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Epic Pennant on BTC Chart


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28 minutes ago, RipMcGillicuddy said:

If you blinked, you missed that "downturn". Come on. 

Context here how BTC behave in economoc downturn, not how long it last.

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10 minutes ago, RipMcGillicuddy said:

K already bored of your mental gymnastics.

Obvious, that thinking is not your strongest side, so do stay bored.

BTC was following market from mid Feb 2020 to March 2020 bottom.

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9 hours ago, QuestionMark said:

However, this time it seems that the general economic downturn is not only cyclical but also structural

you really sound like CNBC.

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Posted (edited)

I must agree with @QuestionMark here. Crypto/Bitcoin hasn’t seen a real bear market. Just cyclical pump and dump manipulation by whales over the years.

During bear markets, people know they are losing value by holding Fiat but do it anyway because holding it in anything else is much worse. No one invests in anything and people focus on keeping their jobs, running their businesses, trying to not go bankrupt, paying their debts, etc. 

This has been one big bull market for Bitcoin and Crypto since 2012. Irrespective of whether Bitcoin is capable of powering payment systems, today its primary purpose is speculative. When people are forced to be careful with their money, they don’t gamble. They keep their money in assets with low volatility and high liquidity. Usually that’s Fiat/Fiat equivalent like sovereign bonds, or Gold/Silver.

That said, I don’t think the world economies are strong enough right now for central banks to keep tightening. Once they lose the Mortgage market (globally 300T) things are going to get ugly real fast. If we see the S&P go very low - say down to 3000 - they’ll panic and print again. 

There used to be a time when the stock market was separated from the economy but it’s not true anymore IMO. At least in the US, pension funds are tightly linked to stock markets and mortgage markets. 

Anyway, coming back to the point… if we enter in a global recession (highly likely) I don’t see crypto or any other market recovering. If central banks panic and print money again (likely to happen eventually), that’s when we will see crypto pumping again.

Who knows? We might see Bitcoin hit 100k again as @Eric123 said, but the money has to come from somewhere and the FOMO generated must be sustained by retail with disposable income.

Edited by Ripley
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25 minutes ago, Ripley said:

Anyway, coming back to the point… if we enter in a global recession (highly likely) I don’t see crypto or any other market recovering.

Are you still holding any crypto, if yes - why?

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Posted (edited)

Some of the panic that has been shared on various news outlets is quite shocking. 

The global economy has needed a kick in the arse to re-establish interest rates at a certain level. What's happening in the U.S. and U.K. in particular is healthy. This inflationary shock is short term, it'll take a year for industries to get over it. 

Monetary policy cannot operate effectively at near zero rates. I am glad interest rates are jumping back up at quite fast paces. It's been far long overdue. 

If a recession were to happen, it would be a "healthy" recession. It would bring normalisation back in to markets. 

Would this create a recession? Maybe in technical terms yes, but in reality we won't be that worse off.

In terms of crypto, if interest rates go up, it just means yields on crypto need to go up to retain a certain risk/reward ratio.

 

Also the mortgage market, atleast in the U.K. is quite resilient. Its nowhere near the casino it was during 2008/09.

Edited by NMNR
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2 hours ago, VanHasen said:

Are you still holding any crypto, if yes - why?

Crypto Holdings

XRP is the only holding I have that I bought with money, apart from a tiny (less than 0.1%) position in TZEROP. With the SGB airdrop, XRP is no longer greater than 99.9% of my crypto holdings but it still constitutes a huge portion. Its footprint will no doubt go down a bit more with the upcoming FLR airdrops.

I sold < 5% of my XRP holdings recently at around 0.7-0.75 (don't remember exact price) when I took out a mortgage. I continue to retain everything else.

Why

I strongly believe in the potential of blockchain and DeFi. I think the shape of the markets will change with regulations, but the genie's out of the bottle and there's no putting it back in. 

When there's a recession, everything usually mean reverts to value. With crypto it should be zero, but I don't think we will quite get there. Post recession - and even during - people will jump to safe investments.

I expect secondary sales of XRP to be deemed as non-securities. After all, that is the precedence set with Gram and that was an ICO project whereas XRPL wasn't. If that happens, XRP will be the only token that gets clarity in the U.S. Development efforts will accelerate rapidly on the XRPL. So will investment activity.

I hope that Ripple can win on Howey and not on the Fair Notice Defense because that will give clarity for all of crypto in the U.S. But the important thing for XRPL is really just the secondary sales situation.

 

 

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Posted (edited)
3 hours ago, NMNR said:

Some of the panic that has been shared on various news outlets is quite shocking. 

The global economy has needed a kick in the arse to re-establish interest rates at a certain level. What's happening in the U.S. and U.K. in particular is healthy. This inflationary shock is short term, it'll take a year for industries to get over it. 

Monetary policy cannot operate effectively at near zero rates. I am glad interest rates are jumping back up at quite fast paces. It's been far long overdue. 

If a recession were to happen, it would be a "healthy" recession. It would bring normalisation back in to markets. 

Would this create a recession? Maybe in technical terms yes, but in reality we won't be that worse off.

In terms of crypto, if interest rates go up, it just means yields on crypto need to go up to retain a certain risk/reward ratio.

