US Congress Faces October Default as Bitcoin Lies in Wait
Buying bitcoin when it is unpopular to own it has proven to be a wise choice, historically. A year ago today one bitcoin cost less than $10,000. Today, it’s over 4-times the price.
Meanwhile, US politicians are characteristically more worried about protecting their political hides than taking the necessary steps to adopt sound money principles like El Salvador.
Let’s dig in.
Yellen: The US is on track to Default on National Debt in October
Last week, Treasury Secretary Janet Yellen warned congressional leaders that the US is expected to default on its national debt in October if the White House and Congress are unable to raise the debt ceiling yet again.
However, the thing with lines in the sand is that they can always be redrawn once the tide comes in.
Check out the full article here!
Technically speaking
Buy the dip?
Bitcoin has taken a haircut in tandem with the S&P 500. As prices trend lower, BTC/USD is inching closer towards a probable reversal in the coming days and weeks.
On the higher time frames, the coin has technically re-entered its all-time-high trading range, judging by naked price-action. This means that it’s generally a good idea to buy the bottom of the range and sell the top (or wait for all time highs).
Zooming into lower time-frames, the daily super-trend flipped bearish, confirming a downtrend that was first visible on lower-time frames, as covered last week.
On the 4-hour chart, BTC/USD trades near the lows ($44,100) after being rejected by the LTF mid-range ($46,000). In the immediate short term, bitcoin may see increasing sell-side pressure that sends it to the key January support level ($42,100). However, the relative strength index is ticking higher as prices attempt to trend lower, opening up the possibility for a swift reversal as noted in the telegram channel.
Once prices trend back within the LTF range, a reclaim of the mid-range ($46,000) would suggest follow-through northward price-action, first to the LTF resistance ($47,300) and second to HTF (high time-frame) resistance between $48,000 and $50,000.
Regardless, BTC/USD is likely closer to the bottom of this correction than it is to starting a new down-trend given the weekly range mentioned earlier. September is typically a month of consolidation in traditional markets as well as in bitcoin, but the past is no guarantee. As noted in the last mailout, deviations below the January support are buying opportunities.
The current state of play
There is increasing awareness that something is very wrong with the current monetary system. At the same time, public discussions calling crypto an outright scam still exist, yet are on the decline.
If bitcoin achieved anything at all, it’s that it popularised the word ‘fiat’ currencies, which is now a common term thrown around by many. It remains to be seen whether the masses realise why all fiat currencies are essentially treated the same way among those who recognise that sound money wins out in the end.
The NFT craze is clearly in bubble territory and discussions about new ethereum killers (solana) are rampant. This is typical argumentation that accompanies greed and has little bearing on the underlying fundamentals and network activity. Ethereum is undergoing the a similar type of scrutiny bitcoin went through during the last cycle, when various pretenders rose to prominence (before dying a slow and painful death). Some sect of Ethereum influencers still talk about dethroning Bitcoin; which is possible. The ‘ultra sound money’ meme has died down thankfully but it will rear its ugly head again in time — possibly being a market for whoever is left holding the bags (before they realise the meme is nonsense).
But I digress. In reality, the likelihood is that as network activity on ethereum grows, interoperability will cater for that growth, resulting in layer 2 solutions gaining prominence (Solana, Cosmos, Polkadot). But as soon as activity falls off a cliff as NFT mania cools off, then it’s unlikely for ‘ethereum killers’ to fare better simply because they are younger and have much less liquidity.
That said, provided the market remains bullish for Q4 2021, my expectations is that Litecoin will catch up with its (former) peers in spectacular fashion in due course. The announcement of smart contracts, Daos, tokenised assets and NFT’s on the blockchain is fairly monumental despite receiving little attention. Litecoin is also a beneficiary of over a decade of trust and is a harbinger of things to come for its brother, Bitcoin. The protocol has been in development for years, which is not something many cryptocurrencies can boast (only two in fact).
In terms of cyclicity, Bitcoin does not appear to have peaked. Provided hodlers keep hodling, there is little reason to be overly bearish for the remainder of the year until this information changes.
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Christopher Attard
Founder of Chris on Crypto
Contributor to www.cityam.com
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Originally published at https://mailchi.mp.
