Crypto, hmmmm… | Cash and Gold are king | 19 May update

The crypto shakeout, losing 40% market cap in 2 weeks, is now in the process of eliminating weak hands, mainly late adopter speculators. This could be over quickly, but the technical picture says this may take many months or even much longer. All time scales are in downtrends to an extend that no short term bullish divergence can become fact and provide comfort any time soon.

This is still a very high risk market and we surely will see some bottom picking driving volatility to extremes again. Is someone to blame? Definitely. Certain influencers as well as regulators who both should better protect young and inexperienced speculators from entering at sky high price levels. Without naming names, high finance drives coordination for profit against the masses. But it is what it is and a fair amount of panic is the result today.
Once the market bounces it may look like a potential V-shape but there will be many larger investors seeking an opportunity to offload at different price objectives. Many will not be filled which then leads to another push down as offers outweigh bids by multiples.

Our portfolio has shrunk too but precious metals and cash grossly held value whilst our single crypto investment, Bitpanda’s BEST, is down substantially as well but still in very healthy territory longer term having been an early adopter. Assets that go up several thousand percent in a matter of months must be expected to reverse to a larger degree, just like Bitcoin did in 2011, 2014, 2017 and now. If history repeats itself for the larger corrections we may drop into the 15-20k zone or even lower. Longer term risk weight needs to first develop bottoming action. That is for later this year.

The BEST to BTC ratio actually looks much more positive for BEST so we would expect BEST to outperform BTC during a large part of the correction cycle we’re in.

We know it always takes time for markets to settle following events like this. As there is no regulation on crypto in the western world we are probably witnessing old fashioned insider trading shaking out ‘ALL’ weak hands and therewith rapidly removing market liquidity in the medium term. Even the strong hands can never sell more than a fraction of their portfolio’s, but always enough to make their initial investment turn several times.
Where markets go crazy, the corrections can go crazy which in a way is very healthy. It is kind of a sad story for many but harsh reality. This is how markets work and it will never change. Depending on the size of damage done it may also influence the macro economic indicators. We’ll find that out during the next few quarters.

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Posted in A - All Financial Blogs | 2021 Forecast, GLOBAL - S&P500 - CRYPTO | EYEFORGOLD, GOLD FORECAST 2021, PLATINUM FORECAST 2021 | EYEFORGOLD, SILVER FORECAST 2021 | EYEFORGOLD, Z - INTRAWEEK MARKET FORECAST | EYEFORGOLD.

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