Cryptocoin Value and Market Trend Discussion

[Vayra86]

Scary chart of the day - the DJIA trading at the top of 90 year pitchfork style trend lines :

View attachment 204919

More on topic, BTC seems to be at a decision point. Will it stay in its trading range and bounce up, or break down lower? We should know very soon.

View attachment 204920

Was sitting on purchasing ETH for a month already and so glad I did wait longer. Im quite close to your line of thinking right now. The pandemic effect is huge and a few influencers plus PoS made the peak even bigger, now, reality sets in.

If I had to guess , this is not the bottom just yet. There are no coins to flee to either.

Looks like the crash is real. BTC below $30k and Eth below $18k. Still waiting for a buy point...

Maybe we are seeing the swap to ETH as leading crypto; BTC cant really compete on a technology level soon, or so people think.

 

[trog100]

why do i have a feeling the crypto markets are front running the stock markets.. he he..

trog

 

[Nash]

why do i have a feeling the crypto markets are front running the stock markets.. he he..

trog

Because $30,817,xxx. They're trying to keep it up for the week.

 

[ShiBDiB]

why do i have a feeling the crypto markets are front running the stock markets.. he he..

trog

The crash is coming, it's not a matter of if but when and how far it goes. If you're in stocks it's not a time for speculative plays imo, you should be moving most of your money to cash or blue chips. Crypto wise, ether/btc are those blue chips. Honestly hopefully this kills some alt coins that have no business existing.

 

[dragontamer5788]

why do i have a feeling the crypto markets are front running the stock markets.. he he..

trog

I mean, when BTC went up by 100% a few months ago, did you expect the stock market to follow it? Now that BTC is dropping, why do you expect the stock market to follow?

If they're correlated assets, then they're correlated both in rise and fall. You can't just assert that they're correlated because one is dropping. In any case, BTC is down by 15%ish in the past month, while the S&P500 is up 0.76% in the past month. I'm not seeing any reason to think that these two are related at all.

Or a few months ago: when BTC was up by 100% or whatever, S&P500 wasn't up or down much at all. In some cases, assets are inversely correlated (ex: Bonds go up when stocks go down), but I'm not seeing that kind of behavior with BTC vs Stock Market at all.

 

[LFaWolf]

The crash is coming, it's not a matter of if but when and how far it goes. If you're in stocks it's not a time for speculative plays imo, you should be moving most of your money to cash or blue chips. Crypto wise, ether/btc are those blue chips. Honestly hopefully this kills some alt coins that have no business existing.

The crash for cryptocoins? Possibly yes. The stock market? I doubt it. They have been crying about a crash coming for months, if not years. We had a correction back in April already. The market is cyclical and eventually a crash will happen, but just not so soon again.

If you are a long term stockholder, any short term fluctuation in price should not affect you. If you are thinking of buy low and sell high, timing the market is quite difficult.

 

[ShiBDiB]

The crash for cryptocoins? Possibly yes. The stock market? I doubt it. They have been crying about a crash coming for months, if not years. We had a correction back in April already. The market is cyclical and eventually a crash will happen, but just not so soon again.

If you are a long term stockholder, any short term fluctuation in price should not affect you. If you are thinking of buy low and sell high, timing the market is quite difficult.

Every indicator is pointing to an overbought market with inflation on the rise right now. And the second part is exactly what I said in the post you quoted.

It might not end up being a "crash" as most people think but a correction is coming.

 

[dragontamer5788]

Every indicator is pointing to an overbought market with inflation on the rise right now. And the second part is exactly what I said in the post you quoted.

If inflation happens, you expect people to sell bonds and buy stocks. That is to say: the Stock market is an inflation hedge. When there's inflation risks, you buy stocks and sell dollars (along with other things denominated in dollars: such as 30-year treasuries).

Lets put it this way: would you rather own Exxon (producer of oil), or UFPI (producer of lumber)... or would you rather hold dollars right now? Especially if you're expecting inflation? Alternatively, you can buy/sell commodities (such as oil and/or lumber directly). That's how you protect yourself from inflation.

Alas, Oil and Lumber prices are down over the past week, suggesting that inflation fears are overblown. Furthermore, bond yields continue to drop, again suggesting that people are not in fact worried about inflation (bonds would be hit hardest by any kind of inflation. 2.1% 30-year treasury vs a 3% inflation rate would cause you to lose a lot of real value)

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Growth stocks are hurt by inflation, because they're not producing a lot of value yet. But any lumber mill / oil producer stock (UFPI / Exxon / etc. etc.) is a very strong inflation hedge. As long as they're currently making tons of product, then you're protected as inflation goes up.

