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Bitcoin (Cryptocurrency)

How to Approach the Market by LevelsIn this educational post, I'll be demonstrating how you can approach the market with simple technical analysis techniques, and logic based on simple probabilities. This is not financial advice. This is for educational purposes only. Identifying Support and Resistance - The first thing you want to do, when you begin with a clean chart with nothing on it, is identify support and resistance levels. - There are a plethora of ways to do this - you can do it using technical indicators, heat maps, order books, etc - The more I chart, the more I find it convenient and accurate to identify support and resistance zones based on past price action. - Thus, for this example, in lieu of using complicated indicators or moving averages, I've decided to simply identify key levels of support and resistance. - Let's begin with the lowest point of support at $40.7k - This is a level that has been tested countless times, both as support and resistance, during this entire trading range of $30-60k since last year. - As we are currently trading above this level, this key region plays the role of support. - If bears manage to push us down below this level, it would provide confirmation that further downside is highly probable. - Next, we have the red line marking resistance at $45k levels. - We have tested this region twice already this year, and failed to break and close above it. - Thus, this level represents local resistance that we need to break and close above, in order to continue on with the bullish reversal. - We're then faced with the resistance at $47.2k, which is Bitcoin's opening price for the 2022 yearly candle. - The opening and closing prices of candles on the weekly, monthly, and yearly candles can play an important role as support or resistance. - Taking this into account, if we were to break above $45k and close above those regions, it would be very likely for us to continue upwards and test $47.2k - Then we have $53.7k, a key level of support-turned-resistance. - We can see how important this level is, as the price dumped down to $42k immediately last year, when support at $53k broke. - Thus, this is a key level of resistance that must be taken out before we can rally towards the $60k ranges. Logical Approach Using Probabilities - It's important to understand that predicting the market's future price action is impossible - And timing the market, while possible, is extremely difficult. - Thus, the best approach retail investors can take in understanding the market is one based on probabilities. - "If X, then Y" is all you need to know. - So for instance, applying this logic on the chart above, we would see something like this: - "If Bitcoin breaks down below $40.7k, then we could expect further downside to new lower lows." - "If Bitcoin breaks and closes above $45k, then we could expect it to test the yearly open resistance at $47.2k." Conclusion This market is difficult for old and new investors and traders alike. There are a lot of external factors combined - rate hikes, regional conflict, etc - that the market hasn't experienced yet. Bitcoin's price action is not extremely predictable at these levels, hence the best measured approach to take in understanding the market is to take it by levels. Identify key regions and levels of support and resistance, and look for confirmation and invalidation. In my personal opinion, I think that the bottom is either in, or that we're very close to the bottom. But until there's clear confirmation that we're out of the woods, I remain cautiously bullish.
BITSTAMP:BTCUSDEducation
by Michael_Wang_Official
8
wedge top's 🔝 in a bear sell offhi there my friend to day I want to discuss about wedges (on of the most powerful setup's). true but there is always some details about it that make us so confuse, some of them that I just learned in past few years are. 1.the might be more than 3 wave's 2.35% of the times wedges will fail 3.if u want to be sure about the pattern wait until a fake breakout happens. I'm sure that u guys might know something else and I'll be happy if you just share them with me. cheers 🥂.
