We have an interesting situation, crypto related stocks and altcoins have rallied far more than $Bitcoin has so far, and now the weekly chart is flashing what could be a big buy signal in the mid to long term. I'm personally skeptical of sentiment, since it seems a bit confusing given what I observe (anecdotal) but the macro backdrop and technical chart give a cue to go long here, risking a 10% drop to make between 17% and 57% within the next 4 weeks.
Overall, most setups in weekly charts are similar, and point to a risk on rally until late Sep to early Oct. Markets will be watching labor related data and inflation prints to try to assess what the Federal Reserve will do by Sep FOMC. Inflation could start to come down given the drop in commodities and the demand destruction effect of high mortgage rates and high oil prices affecting the economy broadly. (which likely kickstarted the decline we are seeing since the top in commodities). A lot of the 'stagflation bros' and similarly aligned perma bear types who have been gloating at the bottom and calling bulls stupid as markets came back up, are expecting the latest NFP report to be an indication of persistent high inflation but there could be deflationary cross currents that might not be on the spotlight now (like potential increase of labor force participation given that the people who expected to retire from crypto and stonk gains got totally destroyed at the depths of the decline and will need to get a job, as well as the demand destruction in commodities and lack of stimulus in China). I think such people are biased, and decided to stay wrong given their rigid thinking rather than act based on data to verify the validity of a thesis with new data points, as they should be. I strive to do 'post-pattern' verification of technical setup expectations and fundamental predictions to stay right, after a thesis of mine generates some positive PNL over time. This is the best way to manage risk and achieve good returns in trends.
In the case of #Bitcoin, it's hard to give it a role as a portfolio diversifier, but it's an interesting asset class to trade speculatively based on technical analysis to manage risk and generate positive reward to risk trades over time. I would never advocate hodling it, as there is no substance other than some potential use cases that could remain viable at any price due to the mining game theory which Satoshi brilliantly laid out. I do like the potential in Lightning network for scaling over time, but that is not going to bring demand by itself magically and is still not here yet. So this remains a tactical trade.
Best of luck gentlemen!
Cheers,
Ivan Labrie.
Overall, most setups in weekly charts are similar, and point to a risk on rally until late Sep to early Oct. Markets will be watching labor related data and inflation prints to try to assess what the Federal Reserve will do by Sep FOMC. Inflation could start to come down given the drop in commodities and the demand destruction effect of high mortgage rates and high oil prices affecting the economy broadly. (which likely kickstarted the decline we are seeing since the top in commodities). A lot of the 'stagflation bros' and similarly aligned perma bear types who have been gloating at the bottom and calling bulls stupid as markets came back up, are expecting the latest NFP report to be an indication of persistent high inflation but there could be deflationary cross currents that might not be on the spotlight now (like potential increase of labor force participation given that the people who expected to retire from crypto and stonk gains got totally destroyed at the depths of the decline and will need to get a job, as well as the demand destruction in commodities and lack of stimulus in China). I think such people are biased, and decided to stay wrong given their rigid thinking rather than act based on data to verify the validity of a thesis with new data points, as they should be. I strive to do 'post-pattern' verification of technical setup expectations and fundamental predictions to stay right, after a thesis of mine generates some positive PNL over time. This is the best way to manage risk and achieve good returns in trends.
In the case of #Bitcoin, it's hard to give it a role as a portfolio diversifier, but it's an interesting asset class to trade speculatively based on technical analysis to manage risk and generate positive reward to risk trades over time. I would never advocate hodling it, as there is no substance other than some potential use cases that could remain viable at any price due to the mining game theory which Satoshi brilliantly laid out. I do like the potential in Lightning network for scaling over time, but that is not going to bring demand by itself magically and is still not here yet. So this remains a tactical trade.
Best of luck gentlemen!
Cheers,
Ivan Labrie.
Trade chiuso manualmente:
Very slow move so far, relative weakness vs risk assets is not reassuring. I'm personally out of the trade.
Commento:
Commento:
Aug 13: 'Trade closed manually: Very slow move so far, relative weakness vs risk assets is not reassuring. I'm personally out of the trade.'
Trend turned down in the daily now, the weekly uptrend failed, and we are at risk of forming a new weekly down trend if $BTCUSD stays down during next week.
I'm short Bitcoin vs a same size long in $SPY as a pair trade from yesterday's close.
Added some more crypto short exposure today, see my $ETHBTC publication as well.
Trend turned down in the daily now, the weekly uptrend failed, and we are at risk of forming a new weekly down trend if $BTCUSD stays down during next week.
I'm short Bitcoin vs a same size long in $SPY as a pair trade from yesterday's close.
Added some more crypto short exposure today, see my $ETHBTC publication as well.
