Bitcoin A Leading Risk Asset
July 7, 2021
July 7, 2021
Back on May 8, 2020, Contrary Thinker stated that “… Bitcoin is a risk asset and leads the stock market direction. It is not a hedge.”
While the coin supply is controlled, everyone is a crypto coin miner, creating new digital assets. So Bitcoin is a brand like Coke or Kleenex and a leader, but many, many, many more on the market and many on the way.
The sentiment is over the moon on BTC. Calling for $50,000.
Yes, he is truly one of my heroes; someone I have met publically says he is buying the coin. I have heard all his calls going back to the 1980s, like the passive short on a head and shoulders on the Swiss franc, which was a disaster. Like I have said before, I never take his public ideas seriously, only his methods, which I have studied.
The BTC was an s dream come true, turning pennies into thousands, and sure if it happened recently, it can happen again if it was just that easy.
The public seems to be an enthusiastic buyer, so the “pool” of liquidity is set up will buy dips, and TPJ will be a seller and a short seller.
At the peak in April 2021, Contrary Thinker was unequivocal when I said ”
Volatility Report of 4/16/21 did not mix words when it said, “The volatility background provides a setup for a 30% to an 80% fall in the next 30 to 45 days.” With follow up headlines on 4/26/21:
Today the hammer is about to fall. Here July 8, 2021, the picture looks like the other shoe is about to drop.
The weekly chart on the left is used alongside its data window so traders can see the support price levels below the close on Wednesday. After being turned away from the Gann descending trend line, prices are testing the high side of Long Term Support. One can see the sequence of levels that would act as a set of dominos with the ultimate target of the high teens, just under $20,000, where the panic buying started. From our point of view, that price would only be a temporary support level, if at all.
The volatility model – TEM- the I-T with a monthly outlook is working on TE#2, which supports more trends. Furthermore, the S-T chart, the daily bar, is on a new TE#2, with %C spiking it too calls for a pro-directional move. Hence, once they begin to fall, the dominoes mentioned above should pick up the rate of change until there is a new event generated by TEM.
I understand how some advisors, capital managers, and investors may become “spooked” when Astrology is used in anything. They relate that discipline to Sunday’s paper with the sun sign forecast for the week or their wife’s copy of Vanity Fair, where she tells you how good or bad a month she is expecting based on her reading. Well, I understand, and nothing is as simple as looking at Sun signs.
What has been uncovered are correlations between certain astrological and astronomic events and market activity. Bitcoin is a good example of a dream come true for the few who own it for pennies. However, once you put aside the greed such a dream evokes, there are no rational reasons behind its explosive advance. Rather it’s been a ghost of a reason that can be seen when the Neptune is known for its hallucinatory effect. The following chart pointed to periods when Neptune was in direct motion fostering the illusion of Bitcoin.
I also highlighted when Neptune goes in retrograde, a period when the illusions are stripped away, and reality becomes clear. These periods have helped provide clear reasons to get out of the “risk assets.” when Mercury – the great communicator – is in aspect to Neptune, as the current situation. It is the same as October/November 2018 for the collapse to $4,000.
The bottom line is if you have the capital to short the futures, that is the play. Last I heard, the margin is the same as the market value. So not much leverage there.
p.s. the peak in mid-April is foreshadowing the decline in the US stock markets.
Fed Chair Powell: ‘Crypto is substitute for gold not U.S. dollar’
(Kitco News) – Leading global central banks, including the Federal Reserve, said that they are not threatened by the growing advancement of digital currencies and stable coins.
Monday, speaking in a panel discussion at the Bank for International Settlements (BIS) Innovation Summit, Federal Reserve Chair Jerome Powell dismissed bitcoin‘s role as a global currency, saying that it is too volatile for consumers.
Powell described bitcoin as a speculative asset that is not backed by anything.
“Crypto assets are highly volatile and therefore not useful as a store of value,” he said. “It is a speculative asset that is essentially a substitute for gold rather than for the dollar.”
Great and Many Thanks,
Jack F. Cahn, CMT
A Thinking Man’s Trader Since 1989,
Capital Managers and Professional Investment Advisors visit www.ContraryThinker.com.
Contrary Thinker 1775 E Palm Canyon Drive, Suite 110- box 176 Palm Springs, CA 92264 USA. 800-618-3820
or 25/1 Poinsettia Court Mooloolaba, QLD Australia 4557 614-2811-9889
— Contrary Thinker does not assume the risk of its clients’ trading futures and offers no warranties expressed or implied. The opinions expressed here are my own and grounded in sources I believe to be reliable but not guaranteed.
— Pricing is subject to change without notice. My indicators and strategies can be withdrawn for private use without notice, at any time.
Trading futures and options involve the risk of loss. Please consider carefully whether futures or options are appropriate to your financial situation. Use only risk capital when trading futures or options.