Looks like Bitcoin is still gonna head down

Charlie5277

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Earlier today, I was hoping that Bitcoin was gonna turn around, and start rising. Here's the graph I was looking at:

1643604597620.jpeg

See that red arrow? If the pink trace had continued and broken through the red resistance bar, it would have indicated a change in the fundamental pattern, and we could have expected Bitcoin to start climbing.

Sadly, that did not happen; it bounced off the red resistance bar, and continued its fall. So, no immediate end to the bitcoin woes appears to be in the cards. By the way, all these prices are Canadian dollars, so don't let that throw you.

Sigh. Color me disgusted. >Charlie
 

Segfault

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Nope, from what I understand big boys have been quietly selling it for a few months now, while advertising bitcoin as safe heaven in Youtube and elsewhere. It was pumped up for Christmas and Superbowl, these are events when people get together and spread information - how they are making money with bitcoin. They are not making money with bitcoin, not before they sell it with profit. The value of bitcoin depends on buyers, more buying - higher the value. This is a Ponzi scheme, making bitcoin highly speculative asset. Safe heaven is something entirely different. Today BC fell what, 7% in space of 20 hours? Safe heaven my foot. Since big players keep selling one day the advertising will end, new buyers won't come in and it will crash big time. I'm no oracle obviously, but I wouldn't be surprised if it falls under $10k soon.
 

cdabc123

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The low was the covid dump right? Is the next high/low the russia situation most likely?
No the low was a continues stagnation and downward trend over time not a event or anything like that. Then it went up again lol.

Crypto is small enough to be manipulated and will continue to be manipulated.

Go grab a 5x margin btc vs eth position for fun. (You have to pick the direction ;) )
 

Andrew_Carr

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I really wanted to short Luna the other day but the exchange wanted KYC for deposits... Long-term I don't see the fed seriously tackling inflation, but in the meantime I guess they're going to try their best to look like they're doing something and it'll be bad for all markets.
 

Zedicus

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No the low was a continues stagnation and downward trend over time not a event or anything like that. Then it went up again lol.

Crypto is small enough to be manipulated and will continue to be manipulated.

Go grab a 5x margin btc vs eth position for fun. (You have to pick the direction ;) )
All the markets are manipulated regularly. Realestate, stocks, oil, currency, you name it.. Just enjoy the ride.
 

cjcox

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The only people that "have it" are the ones at the top of pyramid (when it started).

Everybody else just rides....
 

applegrcoug

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I really wanted to short Luna the other day but the exchange wanted KYC for deposits... Long-term I don't see the fed seriously tackling inflation, but in the meantime I guess they're going to try their best to look like they're doing something and it'll be bad for all markets.

I tend to agree. I was listening to John Cochrane talk about this several months ago. He theorized that the fed does not have the political fortitude like it had under Voelker during the early 1980's. Under Voelker, the way to tackle inflation is to jack up interest rates and slow the economy.

Furthermore, as it stands right now, inflation with low interest rates is good for the federal budget. With a Federal debt of $30.5 trillion, at 2% interest, we are looking at $600 billion. If all of a sudden the interest rate just moves to 8% it is over $2.4 trillion. In 1981, it surged to 21%. If that were to happen again, interest on the debt would exceed tax collections by over $2 trillion. High inflation is good for borrowers...it inflates away the debt. I just don't see how the Fed can deal with inflation.
 

LukeTbk

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With a Federal debt of $30.5 trillion, at 2% interest, we are looking at $600 billion. If all of a sudden the interest rate just moves to 8% it is over $2.4 trillion.
Why would a sudden change like that affect/change the rate of old debt, are recent government debt inflation protected ?

A sudden rise of interest rate could destroy the value of older bond and make them cheap to rebuy I think.
 

applegrcoug

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Why would a sudden change like that affect/change the rate of old debt, are recent government debt inflation protected ?

A sudden rise of interest rate could destroy the value of older bond and make them cheap to rebuy I think.
I am not aware of bonds that are inflation protected. Inflation is usually priced into the interest rate. US treasuries are usually pretty short term, so quite beholden to short term interest rates. Yellen had a glorious opportunity to restructure US debt to long term bonds or even perpetuities and lock in the low rates...whoops.

The Feds qualitative tightening will only hurt the budget more. They said they plan to sell, what, $90 billion a month. That is a bunch more treasuries the treasury will have to pay interest on.
 

Charlie5277

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Earlier today, I was hoping that Bitcoin was gonna turn around, and start rising. Here's the graph I was looking at:

View attachment 438763
Exactly what is represented in this chart?

