Crypto update

Are we going to get our 40% pullback? This is the big question weighing on all crypto followers at the moment. Those of us that managed to get onto the sidelines in 2018 and have dry powder on hold, are wracking themselves while waiting for the big BTFD opportunities. So lets look at the charts to see what they reveal about price action and probable outcomes.

BTCUSD Daily on Bitstamp

  • We are trading at the 12840usd handle at press time. We had tested at over 13000 a few hours ago but have retraced back below this line. This is showing to be mild resistance at the moment it seems.
  • We have broken out of our wedge patter quite decisively 3 days ago. TA seemed to be leaning toward a break down, but as I mentioned in my last post, fundamentals seem to favour a break out instead.
  • And that is what we got, with 2 days of powerful volumes. This turning the environment into a very bullish direction.
  • We got our 30% correction to this most recent rally (to 13880) but we were down there for so very little time and the rebound was so powerful, and since then we have always been posting higher lows.
  • We are stretching away from our 21dema again. It is at 11200 handle at the moment. Will we get a BTFD chance at this level?

BTCUSD Hourly on Bitstamp

  • Here is the hourly to show how this step pattern is developing.
  • This is reminiscent of the bear market we had last year but we were having both the ups and downs and often times the downs were stronger. And at times we would miss an up and have 2 downs in a row. Seems to me that now we see a mirror reversed behaviour of that phenomenon.
  • These spikes are often times 2-3% jumps!
  • Still on the daily, here is a look at the chart with the longs and shorts overlaid
  • There is a clear sign that shorts do not think this will last and are betting on a cool off
  • Though longs are also bullish.
  • If the bulls win, which I think is becoming more likely as we seem more and more certain to retest the local highs shortly, this may flush out shorts in a squeeze that may propel #bitcoin past the recent high to set new highs.
  • But if momentum keep up at this pace, overshoots highs, then the odds of a pullback to at least retest the 13880 level become strong.

Macro look

  • The news about Facebook's Libra cryptocurrency is slowly permeating society. Almost everyone I know falls into 2 camps: Still not heard about it, or, heard about it but don't know what it is. But one thing is certain, people a migrating from camp 1 to 2. The trend is clear Facebook's Libra will introduce cryptos to a huge new market.
  • China has made statements suggesting they will not let the corporate crypto movement (e.g. Libra coin) leave them behind. When they speak like this, only fools do not take heed.
  • It seems rather certain that Google, Amazon, etc.. are either: working on something equivalent to Libra at the moment, or waiting to see what regulatory treatment Facebook get before making any public moves into the space, or both!
  • For me there is absolutely no doubt that Facebook's Libra proposal is our first definitive sign that we will be living in a tri-competitive currency world soon. Fiat vs Corporate currencies vs True crypto currencies.
  • The Traditional Banking World is "sucking in its last good breath of uncontested market dominance in money". Deutsche Bank's restructuring announcements, and now mass layoffs, are solid proof positive, that our economy is built on a sand dune.
  • How can it be reconciled that with the professed robustness of our global economy, combined with the giveaway of ultra low interest rates, that all large banks are not positively swimming in a nirvana of profits?
  • Truth bomb! our economic prosperity is fake! I wrote a blog post recently It is not the mandate of our MSM and economic leaders to tell you the truth, rather their prime goal is to maintain your confidence in their system
  • Many, and arguably most banks around the world are struggling to maintain a growth pattern in their share prices and market caps. This has a uniquely insidious effect on banks as opposed to most other companies, in that their market caps are directly tied to their reserve requirements. As their market caps decline, pressure builds up on their reserve requirements.
  • On that note, who polices reserve requirements for banks? Well, its the financial regulating bodies of our governments.
  • What is the probability that a regulator will be stringent on reserve requirements considering their main task is to maintain public confidence in the overall financial system?
  • And by extension, how vigorous do you think banking regulators will be on banking sectors during their so called "stress tests"?
  • Stress tests are a fake proofing mechanism designed to boost public confidence in banks, not to uncover any shortcomings in the financial system, as promoted.

I am reminded now, as I get into second gear in my rant here, why I had decided to stick to TA in my blog. But off course TA is becoming "less relevant" as macro and fundamental factors take hold in the market.

My strong belief that we have entered the tipping point in society. This tipping point is not in one specific location, but appearing in many facets of society and economy. From the MSM confidence game, to the gathering resistance to US empirical rule via finance, to the splintering and echo chamber effect social media is having on civil discourse and open debate. These conflicts are in many cases only an discrete event away from tipping.

The conflicts are intertwined and have become brittle with age. Society can unravel rapidly from this point. Why I am writing this in a blog about crypto is because #crypto is also in a conflict of powers of sorts, and it is also near a tipping point.

Sorry to just be fixated by Libra, but its appearance on the crypto landscape, and our social interconnected landscape in a broader sense, is such an important sign post in the evolution of cryptocurrencies in our society. This event will I believe be seen as a watershed moment in the years to come.

Your finances and your future

I would like for you to consider a potent historical reality which is still playing out today.

Venezuela enjoyed one of the most prosperous economies in Sth. America. Everyone had access to schooling, medical care, affordable housing, and crime was low. It had a vibrant middle class comparable to many developed western nations from the point of view of living standards and happiness measures.

Ignore your ideological predispositions as to the style of economy and society they had, and focus instead on the average individual in that country. In their recent past, being a member of their society was considered good.

The important takeaway I want to share with you is that back then, nobody imagined that in a few short years, they would be in the state they are in right now! What advice do you think they could share with us westerners. Comfortable in the confidence cocoon of our MSM and trusted elected officials. I cannot know for sure but I can be sure of one thing: they would not advise us to relax and just trust that it will all work out.

I will close here with an image and a graphic I create this morning

This is our adoption clock for cryptos...

And this is an image that has gone viral in the last days outside Deutsche Banks headquarters in London
download.jpg note the bitcoin bag

As always guys, leave comments, have fun and trade safe.

Disclaimer: This post is not financial advice. Before investing any funds do your own research and make your own decisions. Cryptocurrencies are highly speculative.
And finally: Do not invest money you are not comfortable losing.

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