The Bulls Are Back in the Digital Asset Market

Hope you had an excellent weekend. It’s become a bit of a rarity lately while bitcoin was sitting flat, but now that crypto is in a bull market again, I suppose it makes sense to see some volatility over the weekend.

Hope it’s not surprising to anyone. Stocks are moving up, precious metals are marching higher, and capital is flowing toward new age financial technology in a way that we’ve never really seen before.

There’s a lot more liquidity these days, and it has been floating into all sorts of assets but also, especially in crypto, there’s a lot more leverage now then ever before.

This could lead to some extreme volatility like we saw yesterday morning. The prices of bitcoin, ether, and many other digital assets experienced a sizable flash crash.

Several sources have put the final value of liquidations that took place during the crash at more than $1 billion, with Twitter handle Bybt even honing in on an exact number of rekt plebs. …

Bybt

My guess is that this is actually the number of positions that were lost, and not the number of people holding them. Either way, it’s quite a shakeout, and it left a nasty red candlestick on the charts.

As the old saying goes, the markets tend to take the stairs on the way up, and the elevator on the way down. Though in this case, we’ve only descended to the highs of last week.

In crypto, it’s more like we take a rocket ship on the way up, and are only drawn back by the gravity of the moon.

Dollar Short

Honestly, I’d rather not go in-depth regarding the talks that are happening right now between Microsoft and TikTok. Even though MSFT is up today, this really seems more like a political debate than a market one. Suffice to say, corporate power is gaining over politics these days.

What’s far more interesting to me right now is the state of the U.S. dollar, and whether or not we’ll see a sustained bounce. We did touch on this in Friday’s episode of the BMJ Newsletter, but it doesn’t seem like the market has really made up its mind just yet. In the meantime, volatility ensues.

We don’t even have much indication as to how long it might take, either. At this rate, the indecision could easily last until the U.S. payrolls report comes out on Friday.

Everything hinges on the dollar right now, which in turn depends on confidence in the U.S. economy and consumer. Fiscal stimulus has carried us a long way, but now that stimulus has run out, and talks between all sides of the U.S. government have essentially stalled. So, it’s not a great situation. … unless you’re bullish.

Will be interesting to see how long the Federal Reserve allows this to continue.

More FOMO

Bitcoin’s strong breakout above $10,000 last month was critical, and a lot of people noticed. We mentioned above how it’s affected the high leverage crypto traders, especially the new ones, but the dear members of the press are a bit more cautious.

Most of the mainstream media has completely missed the announcements from Visa and Mastercard, and have otherwise ignored or dismissed the hints that both PayPal and Revolut are about to open-crypto related services.

What MSM doesn’t miss, however, is price. When bitcoin starts to moon, people notice.

Seeing a headline like this one on Forbes for example is just oh so tantalizing, even if it was written by a good friend and avid reader of the BMJ Newsletter.

Bitcoin FOMO

The longer we hold current levels or even advance further, the more friends in the media will cover bitcoin and other cryptocurrencies as they clearly outperform every other asset class.

Now that $10,000 is broken, there really isn’t anything in the way of resistance, until the all-time high of $20,000, which represents an entirely conceivable year-end target.

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