market update
firstly let start with I got it wrong. was expecting a correction but underestimated its intensity.
while BTC is hovering around the support levels given earlier and things can turn around, it would be naïve to ignore the price action.
from trend model perspective we have gotten a exit / cash signal in majors.
(this shouldnt be surprising) with the kind of intense move thats happened. no momentum model would still be long.
but in this update we will focus on different ways to play this.
for short term traders waiting for the next long signal makes sense.
use the w3q indicator.
just coz the we got the cash signal doesn't mean sell everything right away.
the move has been so sharp we are likely to get some relief bounce. use those to derisk if you need to.
for long term folks this remains a great opportunity to accumulate.
BTC SOL continues to be asset of choice to accumulate lower levels.
from memes choices remain the same as mentioned earlier.
there are some more i like but lets wait for the markets to find its feet and then we can focus on them.
what was good to see was, we got a brief bounce from the lows earlier today and memes again bounced the hardest.
also most of the stuff like popcat selfie billy not only bounced but also were in high volumes.
this shows theres activity and mind share for these. its the most imp factor for any meme.
5 things really caused this big downward move.
- macro - really soft employment print and many other indicator such SAHM signaled a recession in US. coupled with the fact fed dint cut in the last meet many are fearing a hard landing.
- confidence - warren buffet selling record levels and sitting on over 200b in cash. now these a big headlines. cause a lot of other funds to sell some too. no one wants to be brave and get fired from their investors.
- election odds - kamal has gained a lot of traction in the last few days causing some nervousness among crypto capital especially considering how bullish trump has been on crypto.
- jump capital - less spoken of but one of the big players in crypto jump has been selling a lot. now rumours are they are closing their market making buiness n some fear they are gettting liquidated.
- war scare - Iran Israel situation is still tensed. after Russia Ukraine war, investors dont take these things lightly.
out of all of these factors the most easiest thing to track and likely to have the biggest impact is macro reversal.
given the situation its very likely that FED will act sooner rather than later.
a lot of people bet on but this time its different, fed cant do this or that.
simplest mental model that has served me over the years is
if you had the power to kick the can down the road, will you do it? or will you focus on doing the hard thing (right or wrong is another matter).
FED is no different.
also they cant do these premptively. coz if they did they would get a lot of resistance from opposition etc.
they can only act once the situation has gotten worse enough. that way everyone would want them to, and things move a lot faster approval wise too.
so tieing all of this to markets.
if the FED acts sooner with an emergency cuts and easing then we will have a V shape reversal.
else more likely we will have more time and price correction.
either ways its time to be optimistic but cautious.
see you in the next one.