2023/03/20 (194.057) Technical Analysis

BTC1! Reached The Price Target Of 27365$, On Monday
– I Except Further Price Increases, That`s Why A New 4XSetUp This Week

Looking back, our long BITCOIN Future 4XSetUp started even better than expected!
Is a trade and/or investment in the BITCOIN Future now a safe haven in the current banking crisis?

After the Credit Suisse takeover over the weekend, Bitcoin is proving to be a winner given the uncertainties in the financial sector.
But the EUR is also rising very robustly – vice versa, the USD index is again trading in the direction of double digits. The Bitcoin price went up over the weekend, and on Monday morning the digital currency rose to over 28,000 US dollars. This is the highest level since June 2022.

The price increase is more or less related to the current crisis of confidence in the banking sector!
Even if I personally do not believe in an acute actual problem, let alone in further collapses, I think that BITCOIN should continue to rise. Because BITCOIN simply has a very strong ideological fan base. I don’t share their approach and beliefs. But with the help of the Internet, everything is done and argued and argued so that BITCOIN does not become cheaper. Which is why I decided a few weeks ago to formulate a technical analysis 4XSetUp about the BITCOIN future for you.

After the collapse of the Silicon Valley Bank and the Signature Bank in the USA, the cheap takeover of the major Swiss bank Credit Suisse triggered further uncertainties over the weekend. After several days of marathon negotiations, UBS will now take over its ailing competitor for three billion francs (a good three billion euros). A bargain of the century; let’s not fool ourselves. And the Swiss National Bank (SNB) is supporting the takeover with liquidity assistance of CHF 100 billion (around EUR 101 billion).

Banks in crisis again? I don`t think so, today!
But mist of those who were with us while 2008 don’t seem to be able
to tear themselves away from the pictures and/or words on our hard drive, our memory…

Despite the takeover coup, the stock markets remained restless at the start of the week – also because Credit Suisse bondholders are not to be compensated, which has caused confidence in bank bonds and stocks to drop worldwide. This is the current crisis – in a nutshell! Is my money safe with my bank up to a certain amount? And do I actually get the contractually agreed rate of interest paid out deorally, formally and/or even legally? These are the two questions that unsettle financial market participants. And beat the bank stocks emotionally volatile up/down. The price action on individual days is currently as high as weeks in some stocks; yes even months. The shares of the two largest German banks, for example, here in my homeland, started this stock market week weakly, this Monday: Deutsche Bank’s shares lost a whopping 8.5 percent at the start of trading, and Commerzbank’s at least up to 6.5 percent.
However, the index of the European banking industry, the Stoxx Europe 600 Banks, lost a total of 2.4 percent.

There are voices that sell the takeover of UBS as a bailout

And or also critics who perceive the rescue of Credit Suisse to be another problem.
“2008 actually taught us that we shouldn’t have banks that are too big,” says Gerhard Schick, head of the citizens’ movement Finanzwende.
With UBS and Credit Suisse, two Swiss banks that were already systemically important are now merging. This creates an even bigger player that certainly must not go bankrupt. And thus want to see Switzerland confirmed as a safe haven in the long term in the historical context as far as securities trading is concerned. “This solution is not sustainable and only exacerbates the too-big-to-fail problem,” criticizes Schick. Which I personally don’t see as a problem, but rather as a historically long-term, conservative concretization of Switzerland as a financial marketplace! Think about it?

Whatever semantic conclusions, let alone mathematical calculations, you come to regarding UBS and Credit Suisse,
the following news is more than interesting! Because as a calming pill for the financial market, six large central banks have meanwhile increased the rate at which they supply the financial system with dollar liquidity: dollar transactions are now no longer just carried out weekly, but daily. In addition to the European Central Bank (ECB), the central banks of the USA, Canada, Great Britain, Japan and Switzerland are taking part in the concerted action. This is intended to guarantee that the banks do not run out of the world reserve currency, the dollar, for important, mostly international transactions. The central banks are thus reacting to the fears of many financial market participants. Who are currently unsure whether the money is safe at the bank or whether the interest-bearing security that you bought from the bank is safe! What else should a central bank do? That’s it! And that`s why we can only hope that more and more financial market participants will not simultaneously press the sell button for certain banks! Just like currently vica versa the buy button for the BITCOIN Future…

