There was a sharp upward move above $6,800 in bitcoin price against the US Dollar.The price is up more than 25% in the past few days and it tagged the $7,450 level recently.There is a major bullish trend line in place with support at $6,750 on the 4-hours chart of the BTC/USD pair (data feed from Kraken).The pair remains well supported and it seems like the bulls are now aiming $7,800 or $8,000.Bitcoin price rallied significantly above $6,800 and $7,000 against the US Dollar. BTC seems to be following a nasty uptrend and it could even test $7,800 or $8,000 in the coming sessions.Bitcoin Price Weekly Analysis (BTC)This past week, bitcoin price started a strong upward move after it broke the $5,800 resistance against the US Dollar. The BTC/USD pair surpassed many hurdles near $6,000, $6,200 and $6,400. The recent upward move was such that the price even broke the key $6,850 and $7,000 resistance levels. Finally, there was an upsurge above $7,200 and the price settled well above the 100 simple moving average (4-hours). The price traded to a new 2019 high at $7,457 and recently corrected lower.It traded below the $7,200 level, and the 23.6% Fib retracement level of the recent wave from the $6,238 swing low to $7,457 high. The price even spiked below the $7,000 level, but the $6,850 level acted as a support. BTC price tagged the 50% Fib retracement level of the recent wave from the $6,238 swing low to $7,457 high. There was a sharp bounce after the price tagged the $6,850 level. There is also a major bullish trend line in place with support at $6,750 on the 4-hours chart of the BTC/USD pair.The pair is back above the $7,000 level and it seems to be preparing for more gains. An immediate resistance is at $7,220, above which the price may test the $7,350 level. Any further upsides could take the price towards the $7,500 resistance level. Above $7,500, the next key target for the bulls could be $7,800 or even $8,000.Looking at the chart, bitcoin price is clearly in a strong uptrend above $6,850. In the short term, there could be swing moves towards $6,850 or even $6,600. However, the bulls remain in control and they are likely to aim a new high above $7,500 in the coming sessions. It would be interesting to see how the market reacts if the price reaches $8,000 in the next 24-48 hours.Technical indicators4 hours MACD – The MACD for BTC/USD is gaining momentum in the bullish zone.4 hours RSI (Relative Strength Index) – The RSI for BTC/USD is currently placed heavily into the overbought zone.Major Support Level – $6,850Major Resistance Level – $7,500
Archives for May 11, 2019
ETH price broke the main hurdle near the $178 and $180 resistance levels against the US Dollar.The price even broke the $200 resistance level before starting a downside correction.There is a major bullish trend line in place with support near $178 on the 4-hours chart of ETH/USD (data feed via Kraken).The pair remains well supported on dips and it could rally strongly above $200 and $210.Ethereum price finally gained bullish momentum versus the US Dollar, along with bitcoin. ETH seems to be eyeing a larger upward move above the $200 resistance level.Ethereum Price Weekly AnalysisThis past week, Ethereum price struggled on many occasions to clear the $172 resistance against the US Dollar. However, the recent sharp rise in bitcoin price above the $7,000 level triggered an upside break. The ETH/USD pair broke the $172 and $178 resistance levels to move into a positive zone. The upward move was strong since the price even surged above the $190 level and settled well above the 100 simple moving average (4-hours). The bulls pushed the price above the $200 level and a new monthly high was formed near the $206 level.Later, there was a sharp downside correction below the $200 and $190 levels. The price traded below the 50% Fib retracement level of the last wave from the $169 swing low to $206 high. There was a spike below the $188 level, but the $184 level acted as a support. ETH price tagged the 61.8% Fib retracement level of the last wave from the $169 swing low to $206 high, and recently bounced back. On the downside, there are many supports near $185, $180 and $178. There is also a major bullish trend line in place with support near $178 on the 4-hours chart of ETH/USD.The pair is already recovering and it is trading above the $188 and $190 levels. An initial resistance is