The Mother of All Bubbles - Bitcoin vs Stocks
He everyone,
Been a long time since I posted a chart/comparison.
All major stocks are represented here and compared with Bitcoin. Bitcoin is in its own merits an index for the whole cryptocurrency market, and every crypto-trader/enthusiast knows that when Bitcoin moves up or down, the whole market usually moves with it.
The whole economy, including the crypto-economy, had been going up since 2008, and the rise was steeper and higher than anything seen before. Everything built on leveraged trading and loans. The clock was ticking on the bomb, but it also required a button to be pushed to initiate the detonation sequence... enter COVID-19.
A quarter of the world population is in lockdown right now. This essentially means only the work which is essential, is being carried out. Forget about ambitions or new ideas to be brought to life, this is now about survival.
As per Maslow's hierarchy of needs, the basic need of health and security is being threatened. The ones of the top do not take priority at this time. And this need is going to be under threat for months, and may be challenged in waves. (thoughtco.com/maslows-hierarchy-of-needs-4582571)
There is no demand and will be no demand for anything else for months now. I don't need to point out that the supply of products is usually done prior to the demand in anticipation, hence there are stocks load of products which may go past their expiry date and may not be of use. That will lead to other waste of resources.
Economy is going to face the biggest challenge yet, and will rival the great depression of the 1920s.
Stay safe and make decisions which you can stand by and do not regret later.
All the best!
Been a long time since I posted a chart/comparison.
All major stocks are represented here and compared with Bitcoin. Bitcoin is in its own merits an index for the whole cryptocurrency market, and every crypto-trader/enthusiast knows that when Bitcoin moves up or down, the whole market usually moves with it.
The whole economy, including the crypto-economy, had been going up since 2008, and the rise was steeper and higher than anything seen before. Everything built on leveraged trading and loans. The clock was ticking on the bomb, but it also required a button to be pushed to initiate the detonation sequence... enter COVID-19.
A quarter of the world population is in lockdown right now. This essentially means only the work which is essential, is being carried out. Forget about ambitions or new ideas to be brought to life, this is now about survival.
As per Maslow's hierarchy of needs, the basic need of health and security is being threatened. The ones of the top do not take priority at this time. And this need is going to be under threat for months, and may be challenged in waves. (thoughtco.com/maslows-hierarchy-of-needs-4582571)
There is no demand and will be no demand for anything else for months now. I don't need to point out that the supply of products is usually done prior to the demand in anticipation, hence there are stocks load of products which may go past their expiry date and may not be of use. That will lead to other waste of resources.
Economy is going to face the biggest challenge yet, and will rival the great depression of the 1920s.
Stay safe and make decisions which you can stand by and do not regret later.
All the best!
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DJI 1 month chart, over the past 100+ years.Take a look at the sell volume in March 2020. Now imagine that was just the beginning without the unemployment data rising and not factoring in the current scale of infection spread and the hit the world economy is about to take.
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Economic crisis is going to get bigger. What people do not realise is that the so called "economic stimulus" the governments are offering to businesses, small or large, are all "LOANS" with no questions asked for now, but the reality is, no one will be able to pay off the loans anytime soon. There will be lack of demand for months, probably a year or two, and there is already supply which is going to go to waste. This will lead to two outcomes: 1. Banks issuing loans will then own the businesses (meaning rich people getting richer) and/or 2. Bankruptcy for small businesses with future worst credit rating leading to complete destruction of such businesses and their future prospects.Cryptos are no saviour here. They are going to be a part of a bigger problem. Gold is in short supply and people are now looking at bitcoin thinking this can act as a safe haven. Exchanges will try to create this so called demand, which they are doing as we speak... this "halvening event" is the best way to create hype. IT DOES NOT MEAN ANYTHING! Difficulty will be adjusted for miners every time the price of bitcoin goes down. One way or another, wthey will always be in profit.
What probably is going to happen is that Bitcoin (and the rest of cryptocurrencies with it as we all know), will be pumped BEFORE the economic recovery takes place, just like gold price will be pumped up. This is now aided by the Feds unlimited printing of dollars. Crypto-shillers (not crypto enthusiasts - there is a difference) will be making bold statements like "bitcoin is digital gold or better than gold" and "everyone needs to buy a bitcoin" so that the price goes up. THEN, when the stock markets have fallen hard enough, same shillers will start liquidating their crypto assets and move money into the stock markets.
