Bitcoin Warning - It is NOT digital Gold | 12 December
S&P 500 Weekly Standard & Poor's 500 Price Risk Analysis Forecast
(Previous week in brackets)
|Standard & Poor 500||LT-M||MT-W||ST-D|
|Trend||↑ (↑)||↓ (↑)||↓ (↓)|
|90 (90)||93 (90)||86 (73)|
|Allocation Limit(30%)||Invested||0% (0%)|
21 December: As the weekend unfolded with further extreme Covid situations and today's Saturn Pluto rare conjunction, investing strategies relying on a one way street must be high risk. This applies to all strategies without history like MMT driven asset appreciation and crypto currencies alike. Technically the S&P500 simply looks high risk and only therefore does not fit our common unleveraged investment risk approach. Our weekly risk weight trend has now joined the Daily turning down, which as we know does not mean it will go down. But risk remains very high with bearish divergence clearly present amongst Stochastic, MACD and RSI indicators. It will not be until this index resets itself into a technically driven balance of normality that we anticipate a serious investment attempt. We've been out of this market for just over 2 years. We did not participate in the 2019 rally and did not suffer in the 2020 Febr March implosion. We did not participate in the 2020 rally because of fear jitters when this market got seriously oversold in March. Opportunity missed but without the need to get nervous as the S&P whent from one short lived bearish divergence to the next. We're staying out.
11 December: A mildly weaker close this week coupled with an initial downturn of the Daily risk trend. The entire picture remains very high risk whilst sentiment is totally trusting the MMT narrative. Major market changes are on their way and that brings and along comes a new degree of risk awareness. The bigger macro picture is finally being influenced by helicopter money reaching mainstreet. It means a much higher likelyhood of potential runaway inflation in what will probably, In Our Opinion, Manifest stagflation until a new world financial order can be agreed upon. Our focus is now entirely on preservation and the new opportunities arising in a controlled DEFI environment. Until the risk picture changes to even mildly bullish, which is has not shown since 2016, we stay away from equity indices all together.
Brent Crude oil Weekly Brent Crude Oil Price Risk Analysis Forecast
(Previous week in brackets)
|Trend||↑ (↑)||↓ (↑)||↓ (↑)|
|50 (50)||92 (90)||86 (84)|
|Allocation Limit(10%)||Invested||0% (0%)|
21 December: As we write this on Monday morning ECT, Brent finished last week at 52.25 ending the strong December rally thusfar. The picture this morning is different with clear Daily and Weekly divergence stepping in and pushing the market into a risk weight downtrend from high risk levels. No Change.
11 December: Brent had a fairly strong ride last week peaking at $51 before closing the week at 49.96. The technical picture across our different tools is not looking great even though risk in all timeframes is pointing up. All time frames are also developing bearish divergence, meaning a trun down in the Weekly medium term would trigger a bear move. Our risk management approach is NOT speculation, hence staying out of the Oil market as opportunity is weak in every respect. No Change.
BTC Bitcoin Price, Weekly Bitcoin Price Risk Analysis Forecast
(Previous week in brackets)
|Trend||↑ (↑)||↑ (↓)||↑ (↓)|
|95 (93)||93 (89)||89 (46)|
|Allocation Limit(0%)||Invested||0% (0%)|
21 December: A 140$% rally in under 3 months for a slow and very expensive to trade and mine crypto currency is nothing short of spectacular. The size of investments into this space by large hedgefund speculators and HNW individuals has been staggering and probably translates into a relative volume over 100x the trade Quantum fund did in the 90's to crush Pound Sterling. So, in spite of overbought high risk technical conditions this market exploded simply because this sizeable demand could not be met without seeing a huge spike in the Bitcoin price. But where GBP was clearly on a fundamentally high and unsustainable intervention level, Bitcoin is nothing more than a belief. It doesn't mean that it can't go to 100,000 or $1 million, just like Tulip bulbs mania that ended in 1637, but how realistic is that in light of a clear socio economic phenomenon. Digital currency makes total sense and that market will be with us for decades to come, hence our interest in regulated exchanges having chosen Europe's Bitpanda. But Bitcoin is a stand alone economic phenomenon that wlll probably have some disruptive effect for smaller investors, for various asset classes as wealth will be diversified, and possibly social unrest. All a function of a totally screwed monetary system. Many agree on that. We stay out of this frenzy.
