Cryptocurrency/Financial Markets Q2 2021 Update

banglasteve (45)in #bitcoin • 3 years ago (edited)

Hi everyone,

Following up from my post of Q1 it is only fitting that I do a Q2 to reflect and also forecast movements ahead.
(https://steemit.com/steemit/@banglasteve/cryptocurrency-financial-markets-q1-2021-update)

To summarise some of the recent events:

CRYPTO

• Bitcoin (BTC) corrected from its highs of approx. $64,854 USD to current levels ranging between $32,000 - $33,000 USD (Approx. $45,000 AUD). Sneaky hint below of where I think we are going...
• El Salvador (Small country in Central America) has recognised Bitcoin as legal tender and giving all its citizens $30 in Bitcoin
• Ethereum (ETH) suffered a similar correction from its highs of $4,372 USD to approx. $2,100 USD. Keep in mind at the time of my last article most were celebrating the break of $2k. Ironic how much can change in a few months?
• The total cryptocurrency market capitalisation (value of all cryptocurrencies in the market) is currently $1.3T (down from $2.5T). Remember Shiba and Doge? The run down in the hype is congruent with the run down in market cap of ALL coins. Just remember Bitcoin is always king. When it corrects EVERYTHING corrects!

FINANCIAL MARKETS

• Gold the shiny yellow rock has been on a volatile run. At the time of my last article, it was trailing around $1,750 and now has not quite taken off as expected currently trading at approx. $1,800
• Commodities are still mental! Mental to the upside of course! Copper, Iron ore, nickel and anything in the ground used to make goods has been going up and up - except lumber which has seen a BTC style correction
• House prices are still on rockets! Been to an auction lately? You will know what I mean… saving for a deposit? The goal posts just pushed out further and probably will for the next 1-2 years in my opinion

What’s up doc?

Inflation. Inflation. Inflation.
To summarise the general increases in assets is as discussed in my last blog post – INFLATION. The elephant in the room – But is it really? Measuring in at 5% recently the highest in 13 years! Go shopping lately? Things costing more? Yep that’s inflation. (https://www.the-sun.com/news/3055105/us-inflation-highest-years-trump-biden)

You will come across a lot of excuses like logistic issues and reduced supply/production and everyone likes to point the finger at COVID. But truth be told it is all to do with the money printing and low interest rates as opposed to ‘business logistics’ and I call this ‘COVID tax’ because businesses are capitalising on the greater circulation of money. Greater money in markets buying same goods/less means price go up. Economics 101. You know the market is cooked when second hand cars are going up in price – i.e. a depreciating asset is worth more than it was last year… Does this make any sense? Bobo looks concerned…

Cryptocurrency has been the talk of the town for the first half of this year until we saw the doomsday that be, and you will note I use the term ‘correction’ not ‘crash’. BTC and ETH are still above their yearly opens. Almost half of the market cap (explained above) has been wiped and some alternate coins have seen their prices drop 60-70% from their all-time highs (this is more of a crash) Yikes! Why is this happening? When do you buy? How do we become rich and drive lambos again? Let me just get you the philosophers stone while I’m at it homies…

I will simplify the reasons as best as I understand:
• A lot of people made money in the bull run and there was a lot of profit taking as we topped out
• You buy low and sell high i.e. buy in red and sell in green – no-one can tell you the when homies. Just watch, read and learn and do your own research
• Markets work in cycles so you need to know when to ride the waves and when to get out
• Mistakes make you stronger and better. It is said life will teach you the same lessons until you learn from them. 2017 was a lesson and teacher that gravity always prevails and these things can crash. I tried to tell many to cash out but there was disbelief…

Moving forward, can you profit from downside price action? 100%. Please refer to my tik-tok video below on how to trade downside price action. Some notes although:
• Leverage trading is extremely risky and you can over leverage and cuck yourself
• Without any idea of how to trade avoid and try paper trading
• Have a risk management strategy (this is where most fail)
• Leverage trading is as addictive as drugs because of the quick dopamine hits. Stay safe

How to short Bitcoin 101 - https://vm.tiktok.com/ZSJgdWctN/

CRYPTO MARKET DIRECTION (THEORIES)

Double bubble theory? In my opinion when I look at the daily chart I think this market is finished and we are probably going to revisit $20,000 USD Bitcoin prices and $800 Ethereum potentially. Now having said that nothing falls in a straight line, we get all kinds of patterns from Elliot waves to slow grinds down lower or it could just have explosive moves down as markets correct. Watch the DXY also known as the US Dollar – if this strengthens generally all markets correct. Why? Generally it represents investors cashing out and moving back to safety i.e. USD or the Japanese Yen (JPY). You will see that it becomes a ‘risk-off’ atmosphere where the market pulls back. I do not think we will see market crashes but market corrections in the stock market. The crash will come but with QE and money printing not for the foreseeable future i.e. this year at least.