Education
by trader2613
BTC ON-CHAIN ANALYSIS: SOPR ON-CHAIN analysis can be equated with fundamental analysis in the world of cryptocurrency. From now, I will try to do some of the analysis available in Trading View. The SOPR index is one of the available on-chain data in Trading View. SOPR is an Abbreviation of The Spent Output Profit Ratio (SOPR). it is computed by dividing the realized value (in USD) divided by the value at creation (USD) of a spent output. Or simply: price sold / price paid. In fact, this index shows whether investors are in profit or in loss? When SOPR> 1, it means that the owners of the BTC are in profit and when SOPR< 1, they are at a loss during a bull market values of SOPR below 1 are rejected: In a bull market, when SOPR falls below 1, people would sell at a loss, and thus be reluctant to do so. This pushes the supply down significantly, which in turn puts upward pressure on the price, which increases. during a bear market values of SOPR above 1 are rejected: In a bear market, everyone is selling or waiting for the break-even point to sell. When SOPR is close/greater than 1, people start to sell even more, as they reach break-even. With a higher supply, the price plunges. This indicator can be used in another way - is the price relatively cheap or relatively expensive? Based on historical data, I have drawn OVERBOUGHT and OVERSOLD areas. At low prices, investors tend to buy, which in turn will increase prices, and at high ratios, investors will tend to sell. BITSTAMP:BTCUSD COINBASE:BTCUSD BINANCE:BTCUSD BINANCE:BTCUSDT BYBIT:BTCUSDT
BEducation
by cryptoonchain
1
What is going on in the markets? Aftermaths of Russian invasionRight after Russia declared war and started its military operations in Ukraine, the markets started going crazy. Investors started moving to "safe heaven" trades and sticking with "risk-off" securities. GOLD (XAU/USD) is everyone's favourite to trade for the moment, as the price plummeted straight after the escalation of the war. It has experienced a growth of +4.5% so far, and it has more upside potential. EUR/USD, having a strong negative correlation with GOLD, has endured a 200 pip drop so far, constituting a 1.8% dip. AUD/USD, GBP/USD and other highly correlated USD pairs have deteriorated as well. BITCOIN, often claimed as "digital Gold", is still continuing its downside movements, experiencing a 12.6% drop in 24 hours. Sticking to the safe heavens and riding the trend would be the best possibility right now. Also, remember to stay risk tolerant and cold-blooded, as the markets could get really volatile from time to time, taking into account the current situation.
OANDA:XAUUSDEducation
by Investroy
9
My Trading Strategy in 4 simple steps.Today I will explain step by step the process I use to develop setups. This is how my strategy works. And this can be applied to any asset and using any technical tools. This is as close as I can get to using an empiric approach to define my trading opportunities. Let's start. My trading strategy is composed of 4 steps: 1) Whats the context of the price? Here, I want to understand all the characteristics of the current situation I'm observing. Mainly I will try to define this in the Daily chart. Examples: * Are we making a new ATH? * Are we inside a 300 days correction? * Is the price above or below a Daily trendline? * Are we inside a small correction or a 50%+ decline? 2) Now that I understand my context. Can I look for similar situations in the historical data of this asset? I only work with assets with enough historical data to conduct this type of analysis. If I'm able to find at least 2 previous situations with similar characteristics to what I'm looking for, I proceed with the next step. Here I use the Weekly and logarithmic chart to identify these situations. 3) Do I see a consistent pattern that I can use to trade in those similar situations in the past? Here I will use lower timeframes like the 4HS chart, and I will look into more details in those similar situations. I will try to find something objective, like "The first retest after the breakout of the most external line of the corrections. If I see consistent behavior and a good risk to reward ratio, I will proceed with the final element of my strategy. 4)Define the pattern I'm waiting for and the execution process in advance. At this stage, I want to say, "I'm waiting for this," and this is how I will trade it. This includes: *Entry level *Stop level *Break-even level *Take profit level. *Risk. And this is it. At this stage, my setup can be executed or canceled depending on the price behavior, but in a nutshell, this is the system I have been using for the last 3 years, and I can say that this has, on average, a win rate of 50% and an average risk to reward ratio of 2. I hope this information was useful. Feel free to share your view in the comments or any doubt you may have. Thanks.
