As Bitcoin Chops in Dodgy Waters Is it Time to Consider Liquidating Politicians?
Bitcoin is in choppy waters — that much is clear. But is all the doom and gloom warranted in the grand scheme of things? More importantly, is Bitcoin on track to set a new all time high in 2022 or is it blaspheme to dare to ponder this possibility?
Let’s dig in.
Dear readers,
The purpose of this newsletter is to provide context to cryptocurrency markets. This analysis takes time to write-up and it’s released every Monday and Wednesday. I am not perfect and this is not a science — nor is this newsletter a signals service. While I cannot promise perfection I do my best to be honest and transparent.
Thank you for reading.
Feel free to contact me with feedback on contact@chrisoncrypto.com.
Dollar Fungibility in Jeopardy As Visa, Mastercard PayPal Suspend Operations In Russia
Visa, Mastercard and PayPal are suspending operations in Russia due to the ongoing conflict n Ukraine, the companies announced this weekend. Everyday Russians will now suffer the actions of their leaders as US Dollar fungibility comes under pressure.
Visa will work to discontinue transactions in Russia which will take a few days according to a press statement. Mastercard said it would suspend all its network services in Russia, which started a military operation in Ukraine at the end of February.
Check out the full article here!
Technically speaking
Bitcoin Bottoming Process Continues
Bitcoin/Dollar got rejected at weekly resistance and failed to breakout of the pivotal $45,000 level. The pair is down 9% week-on-week and retains a bearish posture at the time of writing.
BTC/USD is in a precarious situation in the immediate short term, which has been exacerbated by the ongoing war in Ukraine as investor uncertainty on the digital asset space remains high.
Technically, BTC/USD trades within a developing upwards-sloping local trend that could have consequential price-movements to either side. However, liquidity grabs or deviations are not uncommon in crypto. Also, after 5 months of down trending consolidation and key events being priced in, contrarian perspectives may start to hold water sooner rather than later.
Given the tendency for fake-outs, the line in the sand for bulls (in my view) is $36,600. If this level is lost on a daily closing basis, a retest of monthly support ($30,000) becomes probable. On the flip side, should prices reclaim $41,200, then weekly resistance would be next for another retest. That would be the 5th retest of resistance in the span of two months. Generally, the more a level is tested, the more likely it is to get obliterated.
Zooming out, Bitcoin’s weekly close is curious, historically speaking. Bearing in mind that the past is only useful in so far as it adds context to present price-action, BTC/USD hasn’t seen many inverted hammer weekly closes with tall wicks to the upside. In fact, such candles tend to appear closer to the end of bear trends rather than at the start of them.
This is not to say that BTC/USD is about to experience an imminent mammoth rally (although all time highs in 2022 are likely in my view). Instead, we must consider historical precedent bearing in mind that there is *always* downside risk.
However, taking into consideration such candle-stick patterns (which you can learn about here), prolonged downside risk for Bitcoin is statistically lower than it was some months ago, purely in a technical context. If $45,000 is reclaimed in the coming week(s), then the ‘date with destiny’ at the 200 weekly EMA (blue line) may be postponed for some time.
All in all, BTC/USD is likely entering the final phases of accumulation before resuming the trend to new all time highs. Bear markets tend to end with blow off bottoms, but considering that there was no blow off top during what appears to be a lengthening bull cycle, perhaps the worst is already over.
As those who follow my blog are aware, the political situation is also fairly precarious, and lends itself to the ‘sound money’ narrative perfectly for those paying attention. To my mind, if arguments for Bitcoin were strong in 2020 (and they were), those arguments have become stronger in 2022. The FED is stuck between a rock and a hard place, and the path of least resistance is to let inflation run hot. This is true not just politically, but also as a means to repay their ever-growing debt obligations while capping interest rates. Also, is it reasonable to expect a heroic stand from Jerome Powel et al. now, when they’ve presided over the most accommodative monetary policy ever? I’d say rate hikes are limited in scope and ultimately superficial in the grand scheme of things. If there are rate hikes, the bulk of downside is largely priced in regardless in my view.
Besides that, we’ve suddenly shifted from bizarre and moronic covid-19 policies to bizarre and moronic geo-political policies — or at least that’s what it looks like to a dispassionate observer who claims no expertise in medical or military matters. Still, it seems to me that the incumbent global super powers are advertising their inadequacy with each crisis, and I don’t expect this to end until the large funds behind such reckless politics get liquidated (partly due to the same moral hazards they created).
Ultimately anyone in bitcoin is here because s/he has learned a transcendent truth and will not take no for an answer. Nothing else offers a sufficient explanation as to how an asset class has gone from zero to $1.8 trillion (currently) except absolute conviction — the kind that one would die for. So bet the house, the car, the dog, a kidney, the family (or perhaps the least favourite), everything.
Jokes aside, regardless of what happens this week or the next, if you must be deterministic about something then you ought to be deterministic that Bitcoin will trend up over time.
We’re close now. It-tiġrija sal-barkun.
Catch you later.
p.s. This is my opinion. It is not financial advice.
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Best regards,
Christopher Attard
Founder of Chris on Crypto
Contributor to www.cityam.com
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Originally published at https://mailchi.mp.