near the $195 level, above which the price could break the $200 level. A daily close above the $200 level might start a larger upward move. The next key resistances for the bulls are near $210 and $220.The above chart indicates that Ethereum is well supported above the $185 and $180 levels. There might be a few swing moves, but the price will most likely climb above $200. The main target for the bulls could be $220 or even $225 in the near term.Technical Indicators4 hours MACD – The MACD for ETH/USD is currently gaining momentum in the bullish zone.4 hours RSI – The RSI for ETH/USD is now well above the 70 level and it could move further higher.Major Support Level – $185Major Resistance Level – $200
Whether this is the Consensus effect or not, Bitcoin (BTC) is now decidedly above $7,000. As of the time of writing this piece, BTC has finally tapped $7,400, a level that many see as short-term resistance. Let’s see what analysts are thinking right now.Related Reading: Despite Crypto Comeback, Prominent Investor Doesn’t Expect Ethereum 2.0 Until 2021Analysts Weigh In On Bitcoin MovePrices are moving so fast that analysts’ thoughts on the market are constantly cheering. But according to recent comments (which may not be relevant in a few hours’ time), Bitcoin may be locally topping.STEM major-turned-Crypto Twitter mainstay, The Crypto Dog remarks that he thinks the cryptocurrency market is going to top right about here. In an explanation tweet, Crypto Dog remarked that while the price action is undoubtedly bullish from a bird’s eye perspective, BTC’s chart is making it seem like a local peak is forming.The analyst didn’t fully explain this, but he did depict that BTC is currently encountering a resistance box (seen in grey below). What’s more, the parabola that BTC has stuck to for the past few weeks is about to go vertical, meaning that a drawdown is possible.I think we’re about to finally top out.$BTC $BTCUSD #Bitcoin pic.twitter.com/AyRZhFhBdz— The Crypto Dog📈 (@TheCryptoDog) May 11, 2019Others agreed with Crypto Dog’s analysis. Trader Cantering Clark explains that while the ongoing move seems “incredibly bullish”, BTC is still sitting under resistance, and is too far above its 20-week moving average. The 20-week moving average, according to Clark, has and is likely to continue to act as Bitcoin’s center Bollinger Band, meaning that it should return to that level’s vicinity in the near future.1/n-I am 90% risk off at this point, with some spot that is always untouched for insurance purposes. While this does look incredible bullish to me I can not divorce my better faculties of reasoning in thinking that we revert to the mean at some point in the near future. $btc pic.twitter.com/A0pvJlVUHY— Cantering Clark (@CanteringClark) May 11, 2019He explains that as it stands, BTC is a “good three standard deviations from the norm,” with this move being fueled by retail shorts. This hints that Bitcoin may soon see a retracement, returning to more organic and sustainable levels as buying pressure slows in the coming weeks.Room To Run?Some have, however, argued that Bitcoin still has room to run. In a recent tweet, Mr. Anderson postulated that BTC’s parabola still extends higher. He explains that if the stars align, as it were, Bitcoin is likely to establish a short-term base in the high-$6,000s or low-$7,000s, before moving to and potentially beyond $8,000.$BTC Are we Parabolic?A Parabolic Blow-off top has been my primary view for some time now. Parabolic curves are tricky. So, be careful because she will have a deep retrace$BTC has already done a marvelous job, but, the higher the stretch, the better for Bulls#Bitcoin #BTC pic.twitter.com/FaxekEigVC— Mr. Anderson (@TrueCrypto28) May 11, 2019The fact of the matter is, this current rally is largely driven by those already in cryptocurrency, not those not involved in the crypto industry. As NewsBTC’s Joseph Young postulated on Twitter, “existing money in the crypto market [is] coming back due to overall growth in confidence/comfort.”Google Statistics would confirm this. Popular researcher Alex Kruger explains that the “Bitcoin” search term’s volume is still at lows, with interest purportedly being 10% of what there was at BTC’s $20k peak in late-December 2017.Featured Image from Shutterstock
It was 2047, not 2019, in ConsenSys CEO Joseph Lubin’s keynote address Saturday in Red Hook, Brooklyn.
