BTCUSD Daily on Bitstamp

As always we start with a snapshot of where we are. #BTC is trading at 10159 as of press time after dropping suddenly overnight from the 10800 area.

We are trading into a tightening wedge which does not show many technical indicators as to what direction it will take next, apart from the overall aparent trend from the March lows.

We have seen local highs in the 12300's and lows in the 9400's. That is quite a wide range (top to bottom ~23%), so we can say that recent volatility is reasonable. But it has tempered somewhat in the last few days.

I see a wedge pattern as I said; the lows of which can be connected all the way back to the April breakout.

The 3 highs since the end June high connect nicely as well.

The intersection of these comes to a head in mid Sept. Before then, Bitcoin will have to choose a direction within the next 3 weeks.

Geopolitically and Geoeconomically, I lean toward a breakout. A continuation of the bull trend. Breaking the local high of the 12300's top and surging to challenge the 13800's

This would be consistent with the belief that we will be challenging ATH's, of the 20k levels by year end.

A bearish scenario would be justified and grounded in the belief that we still have too much capital in dead alts. This theory could only be reconciled if there is a last rotation, or flush if you may, out of all moribund and comatose alts.

This theory is not necessarily directly bearish for Bitcoin itself since the rotation will most likely go through BTC. But the dead alt holders may not be happy to languish in BTC and go on to dump it onto exchanges for fiat as well.

This theory can be also pushed by speculators who bridge the traditional markets and cryptos. In an traditional market crash, these players may be also liquidating cryptos to cover bets elsewhere.

In this bearish case, a visit to 6k is not hard to imagine. Though to be sure, those with conviction will be aggressive bidders at these levels.

What do you think?

Context

Context is king. The globe has never been as financially interconnected as today. But the business cycle is far from banished by central banks.

Some could convincingly justify that central banks have exacerbated the business cycle by holding back the natural corrective cycles for so long (almost 20y).

It is requiring an increasing willful ignorance to continue to claim the global economy is doing great. Only MSM journalists are able, mainly because their pay checks depend on it.

Politicians are speaking out of both sides of their mouths as they try to maintain confidence in the masses, while also hedging their reputations for what comes after the crash.

The indicators showing that "all is fine" are now a precious few lagging indicators which the MSM will continue to jawbone till the ceiling caves in on them. The orchestra on the titanic is a good metaphor.

In economics, the significance of an event is measured in the statistical term SIGMA. A 4 sigma event is statistically likely to only happen approximately once every 63 years, but there have been at least 10 such events in the bond market just this month. The BOND market. One of the most liquid and foundational elements of our current financial system. This alone is indicating something is amiss. link

Indicators pointing at abnormal behaviour in our financial system are piling up. the MSM is desperate to distract you from looking at them.

Do you agree with this thesis?

Conviction

Why do so many suffer from FOMO and FUD? It is conviction that they lack.

Speculation vs Investment can be delineated by the depth of conviction one has in the underlying asset.

Speculators gamble (and it is an educated type of gambling, not dissimilar to horse racing) on the market sentiment in short to medium time frames. The underlying asset is of secondary importance to them as long as liquidity is present. So their conviction is in market sentiment and in the presence of liquidity.

Investing, on the other hand, is all about conviction in the underlying asset. The belief that your chosen asset has good fundamentals and is positioned favorably to grow in value, in the future you predict is most likely to occur.

I am by no means a seasoned investor or speculator, but I do have enough experience to know the difference between the Speculation and Investing, and to understand the difference each one demands, in the form of research.

Bitcoin (and to a certain degree, a select few alts) is on the whole, an investment play. Its abstract and novel structure offers an alternative bet on the future of monetary architecture. And a colossal bet this is. No less than the cornerstone of our global society.

Sadly the hype, and its abstract nature, has held many back from truly grasping #Bitcoin's potential. And hype it has gained! it is arguably the most attractive asymmetrical assets around.

YTD Bitcoin is 177% up. By far the best high liquidity performer in the whole global investing space. (It must be kept in mind that Jan 1, 2019 was near the cycle lows ;-)

Bitcoin has visited just shy of 20k USD and then promptly crashed to just above 3k (-84%), but this is not without precedent. The venerated Nasdaq crashed 78% after its bubble burst following its Y2k fueled final pump into the turn of the millennium. The mainstreams obsession to bash cryptos with the volatility argument seems quite hollow.

How is your conviction? How did you reach your conviction?

Binary bet

Bitcoin seems to becoming a binary bet against the financial system for Investors.

A steadily increasing cohort of respected academics and economics professionals, not to mention wall street and big bank brains, are draining out of the teetering edifice of our status quo financial system into Cryptos.

Are they wrong with their career bets? Is there a sustainable cure to the ailments besetting the current global financial architecture? These are very weighty questions.

Those not yet asking them are still trapped in the matrix. Still at the point of noticing there is something wrong.

If you are like me and believe that the inherent contradictions deeply embedded within the current financial system are not resolvable, then there is a binary outcome: a disorderly global economic crash, or a semi orderly transition to a new architecture which surely must be currently under intense development.

The next step is what comes next. A careful consideration as to the role of hard money in either outcomes. What will it be? Will there be more than one? How will they interact with the inevitable new architecture the powers that be will surely try to force us into? Will the current rulers of the world succeed to hold onto their precarious positions?

Investing in this environment is as much research as it is guess work, hence the need for strong convictions.

And if you take only one thing away from this post today, it is the following:

There will be no sidelines this time.
Nowhere to hide your wealth.

You WILL BE invested in something when it comes to the reset. What you are invested in will be either accidental, or deliberate.

The changes that are coming will ruin fortunes, or create them.

What is certain though,it will feel literally like an overnight change, and MSM will be the last to tell you about it.

Note: I do not advocate cryptocurrencies with this conclusion. A I advocate is to be aware that you will be taking sides no matter what. So knowing this, and doing nothing will mean there is nobody to blame if your financial life is destroyed. Get educated about your money, and figure out for yourself what the risks are. Ignore all this at your own peril.

As always guys, leave comments, have fun and trade safe.

Disclaimer: This post is not financial advice. Before investing any funds do your own research and make your own decisions. Cryptocurrencies are highly speculative.
And finally: Do not invest money you are not comfortable losing.