Alternate theory – If Bitcoin does manage to climb back to $45,000 and maintain its price and slowly crawl back to $50,000+ levels I will change my views and turn bullish. Bullish means an expectation prices will go higher, this is Wall Street terminology and works on the premise that bulls nod their horns up and symbolically price moves up. This would be consistent with a ‘double bubble’ theory which mind you is super rare in cycles and would potentially push Bitcoin back up to $80,000 - $100,000 USD levels. Insane!

For now we sit and wait, but any market that trades below its moving average and has experienced a ‘death cross’ (https://www.investopedia.com/terms/d/deathcross.asp)
which is a lagging indicator usually indicates a downtrend. Hence, my overall view is bearish which means an expectation the price will sink lower and this is again Wall Street terminology where bears claw downwards used to symbolise a decrease in price. A lot of people were expecting a ‘blow-off top’ which we saw in 2017 where after a parabolic vertical run the market reverses with a very sharp wick upwards. However, as per the chart below we see a rounding pattern – this is actually something observed in mature markets. I highly recommend watching this video to explain the break down by Game of Trades.

Predictions (for fun) for Q3-Q4 following on from my Q1 guess-pectations:

Gold starts ripping higher over the next 6-12 months as fundamentals and technicals catch up with reality
Cryptocurrency markets are word of the street and everyone is talking about them and shitcoins pump some crazy numbers through Q2 2021
Commodities and asset prices continue higher and we slowly see stimulus pull back as travel and world economies open up through 'COVID passports' and further vaccination of society
After Q2 2021 we might see a crash in the markets. This might be the real deal unless we get more "stimmy"

I am still waiting for this to play out and have expectations of a $2000 revisit in Q3-Q4 as inflation is clearly out of control. $2200 is my top target for this year – Let’s see what happens. Silver on the other hand has been much more aggressive and friskier (one to watch)
This played out somewhat where we did have coins like SHIB and DOGE go viral and Elon Musk and celebrities shilling NFT’s. The number of celebrities interested in this space is so long I lose track – Lindsay Lohan, Mike Tyson, Jay Z, 3LAU are some that come to mind. We saw some crazy numbers for sure with Shiba returning 50,000%+ since inception. Safemoon pulled similar crazy numbers (40,000%) where people wanted ‘cheap coins’ and hype can go a long way. One word of advice – if everyone is talking about it, you are too late homie.
This has been the scariest prediction which I am seeing come into reality. COVID passports look to be a real thing and the push for vaccination has been aggressive by world governments and under the logic ‘prevention is better than cure’ being mass sold to everyone. It is a tricky situation where there is not a lot of ‘mass’ testing to evaluate the effectiveness of the vaccines and we are the ‘guinea pigs’ but most of us are in a situation where it is an inevitable outcome. Early 2022 I feel is when we see 70-80% vaccinations of most developed countries and borders open.
There has been a slow crawl of correction in stock markets but I think we still go higher. If we go lower it’s a temporary fake out to scare some out of markets that a crash is coming but we continue higher as stimulus does not look to end. Once this lifeline is cut we will see the roaring 20’s repeated in my opinion. Governments and central banksters know this however and don’t want to see it happen. Hence, the ponzi pumps continue… This is the opportunity of a lifetime for some as we see the biggest wealth transfer from the middle and lower class to the upper class – unfortunately most don’t see it and are happy with stimmy checks. Inflation robs your purchasing power and cheap government money silences you and Universal Basic Income is fast approaching.

Take care and stay vested and well rested. Do your own research and everything I have said is not financial advice. However, it is in everyone’s interest to accumulate assets, remove debt and stay bullish on life. As always start small and earn big.