To close out the 2019 Ethereal Summit in Brooklyn, he foresaw a future where assets had all been tokenized, the web was completely decentralized and networks organized around topical interests had become roughly as important to human life as nation states.
Notably, Lubin predicted President Donald Trump would win a second term in 2020.
He foresaw those following four years as marking a downturn in American civilization, marked by an increase in radical divisions and even hate crimes. The turnaround would only arrive, he predicted, when Facebook, “finally admitting its role in global radicalism,” broke itself into “Facebook Media” (the news feed) and “Open Book,” a decentralized social web that any startup could tap into.
Lubin foresaw a medium-term future where, as he put it from his 2047 perch, “Liberal democracy was on its death bed.”
Despite doubts about ethereum’s potential to change how data is shared, he particularly foresaw a new era in more sustainable, more valuable journalism. “Platforms like Civil triggered the recovery of the journalism industry, especially local journalism,” Lubin said.
Civil is a ConsenSys-supported project aiming to bring distributed verification and micropayments to the media industry.
He continued, “Divorcing news delivery from the influence of advertising dollars was the breakthrough that drove the turnaround of western democracies.”
Lubin described a decentralized era in which “ethics with respect to the truth, ethics with regard to the nature of facts” took hold, as opposed to our backwards era, in which “presenting balanced viewpoints and fostering critical thinking was anathema.”
By 2047 – with a decentralized open platform where former web giants had come to embrace a distributed ethos – “We are all as a society able to engage in direct democratic decision-making,” Lubin said.
“The dream has been made real and we are all in it,” the Lubin of 2047 said. He told the crowd:
“These days we don’t hear people talking about changing the world, just like we don’t hear people talking about breathing or walking. It’s just what we do.”
Joseph Lubin speaks at Ethereal Summit NY 2019 photo by Brady Dale for CoinDesk
Over the past weeks, crypto has returned to the limelight. Bitcoin, Ethereum (ETH), amongst other digital assets have absolutely surged. While no specific fundamental factors have been pinned to the recent rally, it is widely believed that certain bits of news, like Fidelity’s institutional platform and Ethereum starting a Proof of Stake (PoS) integration, has boosted the price.But one notable commentator claims that one key development, Ethereum’s transition to PoS (Serenity) may not occur as soon as optimists expect.Related Reading: Bitcoin Price Has Gained On Average 77% Post-Consensus, Altcoins 161%Ethereum 2.0 May Be Pushed Until 2021 Per CoinTelegraph, during a panel headlined “The Smart Contract War Is Coming”, Ryan Selkis of data analytics startup Messari drew attention to the shortcomings of PoS. He claimed that the consensus mechanism, which gets rid of energy-chomping miners for entitled full nodes that can process Ethereum blocks, is “not proven to work.” Selkis, who is the CEO of the aforementioned firm, adds that Ethereum’s current Proof of Work (PoW) system may be “even good enough” for long-term scaling.And thus, he added he doesn’t expect for “Proof-of-Stake and ethereum 2.0 to happen before the end of 2021 at the earliest.”This news comes after Justin Drake of the Ethereum Foundation remarked last week that code specifications for phase zero are “on track” to see finalization by June 30th. Once finalization occurs, developers can begin building code around said specifications, as they ensure that everyone is on the same page. For those unaware, phase zero, also dubbed “Beacon Chain,” will allow for validators, rather than miners, stake Ether and vote on improvement proposals.Funnily enough, however, Selkis seems to be entirely bullish on Ethereum and its prospects in the short to medium-term. In a recent tweet, the long-time industry insider remarked that with all the things expected to happen during New York City’s Blockchain Week, “you’d have to be insane to short”. He then asserted that the bear market is “over”, and explained that the next “epic bull run”, for Bitcoin and Ethereum, is on the verge of arriving.You’d have to be insane to short going into nyc blockchain week amidst an uptrend.Bear market is over. Let the next epic bull run begin.