Bitcoin sets the tone. This time in reverse | 27 Febr
BTC Bitcoin Price, Bitcoin Price Risk Analysis
(Previous week in brackets)
|Trend||↓ (↓)||↓ (↑)||↓ (↓)|
|88 (93)||88 (90)||23 (95)|
|Allocation Limit(0%)||Invested||0% (0%)|
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.
20 Febr 2021 close: Just watching the markets on our price page we have witnessed some spectecular moves. Binance probably beat them all with a 200% bottom to peak rally and holding up. Bitcoin of course was very strong again with another 19% plus rally into Saturday night and continuing on Sunday. We stay away from the established crypto coins and altcoins as the risk profile is and remains increasingly adverse. Some of the price behavior we witness just feels like an inverse pyramid scheme, meaning a pyramid with the peak pointing downward and where smaller and large recent participants can drop away from the top or early adopters removing from the bottom and decide short term direction. A pyramid because the narrative is loud and clear in all media these days to get everyone to participate.
With all that free Covid money and not spending it due to lockdowns with interest rates at zero percent, Crypto looks the perfect alternative. Bitcoin may not have been designed to achieve this, but it is happening as we watch these incredible events unfold. And the higher this goes the more nervous governments will be on how to ever control this newly found and dangerous wisdom. Massive wealth tax may be the only solution as tax is the only instrument left to control the existing fiat money monopolies. In addition, there will need to be some form of trust established away from the money spinning crypto markets. Possibly using precious metals or at least gold. The danger is also that millions of small investors stand to loose big time or they all become relatively wealthy which leads to massive inflation. The majority of people on the planet however will never be able to participate in these FOMO markets. And they won't like it. Nevertheless a very exciting development from financial market perspectives.
Bitpanda Pro - BEST Token Price Risk Analysis
(Previous week in brackets)
|Bitpanda - BEST/EUR||Monthly||Weekly||Daily|
|Trend||↑ (↓)||↓ (↓↑)||↓ (↓)|
|87 (86)||81 (86)||35 (67)|
|Allocation Limit(30%)||Invested||100% (100%)|
Bitpanda BEST analysis
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.
20 February 2021: BEST was one of the crypto tokens to take breather dropping 7% following last weeks 91% increase. This is still a fairly young and thin market and the price behavior completely logical, since this token only came to fruition for the first time in Q3 of 2020. As BEST has several important reward values from a rapidly growing exchange the potential is really no less than the Binance altcoin on a smaller relative scale. As this market matures we would look for an opportunity to add to the position if prices correct further into a bullish divergence condition. This hasn't happened yet and it may not happen for while either as we have seen with Bitcoin, Binance, Litecoin and other which just keep pumping. Technical systems will thus alway be overidden. We are watching and even participating on a small scale in a few other tokens. Polkidot, PAN and NEM are seen as potential candidates for strong advance and they have already shown that potential in recent weeks. BEST remains the primary allocation as it has a low risk profile with a minimum guaranteed value to pay fees. The monthly trading reward premium paid in BEST tokens makes it, in our opinion, a nicer long term risk proposal against the established high market cap currencies.
S&P 500 Standard & Poor's 500 Price Risk Analysis Forecast
(Previous week in brackets)
|Standard & Poor 500||Monthly||Weekly||Daily|
|Trend||↓ (↑)||↓ (↑ )||↓ (↓)|
|92 (95)||85 (93)||35 (83)|
|Max Allocation 20% (30%)||Invested||0% (0%)|
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.
19 February 2021 close: The high risk daily position seems to have caused some profit taking this time, but we may again expect bullish divergence to develop for a fresh run into new highs. Higher long term treasury yields are potentially indicating higher inflation and we can't predict how markets will react on these developments short term. Technical look like more downside should be expected although hourly risk is racing down. Anything can happen including the start of a longer term downtrend. As MOnthly risk is still up but 2 points lower, this could be an indication that the long term market is seeking a turn. We watch this from the sidelines.
Brent Crude oil Brent Crude Oil Price Risk Analysis Forecast
(Previous in brackets)
|Trend||↑ (↑)||↓ (↑)||↓ (↓)|
|70 (68)||92 (95)||85 (88)|
|Allocation Limit(10%)||Invested||0% (0%)|
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.
20 February 2021 close: Popular commmodities which are used in the EV space have been strong and so has Brent crude although the market finished barely changed. Technicals look indecisive although the long term Monthly risk weight trend remains strongly up. With weekly and Daily risk still and elevated levels and hourly at this week's close racing down the most likely scenario is a short term rally into the new week. This speculative and not a good enough reason to participate in risk size. No Change.