Bitcoin as a currency in crisis – even if I personally don’t see it that way

For BITCOIN enthusiasts, the current horror scenario is actually something that should oppose the financial marketplace. Because the idea for Bitcoin was born under the impression of the financial crisis of 2008. Its creator, Satoshi Nakamoto, set out in a white paper in October 2008 how an entirely new payment system could be created. That should get by without the then struggling banks, which had to be rescued in part by state intervention after the collapse of Lehman Brothers. His concept was: a decentralized accounting system that uses cryptographic calculations for legitimacy – and thus makes central instances such as banks or central banks obsolete. A stunner – worth over $25,000 today!

However, but I agree with Nourinel Roubini, who testified before the US Congress in 2018: “Bitcoin is the ‘mother of all scams’ and blockchain is the most hyped tech ever!” – to which I have nothing to add.

However, let`s get an overview about 10Y Yields price action on this monday,
because the fixed income securities are the historical counterpart of the BITCOIN!
And the BITCOIN Fzture only makes sense on financial narkets because of low interest rates! Or?

Government bond yields in Europe pared most losses on Monday, with the benchmark 10-year Bund yield stabilizing around 2.11%, after falling to as low as 1.92%, a level not seen since mid-December. Investors’ risk appetite returned as authorities increased efforts to restore confidence in the banking sector. Over the weekend, the Swiss government forced a takeover of Credit Suisse by UBS, and global central banks’ moved to boost dollar liquidity. Also, ECB President Christine Lagarde reiterated Sunday the European Central Bank remains ready to support euro zone banks with loans if needed, although the euro area banking sector is resilient, with strong capital and liquidity positions.

The yield on the 10-year Treasury note was trading above 3.44% on Monday, rebounding from a six-month low of 3.291% hit early in the session after risk appetite rose a bit as investors started to hope that banking crises may be under control. The collapse of Credit Suisse appears to have been avoided, after the Swiss government engineered a forced takeover by UBS, although AT1 bonds worth $17 billion, are set to be wiped out. Meanwhile, the focus remains on the FOMC 2-day meeting that will kick off tomorrow, with the central bank set to raise the fed funds rate by 25bps.

The yield on the 10-year JGB fell to 0.25%, its lowest since December 20th, when the Bank of Japan unexpectedly widened the upper band on its yield curve control policy. The instability of the global financial system drove investors to flee to the safety of government debt. Government bonds rallied after the UBS takeover of Credit Suisse triggered a write-off of $17 billion of Credit Suisse’s AT1 bonds, reigniting concerns over the vulnerability of other major lenders. Domestically, the BoJ Summary of Opinions showed that policymakers supported the central bank’s ultra-loose monetary policy unanimously, delaying expectations for an eventual pivot. Meanwhile, the Japanese parliament has already confirmed Ueda’s appointment as the new BoJ Governor starting April 9th. During earlier hearings, Ueda also voiced support for the ultra-loose policy in the near future, stating that tighter policy was inadequate to counter supply-driven inflation.

Is the historic bear market in the BITCOIN future over in 2023?
No! But over 20,000 can be argued from a historical technical recovery!
And that’s why I formulated this technical analysis 4XSetUps – but not without a stop price…

The new bitcoin high can also be interpreted as a recovery from the recent crypto crisis. The year 2022 was marked by major price slumps and bankruptcies: the insolvency of Three Arrows Capital, the bankruptcies of Blockfi and Celsius and finally the spectacular collapse of the crypto exchange FTX caused the price of Bitcoin to collapse. What is now also accommodating for the cryptocurrency: The interest rate expectations of the central banks have fallen, which has pushed down market interest rates. Central banks might even consider rate cuts over the course of the year – at least in the US.

The next interest rate decision by the US Federal Reserve is due there on Wednesday.
A large interest rate step is considered rather unlikely. The European Central Bank (ECB), on the other hand, tightened interest rates once again last week. Low interest rates are fueling risky asset classes, including digital currencies like bitcoin. However, we stay long with our BITCOIN Future 4XSetUp…