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).
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).
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.
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
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
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.
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
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.