Bitcoin is no stranger to $5000 dollar daily moves | 5 March
BTC Bitcoin Price, Bitcoin Price Risk Analysis
(Previous week in brackets)
|Trend||↓ (↓)||↓ (↓)||↑ (↓)|
|82 (88)||85 (88)||36 (23)|
|Allocation Limit(0%)||Invested||0% (0%)|
6 March 2021 close: Following a 43,000 reaction low last Sunday, Bitcoin managed to find a rapid new lease of life last week ending Saturday 6 March at 49,000 rallying the rest of the weekend above 51,000. Where weekly moves of $5000 dollars were commonplace, this now also applies to daily moves. Many seasoned financial commentators and asset managers find this highly volatile asset class very suspicious. The current debate does focus on a bullish narrative that cannot really be denied becauze no one really knows. But bullish against what? Clearly against the US dollar for most speculators and due to the limited supply of 21 million Bitcoins, assuming that turns out to be the true unbreakable number. Technically BTC is bullish as short term risk weight positively diverges against the Medium term timescale. The whole atmosphere around Bitcoin also benefits from an increasing number of very large actors. This can only push prices up in the short run. We remain very cautious and would rather lean towards Ethereum from a technical point of view as the ETH/BTC ratio has a more bullish tone. We feel that ETH has a better change of 10x than BTC. See our crypto chart page.
27 Febr 2021 close: Crypto, led by BTC started the week in Formula 1 mode, racing to a new high for many crypto currencies and altcoins. BTC rallied to a high of $58,330, but the Monday start was One Way street south losing 20%, finishing the week with a 15% loss equalling the 19% $ gain the previous week. Many crypto tokens shed as much as 30-35% in a matter of hours and many if not most of the altcoins seemed to recover slightly better than the real crypto currencies Bitcoin, Ethereum and Litecoin. Volatility takes its tol and it can't be easy for many. The moves are simply mindboggling although we have seen it for a few years now. Getting used to it at these elevated levels remains hard. Daily risk weight took a sprint into the cellar and will try to fill the divergence gap that was created in a matter of days. The trouble with these very volatile markets is that is has attracted so many small and big time gamblers. And that makes a short term forecast very hard. We've explained before that Bitcoin has been shown to develop meaningful corrections of over 80% and whilst this asset class has so many new and large size gold diggers in its ranks, it is impossible to predict how these new players and especially gambles will react to price activity that sets up for big losses. We now see TESLA stock being traded as a commodity and several new Bitcoin funds will need to accommodate several large actors. They won't all be long term investors. Tricky market, no change.
Bitpanda Pro - BEST Token Price Risk Analysis
(Previous week in brackets)
|Bitpanda - BEST/EUR||Monthly||Weekly||Daily|
|Trend||↓ (↑)||↓ (↓)||↑ (↓)|
|83 (87)||77 (81)||62 (35)|
|Allocation Limit(30%)||Invested||100% (100%)|
Bitpanda BEST analysis
06 March 2021: We remain committed to BEST which performed a little better this week ending on near the highs at €0,7050. This token is still immature with little trading volume. BEST is also limited as US and Canadian citizens are not allowed to open an account. Stiff tax and AML regulation on both sides of the Atlantic are the sole reason for that, since Bitpanda is a fully regulated exchange. Bitpanda has started to roll out its VISA card at the end of February and this Debit card allows contact free shopping worldwide up to €10,000 Euro per day using any preferred listed wallet, like Ethereum, Bitcoin, Doge, Euro and many more. This feature is expected to develop more loyalty to trading a slowly but steadily increasing number of tokens on the Bitpanda exchange. No Change.
Besides our long term BEST holding we own a small quantity of other tokens including NEM, Ethereum, Polkadot, Pantos and Stellar since a few months. This is learn understand how these markets function. Volatility is as high as Bitcoin but several tokens do trade against the general crypto trend with some very speculative and equially spectecular moves like Chiliz.
Market Cap of all Crypto's has increased by 50% from OneTrillion to OnepointFiveTrillion in just two months. This is a trend that attracts many new small and large investors into the space.
Something to get used to and with great care for risk.
27 February 2021: BEST tokens held steady trading close to 0,70 most of the time, closing a milder 1.5% lower at 0.6750 for the week. Daily risk weight has reacted very similar to most crypto's dropping rapibly into divergence territory. Divergence being defined as >50% movement away from their longer term timescales. Because there are a lot of small value transactions in this slowly maturing token it is difficult to guage short term direction. This is because small transactions have equal weight as larger transactions to the risk weight calculation. Price is the only determining factor which it should be as the law of large numbers is considered, ioo, the most reliable measure for forecasting based on technical data. Larger volumes simply give no clue as to the reason or the meaning for certain transactions. We do see that hourly and 10 minute charts appear to react in a very predictable way, Very much like the kind of functional technical analysis done 35 years ago.
As a sidenote, what we have found being a relatively recent crypto participant, is that many tokens lend themselves for profitable active trading. Especially for smaller investors. Many of the well established and proven technicals tools, with exception of simple or more complex moving averages, can be successfully deployed for daytrading as long as the size of transactions stays below the level that generates strong heartbeats on >10% moves. Diversifying a few thousand dollars amongst a few popular promising tokens can deliver very interesting returns for many active daytrading investors. Always apply sound risk management principles and missing opportunities, like we do all the time, is a whole lot better than losing marginal funds.
S&P 500 Standard & Poor's 500 Price Risk Analysis Forecast
(Previous week in brackets)
|Standard & Poor 500||Monthly||Weekly||Daily|
|Trend||↓ (↓)||↓ (↓)||↑ (↓)|
|95 (92)||78 (85)||40 (35)|
|Max Allocation 20% (30%)||Invested||0% (0%)|
5 March 2021 close: The S&P index closed slightly lower on 3% recovery after falling to 3722 on Thursday. High interim risk weight has become even more evident in the monthly timescale as the new month started. S&P remains a no go area from a pure risk point of view.
26 February 2021 close: Short term risk weight is again suggesting the next BTFD followed by another rally into ever higher stratospheres. There are plenty of strong arguments that stock prices represent forward looking inflation which much depreciated fiat currencies. And the argument makes enough sense to allocate a certain percentage, But where? Index? FAANG? The technical analysis picture remains high risk for long term investors, because long term time scales must be observed and can, and will at some point, take over market direction. That has happened of course on various occasions in recent years but stalled. Since March 2020 we have witnessed the strongest equity market by any comparison with long term bearish divergence upon bearish divergence. Hence our strong hesitation to participate. No Change.
Brent Crude oil Brent Crude Oil Price Risk Analysis Forecast
(Previous in brackets)
|Trend||↑ (↑)||↑ (↓)||↑ (↓)|
|85 (70)||84 (92)||45 (85)|
|Allocation Limit(10%)||Invested||0% (0%)|
5 March 2021 close: Brent is rapidly developing potential bearish divergence in all timescales. Daily risk shot up over 10% last week from an early week downtrend. Uncertainty about near term requirement and storage of Crude oil makes this asset highly speculative and the speed and size of the up and down moves confirms that. We continue stand down on this market.
26 February 2021 close: Brent is showing overbought territory bearish divergence in both Short and Medium term timescales. This is a high risk technical condition. Very similar to what has been apparent in most equity markets and it doesn't mean this market can't go mnuch higher. It can, but there should be no evident risk taken in a more conservative wealth preservation portfolio if these conditions apply. This is a market for seasoned short term oil traders only. No Change.