BITSTAMP:BTCUSDEducation
by ThinkingAntsOk
101
Thoughts on the current environmentThese are my comments from some conversations I had and I hope you like it :) It is a weird environment overall, as the market is pretty cheap, the derivatives markets are fairly well balance, on chain data & stablecoins paint a bullish picture for crypto... but in terms of TA and the overall psychology of the market, getting to anywhere between 20-28k & 1300-1700 at some point in 2022 is quite likely. I just have no idea when. In late Jan around 37.5k and 2600 I turned bullish in the short term as the market showed strength, it was very cheap and sentiment was really bearish. We are at a fairly similar situation now, only that we did have the pump up to 46k. To me that was always the key point we'd have to retest and as that was hit, the next one is 24k. The same way we perfectly filled the 32-33k CME gap and bottomed, we are going for that one too. In the short term however I see similar dynamics as people are scared, the market is cheap and we are bouncing at support. The price action of both crypto and stocks is telling me that yesterday's bottom was at 'do or die' level which means we've either bottomed now or if we go below that we'd go much lower. Who knows, maybe it's just temporary relief and we could go up by another 3-7% before reversing lower. In terms of the macro picture I think it is very unclear but also pretty clear. The global economy is turning into shit and tensions are rising. People aren't happy, be that inflation or mandates. To me unfortunately we will soon be reliving the period of 194x. Same way 1929 =2008, 1936-1938 = 2020-2022. Poor financial conditions have lead to the rise of authoritarianism, with governments scrambling to gain as much power, while people lose faith in them. There is too much debt and everyone is in a whole that is very hard to get out of. People are losing their minds and tensions then start to manifest internally and externally. Unfortunately history repeats itself and that's what we as traders/investors are doing, we need to learn from it as human beings are the same now as they were 10, 100, 1000, 10000 years ago. Nothing new under the sun. Like Su Zhu said in a tweet the other day twitter.com . This is one of the best tweets I've ever read and I truly mean it. So if that's the period we are in, what do we do? What could come next? Bond yields will go down in one way or another, while inflation stays high. For now we are at a point that bond yields are rising and have some room, until they come crashing down. The Fed will be forced to cut and to support the government. The Gov + Fed will have to do a lot of printing that will be met with very little resistance by the public. We'll be united against a common threat. And to be honest this is usually the only way out of this debt hole. Unfortunately a war and insane amount of currency debasement is the only politically viable way to reduce debt and do a reset. I hate the people who want to push for the 'great reset', but a reset is coming. It's a natural cycle, these always happen and they are usually not nice. But it's like the phoenix rising from its ashes. A rebirth. Now when I say bond yields will have to go down, I think it will be a combination of the Fed trying to keep them low, but also people chasing the safest and most liquid instruments. Most people in such a period won't want to take risks. Low bond yields = not many opportunities anyways. So then we have high inflation + no opportunities + disruptions + tensions + less freedom and so on. So of course we are in the right market. If the physical world is suffering and there could be wars here and there (I have no idea at what scale), then the digital one should be booming. With sanctions and accounts getting frozen, while governments do insane amounts of QE, this is the place to be. Make no mistake, they will come after us to some extend at some point, but as long as we try to preserve some privacy and keep our coins/tokens in our wallets, we might be safe and able to go to locations that we can protect our wealth. Now the issue is, how do we get there? How do interest rates go down again and the bull market resume? Well to be honest I currently feel like we are somewhere in Q4 2019 - Q1 2020 or Q3-Q4 2018. We are close to having a last major leg down, before a major leg up. One catalyst (rate hikes, higher inflation, war), I don't know what... that will lead to the final shakeout which will trigger a huge monetary & fiscal response. This fractal I've mentioned on my previous ideas is what I still expect. twitter.com This is great, but I completely disagree with one part: 'it is unwise to assume that Central banks will respond with more stimulus if inflation is rising'. At the current environment I am a disinflationist, but at the end of the day I know they will have to print. In the past it was banks that printed, but since 2008 banks aren't creating much money... The worse things get, they more risk averse they become. Now we are in a situation that is nowhere near like 1987, but more like 1940s and it something Lyn Alden has been talking