A lot of questions following the crypto collapse. As previously mentioned, the average loss in the sector is now around 75%. It’s close to my expectations of 80%+ and some are already into my lower range having lost more than 90% of their value.
How does this fit with precious metals ? Why aren’t they soaring ? Where has all that crypto money gone ?
When I posted the Bitcoin warning on April 3rd, Bitcoin was over $46k. As I type, it’s currently $28k and crypto total market cap has fallen by about two-thirds. It serves to remind us that a bear flag is a bear flag ,and it’s got that name for a reason. Sometimes the simplest technical analysis is all it takes – a bear-flag breakdown beneath a declining 200-day moving average. It was ‘tulip-mania’ all over again, with those uber-bullish’ influncers promising it was just a temporary dip (many are still clinging onto that narrative). The thing is they may be right…it might be temporary, but until the evidence is there to suggest it’s temporary, erm, well, it isn’t.
So, if we proceed on the basis that the technical and psychological damage now done to the crypto sector is going to result in a prolonged period of declines and then ‘base-building’ (effectively, going sideways), what are the implications ?
Well, it ties in with our recent charts and podcasts etc, where we discuss the likelihood that the SPX/NASDAQ/DJIA etc have put in log-term tops. I showed a chart a few days ago, illustrating the fact that there’s a time to hold general equities, and there’s a time to hold precious metals. All of this is part of the ‘paradigm shift’ which is taking place as a result of interactions between inflation, debt, bond yields, real yields and currency inter-relationships. We’ve been signalling this for a few years in our charts (since before this site was launched). Now it’s unfolding around us.
We have a classic ‘Fourth Turning’ in full swing, and the political/social instability, growing pressure on the planets precious resources and war are directly linked. We have a stuttering economy and stubborn high inflation, in other words – stagflation. Some expect a deflationary bust, and that is possible. It’s important to be on the right side of the macro trends though, and commodities/precious metals are where the charts are telling us the greatest probabilities lie in terms of substantial increases in ‘fiat valuation’.
To be more accurate, these real, hard assets are going to act as barometers of fiat destruction and demonstrate what is ‘valued’ the most over time. So if you’re disappointed at the performance of gold, silver, platinum, uranium etc, just keep reminding yourself, they’re all just starting to claw their way out of the depths that crypto and equities are beginning to enter. The baton is being handed over as we stand by and watch the changing of the guard, and we’ll be here to chart the ‘roadmaps’ for you.Add to favorites