BTC at 20K? Recessions create more selling.
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Sorry about my highlighted line, it's not straight because I used the Snipping Tool.
There is no other good support between here and $20K. $20K Bitcoin does look attractive to buy though. But be careful, it may go to $13K. Recessions in the general economy follow equity market corrections…most of the time. Recessions cause more sell-offs in equity markets beyond the original redistribution of value from risky assets to safer assets, like cash or bonds.
Less Wealth and Recessions
When credit and money become more expensive, there is less of it available to push financial asset prices higher.
And when assets don’t go higher, there is a fear that the top is put in, and people recognize that the value of those assets will not give them the returns that they once had, so they lock in their gains and begin selling those financial assets for money.
That selling pushes financial assets prices lower.
Lower prices translates into less wealth (in currency terms).
The less wealthy someone feels, they buy less, including financial assets, creating a feedback loop…less wealth, less buying, lower prices, less wealth, less buying, lower prices.
People buy less, companies make less money, companies have to cut costs, unemployment rises.
If a percentage of people who lost their job, didn't have an emergency fund, or couldn't afford their debt service payments, they begin selling financial and real assets to cover those payments and debt. That puts even more pressure on financial markets to go down.
In Conclusion:
People are feeling less wealthy now, but they haven't slowed down they're buying much yet, except for big items, like cars and houses.
We haven't hit the recession phase yet, and recession phases usually cause people to sell more.
The only way that this stops… and we begin to see a recovery… is when money and credit become less expensive…and there's more of it available. But I don't expect that for another 12 months.
Stay frosty people
35% allocated to ph-fund
Hi @fijimermaid
I'm curious if your knowledge of finance has been gained from personal experience and learning or is it a product of academic study.
I also think that, although the.situaciln seems to be quite complex, we have not hit bottom, I think the market will get more complicated and the prices of almost everything that in theory serves as an instrument of speculation today is going to go down in price.
Cryptocurrencies will face a lot of rules and governmental attacks, and this may make the situation even worse. I think there are really difficult times ahead. And not because I am a pessimist but a realist.
Formally educated in politics and history…made my money in finance. But I had to pay for the education in both…lol.
Years ago, I realized, shortly after graduating from University, that politics/history doesn’t pay much…so I started working for the insurance industry, selling financial products, and trading “options” (futures contracts) in my spare time. I learned a great deal about finance from working with people in the industry.
However, my best education in finance came from the 2008 Financial Crisis. I lost a lot of money in that market correction. And nothing educates a person more than losing money. Hence, paying for the education :)
So I started reading everything that I could on what happened in the 2008 housing bubble. How debt and derivative assets (based on that debt) inflated asset prices…and encouraged the entire system to take on more leverage…which contributed greatly to the bubble.
I studied how debt works…the history of it…its application. How debt cycles move markets and economies. How it fuels bubbles in financial and real assets...in repeated cyclical trends…over decades and centuries. I applied this to my trading and investment strategies. And have made good money and paid off all debt.
This is why I talk about credit and debt all the time. That is why I sold my trading positions last year (and posted about market weakness). Inflation was going to force central banks, especially the Federal Reserve, to make credit more expensive, and when credit is more expensive, markets sell off.
Anyway, I hope that I answered your question my friend.
You indeed do :)
:)
Hello friend @fijimermaid
Interesting. So you're a historian and a political scientist. Surely that career allows you to have a more global vision, it gives you a better possibility of going from the general to the particular, which is an important tool.
And in general, historians, as I understand it, because my father is one, they are methodical, they have a lot to talk about, they can make many accounts of social and historical events.
It seems not, but yes, it is a career that can be compared to what finances and economics are, in the end, these are largely the ones that have made the world move in a certain direction.
Crises are to learn, without a doubt, or those who don't learn, to break, but I think you always have to look for ways to learn from everything, both from the good, but more from the bad.
Thanks for replying and sorry for being curious. Now I understand you more. Greetings.
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Thank you @alokkumar121.
Things has gotten so bad, but i dont see btc hitting 20k .
It will get worse before it gets better. But it will get better eventually. Just save cash.