I know some of you are tired of my constant rantings about Bitcoin, but what else is there to talk about? The stock market is over-hyped and continues to make new highs, but is that a story?
Gold
I will admit that gold is getting interesting. Since the peak in August, 2020 well over $2,000 an ounce, gold corrected into a classic descending triangle.
(We can debate whether or not a descending triangle formation is a “classic”, or just a bunch of technical mumbo-jumbo spouted by “analysts” living in their mother’s basements seeing patterns where they don’t exist, but I digress).
The chart does indicate an almost 20% correction that is now only a 10% correction, and there is an obvious breakout from the downtrend line at the top of the triangle, so it may be time for gold to shine. (Do you hate the puns as much as I do?).
The reason is obvious: money printing.
The M2 money supply has increased 37% since the start of the pandemic, so it’s not a surprise we have inflation, and it’s not a surprise that investors are moving into gold. For those who are wondering, since 1984 M2 is up 914%. Give it another year or two and we’ll hit money debasement of 1,000% in under 40 years. That’s quite an achievement, eh? No wonder people want gold.
And Bitcoin.
Bitcoin
When money is debased, you want to preserve your wealth in something that can’t be easily printed, so you invest in hard assets, like real estate, gold, and Bitcoin.
Over the last 12 months, Bitcoin is up over 300%, so Bitcoin is more than just a “store of value”; it is a new investment class. Institutional investors are buying, and with a limited supply, the price goes up.
On November 10 a new high was made just short of $70,000, and then Bitcoin did what Bitcoin does; it corrected, down 10% in two days.
No worries. I will be watching the $60,000 support level, and assuming it holds, I continue to expect a $100,000 Bitcoin before the end of the calendar year.
From September 21, 2021 to October 20, 2021 (one month) Bitcoin was up 70%. Granted, September 21 was the bottom of a 14-day, 25% drop, but that’s what Bitcoin does.
So is it impossible for Bitcoin to go from $63,000 to $100,000 in the 48 days remaining in the year? Is a 59% increase in 48 days impossible? Since two months ago Bitcoin was up 70% in one month, it is very possible to see a 60% increase in a month and a half.
I am not married to any specific price target. Being deterministic gets you killed.
But it’s possible, so I will take profits on the way up, but otherwise hang on for the ride.
Enjoy!
Bitcoin: Draw the Lines However You Want
by JDH on November 20, 2021
As I write this at 7:00 am on Saturday, November 20, 2021, Bitcoin is up 3% in the last 24 hours, but down 7.7% in the last week. Volatile, eh?
Is this the start of the bear market, or a correction in a bull market?
It depends on how you draw the lines:
Bitcoin made a new all-time high on November 11, so I doubt that 9 days later we are in a bear market. After making a new all-time high on October 21, and then again on November 11, a pause is expected. To add some perspective: after this week’s “crash”, Bitcoin is now back to where it was on October 28.
Time Between All-Time Highs
There were 21 days between the local tops on February 21 and March 14, then 30 days between March 14 and April 14. Then came the crash, and the next two new highs were on October 21 and November 10, 20 days apart.
So, if we have a repeat of the pattern from earlier this year, with three all-time highs occurring between 20 and 30 days apart, we could see another all-time high by December 10.
I am on record as predicting $100,000 by the end of the year. It is still possible if we have a run in the next two weeks.
We shall see.
I’m not day trading, so the weekly fluctuations are of minimal interest to me. I have my position; we’ll see how it goes.
As for the stock market: it appears to be on a never-ending run, so I see no need to scale back at this point. There will be a crash, but not this week.
That’s the update. See you next week.