 

[trog100]

well the bitcoin journey below 30K was short and sweet... he he..

trog

 

[ZenZimZaliben]

I have been averaging down this entire time. Got more BTC/ETH/LTC/ETC every day during the drop.

 

[RandallFlagg]

If inflation happens, you expect people to sell bonds and buy stocks. That is to say: the Stock market is an inflation hedge. When there's inflation risks, you buy stocks and sell dollars (along with other things denominated in dollars: such as 30-year treasuries).

Lets put it this way: would you rather own Exxon (producer of oil), or UFPI (producer of lumber)... or would you rather hold dollars right now? Especially if you're expecting inflation? Alternatively, you can buy/sell commodities (such as oil and/or lumber directly). That's how you protect yourself from inflation.

Alas, Oil and Lumber prices are down over the past week, suggesting that inflation fears are overblown. Furthermore, bond yields continue to drop, again suggesting that people are not in fact worried about inflation (bonds would be hit hardest by any kind of inflation. 2.1% 30-year treasury vs a 3% inflation rate would cause you to lose a lot of real value)

------

Growth stocks are hurt by inflation, because they're not producing a lot of value yet. But any lumber mill / oil producer stock (UFPI / Exxon / etc. etc.) is a very strong inflation hedge. As long as they're currently making tons of product, then you're protected as inflation goes up.

This is all true, but your core assumption here is that inflation will continue and be sustained.

When asset bubbles burst, it is not inflationary.

Also of note, the Fed just did ~740B in repos. That sucked up 6 months of their QE.

 

[dragontamer5788]

This is all true, but your core assumption here is that inflation will continue and be sustained.

When asset bubbles burst, it is not inflationary.

Also of note, the Fed just did ~740B in repos. That sucked up 6 months of their QE.

By "inflation", I'm talking about food prices, housing prices, transportation prices, clothing prices, and raw material (lumber, bricks, steel, maybe computer parts) prices.

I think people have serious worries right now that inflation is going to go up. Because... it has. The question is if inflation is "transitory" (caused by the reopening of the US economy thanks to the vaccine), or if its a more permanent form of inflation. We've all seen lumber prices go up by 200% or 300% or whatever the heck it is now. We've seen gasoline prices shoot up from $2/gallon to $3/gallon as well.

Real estate may drop (but I believe 2008 was a black swan event. We all know real estate prices could drop, and that shared knowledge alone is going to be helpful at mitigating the next real estate bubble). But real estate is in such a weird spot right now: people are clearly moving around the country, but I don't think anyone really knows where all of us are going.

 

[80-watt Hamster]

Also of note, the Fed just did ~740B in repos. That sucked up 6 months of their QE.

Could you Cliffs Notes what that means for the benefit of us morons in the cheap seats?

 

[ZenZimZaliben]

By "inflation", I'm talking about food prices, housing prices, transportation prices, clothing prices, and raw material (lumber, bricks, steel, maybe computer parts) prices.

I think people have serious worries right now that inflation is going to go up. Because... it has. The question is if inflation is "transitory" (caused by the reopening of the US economy thanks to the vaccine), or if its a more permanent form of inflation. We've all seen lumber prices go up by 200% or 300% or whatever the heck it is now. We've seen gasoline prices shoot up from $2/gallon to $3/gallon as well.

Real estate may drop (but I believe 2008 was a black swan event. We all know real estate prices could drop, and that shared knowledge alone is going to be helpful at mitigating the next real estate bubble). But real estate is in such a weird spot right now: people are clearly moving around the country, but I don't think anyone really knows where all of us are going.

Or maybe it is because the current administration has dumped Trillions of new printed money into the economy. They are diluting the dollar so fast we aren't even able to process it. Cash sitting in a savings account is losing buying power maybe as high as 10% right now, and they are planning to dump billions more. Sadly with crypto and stock on the decline there doesn't seem to be many safe places to store value. Even gold was down some how...like that one I especially don't understand.

 

[dragontamer5788]

Or maybe it is because the current administration has dumped Trillions of new printed money into the economy.

And how much inflation occurred after multiple rounds of QE from the previous administrations?

Look, people have been trying to convince me of inflation for the last decade. I've grown tired of the argument. I'm just looking at the stats at this point, because inflation-crazed fearmongers have called at least 13 recessions over the past decade: 2011, 2012, 2013... etc. etc. This is always a sign for another set of devastating inflation just around the corner.

Color me skeptical. Eventually the crazed inflation will happen, but I'm not entirely convinced by this line of argument. Maybe inflation will happen, but not in a way necessarily related to QE or printing of M0 / M1 measures of money.

