Potential Banking Crisis Sending BTC to $10k? (Elliott Wave)
A banking crisis may be underway in the US and could bring equities and crypto to their knees until the Fed is forced to respond by turning the printer back on and cutting rates. Expecting a very dovish FED in the following months as more banks follow SI and SIVB, suffer bank runs and must be bailed out by the FDIC and the Fed. We will likely see the full extent of the fallout next week and it could mean more banks going under as depositors start to lose confidence in these risky banks. Depositors unable to get their money out of banks as regulators deal with the fallout could lead to a sudden and temporary spike in demand for dollars and a liquidity crisis across the financial system. This demand will then be quickly extinguished by the Fed printers coming back on to stave off collapsing asset prices, and this will trigger the next bull market in equities and crypto.
From a Neowave standpoint, the structure from the last few months looks exceptionally weak, especially on BTC, and since we've been unable to materialize a consistent bullish structure, and with the macro environment suddenly souring, it seems likely that most cryptos and major stock indexes will see new lows and briefly fall under their 2022 lows. What I believed do be a diametric which would have ended at wave-g has now added a wave-h and wave-i and will end a little later and a little lower. This will likely lead to serious issues at many crypto firms such as Microstrategy who will probably need to sell significant amounts of equity or BTC to remain afloat at such low BTC prices, and with lenders and investors tightening up during a crisis it may be difficult for them to get funding.
For BTC specifically, I think $10k is a solid floor. There's a psychological level, a 61.8% retracement, and it would be about as big as the 2018 bear market. Most cryptos will probably retrace their 2020-2021 bull market by around 61.8%. This should also coincide with the Fed doing a hard pivot to save the banks, leading to investors suddenly turning risk on again and sending asset prices to all time highs.
From a Neowave standpoint, the structure from the last few months looks exceptionally weak, especially on BTC, and since we've been unable to materialize a consistent bullish structure, and with the macro environment suddenly souring, it seems likely that most cryptos and major stock indexes will see new lows and briefly fall under their 2022 lows. What I believed do be a diametric which would have ended at wave-g has now added a wave-h and wave-i and will end a little later and a little lower. This will likely lead to serious issues at many crypto firms such as Microstrategy who will probably need to sell significant amounts of equity or BTC to remain afloat at such low BTC prices, and with lenders and investors tightening up during a crisis it may be difficult for them to get funding.
For BTC specifically, I think $10k is a solid floor. There's a psychological level, a 61.8% retracement, and it would be about as big as the 2018 bear market. Most cryptos will probably retrace their 2020-2021 bull market by around 61.8%. This should also coincide with the Fed doing a hard pivot to save the banks, leading to investors suddenly turning risk on again and sending asset prices to all time highs.
Trade closed: stop reached:
This count seems unlikely at this point. Too many possibilities to be sure what the current count is.
Trade active:
This trade is now active following multiple sell signals on BTC, as well as Coinbase receiving a wells notice (soon to be followed by a presumably very bad lawsuit) as well as Justin Sun and the Tron Foundation being sued by the SEC for bogus securities violations.
This creates a fundamental structural issue with crypto until there is some sort of regularity clarity. Especially if the Coinbase lawsuit ends up being really bad, institutions will stay away from crypto until things are more clear with regards to securities regulations.
That much needed clarity could come from a victory in the SEC v Ripple lawsuit later this year. Until then, things can get much worse thanks to the SEC's rampage against crypto investors.
This creates a fundamental structural issue with crypto until there is some sort of regularity clarity. Especially if the Coinbase lawsuit ends up being really bad, institutions will stay away from crypto until things are more clear with regards to securities regulations.
That much needed clarity could come from a victory in the SEC v Ripple lawsuit later this year. Until then, things can get much worse thanks to the SEC's rampage against crypto investors.
Trade closed manually:
Closed this one manually. The sell signals have been broken and reversed so there is likely more upside left here. Changing forecast to neutral.
Comment:
After moving slightly higher as expected, it seems as though we are now forming a potential top here. Moving this trade over to this new chart
After moving slightly higher as expected, it seems as though we are now forming a potential top here. Moving this trade over to this new chart
Since we do not have that situation, the chances that this bear market is extended for at least a few more weeks and possibly even until next year, are relatively high.
Until we are sure there are limited possibilities from a wave perspective, it's best to avoid trying to make any specific short-term forecasts based on wave theory.
While bank runs still loom within the US, it is still very possible we quickly retrace these gains and resume the bear market from here when more banks begin to fail. This could continue until the Fed is forced to respond by lower interest rates and quantitative easing