2023/03/13 (189.052) Technical Analysis

The 1st Battle For Us Bulls In BITCOIN At 20000 Has Been Won
– In Order To Win In Long-Term, 30000 Must Be Reconquered Medium-Term

Joseph Stiglitz is considered one of the most renowned economists of our time.
The economist, who is also valued by me, is politically classified on the semi-left flank; from me too. Nevertheless, as with most economists, there are always a few aspects in his case that can be accepted as right – and not wrong, because he feels he belongs to a different political current. I like Stiglitz because he doesn’t beat around the bush, as we say here in Germany. The outspoken Nobel laureate’s views carry weight – mostly by the US Democrats. His comments on the Fed’s monetary policy at the beginning of 2023 are likely to be of great interest to us financial market participants.

For almost a year, the Fed has reacted to persistently high inflation rates with offensive interest rate hikes.
During this period, the US interest rate rose from zero to over four percent. Many other central banks such as the ECB, the Bank of England and the Swiss National Bank (SNB) followed suit and gave up their low interest rate policy. Even the Bank of Japan (BoJ), which has been seen as particularly dovish in recent years, has taken tentative steps towards tightening. Economics Nobel Prize winner Joseph Stiglitz, who served as chief economist at the World Bank between 1997 and 2000, considers the restrictive monetary policy to be a mistake with serious consequences. I don’t – to make it clear upfront. And with all love and respect. Because when I read, hear and/or see something by Stiglitz, I always deal with it – and form my own opinion. Whatever you should do.

In an article published in the British daily newspaper “The Guardian” at the end of January,
Joseph Stiglitz criticized the current monetary policy of the US Federal Reserve with harsh words.
In his opinion, the Fed’s interest rate rate is based on incorrect assumptions. The US Federal Reserve incorrectly thought that too much demand from consumers and companies met too little supply of goods, which caused prices to develop upwards. Interest rate increases were therefore necessary to reduce the demand for goods and services. The US economy will also have to put up with a recession, as Fed Chairman Jerome Powell emphasized several times in widely acclaimed speeches. A declining demand situation is therefore essential for restoring long-term price stability, especially since otherwise there is a risk of a wage-price spiral. However, Stiglitz has a very different opinion on how inflation came about. “There is overwhelming evidence that the main cause of inflation was pandemic-related supply shocks and shifts in the demand structure, not excess aggregate demand, much less additional demand created by pandemic spending,” the Nobel laureate said. Therefore, interest rate hikes were not necessary: “Anyone who has a little faith in the market economy knew that the supply problems would eventually be solved; but nobody could know when.” I disagree with him on this – 100% diametrically! Because he argues like an expansive fiscal policy dove from the Corona period. And in retrospect he also blames the restrictive, hawkish FED policy. And what is the FED doing? In the person of your Chairman Powell, he is too much diplomatic in public to react to such criticism. And always refers to his mandate of inflation and unemployment.

Don`t understand me wrong – or suggest a conflict between me and Stiglotz.
I simply prefer a basically an hawkish policy. So don`t understand me wrong! It`s not about who`s right! It`s all about which us fiscal policay and/or monetary policy have a majority. And I just can’t help myself zo resolve the us economy without the picture of Biden’s Cain economic policies. Because his green opposite economic policy was and is responsible for today`s us economic scenario. Just look at US inflation during Donald Trump’s time – and the rise since Biden had the final say in the White House. But at least the pressure for a higher oil price, since the beginning of this week, should be tacitly gone, if I’m not mistaken. And that regardless of the demand from China, let alone Russia’s war of aggression. Because Theran and/or Ryal seem to agree peacefully – and that thanks the help of the Chinese and not US Americans. That`s why we remain short in the oil price. But that’s just by the way.