*(Doesn’t necessarily apply to most assets outside of BTC/ETH) https://t.co/Ul97XTjIw0— Ryan Selkis (@twobitidiot) May 11, 2019Ethereum (And Bitcoin Too) Still Looks AppealingDespite all this, Ethereum has remained tantalizing, with the project seeing an array of other bullish developments.For instance, in late-April, rumors revealed that Samsung, one of the world’s largest technology shops, has intentions to build an Ethereum-based blockchain that will host its own token. It isn’t clear what use this asset would hold, but the source suggests that blockchain could be brought to Samsung Pay, the tech giant’s fintech application.In a similar string of news, JP Morgan and Microsoft unveiled a partnership that will see Quorum, the former’s Ethereum-based chain, be implemented into the tech company’s Azure Blockchain Service, thus allowing for the wider adoption of blockchain.And most recently, a “senior official” that has knowledge of the U.S. Commodity Futures Trading Commission (CFTC) claims that the regulator is entirely amicable towards Ethereum. He/she explained that “we can get comfortable with an Ether derivative being under our jurisdiction,” confirming the hearsay that the CFTC’s cousin, the Securities and Exchange Commission (SEC), sees ETH as a non-security. This means that if an exchange like the CME or CFTC requests to launch Ethereum futures, the agency is likely to approve such a proposal.Featured Image from Shutterstock
By CCN: Bitcoin is 2019’s best-performing asset thanks to the massive rise in the price of the cryptocurrency, and a growing chorus on Wall Street proclaims that BTC’s terrific momentum won’t be dying out anytime soon.
“Bitcoin has started to form the spring 2019 bottom we began mentioning last year, although a close look at the chart suggests the recovery may be slightly ahead of itself. Looking ahead, if bitcoin were to continue following the same trend, the implication is a slow climb back toward its all-time high of ~$20,000, theoretically reaching that level in March 2021.”
Canaccord: Data Indicates Rising Demand for BTC
Canaccord analysts based their bullish bitcoin price forecast on key variables that indicate an uptick in demand.
The first is BTC’s daily estimated transaction volume, which has shot up to $801 million so far in May, compared to $743 million in April and $521 million in March. This is the highest daily estimated transaction value of bitcoin since November 2018.
Don’t be surprised if the number goes higher as we are still in the second week of May, and global economic tensions could boost bitcoin demand and price.
In a period where:
—political tensions escalate between US and China,
—global equity markets fall sharply
—VIX largest spike in many months
—global yield curves flatten/invert#bitcoin has RISEN and >$6,000
Crypto showing its value as an uncorrelated asset.
— Thomas Lee (@fundstrat) May 9, 2019
The second parameter Canaccord highlights is the rising number of confirmed transactions per day.
So far this month, the number of confirmed transactions averages 387,000 on a daily basis, compared to 366,000 transactions last month. What’s more, the May figure is a big jump over March 2018 when the number of bitcoin transactions had averaged just 185,000 per day.
Canaccord also noted that the average transaction size, which is calculated by dividing the daily estimated transaction value by the number of confirmed transactions, is at $2,047 thus far in May. This value was nearly 15% lower just a couple of months back.
Institutional Adoption Remains Crucial
Canaccord believes that an uptick in institutional interest in bitcoin remains a crucial catalyst for the price of the flagship cryptocurrency. The research note says:
“Bitcoin’s most compelling case for institutional investors may be as an uncorrelated asset to stocks, bonds, gold and oil, as bitcoin continues to demonstrate low correlation to other asset classes.”
This indicates that wealthy investors could view the digital currency as a solid alternative to other asset classes. Not surprisingly, big institutional players are now willing to making a deeper push into bitcoin.
Fidelity Digital Assets, a subsidiary of asset manager Fidelity Investments that has $2.46 trillion in AUM (assets under management), recently carried out a survey of 411 institutional investors in the US. The survey found out that nearly half of the respondents are comfortable with owning digital assets in their portfolios.
