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HEALTH, WEALTH, AND HAPPINESS |
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| "Leaders in China and India realize that science and technology lead to success and wealth. But many countries in the West graduate students into the unemployment line by teaching skills that were necessary to live in 1950." - Michio Kaku |
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| Chinese Bank Depositors Face Police in Angry Protest(Associated Press): Imagine hearing that your local bank was running into financial trouble, and freezing all withdrawals. It's reportedly happening in the Henan province of China, where hundreds of protestors showed up on Sunday to withdraw their money, only to be violently dispersed by police and plainclothes officers. For blockchain believers, this is a perfect example of why the world needs global digital money that can transcend banks and governments. An estimated $5.9 billion is locked up in the bank, with citizens unable to withdraw their life savings. The Associated Press and BBC News -- both reputable sources -- each have their own accounts of the protest and ensuing conflict. |
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| Photo courtesy Associated Press Investor takeaway: The world didn't pay much attention to the mysterious virus in Wuhan, China back in 2019 until it grew into the Covid-19 pandemic. Could this bank protest lead to similar financial contagion across China and the world? Watch for similar "bank runs" to see if this is a one-off event or the tip of the iceberg. |
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Here's a diagram of the 2008 mortgage crisis, showing how financial contagion spreads across markets, and around the world. |
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| Courtesy Wikipedia
Investor takeaway: The point is that a seemingly small event can be a harbinger of a much larger problem. We've seen this in crypto markets over the last few months, as the collapse of Terra has triggered a domino effect across other platforms and players.
Watch the Chinese banking story closely to see if the financial contagion starts to spread. |
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Hi everyone,
It's now been nearly a month since the last major sell-off in risk assets. Bitcoin and ethereum are giving a good test of support levels at $20,000 and $1000, respectively.
There doesn't seem to be any major news of any new exchanges going bust or locking funds. For the first time in what seems like forever, it's a very boring day in the markets. What a blessing.
If you're reading this, you likely believe in the long-term potential of blockchain and digital assets and that they will continue to rise in value over time. I believe that too, but we first need to establish a floor. |
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Finding the floor
The internet is flooded with technical indicators and armature chartists who claim they can identify where a market bottom will be, but reading a price chart only tells us the past, and nobody can really predict the future. However, that's not to say charts are totally useless.
As someone who's been using computerized price graphs pretty much since online trading was a thing, I would say there are two key bits of information we can gain by looking at any chart.
Number one is what direction the price is trending. As we indicated in the opening statement, for the past month the trend has been flat, though we can't ignore the longer-term charts that are showing some serious downward momentum. Of course, if we zoom out even further, the price has been trending upward pretty much since these assets were invented.
As the saying goes, the trend is your friend until it ends. |
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When does it end??
Though we may not be able to pinpoint an exact bottom, I've heard forecasts as low as $8,000 per bitcoin, but we may have seen the bottom already. Your guess is as good as mine.
The good news is the second bit of info we can glean from any chart, the only real thing that really matters: whether the price is high or low.
Again, this will depend on the time frame you're investing in, but it's easier to determine the longer your time frame is. So, fully zoomed out we're given three data points: where we are now at $20,000, the all-time high at $69,000, and an extreme low forecast of $8,000. It seems pretty apparent where we stand now and what the correct play is. |
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| The outlook only gets better when we realize that the absolute worst-case scenario is probably not extremely likely, and we may just find the floor at any moment.
Stay humble, stay safe, DCA, stack sats and HODL. |
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| Thanks for reading,
Mati Greenspan Analysis, Advisory, Money Management |
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It's not easy falling off the stage. |
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