Hey, Verge... This is Bitcoin price action over time, with Bitcoin price in the vertical axis and time in the horizontal axis. The time frame of the graph is one month. It's worth noting that I posted this back on January 30, so any meaning that can be extracted from this graph is of historical interest only.

Since posting this, the market has been struck with multiple events which were unforeseen at the time. I am now concerned that Bitcoin has the possibility - not the certainty, but the possibility - of plunging to the $10,000 USD level. If this happens, it will completely change the cryptocurrency market, and I would expect that there will be multiple major losses as the shock ripples through the community. Not every coin or company will survive.

For a start, power is much more expensive in Europe, Great Britain and the Phillipines. If BC drops to $10K USD, it will no longer be economic to mine the coin in those locations; this will lead to a significant drop in the installed hash rate.

40% of the worlds grain supply is produced by two countries: Russia and Ukraine. Production in Ukraine is essentially halted, and global sanctions against Russia limit the availability of grain sales. Exacerbating this shortage is the fact that last year was a poor harvest globally, so the price and availability of grain is already under stress. This will drive the price of grain in the next six months to record highs, well beyond the ability of the poorest countries to purchase grain. Those people will starve. We know that, historically, people always fight before they starve to death; starvation is a potent conflict driver. So we should expect a significant increase in global conflict, particularly in Africa, Iran, Madagascar, and the oil-poor areas of the middle east.

During the global pandemic, many countries made it illegal for workers to work for a time, and provided 'free' cash awards to enable those workers to make essential payments. They did this by basically increasing the money supply; they printed more money, so there were more pieces of paper chasing the same National net worth. This significantly decreased the value of each dollar, which we are now experiencing as inflation. Each dollar is worth less, so it takes more dollars to purchase the same goods. Exacerbating this problem is the problem of supply chain disruptions, which have resulted in temporary shortages of specific items, thus driving up the price of those items; and of course the Russia/Ukraine conflict. As we are all now aware, much of the worlds natural gas and oil comes from Russia, and with sanctions hampering the sale of those products, the price of those products has risen dramatically. The best forecasts suggest that the conflict will carry on for all of 2022 and well into 2023, so there will be no quick relief. In addition, even after military action has ceased, the sanctions will likely continue.

In rich countries such as the USA and Canada, we are experiencing this as strong inflation. The Governments response has been to raise interest rates; this will raise mortgage prices, loan rates, even interest rates on credit cards. This is done as a result of the assumption that inflation is the result of an 'overheated' economy, and that raising interest rates will cool the economy down.

However, this inflation is not happening as a result of an overheated economy; it is happening as a result of a genuine market shortage of many items. We all know that when demand exceeds supply, the price of an in demand good rises. A secondary driver is that, during the pandemic, many countries printed billions - even trillions - of dollars to combat the joblessness resulting from the pandemic. That is now contributing to inflation. More pieces of paper chasing the same National net worth.

So, in addition to being required to pay MUCH more for essential items - such as heating and auto fuel, and food - we are also now being called upon to pay more for our mortgages and loans, expenses which - to this point - had not been impacted by the pandemic and the war.

The result of this is that we all have much less money in our pocket, and may indeed be living in debt. Personally, I know I'm eating much more mac and cheese, and a lot less hamburger. (And I stocked up; the coming grain shortage is going to drive pasta costs through the roof.)

How does this impact bitcoin?

Well, even the most diehard HODLers will sell their bitcoin at depressed market rates, when the alternative is to lose their home or watch their children starve. An economy that is suffering from the twin effects of decreased product availability, and high inflation is not an economy that will foster high prices of anything; not Apple stock, not Tesla stock, not Bitcoin. We're entering a very, very difficult time.

(And I will insert a small additional factor into this missive that doesn't really fit anywhere else, but it annoys me: to this point, over one million Americans have died of Covid. Newscasts are complaining that employers are having to raise salaries, because companies can't get people to return to work. Listen, when you pull one million people out of the work force, of COURSE it's going to have an effect. People aren't failing to come back to work because they're lazy; they're failing to come back to work, because they're dead. Sheesh.)

And so I will close this little diatribe with a small request: Take a look at the following picture... and tell me, where do YOU see the next price support for Bitcoin? Because I don't see anything but open air. Remember when the Coyote would chase the Roadrunner, and inadvertently run off the cliff? He'd float there for a moment, looking very sad... and then he'd fall like as rock. Well, that's us. We're the Coyote, and we're off the cliff... and hovering.

And it's a helluva long ways down.

>Charlie

1652677879404.jpeg
 

funkydmunky

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Earlier today, I was hoping that Bitcoin was gonna turn around, and start rising. Here's the graph I was looking at:

View attachment 438763
See that red arrow? If the pink trace had continued and broken through the red resistance bar, it would have indicated a change in the fundamental pattern, and we could have expected Bitcoin to start climbing.

