James,
what do you think of this article, “The Fed move means that people who were thinking of crypto as actual currency are going to get their bubble popped,” says Chen. “Many Bitcoin types were thinking that it is a currency and that it would replace traditional currencies. Well, not if the Fed, the European Central Bank, and other central banks have anything to say about it.”
If governments create their own digital currencies then why would we need bitcoin & others like it?
Scott
Scott,
I think it will depend on the future market acceptance of DeFi, (decentralized finance) which continues to favour cryptos vs CBDC (central bank digital currency).
Pls refer to this article for more information.
https://coinculture.com/au/markets/are-cbdcs-good-or-bad-for-crypto/
Regards
James
Scott,
RSI=53
Will RSI drop below 50 (indicating downward momentum and start of a bear market), or will RSI stay above 50 and rise again, because at the peak in 2021 RSI did barely go above 90 as well (no high peak = no extreme low).
Regards
James
Thank you James
I read this as India trying to steer its citizens into its own cryptocurrency.
Scott,
Bitcoin initially surged to day high after the news but has fallen back below 38,500 now.
By the way, I switched out of XLK to BLOK at market opening today.
Not sure how long I will be holding BLOK.
Regards
James
Edit : Just took profit on BLOK at market close. I may buy back BLOK tomorrow depending on the update on my model in P123.
Bloomberg Markets
India Finally Warms to Crypto With Tax, Digital Currency
Thank you James.
These regulatory changes could come from any country at any time and when combined with the questionable utility of many of these cryptocurrencies there is a dimension of risk and unpredictability which is unique.
Jim/Scott,
It is pretty interesting that despite the crash in stocks yesterday, crypto was relatively unaffected.
Both stocks/bonds are falling right now after the Jan payroll report, crypto is up now with bitcoin rising almost 10%.
Regards
James
EDIT : Bitcoin futures just broke through resistance at 39,000
Thank you James. It’s truly uncorrelated.
Scott,
Bitcoin CME futures just broke through the 42,000 resistance.
As long as it stays above 41,000-42,000, the next resistance is at 45,000-46,000 level.
We can see whether the decoupling is occuring when the US equity market opens .
Regards
James
Jim/Scott,
S&P 500 and Nasdaq 100 drops 0.4 and 0.8% respectively while Bitcoin rise more than 8.5%.
We are seeing a temporarily decoupling for Bitcoin and the US equity market.
Regards
James
Thank you James
Or maybe it was a temporary coupling between Bitcoin and stocks:)
Bitcoins volatility seems to be due to a combination of the inability to value it and greed/fear
James,
The recent Bitcoin price jump occurred when the non commercial traders moved to net long positions for the first time ever as per the prior graphic
Scott,
Bitcoin CME futures just dropped through support at 43,000.
If it stays below 43,000, there is a good chance that it will test the support at 39,000-40,000 level next week.
Regards
James
Thank you James.
I’m just watching it from a distance. Cryptos are very volatile and don’t mean revert or trend well, return drivers are questionable, Crypto hedge funds overall have a .88 correlation to Bitcoin suggesting more beta and less alpha, and I don’t have confidence in it as an asset class similar to this paper (https://www.institutionalinvestor.com/article/b1wnwl7t74ywtw/JPMAM-s-Michael-Cembalest-Says-He-Won-t-Play-the-Sap-for-Crypto). However I do recognize it’s value in being non correlated to everything else
Scott
Scott,
I am also watching from a distance right now.
For bitcoin, I will consider buying the dip if it dropped to 20,000 level or if it rises about the weekly Parabolic SAR (breaking new ATH) at about 60,000.
Regards
James
James,
I posted the prior article because it shared my view that it’s hard to find the bottom of a crypto selloff because there’s “nothing there” as the senior JP Morgan Strategist states in this article. Based on the same theme the Strategist states that digital assets are in particular danger because they serve no purpose. “It’s still all fairy dust and very vulnerable to higher interest rates,” he said.
Scott
Scott,
Thanks for sharing the article.
However, it should be noted that JP Morgan’s prediction was completely different 3 months ago and forecasted bitcoin hitting 146,000 in the long term.
“Indeed, JPMorgan reckons that volatility is such a problem that bitcoin’s fair price is actually around $35,000 at the moment. Yet the bank said that the token’s volatility is currently falling and that a price of $73,000 looks reasonable for next year.”
Like forecasting S&P500, investment banks change their view very often depending on the market direction.
Here is the link.
Regards
James