— Fidelity Digital Assets (@DigitalAssets) May 2, 2019
Wall Street’s Crypto Chorus Belts Out a Bullish Anthem
Fidelity and Canaccord are just two voices in Wall Street’s growing chorus of crypto bulls.
Mike Novogratz, a Wall Street executive and the founder of crypto merchant bank Galaxy Digital, expects the bitcoin price hit $10,000 by the end of the year. He also estimates that the market will hit a new all-time high in the next 18 months.
Earlier this month, independent research firm Fundstrat Global Advisors said that bitcoin looks all set for a rally in the second half of the year based on technical indicators. Now that the bitcoin price is well beyond Fundstrat’s $6,000 resistance target, co-founder Tom Lee’s forecast of new all-time highs by 2020 could come true.
Wall Street’s growing interest in cryptocurrency is proof that those who predicted the death of the digital asset at the peak of the crypto winter last year were ridiculously short-sighted. That said, it isn’t too late for the bears to switch teams – there’s still plenty of profit to be made before the bitcoin price breaches $20,000.
Bitcoin’s recent series of upwards surges that have led it towards $7,000 have put the final nail in the coffin for the crypto’s bears and have drastically altered the overall market sentiment for the better.Now, analysts are closely watching to see how altcoins respond to Bitcoin’s recent surge, and many analysts believe that Bitcoin’s rally may begin to cool-off, allowing the overall crypto markets to surge higher.Crypto Markets Surge as Bitcoin Nears Resistance at $7,000 Although the crypto markets have endured a long and dark Crypto Winter, it now appears that Spring has begun, with Bitcoin surging to fresh year-to-date highs and multiple altcoins flashing bullish technical signals.Although the altcoin markets have been caught in a bout of sideways trading ever since Bitcoin began its upwards surge, many cryptos have started climbing higher today, and analysts believe that many alts will soon incur an explosive upwards surge.DonAlt, a popular cryptocurrency trader on Twitter, spoke about this possibility in a recent tweet, explaining that he believes longing various altcoins will be more profitable in the near-term than trying to short BTC.“To all the people trying to snipe the Bitcoin top by shorting it: Have you thought about longing altcoins instead? They’ve been / are capitulating and will very likely explode the moment BTC tops out. There is more money in that than shorting BTC in my opinion,” he explained in a recent tweet.To all the people trying to snipe the Bitcoin top by shorting it:Have you thought about longing altcoins instead? They’ve been / are capitulating and will very likely explode the moment BTC tops out.There is more money in that than shorting BTC in my opinion.— DonAlt (@CryptoDonAlt) May 11, 2019Today, many altcoins have already began breaking out, with Ethereum jumping 10% to its current price of $191, XRP surging over 7% to its current price of $0.322, and Litecoin pumping a whopping 16% to $88.“Altseason” Could Soon Be Upon the Crypto MarketsAlthough today’s gains are certainly positive, they are a far cry from the massive 100%+ gains many altcoins have seen in previous bull markets.Despite this, altseason – the term many investors use to refer to period of parabolic gains for cryptocurrencies excluding Bitcoin – may soon be upon the crypto markets.Josh Rager, another popular cryptocurrency analyst on Twitter, spoke about altseason in a recent tweet, explaining that he is closely watching Bitcoin’s dominance for insight into whether or not a surge in the aggregated crypto markets is imminent.“$ALT Season in the making? – Just watch Bitcoin dominance. Bitcoin dominance dropped 10% to 14% during the monster altcoin runs in 2018. My strategy for buying altcoins is to watch the charts for BTC dominance % to pullback. An alt rally could push BTC % back down near 50%+/-,” he noted.$ALT Season in the making? – Just watch Bitcoin dominanceBitcoin dominance dropped 10% to 14% during the monster altcoin runs in 2018My strategy for buying altcoins is to watch the charts for BTC dominance % to pullbackAn alt rally could push BTC % back down near 50%+/- pic.twitter.com/M3PAoR1QcC— Josh Rager 📈 (@Josh_Rager) May 11, 2019Whether or not the crypto markets are able to sustain their newfound upwards momentum throughout the weekend will likely signal whether they are ready to continue surging higher during the week ahead.Featured image from Shutterstock.
