Talk about market equity evaporating before us. Over 5 Trillion dollars has been erased form the markets since February 1st with around 2.5 Trillion being erased in the USA alone. Not only this, 24 billion has flowed out of the ETF market alone. The fear on the street is "It Ain't over Yet!", and yet the fake news that is constantly thrown across crypto sites is that many nations are concerned about bitcoin and its affect in the financial markets and are looking for tougher regulations. These so call analysts and news writers live in a house with now windows! The furthest thing on the minds of Countries right now is Bitcoin' period! We are in the midst of rising rates, rising inflation, an equity meltdown, a potential derivatives market collapse, and you really think that the central banks of the world are worried about the 400 billion dollar market? This could be no more evident in the lack of knowledge among several senators, during the Senate Banking Hearing with the CFTC and the SEC, of the space in general. They lack knowledge because it is the furthest thing from their minds with a budget bill needing passed, healthcare, immigration, terrorism, and to cap it off a derivatives meltdown on their plate. The crypto market is simply a side venue which several showed up for because they had to, or like Sen Warren, to grandstand for CNN'. There were several empty seats!
With carnage in the markets you would think that gold' would be bullish. Quite the opposite, it is down with equities. Now much of this is simply institutions that use gold for a hedge are now selling to cover their margin calls. However with all the wreckage in the markets smaller investors as well as larger investors are going to look for not only a safe haven, but for growth that can offset their losses, and a hedge vs inflation. So what will they buy now?
Bonds Your kidding right?
Stocks There is simply not a lot of VALUE in the stock market regardless of what you may hear. Simply you are paying a premium for growth like NVDA with a 55PE or Amazon at 219.
Gold Sure you will see a rise in gold prices, but the world economy is still growing, and it is already trading at the top of its range. Now gold is an inflationary hedge, but many already own gold, so how much more can flow into this market? Most hold "digital gold" and a little physical.
Cryptos I think money starts flowing into the crypto markets especially after the Senate Hearing this past Tuesday. Money managers are looking for growth right now and with a 400 billion dollar market cap, and the future being bright for block chain, there is plenty of room for growth here. Retail investors that are pulling their money out of the market as a whole, are concerned about inflation which reduces their purchasing power, and another round of QE, to settle the markets, would be a boost for deflationary currencies such as Bitcoin'. Who wants fiat deterioration?
Yesterday we posted that we were looking for a pullback from the 8398 level to around 7500 where we would look to buy. Well we did not quite get there and are trading around the 8275 level. So do I buy here? As we may still pull back and are trading close to the top of the channel, and the 8400 level, the risk to reward tells me to be patient. I do not mind buying a breakout which is 125-150 pts away, when there is an opportunity to buy 775pts lower at the 7550 level. I'll be patient here.
Could continued selling pressure in the equities markets cause another pullback? Sure but unlike the gold derivatives market which is very deep, any selling in the crypto space has likely been done to cover margins in the market.
Bottom Line: As the dust starts to settle the best opportunity for growth is in the crypto space right now. Your buying off the highs, near the lows, in a young market that has the potential to be a disruptor. Is this a risky market? Sure it is, but so is the derivatives market as we have seen this week.
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Note the selloff in Bitcoin coincided just prior and during the meltdown.
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Gold and SVXY
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We have broken through the upper channel trend line and are simply testing it here. Closing above this level on the daily would be a good bullish signal. I have added breakout or breakdown levels which would signal either a bearish continuation or a bullish reversal. Very simple chart.
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On a shorter term basis we have broken through the 0.382 retracement of the most current correction from 13k. As long as we hold above the 7550 level (even if we get a very short spike to the 7250 level which is the 0.618 retracement of the overall short term bullish move) we should get a run at the 9850 level. I'm not adding here but this could set up nicely for a shorter term trade. A break of the 9850 level increases the probability that we are in the final 5th wave of the long term cycle. A break of the 14598 level confirms this and we get at least one more run at 20k.
Damn, this is the best fundamental commentary I've heard in a long time, and you've basically said what was on my mind already but in a much better way. Besides, that is, for the point that most governments simply aren't INTERESTED in this small market. Because even if it is a 400 billion capitalization market, that's on a GLOBAL level, not just for one country.
Good stuff, I really like this. Not to say it will go straight up (or straight down), I just really liked reading your thoughts that you shared with us.
@goldbug1, Good Stuffs again. I check every morning .. if GoldBug has anything to say.. and this was an interesting read again, as always and thank you for taking time to share your knowledge :)
CryptoBuzzAnalyst
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This was an awesome analysis. The general markets are tumbling and in current shakedown! The DOW dropped 1500 points which I read in an article was the worse in 122 years recently. But wait, doesn't that mean it was worse than the depression period??? When the institutional money arrives to the crypto space it will stabilize it. Right now I enjoy the volatility cuz we can all make some serious money on the volatility.
So for the time being I don't wish that stability, but of course that's out of my control. As blockchain technology matures and develops and provides some faster transaction times , then I believe this train will actually take off. I believe we are a few years from that. Blockchain is young , unperfected and immature. Etherium is fast, EOS, says it could do it faster, then some other blockchain will claim they can go even faster. Competition will be good for blockchain. The future is bright in crypto! Regulation is being handled relatively with common sense in the US. Globally its hindered in many countries, but that wont stop crypto.
It so true, that while the American financial space is in agony, they tend to worry too much about our niche crypto space... We are not going anywhere. We are ground floor in the most promising technology the future has to offer. I am happy as an investor to do my small part in shaping this bright future. When I talk about crypto the millennials listen and the elders think I'm nuts. I can't wait to see how this all unfolds in the next 20 years. Hopefully I'm a millionaire in a couple years. ! Thanks for your insight it was entertaining and highly education.
CrytpoBuzzAnalyst
GStack
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@CryptoBuzzAnalyst, It was a bigger absolute drop than during the depression, but not nearly as big of a relative drop. The market is much bigger now than back then!
satertrading
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@CryptoBuzzAnalyst, everybody gets their knickers in a twist over point drops. It’s all just sensationalism, and drives fear in the minds of the uninformed. This is almost as bad as CNBC showing non-logarithmic charts to make everyone freak out on price changes! What matters is the percentage change, NOT point change. The Dow “officially” entered a correction at close of business Thursday, as it was down 10% from its all-time high. It has been there many times before, and will be there many times again. Nothing to worry about, for sure, and it leads to a healthier market on a go-forward basis.
goldbug1
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@CryptoBuzzAnalyst, becareful with headlines like that it is a bad comparison. The dow dropping 1500 pts is not significant, if the dow dropped 50% that would be significant. Percentages are important not point movement.
The dow dropped 778 points in 2008 which was a 7% decline in one day. Today that is about 3%. Compared to a 500 pt decline in 1987 which was a 22% correction. or a 41 pt pullback during the great depression which was a 13% pullback.
Ragnarok7
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What do you think , bro ?
fceuropa
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@Ragnarok7, I am not an elliot wave expert by any means, but I am guessing since B is a corrective wave it probably shouldn't take us below your (5) on the chart.
Ragnarok7
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@fceuropa, thanks for comment , I hope you're right, no more falls, hahaha , I was talking to @ a.shevelev002 and he told me that my abc should actually be a 1-2-3, being that B would be the 2 and would not go past the previous 5 wave.
Good stuff, I really like this. Not to say it will go straight up (or straight down), I just really liked reading your thoughts that you shared with us.