about for quite some time. There are big differences from then to now of course, but the setup in terms of Governments - Central Banks - Banks is very similar. What people need to understand is that we are getting inflation mostly not because because of issues on the supply side, not so much by Fed & Gov actions. These issues could become worse, in an environment where banks aren't lending, there is too much debt, too much uncertainty, overvalued stock markets, ESG mandates and so on. The yield curve flattening so much is a sign that the Fed might not even be able to raise rates more than a couple of times, and that in 2023 they might be forced to cut. Think of it like this... Prices are going up and people aren't making enough money to keep up with inflation. The way things are going they won't be making much, so they need someone to give them money. Who are they going to ask for that money? The government. If prices are going up, they will demand more, something that could create an inflationary spiral. Except if, maybe, by creating a CBDC to control everything they will be able to control inflation. They want full control of the banking system and where people spend their money. For example if there is a shortage of milk, they might be like OK with your account you can only buy 1 litre / week. The majority of people think that vaccine passports are about reducing the spread and that them being used as a gateway for a CBDC is a conspiracy theory. Well in my country they already created an app called government wallet that can contain your ID + vaccine certificate. Wouldn't it be nice connect your bank cards + accounts in there and route all transactions through the government directly? It's been extremely clear that that's the goal. It is their belief, and it is possible, that by having total control over the monetary system they will control inflation. But at this stage, they will be forced to do something. Let's no forget they always printed/borrowed for wars. And let's no forget that in the case of a war, they won't care about inflation. They will shut down the debate about inflation as they have a bigger goal. Markets crashing + Russia going for Ukraine & China for Taiwan, and they will be nah, we'll raise interest rates. Let's not forget that they can't let markets crash completely. The eurodollar & US bond markets are screaming loud and clear : you raise rates a few times at best and then you go back to cutting. So if they have to save markets again and can't fight inflation, then it's time for Universal Basic Income as this is the last time they will only save markets and not ordinary folks. At the end of the day, the situation with passive investing and the whole structure of the system in general has gone too far. They can't do anything to fix it, and they most certainly aren't capable of fixing it. Replacing the old system with a new one won't be easy and there will many shocks along the way, but I have no doubt that crypto and commodities are the best place to be in this environment. End of rand😝
TVC:VIXEducation
by BitcoinMacro
1
🔥 Types of Analysis 📉 In trading and investing there are 2 t🔥 Types of Analysis 📉 In trading and investing there are 2 types of analysis a trader can make to have an edge and generate trading ideas. 📉 There is no such thing as technical analysis is better than fundamental or viceversa, personally i use fundamental analysis to understand what to buy or what to sell on a mid-long term perspective and technical analysis basically shows me when to enter the trade at a better price level. ‼️ Fundamental Analysis • Using of the financial statements, news and events to generate trading ideas • Mid-Long term approach • Usually investors/traders use this for investing or position trading that could last for couple months ‼️ Technical Analysis • Use chart, volume and price action • Short-mid term approach • Usually people use this for intra-day or intra-week moves Which one you like more ?
BINANCE:BTCUSDEducation
by AnonimFXRO
Why 90% of Traders Lose ? ❌ Going Full Margin Risk management is the most important in this game because it keeps you alive, keeps your account fresh during bad market conditions. Learn risk management first to understand how to protect your capital first of all and then learn a strategy You have to know your risk numbers in terms of • Risk per trade • Daily Drawdown Limit • Weekly Drawdown Limit • Monthly Drawdown Limit ✅ Buying SIGNALS Buying signals and expecting overnight succes could be bad for your trading journey, don't expect anything from anybody and start to be your signal generator ✅ Get Rich Quickly Trading business its not getting rich overnight, its getting rich for sure on a long term basis. Don't expect succes overnight its not gonna happen i promise you. • Trading is a marathon, not a sprint. Give it time and simply commit to the process ✅ Not Sticking to the Plan Your trading plan is your trading bible and principles, you should respect it no matter what. Your trading plan its the only thing you can control in the markets as you can't control the price movement. Make the plan and trade the plan. What do you think ?
