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A Risk-Off Environment Only Tolerates Momentary Upside

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2 weeks ago

Bitcoin Will Surge Again

Hopefully, people are now beginning to understand the current fragility of the Crypto market. This is not an isolated scenario, all markets are extremely fragile at the moment. It’s a risk-off environment, which means “Smart Money” is not looking to buy just yet. There may be a few nibbles but markets are not moved by nibbles. What we have seen and are likely to continue experiencing are modest pumps to the upside, which ultimately go nowhere. This will continue until markets receive a significant indication to change gears. A shift to a risk-on environment will ultimately trigger a resurgence in Crypto and stocks. Provided, there are no events similar to a China ban, I expect Crypto to skyrocket. The only problem is that this could take a lot longer than many have envisioned.

You Need To Get This!

A bottom does not necessarily imply the beginning of a bull market. It merely means that prices are not going to be heading lower. It does not suggest that prices will begin climbing. There is the chance that once a bottom is in the market continues to drag along. It may take some time to shake off the “caution” and shift into a risk-on environment. However, once it’s “risk-on”, things will begin to accelerate rather speedily. All things considered, you can’t realistically expect a risk-on environment with high inflation and high-interest rates. The shift takes place together with these dynamics. Until there is enough of an “adjustment”, the transition simply can’t take place.

Smart Money & Levels

Institutions and large players are always looking at the charts. There is never the aspect of “hope” but rather probable outcomes. This is why once certain levels are triggered they exit. I have addressed this before, most notably when we breached $30K and then $25K. Smart Money does not partake in risk outside of the technicals. Once a certain level is breached it becomes clear that the applicable asset is going to drop significantly further. Once again, to another measured target. What many fail to realize is that Smart Money is generally accurate for one simple and logical reason.

Volume

Regardless of whether a move is a good move or not, put enough volume behind it and it becomes accurate by default. Volume moves markets and this is how Smart Money continues to dominate. Large investors play within the rules that they know other traders worth their salt are respecting and then they operate with significant volume. It’s almost a done deal unless “retail” manages to muster up an army like in the case of WallStreetBets. However, even in such situations, the move is temporal. It’s merely a trade and not necessarily a change in the trend or direction of the market.

Final Thoughts

This is still very much a trader’s market. There have been a few very convincing pumps, even as I am writing BTC is pumping towards $21K after collapsing to $18.5K briefly. As I mentioned in my post from the 7th of September, a bounce is extremely likely at this point. It is however still just that a bounce, until proven otherwise. With an inverse head and shoulders now beginning to form on the S&P, it will be interesting to watch unfold. Until next time, keep your head in the game.

Disclaimer

First of all, I am not a financial advisor. All information provided on this website is strictly my own opinion and not financial advice. I do make use of affiliate links. Purchasing or interacting with any third-party company could result in me receiving a commission. In some instances, utilizing an affiliate link can also result in a bonus or discount.

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