Are the most popular (stocks and crypto) markets ready for correction? | 1 May
BTC Bitcoin Price, Bitcoin Price Risk Analysis
(Previous week in brackets)
|Trend||↑ (↓)||↓ (↓)||↑ (↓)|
|86 (82)||72 (80)||70 (16)|
|Allocation Limit(0%)||Invested||0% (0%)|
1 May: BTC April month end was the first down close in 7 months with a narrow margin of just $1,130 between op and closing price. The 25 largest crypto coins by market cap increased 20% in value last week. Starting May 1, Bitcoin monthly risk weight has turned back up in a potential danger zone as the previous risk weight peak was reached in January at $42,000.
End of April was also dominated by strong pro and con crypto comments including repeated accusations of scam and ponzi. That is nonsense of course as most known and highly active crypto coins are native to strongly developing fintech corporations. However, there is arguably a short term overvaluation of those native coins driven by a massive amount of hard talk in favor of staying on 'hodl'. The crypto influencers and very early adopters of the same now seek to protect what was set in motion, successfully, with Bitcoin 10 years ago. Millions of first time investors have come into this market the past 6 months with a 'sky is the limit' experience. The technical picture today is cause for prudence. This means, since all crypto markets have delivered massive returns into April 2021, taking profits on between 3 (low price entry) and 25% (high price entry) depending on entry level. As we suggested 2 weeks ago after the first large 20% drop, Ethereum may have been the prime beneficiary from a swap out of BTC. Given the high risk weight peak 2 months ago, a >30% correction could easily play out. During the past week we have released 4% of the crypto portfolio to limit investor risk to opportunity loss only. The balance can now be used to further advance the broader portfolio by applying our low risk technical analysis based management approach. We may increase our precious metals portfolio on a breakout or deep risk weight. Our core portolio of BEST therefore remains largely unchanged.
24 April: Most short term signal favor the broader Crypto market cap to increase and this applies to Bitcoin. However this is short term whilst medium and long term risk are pointing down. Whilst Bitcoin is one of a key drivers for the entire market it only has that special quality of being the most promoted, hence receiving the most attention from investors. Many commentators attrributed last Sunday's drop to events in China but as we noticed already last week it may well have been a part of a large swap between BTC and ETH. The latter is holding up very well. Whilst crypto got hammered last weekend and again coming into this weekend, Gold and silver actually performed very well during the week, but also suffered a bit towards the close. The Bitcoin (Oranges) and Gold (apples) debate shows the importance of holding a minimum amount of precious to protect against certain very unexpected events. Many crypto tokens, away from BTC and ETH, have tremendous credentials but all suffer from a big speculative undertone. Dogecoin being the king of all. BTC still holds that same risk although we might finally develop a very minor interest in coming weeks or months as a small diversification from our main holding in BEST. This probably requires a more significant price drop and at least medium bullish divergence versus monthly risk. No Change.
Bitpanda Pro - BEST Token Price Risk Analysis
(Previous week in brackets)
|Bitpanda - BEST/EUR||Monthly||Weekly||Daily|
|Trend||↓ (↓)||↑ (↑)||↓ (↓)|
|78 (79)||82 (82)||55 (62)|
|Allocation Limit(variable)||Invested||100% (100%)|
BEST token live price
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Bitpanda BEST analysis 1 May
The last week of April ended with a 5% lower price action for Bitpanda's native coin BEST. Partly a result from early adopter profit taking which started the previous week in a relatively low volume market. The Bitpanda broker however appears to be managing this well by actively and smartly (AI) offering a constant bid-ask spread. The broker margins have become steeper as a result of higher than average volumes. Last week we released a total of 4% of our 90% BEST and 10% other altcoin crypto portfolio to fully limit our original investment risk after the substantial increases since early December 2020. The portfolio can now be developed and somewhat diversified further based on short (Daily), medium (Weekly) and Long term (Monthly) risk weight analysis.
24 April 2021:
It was an important week for BEST as Bitpanda launched its fractional stock trading on Thursday for 45 major international corporations. This created a massive price boost on Wednesday as BEST raced towards a high of €2,60. We understand that a few larger position were liquidated and this, assisted by a second general crypto market drop, pushed the price of BEST down by 27% from those highs into Friday before recovering towards a range close to the previous week's Saturday close (17 April). We do notice that BEST is reaching a bit of a longer term technical risk peak versus Bitcoin after having outperformed Bitcoin by 250% since September last year. With short term risk in deep oversold condition we do not contemplate any change to our portfolio yet except for diversifying the monthly (1%) BEST rewards as they come due on Saturday May 1st. To be eligible for rewards the account must trade to a certain minimum which generally works favourably using our short term technical minimum divergence confirmation between Hourly, Daily and Weekly time scales. Being aware that all crypto's have large inherent risk and prices can be under severe pressure. Our current cushion also allows for this to be absorbed.
We do have a long term target for BEST which for now is just called 'BEST higher'.
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)||97 (97)||85 (78)|
|Max Allocation 20% (20%)||Invested||0% (0%)|
30 April 2021 close: Both Monthly and Weekly risk weight ended the month unchanged, both still in a narrow, almost neutral, downtrend with a high risk weight percentage. Daily risk turned back up to develop a bearish divergence downtrend picture, which is of course 'deja vue' and determines our low risk investment approach to equities. This technical picture is seen across the entire spectrum of stock indices. No Change.
23 April 2021 close: The S&P now represents inflation pur sang. MMT may drive the index (much) higher still but it will not benefit the broader economy and possibily only a very small minority of people being rewarded from ZIRP corporate activity plus very long term funds that simply have little alternative other than government bonds or precious metals. Crypto market is still way too small for the truly large investment funds. With Medium and Long term risk weigh still at near maximum risk percentage this Index is still no option. Hopefully oportunity compensation and rewards can be realized by our Fintech crypto investments. No Change to staying out of equities.
Brent Crude oil Brent Crude Oil Price Risk Analysis Forecast
(Previous in brackets)
|Trend||↑ (↑)||↑ (↑)||↓ (↓)|
|83 (84)||68 (67)||78 (65)|
|Allocation Limit(10%)||Invested||0% (0%)|
30 April 2021 close: Brent crude Bearish risk divergence within the Daily time frame is always a reason for being cautious. Within our Low risk long only investment approach it may take a very long time to develop a serious position. Same with Equities and any other investment for that matter. Cash has only been a necessary unavoidable risk alternative which we have managed to transfer into PM at favourable levels a few years ago that now offer an important cushion as both an inflation hedge or a potentially worse global monetary situation. Something smells very tricky in the entire financial industry. We can only hope to have done the right thing to protect our investor assets and be extremely cautious with higher risk investments that not offer a clear purchase signal with a decent chance of success.
Brent is no different and after having had a false interpretation experience last year, this commodity could be anywhere at the end of 2021. Our choice would probably be copper still but we do not trade non precious or a highly commodity driven precious metal like Palladium. No Change on Brent crude oil.
23 April 2021 close: Brent had an uneventfull week trading down from 68.00 to 65.50 closing in a fairly tight daily range at 66.05. Medium term Oil price targets are anyone's guess. We cannot see any material technical clue for future direction. Only short term trading is an option which is not what we typically do unless we diversify from an existing longer term hold. No Change.