Sadly, that did not happen; it bounced off the red resistance bar, and continued its fall. So, no immediate end to the bitcoin woes appears to be in the cards. By the way, all these prices are Canadian dollars, so don't let that throw you.

Sigh. Color me disgusted. >Charlie
Crypto? Graphs? If there was a scheduled or guaranteed trend we would all be billionaires, ya?
Yes there is some mertics to historical graphs but.. we aren't in that world. It is being redefind by the day. History unfortunately means little when you are having so many obvious power grabs that manipulate everything in every market. We are in WW3 yet no one will admit it. Pretend food shortage next. How will that affect the markets?
 

Andrew_Carr

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Why would a sudden change like that affect/change the rate of old debt, are recent government debt inflation protected ?

A sudden rise of interest rate could destroy the value of older bond and make them cheap to rebuy I think.

My understanding is that old debt (like if you borrowed to repay a house for 30 years and locked in low rates) effectively doesn't exist for federal debt because everything is re-priced around new interest rates after 6-12 months max or so. So it's not like increasing interest rates only affect new government debt going forward.
 

applegrcoug

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40% of the worlds grain supply is produced by two countries: Russia and Ukraine. Production in Ukraine is essentially halted, and global sanctions against Russia limit the availability of grain sales. Exacerbating this shortage is the fact that last year was a poor harvest globally, so the price and availability of grain is already under stress. This will drive the price of grain in the next six months to record highs, well beyond the ability of the poorest countries to purchase grain. Those people will starve. We know that, historically, people always fight before they starve to death; starvation is a potent conflict driver. So we should expect a significant increase in global conflict, particularly in Africa, Iran, Madagascar, and the oil-poor areas of the middle east.

While I'm not sure about the 40%...perhaps 40% of exported grain comes from those countries?

BUT, It is potentially even worse than that...

Nearly all of Russian exported wheat travels through the Black Sea. That is now a war zone. So let's say a country like Egypt (a historical large customer of Russian grain) wants to continue purchasing Russian grain. LoL (or any sane underwriter) will not underwrite any ship traveling into a war zone. Sanction or not, Russian grain exports are dead.

Then, it still isn't bad enough. Nearly all potassium based fertilizers are a product of Russia. Nitrogen based fertilizers are a product of natural gas refinement. I can tell you as someone in ag, that the price of N based fertilizer is 2x what it was a year ago. That makes it not economical for many to farm in a lot of situations. It is perfectly rational to expect a contraction in food production from everywhere else. Oh, and this is before nature even causes a flood or drought.

Case in point, here, in the PNW, it has been unseasonably cold. While not a major source of calories, if you are a lover of sweet cherries, they are going to be rare. The crop has been decimated. Apples and pears also look to be impacted. All three of these crops rely on honey bees to cross pollinate. Many of the bee hives are coming out of the orchards with completely dead colonies because they have starved; it has just been too cold for them to forage. I have no clue how this cold has impacted the Palouse region which is an extremely productive grain region. Nearly all the wheat grown there is for Asian export. Another large weather event in the NA mid-west could spell doom.

The situation for some large famines in Africa and Asia is a definite regality. The Arab Spring was set off by food riots smaller than what we are going to see soon.
 
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Charlie5277

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AppleGrCoug... Yes, yes, and yes. I was a bit off on my grain estimate; think I confused it with Russian oil exports. It's actually 32%, which is still awfully bad. Basically, 1/3rd of the worlds wheat comes from Russia or Ukraine. I didn't even get into fertilizer manufacture or distribution, but you're entirely correct. Fertilizer costs have soared, and many countries cannot afford to purchase it. Nor can they do without it. Do country leaders want to bankrupt the economy, or starve the people? It's an impossible choice. I hadn't heard the the PNW was experiencing screwy weather this year; I remember last years heat dome, and triple digit temps (in Seattle, fer heavens sake!). I've been following the California drought; we're going to see huge crop failures there.

Your comments about shipping out of the Crimean Peninsula are entirely correct, and well worth mentioning. Add to that the fact that most logistics providers (shipping companies) won't do business with Russia due to sanctions. So, even if the ports became active, the shipping providers won't deal with Russia.