Nothing brings bitcoiners together like a quest peppered with cryptographic clues.
According to Satoshi’s Treasure co-creator Eric Meltzer of Primitive Ventures, so far nearly 60,000 people have signed up for notifications related to the international scavenger hunt for $1 million worth of bitcoin.
On Saturday, at the Magical Crypto Conference in New York, Melzter and the team revealed yet another clue: A series of cryptic images and other hints hidden on business cards distributed at the event.
And, as revealed exclusively to CoinDesk, a group of veteran crypto investors have pledged an undisclosed amount to fund future games and campaigns. These sponsors include Naval Ravikant, Balaji Srinivasan, Mark Pincus, Andrew Lee, IDEO CoLabs Ventures, Nic Carter, Matt Walsh, Meltem Demirors, Li Xiaolai, Jehan Chu and Sam Engelbardt.
“I’d say Satoshi’s Treasure is so exciting because it’s the pure joy of a treasure hunt,” Carter told CoinDesk. “It’s global and anyone can participate.”
Meanwhile, many have formed online teams to collect the 400 key fragments required to move the prize from the game’s bitcoin wallet, Meltzer said. Yet even the dynamics of these teams highlight how bitcoiners are unique compared to other online gaming communities. For example, software engineer John Cantrell cracked the code for one of the first key fragments then promptly detailed on both Twitter and GitHub how he managed to do it.
“For me, it’s really all about education,” Cantrell told CoinDesk.
Since then, Cantrell also joined several teams and created a free tool called Ordo to help teams organize clues and fairly credit contributions to the hunt, which will come in handy for any winning team looking to divvy up the loot.
Cantrell said so far the largest team using Ordo appears to have 600 members.
Another large team, called the Magellan Clan, told CoinDesk via email it has 100 members from 30 countries. It even made a unique token to reward people beyond the team who provide tips.
With so many players flocking to Satoshi’s Treasure, Cantrell isn’t the only one making tools and services for other players.
The 18-person ToshiCiphers clan, for example, has launched a merchandise store for teams looking to make shirts and other swag. ToshiCiphers clan member Devon Kramer told CoinDesk they’ve had four orders for custom shirts so far.
While many players in this game were, like Cantrell, already bitcoin veterans, some gamers have been attracted to Satoshi’s Treasure by the collaborative play, rather than the prize itself. Clues are spread both around the physical world and online, requiring a wide range of skills and languages for teams to be competitive.
“We have a couple of people who are new to cryptocurrency, didn’t know much about blockchain, but they were brought in by the hunt,” Kramer said.
Kramer’s teammate, who goes by Yann, added:
“I think we are playing the first Great game of the Augmented Reality Era.”
Satoshi’s Treasure hunters image via Eric Meltzer
Sending bitcoin transactions without an internet connection just got a little bit easier.
Announced at the Magical Crypto Conference on Saturday in New York City, Blockstream Satellite and goTenna are integrating their technologies to make it easier to send bitcoin transactions with technology used to onboard people without direct internet connections.
Blockstream Satellite is a network of satellites deployed so that people across most of the planet can download a bitcoin full node, the most secure portal to the bitcoin network, even without an internet connection. That is, as long as they have a satellite receiver with Blockstream Satellite’s specific software installed.
goTenna is a startup exploring technology that allows users to connect with others without the internet — to send text messages to others, for example. Instead, they have formed their own “mesh network” for sending messages. The limitation is that a user needs to connect to someone close-by, within a mile, to send a transaction.
As of late last year, the goTenna device also connects to their bitcoin wallet on an Android phone that users can put bitcoin in and then use to send bitcoin transactions without an internet connection – as long as they’re able to connect to another goTenna user that has an internet connection.
goTenna explained in a statement:
“What this means for users is that they will be able to receive blockchain data via a satellite and send signed bitcoin transactions out via the goTenna Mesh network without a direct internet connection.”