The stock markets has not seen the bottom yet. No sir! There is a long and painful winter coming for all stocks around the globe, and except the online retailer giants like Netflix, Amazon, Microsoft etc, most of the companies will see a massive fall in their share prices.
In my view, this is probably the worst financial crisis that we will see in our lifetimes and this will take not months, but will span over years.
So, be wise and wait first before making any move. I am not going to tell you whether to go short or long, but the safest way at this time for me is to wait and observe for a few days or may be weeks. The bounce we saw in stock markets last week was nothing more than a dead cat bounce. There is more pain to come.
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Self explanatory:cnbc.com/2020/04/03/jobs-report-march-2020.html
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I don't think BTC is going to fall just yet. There may be some distribution going on, but there are other factors to consider:1. Large amounts of BTCs have been bought and stored in private wallets recently.
2. datamish.com gives you an idea about longs and shorts at Bitmex. Bearing in mind this entire data can be manipulated and there can be far lower number of longs vs shorts.
3. Stocks futures gives an indication about what we can expect the following day. money.cnn.com/data/premarket/
4. BTCs halvening date is 13th May 2020. today is the 4th of April 2020. This is by far the biggest date to come for years now for BTC since the BTC futures lanuches on CBOE and CME. I remember the rally from the low of 5.4k on 12th November 2017 to 17th December 2017. That was a bear's nightmare rally to the point when 'buy the rumour sell the news' happened, i.e. between 17th and 22nd December BTC lost around 45% of its value, followed by a decline to 6k on the 6th of February, and then eventually to 3.2k within 12 months.
6. World economy is failing, this is going to last for months at least but will probably extend to 2-3 years before a proper bounce happens, just like the housing crisis started in 2007 and the bottom was found in 2009-2010ish. This time it is bigger and has an impact on everything, from retail to travel, logistics, housing, businesses, etc. The bottom has not been set yet.
7. The biggest marker for BTC's bear phase now will be that those BTCs from private wallets move back to exchanges for sell off. Date should be around the second week of May to the third week.
I am not trading anything at all at this time. These are uncertain times and unless I see a really big spike in a short duration of time, I will not be entering any short positions.
The whole crypto market is being manipulated. Rich want to get richer. The stocks markets will keep trading in the dumb zone before another massive sell off, which will probably happen around the same time as BTC's halvening, i.e. mid May. that's the time to sell BTC. And at that time, I will be looking for blood.
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A possible swing trade scenario....Note
This is the beginning of what I am now expecting on a very big scale. Cath Kidston going into administration
bbc.co.uk/news/business-52172005
New Look delays supplier payments and will probably be the next one to go:
bbc.co.uk/news/business-52153183
Debenhams going into administration:
bbc.co.uk/news/business-52156457
A lot of these big retailers will go bust over the next few weeks to months, taking down a lot of other small businesses with them, meaning a lot of unemployment. This is just the clothing sector. There will be reduced demand for others, such as electronics, mobile computing equipment like laptops, mobile phones, computer parts; automobile industry will be impacted next.
I would keep an eye on this web page:
bbc.co.uk/news/business
Regarding BTC, over the past 24 hours the development has been this:
cointelegraph.com/news/7-crypto-firms-targeted-by-11-lawsuits-in-new-york
coinspeaker.com/lawsuits-filed-binance-bitmex-block/
Basically a class action lawsuit involving Bitmex, Binance and several other exchanges, and also teams behind EOS and other major cryptocurrencies.
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A possible ultra bullish, bear's nightmare, BullS£$%R"£ BTC chartWith BTC, anything goes!
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The Great Depression 1929-1932And these...
bbc.co.uk/news/business-52211206
bbc.co.uk/news/business-52211919
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I think it is time...Note
Just hit the bottom of the ascending wedge formation...
Support zones highlighted for possible swing trades if this continues the decline downwards... or should we expect a long squeeze now?
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