Month: March 2020
A boring week of little note…Aside from unfolding global market chaos and central bank money printing to the tune of trillions. Overnight US repo markets are now set at one trillion dollars. The Bank of England has slashed rates to 0.1% the lowest since its founding in 1694. On and on the money printing responses go. Of course, volatility is at extreme levels and shows no signs of abetting. The dollar is crushing other fiat as dollar demand sky-rockets.
Crypto has rebounded somewhat but it would be highly optimistic to assume the cryptosphere will escape further market turmoil.
Bitcoin, in particular, is beginning to look like an opportunity. The contrast between BTC and fiat is becoming ever starker and perhaps just perhaps a moment of inflection is approaching. Remember, first and foremost, this is a time of opportunity and or planning – you can worry later.
Much to be learned from this thread by Alex Kruger. Also of great value is this discussion of the systemic failures embedded in the current financial house of cards. Beyond the chaos – Nick Szabo is always worth listening to/learning from.
Collecting bullish-bearish metrics and contextualizing each (highly recommended):
Ari Paul’s observations on recent crypto price action (recommended):
Caitlin Long dissects current financial market chaos (highly recommended):
Dump then moon?
An opinion on the BitMex ‘hardware issue’:
BTC continues to function as intended:
More on BitMex and their possible role in crashing the crypto market:
On simultaneous demand and supply shocks:
A snapshot of recent central bank rate cuts (already out of date):
This is not a drill – economic chaos is here and now (highly recommended):
Reflections on central bank policy/economic chaos through the lens of 2008:
Analyzing cryptos recent price collapse (highly recommended):
In this moment of crisis, Bitcoin shows its superiority over Wall Street:
What happens to Bitcoin in a financial crisis (highly recommended):
A basic overview of Bitcoin’s design/purpose:
Play the long BTC game:
Smart contracts and the insurance industry:
Discussing EOS token policy changes:
Arguing that the Corona virus is providing cover to failed government policies:
Is the Corona virus about to call America’s bluff?:
A true titan of the cryptosphere – listen and learn (highly recommended):
Discussing the stock to flow model pre-price collapse but just as relevant (recommended):
Alessio Rastani on when to buy (recommended):
Where to now post-crash discussion (recommended):
Sell, stay the course?
Caitlin Long on the range of deep structural financial issues which are now being exposed (highly recommended):
Focused on Australia but nonetheless provides a good overview of the current market challenges (non-crypto but relevant):
On central banks (hilarious presentation but highly recommended):
Central banks scrambling to cut rates – historic lows abound:
This was the state of the BitMex order book when they had their ‘hardware issue’ 19 million dollars to zero…:
Let’s not forget there’s a sea of opportunity out there:
Useful DeFi comparison site:
Stay strapped in – plenty of ups and downs to come. As always, opportunity will present itself.
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.
Have you picked a side, or are you neutral – watching and waiting?
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Yesterday I was not worried. Truly, that dip did not bother me.
But things have changed.
We are experiencing the perfect storm. The last straw for the markets seems to be the Trump travel ban (the ludicrous one which excludes the UK and Ireland for “doing a good job” and which ignores the fact that the USA is one of the worst hit and fastest growing Covid-19 countries).
I’ve said on multiple occasions that this dip is not THAT economic crash – the fiat house-of-cards collapse which many of us have been expecting to see in the near future. I stand by that statement. For now…
That doesn’t mean that THIS collapse will be any better!
And a collapse it is…
Yesterday my BTC price long-term base trendline was breached. As I explained on Twitter, there are circumstances under which this can and does happen. It did not matter at that stage.
But BTC has subsequently plunged beyond (and stayed there) to levels which indicate that this will not be a “quick dip below the line” or just a tail on a weekly candle.
The important thing is that a VERY substantial and important BTC trendline has broken down. This is not an analysis fault on my part. It is not a TA fault with a misplaced trendline.
WHAT IS HAPPENING NOW IS NOTHING SHORT OF THE COLLAPSE OF MAJOR ECONOMIC MARKETS!
Read that again, it’s important.
Note that I did not say “dip”. Nor did I say “contraction” or “retracement”.
I said “collapse”, and I meant it!