 

[ZenZimZaliben]

I mean 6 Trillion in "New" spending is going to have an impact. $18k per tax payer. That pool of "tax payers" is also growing smaller.

 

[RandallFlagg]

By "inflation", I'm talking about food prices, housing prices, transportation prices, clothing prices, and raw material (lumber, bricks, steel, maybe computer parts) prices.

I think people have serious worries right now that inflation is going to go up. Because... it has. The question is if inflation is "transitory" (caused by the reopening of the US economy thanks to the vaccine), or if its a more permanent form of inflation. We've all seen lumber prices go up by 200% or 300% or whatever the heck it is now. We've seen gasoline prices shoot up from $2/gallon to $3/gallon as well.

Real estate may drop (but I believe 2008 was a black swan event. We all know real estate prices could drop, and that shared knowledge alone is going to be helpful at mitigating the next real estate bubble). But real estate is in such a weird spot right now: people are clearly moving around the country, but I don't think anyone really knows where all of us are going.

Yes, I know what inflation is.

I'm just saying that your expectation of future inflation based on current conditions may turn out faulty. I'm not talking about transitory effects either. Much of Europe and Japan have had deflation for years, and it's not like they haven't had the printing presses running.

As far as 2008, well I consider that to have been part of a 9 year correction. Yes, that's correct. Before you laugh, consider the effect of inflation on real dollar market value. Then consider these 3 charts.

The simplest corrective pattern, an A-B-C correction :

This is an inflation-adjusted S&P 500 :

So the above chart would suggest that 2008 was simply the 2nd leg of a bear market that started in 2000.

Edit: Just for the record, inflation adjusted asset price charts are far more bullish than the non inflation adjusted ones. Especially when you look at commodities and real assets like property.

To wit, this is what happened to the dollar in the past month. Many TA types believe the dollar has hit a multi-year low and starting a new bull run which dates back to 2008.

One place I follow was calling for 89.50ish as the bottom. For a currency, this is a big move in a short time, like 2.5%. That will go a log way to eradicating commodity inflation :

Putting this into larger perspective, there's a pretty clear 3-waves up pattern from 2008. If that count is correct one might expect the dollar to go up about 20% from here. That would be very deflationary, and what would cause it might be interesting (like, imploding asset markets).

 

[LFaWolf]

well the bitcoin journey below 30K was short and sweet... he he..

trog

What I see is when there is a dip, there is a slight uptick from the people that buy the dip. I think the real story will be by the end of this week, what would it be.

 

[trog100]

What I see is when there is a dip, there is a slight uptick from the people that buy the dip. I think the real story will be by the end of this week, what would it be.

pretty well all the "experts" have been saying that if it broke below 30K it would go much lower.. it did break below 30K but then shot straight back up again..

to me its still looking like 30K is the bitcoin bottom.. what i would like to see is bitcoin and eth go sideways between where they are now and maybe 10% higher for a while.. maybe a few weeks even..

i think the altcoins have hit bear market territory but not bitcoin i still think that long term its going much higher..

trog

 

[RandallFlagg]

What I see is when there is a dip, there is a slight uptick from the people that buy the dip. I think the real story will be by the end of this week, what would it be.

I'll just say, this now counts as 5 waves down. Correctives do not end on 5 waves down.

Roughly speaking, the red circle is where we are with BTC. That decline "A" may not be done but one can expect one hell of a sucker rally when it completes. I still think it will go down to 24-26k in a final capitulation, as you say later this week.

Someone who knew something called me out earlier and asked how I knew this was not completed around 33k as a complete A-B-C pattern - after all 1-2-3 can be a-b-c. Mostly my view was based on momentum, market moves don't end on max momentum, but that person was exactly right I did not 'know'. Turns out I was right though, and we have a new low and potentially some slight more downside to it.

Another implication here though. Since we had 5 waves down, the real pain looks to be later this year. That C wave awaits. The B wave will give some folks an opportunity to exit at higher price levels I believe.

This is actually no different than what has happened before, 2017-2018 BTC too 12 months to bottom, and in 2019-2020 it took 9 months. We are relatively early into this one.

You are here (red circle) :

 

[LFaWolf]

I'll just say, this now counts as 5 waves down. Correctives do not end on 5 waves down.

Roughly speaking, the red circle is where we are with BTC. That decline "A" may not be done but one can expect one hell of a sucker rally when it completes. I still think it will go down to 24-26k in a final capitulation, as you say later this week.

