Crypto weak hands are seriously challenged... again | 5 June
BTC Bitcoin Price, Bitcoin Price Risk Analysis
(Previous week in brackets)
|Trend||↓ (↓ )||↓ (↓)||↓ (↑)|
|70 (79)||21 (22)||50 (48)|
|Allocation Limit(0%)||Invested||0% (0%)|
05 June close: El Salvador announced at the 2021 Miami Bitcoin conference on Saturday 5 June to make Bitcoin Legal tender. Various media reported this and suggested that BTC should have immediately gained in price, but it didn't because Elon Musk's one but latest tweet had a bigger negative weight on the market. This whole circus makes us wonder what the majority of investors are trying to achieve other than achieving fast opportunity profits. Great if you're in it early, but it is soooo speculative. There are different ways to observe technical risk weight and as regards Bitcoin all time scales are in a down trend today. Looking at quarterly risk in the below quarterly close BTC risk chart and how this asset behaved following peak risk weight in the past, this is simply a high risk profile and could be for 6 or 9 months at least. As the longer term downtrend are well underway, there is less change of short versus long bullish divergence. The stock approach for positioning would now to be to wait for at least the Medium term Weekly to produce bullish divergence in its own timeframe. The other 'old saying' is to never add to a losing position. This goes against the story now told by many influencers, but it has historically been the better protective trading strategy. Losing a higher risk opportunity has generally been the better draw. No Change.
01 June close: Some people in this highly speculative industry say that technical analysis has no purpose. Because purpose is long term wealth creation? We would argue quite the opposite; technical anyalsis has every purpose to assist with reducing risk. It is so different and so much easier if the entry point was low enough to 'not worry about a 50% drop'. However, the crypto market is entirely speculative for 95% of participants, which is why so many major authorities seek to regulate, but don't yet know how.
What we have seen in our technical indicators the past three weeks is an almost exact copy of Bitcoin indicators on most major and minor crypto tokens say from 50M to 1T market cap.
So, looking at Bitcoin risk weight, which applies to most others, we see a bearish divergence in monthly risk weight that only materialized at the 31 May close, but became interim fact during the first attack on 12 May. Weekly and Daily were already in strong downtrends and the question now is; have we bottomed? From a risk point of view that is NOT the case. Given that Medium and Long term time frames have turned down sharply, based on a minimum 50% correction thusfar, we should expect to see at least a Medium term (weekly) risk weight bullish divergence before a more serious rally can be expected. Serious as in probably 25% to 60% from a recorded correction low. That low is now 30k since the 64k peak and risk is high that the current rally back towards 40k ends and turns into another bear section with new lows. We now see Daily risk moving up in a price range between 30 and 41k.
The 4 hourly chart is already showing potential bearish divergence. Traders that were able to buy the dip should get worried at 38k or higher and put stops in. The unprecedented crypto rally we've witnessed between December and April, simply came to a halt as many started to cash some profit.
For long term holders that stepped in late, the current level and higher is high risk. The chart suggests a good possibility of up to one year of corrections before a fresh advance can develop in earnest. Precious metals currently are a safer play for long term wealth preservation.
Crypto, being highly volatile, is a technically tradeable marketplace when actively looking for divergence between all short term time scales. Long term holds are at risk of losing another 50% at least.
Bitpanda Pro - BEST Token Price Risk Analysis
(Previous week in brackets)
|Bitpanda - BEST/EUR||Monthly||Weekly||Daily|
|Trend||↓ (↓)||↓ (↓)||↑ (↑)|
|60 (70)||30 (32)||45 (30)|
|Allocation Limit(variable)||Invested||100% (100%)|
BEST token live price
Bitpanda BEST analysis 05 June
Having reduced our position marginally at higher levels we have decicded to stick with the strategy of claiming monthly rewards and keep the position. This asset too looks vulnerable as do most crypto's as they initially appear to be following BTC's lead almost every time. Just like two years when we started crypto, this is a reasoned long term hold. No Change.
01 June 2021: BEST actually looks equally worrysome for late entries, i.e current level and higher. No change for our friend's portfolio's having cushioned the original and just reaping monthly rewards benefits. This still makes BEST one of the most attractive tokens in today's market, but for late investors it would be high risk to gamble on serious upside until at least our medium term risk weight shows a potential bottom confirmed by short term bullishness. Speculative longs may well see a 10% or more advance from current level which would offer an opportunity to reflect (square up) on a medium term outlook. We could eventually see this market bottom out, just like BTC at a 50% lower level. Extremes however should not be underestimated. Several native crypto tokens would appear highly attractive if they can be acquired at 70 or 80% below current level. A fairly common panic move could trigger those levels becoming reality. Remember we were there only 5 months ago and that is the risk and opportunity on the table today.
S&P, Stock Indices, Equities, High Risk, No Limits
S&P 500 Standard & Poor's 500 Price Risk Analysis Forecast
(Previous week in brackets)
|Standard & Poor 500||Monthly||Weekly||Daily|
|Trend||↓ (↓)||↑ (↑)||↑ (↓)|
|98 (98)||90 (90)||85 (87)|
|Max Allocation 20% (20%)||Invested||0% (0%)|
04 June 2021 close: S&P 500 simply remains high risk in all time frames. It is just a matter of insider knowledge that the near zero interest rate window is closing. That should finally trigger the biggest consecutive series of down days ever. Opportunity lost for sure, but better safe than sorry. No Change.
01 June 2021 close: The first trading day in June is now indicating a potential downturn of monthly risk whilst 31 May close is still pointing up. The absolute level of 98% high risk says enough whilst the current price of the S&P index is beyond normal price discovery given the very steady and near uninterrupted 100% advance since the March 2020 bottom. Our long term economic outlook since many years is a period of stagflation. What that means for equities remains to be seen and it has now become a historically less predictable asset class than precious metals, in our opinion.