Remember Bit Brain’s Fourth Law of Crypto which states that: Technical Analysis is a graphical representation of market psychology. It is a way to visualise the feelings of masses of people wrt trading.
TA is psychology on a chart. People don’t panic because charts dip; charts dip because people panic!
The complete breakdown of my long-term base trendline for BTC means that the markets are suffering a complete breakdown!
Do not make the mistake of interpreting this as “analysts who got it wrong and are justifying their poor predictions”. If that were the case then I wouldn’t be writing this post and drawing attention to it.
Also: do not make the mistake of following the predictions of some lucky outlier analyst who guessed right and happened to call this crash from a long way away. Prior to about a month ago, there was no indication as to how bad things would get. A good analyst could have called this as part of a worst case scenario a month ago, maybe some of them did, but I didn’t see any do so.
Firstly: don’t think that this is a crypto issue, it isn’t.
The crypto crash is only a symptom of a much greater problem. To sell crypto now would be foolish: it’s already taken a larger hit than most – so selling it for something else would mean making a loss (even if you are ahead in USD terms). I can’t tell you what to do, but what I am going to do is to hold through this crash until we come out the other side. I’m not selling crypto at a loss.
I can say that because while TA may not longer be on our side, the fundamentals of crypto are as strong as ever!
The charts may have changed, but nothing has changed in the fundamentals of Bitcoin and the alts. Each and every reason we have to believe in the massively disruptive
revolution that public blockchains are is still 100% valid.
My faith in blockchain tech and its associated cryptocurrencies remains absolutely unshaken.
In other words: I have no doubt that crypto will not only recover from this, but thrive. Perhaps next time around BTC will be seen as the ultimate store of value.
The second major implication is that the major fiat crash has yet to come. That will be the crash based on loss of faith in fiat economies. This crash may still turn into that crash, but we have yet to
see significant signs of that happening. If Covid-19 hangs around long enough, it is possible that the fiat monster – already stretched rather close to breaking point – may collapse entirely.
Assuming that the lose-faith-in-fiat-economies crash does not occur; the effect of a corona-crash will be that it is likely to delay that crash. It will do so by resetting the values of over-valued pseudo-assets, a process which is already well underway.
Whatever happens, crypto is still the place to be in the long-term.
The final major implication is China (again).
It was only the other day that I spoke about how I hate having to praise a communist government for its actions, and yet here I am – doing it again! (Perhaps that demonstrates just how seriously our ridiculously liberal and corrupt Representative Democracies have failed?)
China has not only beaten Covid-19 (to all intents and purposes), but it has managed to end up with the bulk of global manufacturing capability located within its very own borders. In a virus-ravaged world, that gives the Chinese economy unrivalled power and far greater ability to recover from a disaster than anyone else. Chinese manufacturing stocks may be the best place to invest right now! Already its economy seems to be weathering this storm better than many others, despite strict lock-downs and the highest number of Covid cases to date.
I realise that this post is somewhat distressing, but unfortunately that can be the nature of the game. As a realist, I must tell it like it is, even when the truth hurts. My own portfolio is lying in tatters, leaving me in an even more precarious situation than usual. I know how it feels. Nevertheless; I do not believe that having faith in crypto is a naive or foolish pursuit, and I will continue to buy more of it if I manage to get money to do so. (I bought yesterday, just by the way.)
If you are looking for Covid-19 insights and information then do not miss my post “Analysis of a Sick Market – Part 1 (The Virus)” from earlier this week. It will not only tell you the important things, it will tell you that which others don’t.
DO NOT UNDERESTIMATE THIS VIRUS! I see far too many complacent people doing that, it is most distressing! (Not to mention selfish and foolish!)
Good luck out there guys. I hope you can weather this storm without too much hardship. The best advice I can possibly give you is this: “don’t panic”. Stay calm, stay rational. Avoid making
decisions in haste. Do what you need to do to get by for now, and we can pick up the pieces on the other side of this disaster.
The Sun will rise again!
P.S. If you just need to chat / unload stress / rant a little / discuss your fears / whatever – my ear is available to you.
Yours in crypto
“The secret to success: find out where people are going and get there first”
~ Mark Twain
“Crypto does not require institutional investment to succeed; institutions require crypto investments to remain successful”
~ Bit Brain