Stiglitz is considered a neo-Keynesian economist
who generally advocates low interest rates and financial generosity on the part of the state.
What the US inflation demands, yes even conjures up, is the logical consequence if US production, i.e. the supply of goods and services, namely material goods and non-material service offers, is not at least as high. Because when US inflation overruns US GDP in the truest sense of the word, then we will all experience what we are experiencing together in the USA; namely an US stagflation. Hardly anyone talks about it in public – except for Nourinel Roubini. In this sense, Stiglitz calls for a generally low level of interest rates and government stimulus packages. On the other hand, there are some economists who think the Fed’s interest rate policy doesn’t go far enough. For example, the “Black Swan” author Nassim Taleb accuses the Fed, ECB & Co. of having created “malignant tumors like Bitcoin with their ultra-liquid monetary policy in recent years.“ Therefore, all central banks urgently need to return to an interest rate of four to five percent as quickly as possible and maintain this higher level. This is the only way that future stock market excesses can be avoided and investors’ investments can once again achieve greater economic benefits. “Dr. Doom” Nouriel Roubini is a notorious critic of the Fed’s interest rate policy, which he sees as a major reason for the escalating debts of states and “zombie companies”. A less liquid monetary policy is not only necessary to reduce inflation, but also to tame the ominous speculation frenzy of many investors. I agree. But roday 2023 we currently have several generations of financial market participants who only know US inflation from books. As well as a generation that only knows low interest rates. And that`s why I assume that we will deal with us inflation, even us staglation, longer as we would like. And I let myself be persuaded to formulate a BITCOIN long 4XSetUp. How exactly? That every day this week in the Technical Analysis 4XSetUps…BITCOIN Futures Explodes
The Bitcoin Can Record A Whopping Increase Of Almost 20 Percent

After the Bitcoin price fell below the 20000 on March 10, hardly anyone would have guessed that things would pick up again a short time later. The general uncertainty on the financial markets had also gripped the crypto market and pulled most of the cryptocurrencies south. But as it stands now, it was just a bear trap. Because the Bitcoin price passed the 24,000 US dollar mark in the afternoon of March 13th and can thus put a 24-hour plus of over 18 percent on the floor. The Bitcoin price also enjoyed a decent increase of over eight percent over the course of the week. Meanwhile, the entire crypto market is benefiting from the Bitcoin rally. The Ethereum course (ETH) is also in good shape at 1,690 US dollars and a 24-hour plus of almost 8 percent. The entire crypto market was able to break the market capitalization of one trillion US dollars again.

Bitcoin price benefits from developments around Silicon Valley Bank also
It looks like the current Bitcoin price recovery rally indicates that the brief panic caused by the banking crisis surrounding Silicon Valley Bank has subsided for the time being. By winding up Silicon Valley Bank, Signature and Silvergate, the USA has apparently been able to prevent worse from happening. It’s madness! It`s amazing! But it`s the price action reality! But the market is emotionally driven, which is reflected in the high volatility. Basically, I did not expect an increase in the BITCOIN Future. More in the NASDAQ 100 Future – but the NDX holds up better than I thought. A fall of 20% and more; i.e. to old new lows, from 2022, are fundamentally justified due to the fundamentally inflationary economic policy environment. However, the financial market is fundamentally not rational. So that speculative capital is likely to flee back to cryptocurrencies. And that, although there are now also fixed-interest. And that longer than expected.

SVB bankruptcy shakes the markets
At the end of last week, the markets faltered after Silicon Valley Bank (SVB), which specializes in tech and startup companies, announced an emergency capital increase. As a result, SVB’s share price fell by 70 percent at its peak. There were fears that the largest US bank failure since the 2008 financial crisis could spread to the entire banking sector. However, this concern has probably not been confirmed. At the weekend, the US government announced that it would protect all deposits at the Silicon Valley bank and also promised other financial institutions financial support. This helped cryptocurrencies such as Bitcoin, Ethereum & Co. to recover significantly. The crypto market itself had recently come under pressure from two bank failures, most notably from Silvergate Capital.

Silvergate bankruptcy hurts cryptocurrencies
Silvergate announced on March 8th that it would cease trading. The company was one of the most important banking partners of the crypto industry and acted as a payment service provider for cryptocurrency customers. For traders, Silvergate provided the bridge between digital currencies and FIAT currencies like the US dollar. The company blamed recent developments in the industry and increasing regulation for the bankruptcy and cessation of operations. However, the consequences for the crypto market were manageable, as numerous large customers such as Gemini, Crypto.com and Coinbase had already ended business with Silvergate.

To get to the point again,
the course of the Bitcoin Futures is extraordinarily historically highly volatile

The most common cryptocurrency, Bitcoin, currently costs $24,339.06 (rate: 9:03 p.m. CET) per coin. This is an increase of 9.81 percent compared to yesterday. Bitcoin reached the record level of $48,105.50 on March 28, 2022, which means a loss of 48.32 percent to date.

The largest one-day price fluctuation in the past 12 months was just over 17.41 percent on June 13, 2022. Thus, trading widths of currently 11.31 percent are not particularly exotic. However, sharp price fluctuations are currently rarer: In the past 30 days, the strongest daily fluctuation was 11.31 percent.