Youtube video for this blog post: https://www.youtube.com/watch?v=3Xp6s13MybU&feature=youtu.be
Will there be more upside? I believe we are on the doors of a large move which will occur once we break this flip zone of 11,000.
However it really isn’t to do with US Dollar weakness…it is all to do with CHINA!
You do not require permission from the government to open a trading account since crypto is decentralized ( Bitcoin anyways). Also, you can day trade it in China (again not allowed in China). When Bitcoin moved to 20k in the mania of 2017-18, over 80% (some say 90%) was Chinese money! Many of the crypto purists do not talk about this!
The Chinese Communist Party ( CCP ) made Bitcoin trading illegal, the average Joe in China dumped their Bitcoin , that’s when Bitcoin crashed. I argue the same would happen in any other country. If the US or Canadian government said Bitcoin is banned, the average Joe would dump their holdings in fear of being punished or fined.
Now things in China are going from bad to worse. Money is now leaving China. China also has a huge debt problem They will not escape from the debt crisis upcoming.
Hong Kong was a way to get money out of mainland China and then into places like Canada and Australia. Mainland China is coming down hard on Hong Kong and will remove their British system of Law. A lot of Hong Kong money is fleeing.
Bitcoin provides a way for Chinese money to leave the country. This is why the alt coins are not really moving. If you are trying to remove a large amount of money Bitcoin is still the best (Litecoin and Ethereum as well…more Litecoin). You would not do it through the other alt coins…
Unfortunately, for the alt coin traders/speculators, two things are needed for alt coins to get a big bid (one outlier is a geopolitical/economic crisis…perhaps money may run into alt coins although Bitcoin , Litecoin, Ethereum will probably do better).
1) Regulation. Once crypto markets become regulated, banks and institutions will jump in. They need regulation though because it is hard to justify to your customers buying crypto’s when brokerages can shut down and there is no deposit protection.
Of course the crypto purists hate this because it would mean wall street would get their hands on crypto’s. Not really decentralized anymore.
2) A flood of new buyers. Many of the average Joe people who jumped into crypto’s during the last run are holding alt coins. They missed the move in Bitcoin so jumped on the cheaper coins for yield. A lot of them are holding losing positions, and are likely to sell at break even if prices go up. There will be a large selling pressure as price moves higher. It needs to attract new buyers.
We are in very interesting and exciting times. The Federal Reserve cut rates (albeit a hawkish rate cut), but President Trump, the day after, released new tariffs on China! Coincidence? All central banks are trying to devalue to cut rates. However, they need to do it in a way to save face and MAINTAIN CONFIDENCE. Tariffs bringing the stock markets down provides an excuse for the Fed to cut rates…”oh our policies were working well, we did a one and done mid cycle adjustment rate cut, however tariffs brought the market down and slowed world growth, we need to cut rates…even though the domestic economy is the strongest ever.”
As I said, interesting and exciting times. This is the confidence crisis I have been warning about. It will be interesting to see how the US Dollar reacts, how the Japanese Yen reacts, and of course how Precious Metals and Bitcoin and other Crypto’s also react.
Buckle up. The volatility is just beginning.