Tuesday 08 October 2013
If there was any doubt over the vulnerability of fiat and the fact that global econmies are teetering on the brink of another 'catastrophic' collapse, this article by Yalman Onaran on Bloomberg's Businessweek makes for an interesting, if not concerning, read.
Anyone who remembers the collapse of Lehman Brothers Holdings Inc. little more than five years ago knows what a global financial disaster is. A U.S. government default, just weeks away if Congress fails to raise the debt ceiling as it now threatens to do, will be an economic calamity like none the world has ever seen.
Failure by the world’s largest borrower to pay its debt -- unprecedented in modern history -- will devastate stock markets from Brazil to Zurich, halt a $5 trillion lending mechanism for investors who rely on Treasuries, blow up borrowing costs for billions of people and companies, ravage the dollar and throw the U.S. and world economies into a recession that probably would become a depression. Among the dozens of money managers, economists, bankers, traders and former government officials interviewed for this story, few view a U.S. default as anything but a financial apocalypse.
Read more here...
There are plenty of animated bitcoin videos out there but we've not seen anything like this before. A brilliant, documentary-style animated short from the guys at Film Tree and Evan York Pictures that is well worth a watch.
Also of note, Jon Matonis will be speaking at Emerce's E-Day festival in Amsterdam on October 10th. His topic: The Appeal of a Nonpolitical Currency.
Find out more here...
And our latest analysis rounds things off:
Okay, so everything has kinda stalled as bitcoin has settled back into a $5 range, between $135 and $140.
Here's how it looks on a chart:
Is this a good news or bad? And what might it mean moving forward?
Well, as a general rule, if price has been trending and then levels off it is generally an indication of continuation. And as the moving averages 'catch-up' trend traders jump aboard or add onto positions as early counter-trend traders (those who attempt to time reversals) lose confidence and/or bang out of losing positions with small losses. The combination of these two phenomena creates the trend positive order flow that carries the market into the next leg of its trend.
And this could be what we are witnessing.
Having said this, what will be worrying bitcoin bulls right now (and I know this because it is starting to play on my mind...) is that price has leveled off at a point below last month's top and the most recent high, when what we all wanted to see was a gathering of momentum into and, ultimately, through resistance.
And as time goes by more and more bulls will see their confidence in long positions undermined thus.
In situations like these it pays to have some price levels to watch, so let's focus on that.
As is stands - and while we would obviously like price to pick up from right here, a fall and bounce from $130 should be expected and a fall lower to $125 tolerated. Anything beyond that is going to leave active traders extremely edgy; bulls will be bailing out and bears will be gaining confidence in equal measure and the resultant order flow could see us right back down at last weeks's low - which would be unpleasant.
Longer term traders and bitcoin investors can afford to be a little more sanguine. After-all, if we are moving back into a broad range, between say $110 and $150 this can be tolerated for as long as it takes as it does nothing to invalidate the overriding investment thesis.
So, there you are, slow days are never pleasant - particularly for active traders - as they leave one far too much time to ponder. For us however, the overarching rules do not and have not changed. You pick your levels above and below price and you have a plan for what you will do should price breach them
And that's your lot for today.
Rob @ BitScan
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