BINANCE:BTCUSDEducation
by AnonimFXRO
3
An NFT ManualHello, Let us talk about 'NFT.' In this post, we will read about NFTs, where to find them, and how to buy them. Furthermore, what are they really? Indeed we have all read this sentence since this is the first thing that comes up when we Google NFT: "A non-fungible token is a non-interchangeable unit of data stored on a blockchain, a form of digital ledger, that can be sold and traded. Types of NFT data units may be associated with digital files such as photos, videos, and audio." Well, it is not wrong. It is a non-fungible token that can be traded. They are mainly formed in 2D and 3D art forms. You can profit from hundreds to thousands of dollars by buying and selling NFTs. However, you need to be careful because there are too many scams out there. Many people get hacked, phished, or follow bad projects and lose their money. Before answering the most FAQs, have in mind that NFTs can be built on many blockchains, traded on many platforms, and bought with different types of cryptocurrencies. However, we will focus on the main, primarily used methods in this post. Where should we find NFT projects? Twitter, Instagram, and public/private chat rooms provide this information. Nevertheless, Twitter is where it all happens. All NFT projects advertise on Twitter, and we can see by the number of their followers, likes, and comments, how genuine their community is and if it is a worthy project or not. Where can we get access to mint/buy? Once we find our desired project, we should find them on discord and join their server. Different projects have different methods to White-List us to get us early access to mint/buy. Some require invites, some require being active and being helpful to their community, and some have their own unique rules. Once we get past those requirements, we will be White-Listed to mint earlier than other people. Where does it all happen? Mostly on Opensea. When we buy or mint an NFT, we need to list it to trade it or sell it again. That is when we need to pay Opensea for making a listing. Then we can list our NFTs on that listing and either take offers or set a fixed price for them. What wallet do we need? MetaMask is the wallet that is being mainly used in order to buy or mint NFTs. It is a safe wallet, and we can easily create one for free without identification. What browser should we use? Yes, Safari for Mac users and Chrome/Edge for Windows users is the preference we are familiar with. However, when talking about NFTs and MetaMask and much money, we need to switch to something safer and more compatible. Brave Browser is the one for this use. It also provides its own wallet, but we can always connect our MetaMask. What is minting? Most simply: When we decide to buy an NFT, we have to produce it, validate it into existence, create a new block for it, and set its information. Do not worry, it all happens automatically, we only need to pay the Gas fees. Important tips: Turn your DMs off on Discord. Do NOT connect your wallets to unknown websites. Use Brave Browser. Have you ever traded NFTs? What do you think the pros and cons are? Let us know your ideas. Good luck.
Education
by ShawnMCR
6
Stochastic Retracement Lines Welcome Back Please support this idea with LIKE if you find it useful. ********************************************************** Hello.... after I tested this new indicator a lot .. and i found it very useful to find the best key lines on the chart I decided to share it here.... the indicator is depending on stochastic momentum to collect the strongest lines on the chart and draw the lines depending on it .... and I found this stochastic retracement on this level: 0.9 0.5 0.2 0 -0.2 -0.5 -0.9 and this levels can lead us to get that confirmation to open our new positions.... =========================================================================== and it works with all time frame ....
Education
by MOHAMAD-KL
6
WHAT are Bitcoin cycles and WHY is it so important ✅❓What are bitcoin cycles and why is it so important❓ 🚀This graph shows the entire history of bitcoin, approximately 13 years. If you open the logarithmic display of the chart, you can see some patterns in price behavior. Namely, that bitcoin moves in cycles. Which in turn are divided into an uptrend and a downtrend. 🎢Three complete cycles can be clearly seen on the chart. One cycle lasts four years on average. Of which 2.5 years of growth, and 1.5 years of decline. At the same time we would like to note that the cycles expand over time. But with the arrival of big money, institutional investors and various global companies, this pattern will be less and less noticeable (like the example of the S&P 500). Why is bitcoin cyclical❓ The answer is actually very simple. It is only noticeable because bitcoin is in its early stage of development and acceptance. There are cycles in everything, it is a natural phenomenon. 🔋As examples: - World cycles, every 10 to 12 years there is a crisis followed by a renewal and continued growth; - Natural cycles, many examples of how the environment develops and renews; - Our well-being, sometimes you have noticed that your mood and energy is at its highest when you are very productive and feel good, and vice versa, when it is at its lowest and you are less productive. Markets are human creations, so they are also subject to natural behavior. How can cycles help trading❓ ✅Statistically, according to brokers and exchanges, 85-90% of traders are losing, 5-10% of traders are breaking even and only 5-7% of traders are earning. One of the most important tasks for any trader is to identify the right trend. Usually, when traders try to trade against the trend, they lose their trading accounts. That is why it is important to understand how to identify the trend and how to earn with the movement of the trend. This is where understanding bitcoin cycles helps. Some of our trading systems are based on these principles. 💚 Please like and subscribe to us to get more ideas like this.
BNC:BLXEducation
by AlexWhale
12
Momentum in the Markets ✅✅✅✅ I will look at the momentum to understand if price has power to move towards my take profit area or no, a perfect scenario is when i enter a long or a short order the momentum should increase from candlestick to candlestick not decreasing, increasing momentum meaning that price has fuel and it is not exhausted. 🎯 Increasing momentum - bulls/bears has power, they have fuel to push price 🎯 Decreasing momentum - bulls/bears are losing power, they dont have fuel they are exhausted. ‼️ Take a look at this concept in HTF starting from H4 - MN Kindly see the photos attached with bullish/bearish decreasing and increasing momentum.