12 December: This 24/7 market is completely controlled by some of the major stakeholders and early adopters of Bitcoin who had both the vision and also massive luck with the sheer size of the price advance from a few dimes to many thousands of dollars in just 5 years. 2 weeks ago Bitcoin was one hair short of making a new high before dropping more than 10% into last week and thereafter recovering some 4% into this weekend.
Some of the major influencers in this space all strongly promote Bitcoin as the only or best alternative to a rapidly failing and largely outdated traditional banking system. They like to call Bitcoin 'digital gold'. But Bitcoin is NOT digital gold. The arrogance that anything other than Platinum can be compared to physical gold can and probably will backfire big time. The only digital gold, with full legal ownership, would be an exchange traded token with 100% physical gold backing. Bitcoin, in our opinion, will not represent anything like Nature's Money (gold), only because a few wealthy investors say so? Bitcoin is not an attractive proposition anymore. It is extremelty slow, and thus cannot be used for quick exchange of goods. It is also very costly, energy wise, to mine and confirm new transaction blocks entering the chain. Our guess is that some of the highly sucessful entrepreneurs that have recently adopted Bitcoin as the 'only' store of value, committing 100's of millions at price levels closer to the highs from the most recent uptrend starting at $10k, can as easily loose 90% or more, because their risk assessment can only be atrributed to trust in the 'Bitcoin only narrative'. The fact that someone calls Bitcoin at $100,000 or $1 Million by whatever date is meaningless. All it does is trigger human greed which suits the manipulators well as they control enough Bitcoin to decide where the price goes. They cannot be financially broken anymore, whatever happens to price, as they are the VIRTUAL CENTRAL BANK OF THIS DECENTRALIZED CRYPTO ASSET. They, and their $multi billion investor friends, are the whales that determine its fate. Normal price discovery is out of the question as every price move can and if necessary will be controlled.
This all doesn't alter our view that a simple 2017 gap open above 2800 is still outstanding to be filled in normal trading hours. Simple, because history tells us that it does fill in 99% of cases.
Why is Bitcoin high risk?
Besides the dated technical specifications and not being very userfriendly requiring personal cold wallets to protect the asset, there are major developments in the Fintech space today driving a brand new world of finance where digital money can be transferred within seconds to any place on earth in a secure centralized or decentralized and regulated environment. Ethereum platform digital tokens like Bitpanda's BEST and Ripple's XRP are examples that could prove a lot more attractive as they actually represent something tangible. Bitcoin does not as long as it behaves like a massive speculative investment, yet as long as enough people believe the Bitcoin story it will no doubt extend its lease of life. But if we hear today that serious entrepreneurs are betting a vast majority of their liquid assets on Bitcoin, based on a 5 year old success story, something has to be very wrong with risk assessment. To us this is an 'all or nothing' highly dangerous single purpose hedgefund type strategy without the fundamental type economic logic of the 2008 Big Short. Just because a few smart influencers say so?
To us this is a very high risk approach and should only be adopted with liquid funds that one can afford to loose. BEWARE, Bitcoin is NOT digital gold and never will be. The demand for Bitcoin is also determined by a potentially disasterous false belief that it can replace the current regulated money system or that Bitcoin is the ultimate protection against a major system reset. Its value is however determined only by 'supply and demand' and nothing else. It is backed by nothing and it costs a huge amount of electricity to maintain.
One Billion dollars in Fiat currency is small fry these days and will hardly move the market. If there are a few serious buyers of Bitcoin with a similar dollar value it can drive the price up by 90% as it has done since August of this year. Nature then draws in small retail speculators most of whom will end up with a loss as history learns. History always repeats itself.