“The goTenna app is that it lets you send signed bitcoin transactions over our mesh network. If you’re local provider is censoring you or your connection is down for some reason, maybe due to a natural disaster, you can still get it to the internet,” said goTenna decentralized applications engineer Richard Myers in an interview with CoinDesk, adding that it also provides a more private way of sending bitcoin transactions.
This integration is part of a larger effort to make it easier for people to send offline transactions if they need to. It also makes Blockstream Satellite, which perhaps sounds more like a sci-fi project than a thing that will actually help people, a bit more useful.
“The need for this technology might not be in New York City, but other parts of the world. It could be useful there instead of centralized internet providers,” said Myers, adding that right now, users can send transactions with Blockstream Satellite using other technologies, such as high-frequency radio, but these technologies generally requires “more specialized knowledge.”
This technology gives users one other option that Myers argues is easier. “It lowers the bar for who can do this kind of wizardry,” he said.
Image via goTenna
By CCN: Wall Street loves to compare bitcoin to tulip bulbs and beanie babies, but if the stock market isn’t trapped in a devastating bubble then nothing is.
It’s easy to trash crypto in the wake 2017 ICO frenzy. From peak to trough bitcoin lost around 85 percent of its value in 2018. And bitcoin is generally regarded as the safe haven play in the digital currency landscape. Many small-cap coins lost more than 95 percent of their value; others went bust.
That may, however, be a valuable lesson for anyone keeping a close eye on US equities. Stocks are forming an ominous parabolic curve all too familiar with those who’ve been in the markets for more than just a few years.
Are we in the midst of the next mania? It sure appears that way.
Dissecting a Stock Market Bubble
History is replete with examples of economic bubbles, going all the way back to Tulipmania in 17th-century Holland. A more relevant and recent example can be found in Amazon stock (NASDAQ: AMZN) during the dotcom bubble:
The classic bell curve in all its devastating glory. Amazon’s stock price took a 95 percent hit as the dust subsided in 2001. Where have we seen that kind of loss before? Oh yeah.
Now, ten years after the global financial crisis, Amazon stock once again looks uncomfortably parabolic:
That is one scary-looking chart. Another bell curve in the making? A theoretical drop of 90 percent – a devastatingly bearish outcome, to be sure – would see the stock return to 2012 levels around $200 per share. Ouch.
The Risks Just Keep On a-Comin’
Charlie Bilello notes that, up until May 8, the S&P 500 had never had such one-sided trading in all of recorded history.
— Charlie Bilello (@charliebilello) May 8, 2019
That may be a result of President Trump’s so-called plunge protection team that many have speculated only exists to provide another hit for the stock market’s next desperately-needed fix.
In a world of “free” money, the addict has no choice but to drive the price of paper assets parabolic. Add to that the fact that corporate buybacks are at record highs, and you have a technical and fundamental recipe for disaster.
Hold Your Crypto Horses
Market commentators will point to the sale of unregulated initial coin offerings as the culprit for the downfall of crypto in 2018. The truth is that bitcoin, and to a lesser extent, altcoins have endured several boom-and-bust cycles.
A simple logarithmic chart from 2011 highlights this:
This doesn’t mean you should race to liquidate your traditional portfolio or even worse, amplify your risks by shorting it.
Calling market tops and bottoms is a fool’s game, and only the
most experienced luckiest traders are able to pull it off. That said, cryptocurrency is definitely looking a lot more attractive as an asset class right now.
In fact, billionaire pundit Mike Novogratz of Galaxy Digital believes the bull has returned and has a lot more room to run. So where are we in the crypto bubble cycle? It’s hard to say. This year marks the longest pullback in bitcoin history, but the bottom appears to be in.
When the air escapes from this stock market balloon, it may flow a lot quicker into this new asset class than you anticipate. Crypto has, after all, only captured a tiny fraction of the global economy.
Don’t expect that status quo to last forever.