Basically, the world is going to hell, in a hundred different ways, and all at once. We're headed for a recession that is going to make 2008 look like a tea party. Maybe even a medium sized war, if we get even less lucky than we've been. But none of this argues for happy prices on bitcoin, or any of the other cryptocurrencies. Back in January, when all we had to deal with was recovering from Covid, I thought we'd be getting back up on top of the wave by April. But with the Ukraine war and rising interest rates in the mix, I've basically written 2022 off. This is not a time to thrive; this is a time to survive. Thanks for your thoughtful comments. Well done. >Charlie
 
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LukeTbk

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My understanding is that old debt (like if you borrowed to repay a house for 30 years and locked in low rates) effectively doesn't exist for federal debt because everything is re-priced around new interest rates after 6-12 months max or so. So it's not like increasing interest rates only affect new government debt going forward.
I imagine it depend from government to government, in Canada provincial debt is 60%+ more than 5 year's with a significant amount 26-50 year's, maybe the rollover of old debt that need to be baid pack and refinanced make it a mute point, in 2005 the average interest rate paid on the debt was still above 6% while interest rate were much lower for quite a time because of that lagging effect (new 10 years bond were at 4%).

And there is a proportion of the debt that a government entity do not necessarily pay interest on right away, like employees future pensions that have yet to retire.
 

LukeTbk

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I am not aware of bonds that are inflation protected. Inflation is usually priced into the interest rate. US treasuries are usually pretty short term, so quite beholden to short term interest rates. Yellen had a glorious opportunity to restructure US debt to long term bonds or even perpetuities and lock in the low rates...whoops.

The Feds qualitative tightening will only hurt the budget more. They said they plan to sell, what, $90 billion a month. That is a bunch more treasuries the treasury will have to pay interest on.
https://www.bis.org/publ/r_qt0011f.pdf

In 1999, 72% of treasury were long term

treasuries_outstandinglrg.png
 

vegeta535

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I don't care what digital currency does now. I have $400 left in Bitcoin and I am just going to let it sit.
 

whitesand

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The downward trend of Bitcoin and most other cryptocurrencies is likely to continue for a while. However, I expect prices to recover towards the end of this year or in the course of next year.

That being said, everyone should be aware that investing in crypto can be risky. So you shouldn't put money into it that you can't afford to lose in the worst case scenario.
 

Dreamerbydesign

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Thats a hard drop today....

Lost 24% in three days. The largest loss in that amount of time. Ouch.
 
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It seems like Bitcoin hit a "support level" of around $20,000. Every time it dips below that, it quickly recovers.

You have to wonder if there are some big Wall St interests who are trying to keep the value propped up above 20K. There are a lot of big companies like Square/Tesla/Microstrategy who have Bitcoin on their balance sheets, and it would probably be bad for the economy in general if they were to get in serious debt trouble.
 

techie81

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It seems like Bitcoin hit a "support level" of around $20,000. Every time it dips below that, it quickly recovers.

You have to wonder if there are some big Wall St interests who are trying to keep the value propped up above 20K. There are a lot of big companies like Square/Tesla/Microstrategy who have Bitcoin on their balance sheets, and it would probably be bad for the economy in general if they were to get in serious debt trouble.
100%
 

NukeDukem

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If $20k was support, it has been broken.

$18.8k and dropping right now.

The everything bubble is bursting. With the Fed FINALLY beginning to do their job, the free money ride is over. Good luck.
 

Verge

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If $20k was support, it has been broken.

$18.8k and dropping right now.

The everything bubble is bursting. With the Fed FINALLY beginning to do their job, the free money ride is over. Good luck.
17.8k now lol
 
D

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I think it will settle somewhere around 16K and come back up slowly. I have dabbled in crypto investments, by no means am I an expert on them, and I don't mess with them anymore. Way too volatile for me. You can time it right and get rich, time it wrong and go broke, or time it so-so like I did and get out roughly even.
 

pututu

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From a technical chartist point of view, there is no support around the current price. There is a strong price support around $10,000ish and below other than the spike in Dec 2017. Still early to say if the current price is convincingly piercing the Dec 2017 high (~$20,000) or will it bounce back above that level. As always only time will tell.

Disclaimer: this is not a financial advice.

1655589611455.png
 
D

Deleted member 289973

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From a technical chartist point of view, there is no support around the current price. There is a strong price support around $10,000ish and below other than the spike in Dec 2017. Still early to say if the current price is convincingly piercing the Dec 2017 high (~$20,000) or will it bounce back above that level. As always only time will tell.

Disclaimer: this is not a financial advice.

View attachment 484306
How can you look at a chart and see support levels? Not criticizing your statement but genuinely asking. It might be difficult to see on the chart above since it's so scaled out.
But on the topic of price speculation, I doubt it's going to fall below 10K unless the economy as a whole completely collapses or shuts down like it did in March 2020. I think it has the backing of too many people and companies for it to go bust, but who knows. I could be wrong.
 
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