Critical Resistance
All in good time.
Bitcoin seems to be fully decoupled from the stock market right now. Stonks have to worry about things that Bitcoin doesn't seem to have to worry about. Take the banking contagion for example. It feels like crypto was specifically targeted within the context of a shadow Operation Chokepoint 2.0. Crypto didn't care. The market pumped in spite of losing access to banks. Classic example of the fact that crypto is its own decentralized banking solution.
As more evidence comes out about Signature bank it appears a greater likelihood that crypto is indeed being targeted. Signature bank was just recently bought out by Flagstar, but Flagstar will not accept any of the liability from $4B worth of crypto deposits, even though they are buying out $38.4 billion worth of other assets. Seems odd, does it not? Rather than being accepted by Flagstar, those depositors will simply be made whole via FDIC and have to find another banking solution (if they can find it).
The greed index is higher than ever.
People are rooting for the banks to fail because they see a correlation between bank failures and number going up. I'm not so sure this is actually what's going on. A lot of these banks were crypto banks... so if you are a crypto company with money tied up in these banks... where are you going to put your money now that these banks are no longer affiliated with crypto? Probably into Bitcoin, right? This banking contagion could be a one-off event that doesn't escalate further like many assume it will. Of course I'd like to be wrong and instead come to find that legitimate adoption of crypto occurs within the eye of the hurricane. That would be pretty cool.
Breaking below $30k was a crucial breakdown when considering this bear market. This happened in summer 2022 when 3AC and UST were collapsing to zero from insolvency. Foolishly I once again put my faith in the doubling-curve "support", which I have subsequently downgraded to the doubling-curve "trendline". At the time this line was at $30k, but today it towers above $60k.
The curve works very well as support as long as the legacy economy is doing well, but tends to break down when shit hits the fan like COVID, supply disruptions, proxy wars, sanctions, and the FED increasing rates faster than ever before. Live & Learn.
Peaks and troughs
We can clearly see that the $30k line might be a trough just like the FTX contagion. If we're being honest the FTX contagion should have turned out much worse than it did. We got off easy, as the market was already scraping rocks at that level. I expect the same thing to happen on a macro level with this $30k resistance line. Once we get above $30k the market will pump hard all over again, although it could take a while for that to happen just like it took us a month to crack through $25k.
FOMC meeting tomorrow
In 24 hours the mighty Powell will tell us the magic number that the fund rate will be manipulated. All guesses are centered around +0 points and +25 points. +0 was favored in the middle of the banking contagion, but now that the backstops are in place and the situation seems more handled the guesses are centered around a quarter percent increase. The broken backstop that allows banks to borrow against their own failed investments at full value would theoretically allow this to happen without the contagion spreading.
Personally I don't think it matters what the FED does anymore, but I guess we are going to find out tomorrow what kind of short term chop we can expect. Fund rate go down: market rips and FED loses credibility. Fund rate go up: banks struggle even more and people have even more reason to enter Bitcoin. It might be a win/win at this point. The FED is finally trapped within their own web. Especially true considerin more than half of the hikes haven't even cycled through the economy yet as this requires 9-12 months.
Seeing that today is the New Moon and 25 points is likely and the greed index is high and we are sitting on resistance... I have to assume Bitcoin will crash to $25k and confirm support at that once 'uncrackable' resistance line. That would be a very healthy confirmation.
We can also infer from a move like this that Hive would crash another 10% as well, hopefully confirming 37 cent support but there is a strong buffer all the way down to 35.
As if the situation wasn't crazy enough, XRP has spiked 20% today.
This is the signal we've been waiting for. Does someone know something? Is this insider trading? Is Ripple going to win the lawsuit against the SEC and catapult the entire cryptoverse into a massive 3-month mega-rally? Definitely could happen.
Imagining the best case scenario...
What happens if:
- the banks continue to collapse and more money pours into Bitcoin?
- Ripple wins the lawsuit?
- the FED pauses or even lowers the fund rate?
As I've posited before, we are on the precipice of a perfect storm for crypto. Even if the doubling-curve trendline is acting as resistance right now BTC could still spike up to $70k in the summer before retracing. How wild would that be? It's hard to imagine, and yet if the doubling curve is the metric we are trusting it that wouldn't even be the bullish scenario; simply a return to the mean average. Wild.
What about CBDC?
What about it? Again as I've stated before time and time again: CBDC empowers the crypto narrative. For years the narrative has been that crypto is worthless and that we should just trust the banks. Now people know they can't trust the banks. They said crypto was for criminals. Now they know crypto is for everyone. They said crypto "wastes resources". Democrats are still struggling with this latest piece of woke ESG propaganda, but they'll figure out that it's bullshit as well eventually.
If CBDC becomes a thing the narrative suddenly becomes: yeah we were lying the entire time crypto actually does have value. That's not a bad thing. We should cheer when that happens, but again it's not going to happen because it undercuts the entire retail banking sector. JP Morgan and Bank of America will not let CBDC happen... the only way it can happen is if the entire retail banking sector implodes with no way to salvage it. Not saying it can't happen but I feel like the chances are pretty slim considering the circumstances. They haven't even tried bail-ins yet.
Conclusion
There's a lot going down in crypto and we are living through an exciting time in history. The foundation of the entire banking sector is showing cracks and faith in Bitcoin is just as high today as it was at $69k. Probably higher honestly. "Chancellor on the Brink" is a much stronger argument than "laser eyes".
