IT’S JUST A BEAR MARKET IN CRYPTO

It’s just a bear market. All the talk about why and what and how. It’s just a bear market. Thus it’s a good time to reiterate the rules of a bear market.

A potential bear market can only start on a break of the 50 day moving average. Bitcoin broke the 50 day moving average on 10/13. We put the avoid label on it that day. It tried to retest getting back above on 10/28 but to no avail. Since, nothing but misery.

In order to continue the bear trend, the next lines of support must be taken out. The next line of support was taken out on 11/13.

In bear markets, surprises happen to the downside. In spite of all kinds of bullish talk from the permabulls, the selling has not let up.

Bear markets worsen because of leverage. All one has to do is read up about Microstrategy, now called Strategy and one can deduce potential problems going forward. After all, what kind of a strategy is going into more debt and issuing more stock to buy one asset?

Bear markets will end when they decide to end and not when people say they will end. They have to run their course. This is not a prediction but the last bear market in bitcoin dropped into the 70s.

The issue is whether a further drop will  affect the stock market and we must say that in the past, the NASDAQ has gone along for the ride or has actually led the way down, but as of yet, this has not occurred as the NASDAQ is back above the 50 day moving average with the very important semiconductors with a very good recovery in the recent week.

We always state of unknown price and time because we will never know when a bear phase ends but will react when it shows a bottoming process. Normally, bear markets end with a process of bottoming and not in a flash. Normally! Not sure there is much normal about crypto that trades 24 hours.

Do not forget that crypto has no earnings, no sales, no products, no services thus no way of putting a valuation to it. It’s quite comedic when we watch someone try to explain the fundamentals behind crypto. We know there’s a lot of backing and we know there is a lot of backing out of Washington DC but we can promise that will not matter if it wants to go lower.

Near term, stretched, extended and oversold. Bounces can occur at any time, even good bounces. But so far, has not been of help.

We will keep you apprised.