Someone who knew something called me out earlier and asked how I knew this was not completed around 33k as a complete A-B-C pattern - after all 1-2-3 can be a-b-c. Mostly my view was based on momentum, market moves don't end on max momentum, but that person was exactly right I did not 'know'. Turns out I was right though, and we have a new low and potentially some slight more downside to it.

Another implication here though. Since we had 5 waves down, the real pain looks to be later this year. That C wave awaits. The B wave will give some folks an opportunity to exit at higher price levels I believe.

This is actually no different than what has happened before, 2017-2018 BTC too 12 months to bottom, and in 2019-2020 it took 9 months. We are relatively early into this one.

You are here (red circle) :

View attachment 205023

I actually feel the same way too, although I don't chart the movement like you. Just wait and see at the moment for a better entry price point.

 

[dragontamer5788]

pretty well all the "experts" have been saying that if it broke below 30K it would go much lower.. it did break below 30K but then shot straight back up again..

Just because someone else is wrong doesn't make you correct. Its possible both you and the other guy are wrong.

 

[ZenZimZaliben]

All I know is that with the selling/buying (30/70) ratio's I'm seeing, all these whales are doing is allowing other buyers to pickup coins that the whales will not get back for even remotely the same price. Even if whales dump all their coins there is enough people to buy them all and then the price will naturally go up and the gap the whales made is closed over like it never happened.

 

[RandallFlagg]

Could you Cliffs Notes what that means for the benefit of us morons in the cheap seats?

Fed Reverse Repos: <-- Link. Basically the Fed puts up its bonds / treasuries as security and offers a small interest rate to banks for the banks to deposit cash with them, and uses its assets (which it has plenty) as collateral.

It is short term, but during that time the banks do not have that cash to lend. They basically already lent it to the Fed.

I love the way they explain it :


"FEDERAL RESERVE: “Hey Bank of Stacey, this is the Federal Reserve Reverse Repo Pawnshop. Listen, I know you wanted to lend to your friend and get 5 percent interest back , but that’s awfully low. I don’t think you should be so generous. In fact, why don’t you just lend that factory money to ME instead of to your friend. I’m not gonna build a factory with it. I’m gonna do NOTHING with it. Here, I’ll pawn my bonds to YOU, and I’m gonna buy them back later for 10 percent more than you gave me – it’ll be like you’re making 10 percent interest!”

BANK OF STACEY: “What about my friend?”

FEDERAL RESERVE REVERSE REPO PAWN SHOP: “Um can she pay 10 percent interest? I don’t think so. So if you could just go ahead and lend me the money. Kthxbai.”

Reverse repo = suck money out of the economy, fast.

"Repo" does the opposite, injecting money into the economy.

Fed sees record $756 billion demand for reverse repo program and may hit $1 trillion

Demand by banks and others using the Federal Reserve's overnight reverse repo program surged to a new $755.80 billion record high on Thursday, a day after...

www.marketwatch.com

 

[80-watt Hamster]

Fed Reverse Repos: <-- Link. Basically the Fed puts up its bonds / treasuries as security and offers a small interest rate to banks for the banks to deposit cash with them, and uses its assets (which it has plenty) as collateral.

It is short term, but during that time the banks do not have that cash to lend. They basically already lent it to the Fed.

I love the way they explain it :


"FEDERAL RESERVE: “Hey Bank of Stacey, this is the Federal Reserve Reverse Repo Pawnshop. Listen, I know you wanted to lend to your friend and get 5 percent interest back , but that’s awfully low. I don’t think you should be so generous. In fact, why don’t you just lend that factory money to ME instead of to your friend. I’m not gonna build a factory with it. I’m gonna do NOTHING with it. Here, I’ll pawn my bonds to YOU, and I’m gonna buy them back later for 10 percent more than you gave me – it’ll be like you’re making 10 percent interest!”

BANK OF STACEY: “What about my friend?”

FEDERAL RESERVE REVERSE REPO PAWN SHOP: “Um can she pay 10 percent interest? I don’t think so. So if you could just go ahead and lend me the money. Kthxbai.”

Reverse repo = suck money out of the economy, fast.

"Repo" does the opposite, injecting money into the economy.

Fed sees record $756 billion demand for reverse repo program and may hit $1 trillion

Demand by banks and others using the Federal Reserve's overnight reverse repo program surged to a new $755.80 billion record high on Thursday, a day after...

www.marketwatch.com

Nice; thanks. The other implied question was, what's the cause-effect relationship between that and QE?

I'm asking you rather than Google because you seem to have a pretty good handle on this stuff, and are better at explaining it in plain language than most.

(If this is getting too off topic, please ignore.)