BINANCE:BTCUSDEducation
by AnonimFXRO
How To Use Bitcoin Futures To Hedge Your CryptoYou are either a trader or a HODL'er. Since I am a trader I don't like to sit in massive swings in my spot Bitcoin positions, I like to use Micro Bitcoin Futures to hedge my spot position to minimize the risk and also maximize my long position in spot. In this video I explain how I am currently hedging my long Spot Bitcoin position using Micro Bitcoin Futures, Symbol MBT. Past performance is no guarantee of future results. Derivatives trading is not suitable for all investors.
BEducation
by anthonycrudele
40
Get the Highs and Lows by Trend-Based Fib Time!Hey everyone, I have come back with a new study on Bitcoin. This is all based on my observations, do read the whole idea! The chart must be looking very messy but let me explain the whole thing to you. I have used two tools here: Trend-Based Fib Time Fibonacci Channel Trend-Based Fib Time This tool is very helpful in predicting the future highs and lows of the market! We can cover the ‘how to draw it’ part in another idea. Let me show you how it is used. Fib Time Tool predicts the trend reversal points at certain time intervals. These time intervals are derived on the basis of the Fibonacci Numbers. Check out these intervals marked by the vertical lines; each vertical line triggers some big move in the market. In the chart, the zic-zac arrow line indicates the move of Bitcoin. My observations: The pink zones, or the 382 to 618 zones (1.382 to 1.618 or 2.382 to 2.618 or 3.382 to 3.618) are the zones of big impulse moves. The blue zones, or the 618 to 1 zones are the zones where the price consolidates. The remaining, i.e., the 1 to 1.382 or 2 to 2.382 zones are the zones of impulse moves too, but the moves are not as strong as the moves in the pink zones. Fibonacci Channel: For making a Fibonacci Channel here, we will do the exact opposite of the instructions given by TradingView for it. I have tried this on Gold too, where it works very perfectly! Check out the XAUUSD idea through the link at the end of this idea. TradingView states that, in order to make a Fibonacci Channel in an uptrend, we need to start with the 2 lows and then put the third point on the high coming between these two lows. This idea works perfectly if the trend continues upwards. But, what to do in the situation of reversals? So, in order to trade the trend reversals, we will draw it in the opposite way. We are not starting with the lows; we will first take the 2 highs and then the low between them. Check out the below chart image for reference. I have marked it with A, B and C. By this, you will get the levels, on the basis of which, you can set the targets. Always confirm the next move by a pullback. You can trade with this tool by taking the help of the Fib Time. What is the current scenario? I have marked the reversal points by pink arrows and consolidation zones with pink boxes and black arrows. Here, we are currently entering into the consolidation phase, which might end by Feb 15. Check out the Pink Dashed arrow for reference. We might see another major and last dip around 6th March! Comment down your doubts and trade safe!
BITSTAMP:BTCUSDEducation
by theTAguy
Motive waves (key characteristics) Hi everyone, There are four different variations of a 5 wave move: 1- Impulse wave, 2- Impulse with Extension 3- Impulse with Truncation 4- Diagonal. Five wave structures : 1- Impulse: 1-1 Extensions : Appears in either wave 1, 3 or 5. 1-2 Truncations : wave 5 does not exceed the end of wave 3. often occurs after a strong third wave. 2- Diagonal triangles: Leading Diagonal, Ending Diagonal Wave 4 almost always moves into the price territory of wave 1. Normally has wedge shape
FTX:BTCUSDEducation
by BTC-XLM
4
Does Gold Perform Better Than Other Assets in Times of InflationGold Price Against Inflation When the economy is experiencing inflation, investors often turn to gold to help protect their assets. This is because gold does not suffer from the same devaluation as paper money in times of inflation. But does it always perform better than other assets? We analyzed data to see if that was the case and found that it depends on what type of investment you’re looking at. For example, stocks generally do well in periods of inflation, while bonds perform poorly in these same cases. What is inflation? Inflation is defined as an increase in the overall price of goods and services. To better understand what this means, consider a loaf of bread. If it costs $2 to buy a loaf of bread today, but tomorrow that same loaf costs $2.50, there has been inflation because the price went up. What are the different types of investments? Investments are opportunities to save money and grow wealth. But what exactly is an investment? A traditional investment is a transaction between an investor and a company or individual. The investor provides capital in exchange for shares in the company’s stock, bonds, property, commodity futures, forex trading aand more. When deciding what type of investment you should make, there are many options (gold is just one). In addition, there are several types of assets, such as stocks or bonds. Each of these investments