In the short term we should expect pretty high volatility starting tomorrow. Most likely a dump that hopefully settles around the previous resistance at $25k over the next few weeks. However, I still think there may be like a 20% chance that the hyper-bullish scenario plays out and we crack this $30k resistance without even trying. It's a glass ceiling just waiting to be shattered either way. Only a matter of time now. Doesn't really matter if we have to wait another month.
The ultimate play is still conservative with a wait-and-see attitude. All signs point to a summer rally and a repeat of the 2019 four-year cycle. Be mindful of BTC dominance. There's a very solid chance BTC will continue to outperform for the rest of the year. Hopefully alts can catch a bid but no promises. BTC stronk.
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Thank you for this, the market further solidifies the dominance of cryptocurrency as a currency here to stay.
We're hopeful for positive performances and yes, BTC has a dominant role in crypto space
Well said. Hard to think what other cards they might have their sleeves, other than pushing everyone over the edge by continuing to hike rates...?
After all,isnt the end game that:
(At least we own some crypto ;))
The WEF's goals and the FED's goals do not necessarily align.
Powell has a lot of powerful people to answer to.
Politics would not allow them to keep raising rates during complete implosion.
We'd need even more ninja bailouts to occur... which is again good for crypto.
the Hive pump & dumps are honestly just a nightmare. Probably scaring away quite a few. The only solution I see is that we all move to South Korea and apply for citizenship there so we can trade on Upbit and move Hive off of there :/
Ha well if more people simply had steady hands and were willing to dump into the pumps and defend obvious support lines we'd be just fine. Surprisingly few actually do this. No matter how much number pumps most will want it to pump more. When people do end up finally selling it's not to defend a support line but to cash out and actually buy something.
Creating a market-making trading bot that anyone could use would be a good start, but no one has a financial incentive to build such a thing because they'd be inviting competition in to nerf their own gains.
good point, and yes it's definitely market psychology at play which is super hard to overcome.
that's super interesting. Not sure how to solve the problem underlying it
Could be developed by a bad-ass open source dev or simply funded by the @hive.fund out of pocket.
Honestly bots like this already exist as Hive already has market makers.
The trick is watering one down for mass consumption.
It would also be possible to do a lot of this on the internal market.
I've always thought the idea of Swarm Intelligence (perhaps even paired with AI) would work.
At the end of the day it's simply a matter of consensus.
Where should we place bids and asks and for how much?
This is the only question that needs to be answered.
Users can place the orders themselves or with a super simple bot.
well we already know when these pumps happen: virtually all of them happen at 00 UTC.
We could then calculate the average of these pumps (a difference seems to be "mini" pumps with max 20% and the others big ones with 40%+) and place the sell order there, the rebuys are basically always at the start of the pumps. It actually seems very straightforward
Interesting conversation. An innovative way to dis-incentivise non value add extraction from the community. There is a good chance that trying this actually loses the ppl doing it profits when the issue is resolved, profits that ppl who didn’t contribute to the effort will gain. But the ppl contributing to such an effort would be well appreciated if it reduced incentives for pumps and drops that make the rest of the community loook like the play thing of a small faction of a community that has quite well isolated itself from the rest of the market… discuss further?
https://peakd.com/@edicted/venti-20-point-crypto-trading-system-explained
Ultimately what needs to happen is that I actually get to work and built the shit that I've been talking about for years. But honestly some of my ideas... like this one (Venti Trading System) get better and better as infrastructure improves.
I would have never dreamed of making such a thing using the Hive/HBD internal market back when I wrote this... but now it seems like the obvious thing to do because all the data is on-chain and the internal market actually has volume now.
I've been trying to get back into the grind and continue working on MySQL database but it's been damn near two years and I'm dreading how rusty I am. Perhaps I need to pay for an AI subscription that can bootstrap my coding ability. Is there one specifically for programming?
Are unaware that a layer two JavaScript smart contract system that could do this autonomously is about to be released?… I can t say much more, but all in good time
ChatGPT4 is what you need.
Swarm intelligence will be good, many will be able to learn and if it works in keeping hive price healthy then by all means bring it on.
Is that greed indicator for cryptocurrencies dealing with hive? I use the same indicator for equities, but the warren buffett one. Good work my friend
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the market is unstable right now I think there will be a correction
I think this reveals that you do understand the pretty lines on charts aren't actual resistance or support, but that they represent very real things for which they are a proxy, such as the various actual things you mention were more meaningful than the line on the chart.
The lines on charts are useful if you understand they are proxies for actual things that influence value.
Thanks!
Many more alts will follow suit with XRP. Most of them are close to 90% down and that's about to change. Once the BTC.D starts falling. It looks like peaking to me...
When i watched JP Morgan's presentation in Frankfurt, they seem to be investing heavily in ETH and Oracle like services. I presume so they can provide hypothecated crypto lending in the future. I cannot see that they have any interest in CBDCs being promoted by central banks. Is there a real conflict of interest between central and commercial banks? I thought they were all frens?!
There are too many circumstances that are having a direct and undirect impact on the financial and cryptographic markets right now. The banking crisis and the Fed's measures, for example, are the perfect breeding ground for the paradigm shift implied by cryptocurrencies to be generated at a deep level; at least the way I see it. So, the total bull run is close, much more that we really think.
And talking specifically about Bitcoin, I think BTC will continue to rise in price for the rest of 2023, but with erratic fluctuations; and the maximum level to which exactly it will end up rising this year... Well, I don't know, but it's practically certain that it will rise in price.
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little dip at FOMC 25 percent point raise. Market expected 0.