commodity prices of winter 2016, largely because the price of oil has since doubled. Nevertheless, market costs fluctuate dramatically, dependent on a range of external factors, which is why it's so important to pursue a smart long term purchasing strategy to mitigate the impact of higher prices.

By contrast, businesses have little wriggle room to avoid sharply rising non-commodity costs. Five years ago, these charges accounted for about 30% of a total power bill, but in today's market it's about 55%. The continued need to remove polluting coal plants, incentivise greener energy supplies and retain security of supply, is expected to drive these charges up to around 60% of total power costs by 2020. For gas bills, there's a split of around 65/35% wholesale to non-energy costs.

Whether using a fixed or flexible purchasing strategy, forward planning is critical. It's commercial suicide to renew a fixed contract at the last minute when you may be forced to purchase at the height of the market. Instead, it makes more sense to lock in to favourable rates well in advance of the contract renewal date.

Fixed rate contracts do offer budget certainty and simplicity, but flexible purchasing offers more opportunity to buy chunks of your energy volume at points in time when the commodity market dips and still provide budget certainty. Your trading strategy must, however, be underpinned by a robust risk management strategy that matches your requirements. A good strategy ensures you never hit the top of the market. This is a far more considered approach than 1:365 odds of picking the day of the year when the market is at its lowest to fix a deal.

It's essential to seek expert, trustworthy professional advice to navigate the complexities of the energy market.  If you're using a consultant, make sure they have full and live commodity market access, buying performance supported by evidence, and that any recommendations are fully aligned with your needs and attitude to risk.

Of course, the cheapest energy is what you don't use. Effective data management is especially important in illustrating how you are consuming energy and pinpointing where you can make savings.

Phil Ivers, Head of Customer Optimisation, Gazprom Energy:

Wholesale energy prices have an impact on the cost of gas and electricity for the end user, as market increases will be reflected in the rates that energy suppliers offer. Government policies, such as subsidies to support renewable energy projects, can also contribute to increases in energy rates.

For small businesses, a long-term, fixed-price energy contract may offer the best protection against rising energy prices. This is when the total energy price is fixed for the duration of the contract term, meaning it won’t change in line with the wholesale energy price.

Those managing business energy contracts should keep an eye on wholesale pricing and the market in general, so as to avoid surprises when their contract ends. It’s also prudent to pay attention to factors likely to affect the wholesale market, which can include weather conditions, current affairs and world events.

By keeping abreast of price fluctuations, you can pinpoint the right time to lock into a suitable energy contract – and remember, you don’t need to wait until your current contract is nearing its end date to put in place future arrangements because many suppliers can offer contracts that start in 12 – 24 months’ time.

We would also love to hear more of Your Thoughts on this, so feel free to comment below and tell us what you think!