has its unique characteristics and risk levels. Does gold perform better than other assets in periods of inflation? Stock Vs Gold As you can see, not all investments are created equal. The performance of investments in periods of inflation will depend on the type of investment. For example, stocks and cryptocurrencies are likely to perform better in times of inflation, while bonds are likely to achieve worse in recent years. If you’re investing long-term, gold and stock can be your best option because their price is subject to fluctuations that can predict most of the time. However, if you’re looking for a short-term safety net, gold and cryptocurrencies might provide some stability that other investments lack. Regardless of what type of investment you choose, it’s essential to have an overall plan for managing your portfolio to align with your goals and risk tolerance. Does Gold Always Perform Better Than Other Assets? It depends. The answer to this question is complicated because it depends on the type of investment you’re looking at. In this post, we’ll explore the pros and cons of investing in gold during periods of inflation. Gold has long been considered a safe haven asset for investors worried about inflation. This is because it doesn’t suffer from devaluation like paper money does in periods of inflation. However, studies have found that stocks and cryptocurrencies do better in high inflation like gold. One study found that “gold’s performance worsens when inflation rises above 10%.” And another study found that “gold does not protect against loss as well as stocks or bonds.” So while gold can be a good investment during moderate inflation, it may not always perform better than other assets during periods of too-high inflation. What Is the Best Investment When Inflation is High? Inflation can have a significant impact on investment performance. In this piece, we’ll discuss the different types of investments and how they perform in periods of inflation. There are five main types of investments: stocks, bonds, gold, cryptocurrencies, and cash equivalents. Each has a different risk level and potential for return. While there’s no guarantee that any investment will perform well during a period of inflation, stocks, in general, have been doing better in times of high inflation in recent years. This is because historically, they tend to rise in value faster than other investments in this situation. Bonds also increase in value during periods of high inflation, but their downside is much higher because they drop quicker when the economy is struggling with recession. Gold and cryptocurrencies have been rising during recent years. It’s because of higher inflation and global concerns about coronavirus and global trade deficits. But gold is more stable than cryptocurrencies. So you can easily predict the gold price, whether it is a bit hard to predict the cryptos. Cash equivalents typically stay at their same levels or fall when the economy enters a recession under periods of high inflation. This is because cash equivalents are less volatile than bonds and stocks due to their equivalence with money which never loses its value. What is the difference between stocks and bonds? If you’re thinking about investing in gold or other commodities to help protect your assets, you need to know where to put your money. Certain types of investments perform better than others, depending on the economic climate. For example, stocks generally do well when inflation is on the rise. That’s because investors are earning more for their money as prices rise. That means stocks often beat bonds in periods of inflation. Like during the Great Recession, stocks also tend to outperform bonds regarding high unemployment rates. On the other hand, Bonds don’t fare as well during periods of inflation and tend to perform better in cases of low unemployment. As far as gold investment goes, it does not always beat other investments like stocks and bonds. Gold performs worse than these investments during periods with low unemployment but performs better than them during periods of high unemployment—like during the Great Recession. So, while you are an investor, you must consider the global situations and growth. If you see covid pandemic is increasing unemployment rates, then it is better to invest in gold. On the other hand, if you see only inflation rising but not employment, I suggest you invest in stock and gold together. Gold vs. Stocks, Gold vs. Bonds Gold is often seen as a way to hedge against inflation. In high inflation, the value of gold and other hard assets will be higher than paper money and other investments. But do stocks and bonds perform similarly? We researched data on stocks and bonds to explore this, comparing them to gold. We found no general rule for performance: While some types of investments do well in periods of inflation, others do not. It largely depends on what kind of investment you’re considering. For example, stocks tend to perform better than bonds when there is inflation because they are less sensitive to changes in interest rates or monetary policy. Conversely, bonds are more susceptible to these factors, so they typically