I know that title seems a bit backwards, but there are lower price supports I’d love to buy some more at.
Oversold and Overstretched
After the recent dump, which had an intraday low of 7,712 (on coinbase) price has rumbled around the past couple days and is now pushing lower.
Many people are looking for it to hit 7,500 and have buy orders in at that price. It very well could get there today or tomorrow, but if it does then price will be extremely stretched from the 10 period moving average.
If you look at the chart you can see the blue line for the 10 period moving average. See how far price is pulled away from it. The past two day bounce, as modest as it was began to let it catch up but with price moving down today things are getting extremely stretched again.
I would love a quick spike toward 7,500 as buying when things are overstretched is never a bad thing. Doesn’t mean price will bounce but I’d rather buy after intense selling as opposed to buying right before.
The Reserve Bank of New Zealand has already cut interests rate three times this year with the most recent cut being in August. Back in August the Bank of New Zealand cut rates by 50 basis points. The drastic cut shocked the Markets because the Markets were only a 25 basis point reduction. At that time, Reserve Bank Governor Adrian Orr hinted at further easing by any means necessary in order to hit their inflation rate targets.
Fast forward to this past Thurs and the Bank of New Zealand shocked the Markets again. But this time New Zealand’s central bank on Wednesday held the official cash rate (OCR) at a record-low 1.0%.
NOTE: This was bullish for the New Zealand Kiwi
Reserve Bank of New Zealand (RBNZ) Governor Adrian Orr said on Thursday that it was unlikely the central bank would need to use unconventional monetary policy tools, although it would be negligent not to be prepared for such a scenario.
“Our current view is that we are unlikely to need ‘unconventional’ monetary policy tools. But we would be remiss not to be prepared,” Orr said in a speech in New Zealand that was released by the bank.
The New Zealand Dollar jumped after the comments, rising 0.3% to $0.6292.
Monthly Chart (Curve Time Frame) – monthly supply is at 2.20000 and monthly demand is at 1.70000.
Weekly Chart (Trend Time Frame) – price also broke the weekly up trendline.
Daily Chart (Entry Time Frame) – the chart suggested to short price at the daily supply at 2.00500, but the trade set-up happened without me for a 2nd time.
This post is my personal opinion. I’m not a financial advisor, this isn’t financial advise. Do your own research before making investment decisions.
Brexit chaos, a US president facing impeachment, a squeeze on repo markets, and a dive in crypto valuations, interesting times indeed! While all this is certainly fascinating – try to keep your eye on the ball. If you’re a trader these are great conditions. If a Bitcoin investor – give it a few quarters before you come to any conclusions.
Picks of the Week
This highly reasoned breakdown of why Hedera Hashgraph’s price isn’t likely to recover anytime soon. Another highlight is this Forbes article on the current state of the US repo market.
A balanced take on Bakkt now that it is live in the wild:
The always interesting/compelling Anton Antonopoulos on Banks as tools of surveillance (highly recommended):
A pessimistic assessment of the sustainability of the current financial system:
Time to bone up on Repo Markets – dates to 2009 but the information remains current:
A case study in economic stagnation (of particular note – interest rate policy) Well worth reading the comments for more context such as Japan’s debt being mostly internal and therefore less subject to default:
Infographic
Just for a dash of context – the Forex market comes in at over $6 trillion daily:
While price action this week certainly hasn’t been stellar for crypto investors, the space continues to expand. Try to enjoy the ride, keep your emotions in check, and learn as much as possible along the way.
Note on Sources:
Twitter & Reddit (cryptos current meta-brains) / Medium / Trybe / Hackernoon / Whaleshares / TIMM and so on/ YouTube / various podcasts and whatever else I stumble upon. The aim is a useful weekly aggregator of ideas rather than news. Though I try to keep the sources current – I’ll reference these articles and podcasts etc. as I encounter them – they may have been published just a couple of days ago or in some cases quite a bit earlier.
