For those that are following me on Twitter or Tradingview, you probably already know what I've been saying for some time. For those who don't, below I have all my recent ideas on Bitcoin, Altcoins, Central Banks, Bitcoin, Bonds, Gold and Stocks. Here are some key takeaways and updates
Split your assets into USD, JPY, Gold and Bitcoin. For more risky stuff short European banks, buy silver, long gold stocks, long stocks that perform well in a recession and lend fiat on crypto exchanges. You can long bonds with good risk management. They are a bubble that I don't see popping soon, but could pop any time. To me they are like buying Bitcoin at 5-10k, so they clearly have room, but nobody knows when the music stops. As for Gold it is doing better than I expected, but for me to turn into a proper bull I'd like to see it clear 1560.
For Bitcoin the timing was not right, but I informed people that I pretty much stayed out since 11800. Even all the way down I explain what I though was the best way to play it for those that are long only. Since I started longing at 10400 I made a few mistakes that took away some of my profits, but at least I escaped bad losses. To me it is all about increasing my BTC stash, but mainly through longing.
Imagine how bearish things were, that even I, a mega bull realized that things were not right. Imagine that a guy that hates shorting had to short in order to hedge his BTC exposure. Too many bulls, too many longs and many other signs of the trend had changed and we were due for a drop. Managed to get a late average entry at 10800 on Huobi's quarterlies and I am ready to add more. I am all in on BTC and the best way for me to protect myself is hedging (not selling spot).
In my opinion the current situation is very bearish. I don't think we are going to put a local bottom right at 10k. We've lost pretty much all important support levels, momentum is pretty bearish, the long/short ratios are only growing and alts are back into falling both in BTC and USD terms like in July. The best zone for a drop right now is at 7800-8500. For me to turn bullish without seeing that area tested, I'd need to see 11500 broken... We went up too fast, too soon and the Daily RSI hasn't been oversold since Dec 2018.
Altcoins were performing well in BTC terms during the Bitcoin drop, until things snapped. I literally updated that idea a few minutes before some of them fell really hard. The reason is that many of these alts are overleveraged in USD terms, so when Bitcoin goes down, it drags them with it. Initially they fall less in USD terms by having a relief rally in BTC terms... until most retest their recently broken support levels in BTC terms, while slowly breaking their USD support levels. After a certain level things get ugly and this isn't the first time this has happened. Not surprisingly it once again happened right at the moment that Bitcoin Dominance was retesting an old high. This shows that the altcoin bear market is still strong.
Now let's get into Bitcoin's role in the current macro environment. The reality is that it is not correlated with any other asset class and anyone who says the opposite is just spewing random nonsense while trying to find a narrative based on his beliefs. Bitcoin whales, market makers and other retail participants other than institutional investors, have pretty much nothing to do with traditional finance. Most people here have survived through insane drops and mad volatility. Most are here to protect themselves from a potential crisis. Very few of them hold other assets, and if they do, then Bitcoin and cryptos are probably just a small fraction of their portfolios. Most Bitcoin investors are either really well off or have very little left from. At the same time many traditional investors have started viewing Bitcoin as a Digital Gold or an uncorrelated asset with tremendous potential that isn't going away.
Finally, in my opinion altcoins have more to fear as they are way more speculative than Bitcoin. With potential harsh regulations in environment where banks are losing control, and all the current negativity around them, they are coming closer and closer to their potential capitulation. We don't know how deep this could be, but we know that Bitcoin will most likely be negatively affected by this event if it occurs on the way down. Alts could capitulate either by BTC mooning or falling hard, but the second scenario would make things worse as we could see a vicious negative feedback loop. The whole situation looks very fragile and until I see most of the longs gone or Bitcoin making a decisive bottom, I'd be very cautious.
Split your assets into USD, JPY, Gold and Bitcoin. For more risky stuff short European banks, buy silver, long gold stocks, long stocks that perform well in a recession and lend fiat on crypto exchanges. You can long bonds with good risk management. They are a bubble that I don't see popping soon, but could pop any time. To me they are like buying Bitcoin at 5-10k, so they clearly have room, but nobody knows when the music stops. As for Gold it is doing better than I expected, but for me to turn into a proper bull I'd like to see it clear 1560.
For Bitcoin the timing was not right, but I informed people that I pretty much stayed out since 11800. Even all the way down I explain what I though was the best way to play it for those that are long only. Since I started longing at 10400 I made a few mistakes that took away some of my profits, but at least I escaped bad losses. To me it is all about increasing my BTC stash, but mainly through longing.
Imagine how bearish things were, that even I, a mega bull realized that things were not right. Imagine that a guy that hates shorting had to short in order to hedge his BTC exposure. Too many bulls, too many longs and many other signs of the trend had changed and we were due for a drop. Managed to get a late average entry at 10800 on Huobi's quarterlies and I am ready to add more. I am all in on BTC and the best way for me to protect myself is hedging (not selling spot).
In my opinion the current situation is very bearish. I don't think we are going to put a local bottom right at 10k. We've lost pretty much all important support levels, momentum is pretty bearish, the long/short ratios are only growing and alts are back into falling both in BTC and USD terms like in July. The best zone for a drop right now is at 7800-8500. For me to turn bullish without seeing that area tested, I'd need to see 11500 broken... We went up too fast, too soon and the Daily RSI hasn't been oversold since Dec 2018.
Altcoins were performing well in BTC terms during the Bitcoin drop, until things snapped. I literally updated that idea a few minutes before some of them fell really hard. The reason is that many of these alts are overleveraged in USD terms, so when Bitcoin goes down, it drags them with it. Initially they fall less in USD terms by having a relief rally in BTC terms... until most retest their recently broken support levels in BTC terms, while slowly breaking their USD support levels. After a certain level things get ugly and this isn't the first time this has happened. Not surprisingly it once again happened right at the moment that Bitcoin Dominance was retesting an old high. This shows that the altcoin bear market is still strong.
Now let's get into Bitcoin's role in the current macro environment. The reality is that it is not correlated with any other asset class and anyone who says the opposite is just spewing random nonsense while trying to find a narrative based on his beliefs. Bitcoin whales, market makers and other retail participants other than institutional investors, have pretty much nothing to do with traditional finance. Most people here have survived through insane drops and mad volatility. Most are here to protect themselves from a potential crisis. Very few of them hold other assets, and if they do, then Bitcoin and cryptos are probably just a small fraction of their portfolios. Most Bitcoin investors are either really well off or have very little left from. At the same time many traditional investors have started viewing Bitcoin as a Digital Gold or an uncorrelated asset with tremendous potential that isn't going away.
Finally, in my opinion altcoins have more to fear as they are way more speculative than Bitcoin. With potential harsh regulations in environment where banks are losing control, and all the current negativity around them, they are coming closer and closer to their potential capitulation. We don't know how deep this could be, but we know that Bitcoin will most likely be negatively affected by this event if it occurs on the way down. Alts could capitulate either by BTC mooning or falling hard, but the second scenario would make things worse as we could see a vicious negative feedback loop. The whole situation looks very fragile and until I see most of the longs gone or Bitcoin making a decisive bottom, I'd be very cautious.