perform worse during times of inflation. But gold always does better in most cases. But when the inflation goes over 10% in those cases, gold can’t perform well like stocks. But we should be concerned about the stock market because most of the stocks have been running higher in recent years. Every company has its profit limitations and people demands. So anytime the stock market can collapse. The Better Inflation Hedge: Gold or Treasuries? Many investors look to gold to hedge against inflation, mainly because it doesn’t experience the same devaluation as paper currency. But does it consistently outperform other assets? The answer is no. It depends on what type of investment you’re looking at. For example, stocks generally do well in periods of inflation, while bonds perform poorly in these same cases. This is because bonds are primarily invested in fixed-income investment vehicles, which have historically done very poorly during periods of inflation. Treasuries are also not the best performance during periods of inflation; they tend to outperform stocks only when the rate of inflation stays below 5 percent for an extended period. Otherwise, their value will be eroded by inflation and the higher interest rates that accompany it. But don’t worry! Gold’s performance can vary depending on many factors like the period (long versus short), the country (G7 versus developing economies), and whether or not there’s a global recession. So let take a closer look at how gold may work as an asset during times of inflation: Real interest rates drop in the inflationary environment, and gold and stock price go up. This is because central banks try to quickly for loans and reinvest in the economy. Can Bitcoin Also Provide Hedge Against Inflation? Bitcoin, the cryptocurrency that many people are now investing in, is often touted as a hedge against inflation. But does it always perform better than other assets? To find out, we analyzed data on four different types of investments: stocks, bonds, gold, and bitcoin. As you can see, each asset performs differently during periods of inflation. As you would expect, stocks do well in periods of inflation, while bonds perform poorly in these same cases. However, stocks typically outperform bonds because they’re less sensitive to changing interest rates. But what about gold and bitcoin? We found that gold fares better than stocks during periods of inflation (although not as well as bonds). Bitcoin performance depends on how people use it; if they use it solely as an investment, it performs well during deflation or inflation periods. On the other hand, if people are using it for transactions, then it performs poorly during periods of both types of economic instability. Conclusion Each asset has its unique characteristics. Therefore, investing depends on the environment, situation, global economic condition, inflation, and supply-demand. Such bond markets are not usually happening big moves. The gold market is again very stable; on the other hand, the stock market and cryptocurrencies doing quite well over the years. The crypto market is so volatile, many traders invest intraday in the hope of making a profit in a short time, and some investors stay away from investing in cryptos. Overall, the gold and stock markets are the best assets for investments when inflation rises. However, it has a definite boundary line, which should never be exceeded.
CAPITALCOM:GOLDEducation
by Gold_Trading_Expert
EDUCATIONAL POST (FVG - Fair Value Gap)EDUCATIONAL POST: (FVG - Fair value Gap) 📊📈 Let's take some time to explain a trading term I often use in my TA. 🤓 FVG - or Fair Value Gap (= inefficiency, void...) 👉 What they mean by that is an area of the chart where the price moved past in just 1 single candle, meaning the candle before + after haven't touched this area. 👉 This is how such a gap is formed. 👉 This gap frequently works as a magnet for the future price, indicating a CONTINUATION (bullish —> bounce, bearish —> drop) NOTE: this is the strongest on the first touch it does, after that it's power deminishes and price often moves back through it. EXAMPLE: (bullish) price moves up fast and creates a FVG. This area will act as a bounce area for when the price drops back down to this, before continuing higher. I've added a theoretical + $BTC example. (scroll back to see it on the chart) Hope you learned something. 👌 Oli 🤙
Education
by theGOATofCrypto
2
Can Technical Analysis Predict The Future?People who tell you, a trader, not to learn Technical Analysis do so trying to keep you ignorant about the true conditions of the markets, not because the tool flawed. Many of the people fighting it have no idea how it actually works or just can't get their heads around it. The more I use it, the more I study, the more I practice, the easier it becomes. It is not about predicting the future. It is about gaining access to information that can help you obtain, when trading, better results. If you would like to read into the future try Astrology or Numerology but Technical Analysis is for those who want read the markets as they are. Try it! It can be profitable. It can be fun. Namaste.
BITFINEX:BTCUSDEducation
by MasterAnanda
21