The crypto industry however is no doubt the most interesting challenge to our dated fiat currency and financial brokerage system, which we participate in and follow with great interest.
Bitpanda Pro - BEST Token Price Risk Analysis
(Previous week in brackets)
|Bitpanda - BEST/EUR||LT-M||MT-W||ST-D|
|Trend||↑ (↑)||↑ (↓)||↑ (↓)|
|84 (82)||88 (83)||81 (80)|
|Allocation Limit(10%)||Invested||100% (100%)|
Bitpanda BEST token
21 December: Unlike Bitcoin, Bitpanda's Eco System Token (BEST) is our chosen crypto alternative as it has real value backing in terms of comissions discounts and airdrop type benefits. It trades in a more controlled and under a fully regulated European authority. Due to the limitation of account holders in Europe only, for now, growth may not be seen as spectecular. But it is steady with a rapidly expanding and highly valued portfolio of software integrations that will change the digital investment space. BEST tokens have performed very well in recent months and clearly have benefitted from the general strong price hikes in all crypto currencies. BEST however should be much better protection as it not only can mirror the performance of any crypto currency, but do well whether markets go up or down since it incentives trading on the Bitpanda Exchange with real financial benefits. The other very important reason for owning BEST is the facility to trade precious metals backed 1:1 by physical deposit in Swiss vaults. This makes this exchange a primary candidate for acquiring a much larger load of transaction commissions in hears to come.
The PANTOS project is another reason to keep a close eye on Bitpanda as it could make that quantum leap integrating different Blockchains fairly soon. In a Central Bank regulated environment this integration can create an environment where exchange of tokens becomes the primary accepted and trusted choice for banking, making investments of any kind and any size at low cost AND pay for goods and services. Intially in Europe and later around the Globe.
12 December: What is the connection between Strictly come Dancing and Crypto tokens? Well, On a Saturday evening one can write a blog about crypto whilst watching an incredible live performance on telly. We started this blog today with BEST tokens trading at 12.97 eurocents and on a second look it trades at 14.18 eurocents, then down to 0,1327 again. Highly volitile and BTC in the meantime rose from 18300 to 18800 and down a little. These are just the kind of funny and rapid moves illustrating that crypto trading is a 24/7 hot kitchen. So, we valued BEST for the purpose of this blog at a weekend price of €0,1300, up 18% from last week. Unlike Bitcoin, BEST represents an Austrian Central bank embraced initiative and offers investors several real benefits. The crypto projects currently undertaken by the solidly growing Bitpanda Exchange go well beyond just trading crypto, precious metals 100% backed by physical, and fiat currency.
Last week BEST tokens actually advanced rather sharply from €0,1100 to €0,1650, a gross increase of 50% before dropping back to just under €0,1300. That is still a huge advance with a healthy price increase recorded the following weekend.
In a few years time the total number of BEST tokens available will have shrunk from the initial 1 Billion tokens to 500 million. 500 million is 23.81*the max official 21 million Bitcoins in circulation. Why could BEST not be valued just like Binance, XRP or BTC or anywhere between 100 and 2000 times its current value? Of course that is not the objective from a risk point of view, but unlike BTC and more like XRP it represents the future of high finance available to retail users at affordable and more transparent commissions. BEST is definitely a long term hold and if held against other tokens on the Bitpanda exchange it can be used for small trading in a smart way that is likely to reap additional financial rewards nearly every month going forward. We believe that every Bitpanda account should take advantage of the BEST benefits by owning at least 5% - 10% of liquid assets in BEST tokens.
Having now experienced the first major short term price advance, any short term technical bullish divergence on pull backs can be used to dispose of a regular financial asset in favor of BEST and then wait for a 20 or 30% BESR price increase to reverse that position again, maybe at a coversion cost of a few percent at most. This will be a repeatable low risk trading possibility over the coming months and years. No Change.