For anyone following the cryptos these days you must feel like you’re on an emotional rollercoaster. One day you’re excited and happy with the massive gains that you’ve made and the next day they’re all gone. If things don’t stabilize pretty soon I think there is going to be a mass rise in the amount of people diagnosed with bi-polar disorder.
One thing to note is that the market’s appetite for taking on risk is still very much intact. If we look at some of the indicators that would let us know if this trend is trading like gold and silver futures we can see that they are continuing on their downward trend. This means that despite the drop in cryptos across the board the light is green for them to go higher.
I know that some people may be looking at their charts and trying to analyze this via some sort of fundamentals associated with the particular crypto. However, in this particular case it could be looked at like when the water level of the ocean rises such as when the tide comes in, all the ships rise along with it. This is what we saw throughout 2017.
It’s hard to say when things will end or when actual fundamentals will once again play a role in investing. But, for now there game is a search for yield. In order to keep this madness going bond yields have to be kept low, thus intelligent investors won’t buy them. And, as a result of the continued inflation caused by creating currency to keep the rates low we will have a weaker dollar. This is all crypto positive and is openly facilitating the market risk appetite.
If we start to see money move back into gold, silver, hard assets, etc., we may be in the midst of a reversal. I’ll bet a sudden one at that, so pay close attention. In the meantime though, looks like we’re going to continue partying like its 1999!
Image source: aceee.org