 

Also the mortgage market, atleast in the U.K. is quite resilient. Its nowhere near the casino it was during 2008/09.

I can give you my perspective. Increasing interest rates is absolutely the right thing to do when the economy is doing well and debt levels aren't too high. The right time to do this was between 2010 and 2018 when the world economy was in a great position. But political parties didn't let that happen. In the U.S., this was under both Democratic and Republican governments, and under the leadership of Yellen (when she was Fed Chair) and Powell. 

Economies in most countries are screwed. Supply chain disruptions aren't getting resolved any time soon. Energy prices are through the roof and inflation is quickly getting embedded (i.e. once prices are raised, they will never go down even after economy eventually recovers but wages do not catch up with he increased prices).

Almost all countries in the world are severely indebted (debt / GDP). If you account for the fact that billionaires severely skew GDP, things are even worse. Debt/GDP in the U.S. is around 140% I think. 

Look at what's happening today. The inflation (in the U.S.) is about 8.8% officially. People can still get a 30 year mortgage between 4.8% to 5.1%. That's a real rate of -4% to -3.7%. Inflation isn't getting tamed unless interest rates are higher than CPI and there is no way interest rates will go that high. 

The mortgage market in the U.S. is much better than 2008/2009. I wasn't referring to collapse in the U.S. but the global mortgage market. And I'm talking about both residential and commercial. See below. This is also true for Australia, New Zealand, etc. China's economy is also highly exposed to this. Unfortunately with the current level of globalization, challenges in one large economy impacts everyone else. See BlackRock and Vanguard exposure to mortgage backed holdings. They also run a majority of the pension funds in the U.S...

image.png.c4d4835d446388a1aae7fb88eea99eca.png

See below on house affordability in the U.K.

image.thumb.png.aece8230040b4e7781216422aa2c909b.png

See below for the U.S.

image.thumb.png.aff590dc26a776e89b4507e825499912.png

Edited by Ripley
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Posted (edited)

Note: This is just a guess and I could be wrong.

I should clarify - my current thinking is that we will go further down from here, with a possible fed intervention in Q4 which will start the next big bull run across all markets and unless productivity catches up, a major major decade long recession starting in 2024.

I think the Fed and the governments will print again later this year and kick the can down the road.

This is just U.S. tech, but see YC's e-mail to startups earlier this month below. This will also impact funding of blockchain startups. 

image.thumb.png.9d32ca8ce8df8ecb1c75326ef4fd421c.png

Edited by Ripley
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Posted (edited)

BTC/ETH prices went down and BTC.D went up decisively, which means people run from alts to ETH and ETH to BTC. There is still a delusional support for BTC and alts. Longs/Shorts is being waited for a blood hunt. They'll sink all in a sudden one day. All of them are in the liquidation process. One way street. Typical bear market and we are far away from seeing the bottom. At least 6 months to go, probably. What'you think?  @Plikk

2083900172_ScreenShot2022-05-26at06_23_44.thumb.jpg.ecf1017e3794dd160528a2c6e9d8011c.jpg

Edited by MQB
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7 hours ago, MQB said:

BTC/ETH prices went down and BTC.D went up decisively, which means people run from alts to ETH and ETH to BTC. There is still a delusional support for BTC and alts. Longs/Shorts is being waited for a blood hunt. They'll sink all in a sudden one day. All of them are in the liquidation process. One way street. Typical bear market and we are far away from seeing the bottom. At least 6 months to go, probably. What'you think?  @Plikk

2083900172_ScreenShot2022-05-26at06_23_44.thumb.jpg.ecf1017e3794dd160528a2c6e9d8011c.jpg

It is very hard to tell right now. All up til November ‘21 market was moving pretty much as I anticipated and made some solid calls back then. But ever since BTC has been dropping from 69k, it has been increasingly difficult to gauge and I have been buying back in too early on several occassions. 
 

TBH, there is so much happening in the world right now, the war in Russia ia almost like a 2nd black swan since covid. TA and On-Chain analysis is still mostly bullish if we look at technical exhaustion lvls for bears, BTC miner sales and BTC leaving exhcanges etc. 
 

But the bear case has been winning over the past months and there is a good chance they will continue to do so, there is still much fear and panic(which again, is in favour of the bulls eventually, but crypto always loves extreme scenario’s so that’s also ‘meh’). 
 

My strategy is still to keep DCA buying until we get a juicy rally up, then I will stop buying. I have bought many local bottoms, only to see it go lower weeks after. All part of the DCA strategy but emotion-wise it sucks. I guess the more it gets to suck, the more likely a bottom is nearing. 
 

Most important thing I have learned from the past few months is to become more humble and open-minded tot all outcomes. And that past cycles/fractals often repeat, but in different manners/timeframes as one would expect. 
 

All I can say is good luck to all, remain focussed on the big picture and be prepared to see the market go any way. Keep in mind that on-chain and technically, sellers are getting exhausted more and more. But that certainly doesn’t mean we wont go lower. Waiting to catch the exact bottom area is a fools errand, but keep buying as heavily as I was, wasn’t that smart either. So small increment buying seems to be the best way to keep exposure without taking too much risk. 
 

GL all!

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