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Speculative Fatigue as Roller Coaster Turns into Crypto Pain

Speculative Fatigue as Roller Coaster Turns into Crypto Pain

Global markets remain uneasy in the short term as financial institutions seek clarity and short term speculators take cover.

Thrill of the ride up turns into fear and lost money

Speculators have shown signs of fatigue in the cryptocurrencies markets. A fear of the long term bearish trend has proven expensive for many traders and is certainly threatening to keep many of the major digital assets within their lower price ranges as they bang up against important technical support levels.

New lows would not be surprising in the major digital assets in the coming days. While influencers may still be heard within the confines of social media, traders may be closing their eyes and ears to the optimistic sounds of ‘backers’ who proclaim now is the time to take advantage of lower prices which glisten across the crypto world. The sound of traders walking away can be imagined easily for the moment.

After being told the crypto roller coaster is safe and that steep climbs, the sudden falls and the rocketing higher of prices are normal and the expected outcome, the bearish trend in the cryptos seen since November of 2021 is hard to ignore. Having been told they will always be satisfied at the end of the ride, speculators have walked away fatigued and over the past two months: in April and May have experienced costly downturns if they have been pursuing the ‘promise’ of reversals upward. The sun is likely to come up again, but predicting the time frames is dangerous.

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Shadows caused by storms in TerraUSD and LUNA/USD have hurt the crypto marketplace regarding speculative confidence. Not only did the so-called stable coin TerraUSD lose value, it plummeted and is essentially dead in the water. The coin’s blockchain has been halted and most major exchanges have exiled it to the garbage heap. Having once traded at 1.0000, the last listing per CoinMarketCap is around 0.02694.

Oh wait, there is the ‘new’ Terra Classic to watch, but you shouldn’t. Apparently this is the re-launched version of LUNA/USD and a so-called ‘airdrop’ of Terra 2.0 was awarded to folks holding the now worthless Luna token. However, one has to ask who in their right mind would trust the Terra crypto team to deliver long term value? The word scam comes to mind, and while it is only the opinion of this writer, it might be best to ignore Terra completely and any project they offer to the public. The words ‘no shame’ come to mind.

As of this weekend many of the major cryptocurrencies including Bitcoin, Ethereum, Ripple and Cardano are stumbling near long term lows. Recent consolidation and headwinds do not offer much hope for speculative bullish traders and strong surges higher near term. If a short term trader wants to buy cryptocurrency at this juncture it may prove wise to cash out profits when they are delivered. No doubt long term buyers will have different notions and different risks considerations regarding their objectives and perceptions. Day traders however who are buying via exchanges and speculating on price fluctuations remain in short supply, and this is having an effect on values as the injured folks lick their wounds and try to recover.

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NASDAQ Composite: Bearish Trend Testing Trading Inexperience

NASDAQ Composite: Bearish Trend Testing Trading Inexperience

The NASDAQ Composite has been within the grasp of a selling trend since late November of 2021, and traders who feel the urge to buy should understand their goals and time frames clearly.

The NASDAQ Composite has seen a strong wave of selling take hold of its equities since the later stage of 2021. Investors have likely been spooked by inflation and high PE ratios which correlate into questionable values and fears of over exuberance and reactions. The combination of U.S Federal Reserve policy which is certainly having an effect on behavioral sentiment is problematic too. Investors are not fans of unclear outlooks and current economic conditions are definitely causing nervous sentiment.

Many traders and investors have not experienced a sincere bear market during their financial careers. Indices and their equities have produced a rather steady upwards vehicle for years. The thought that an equity index can actually go down for a long duration, without significant reversals higher following is troubling and new for many people. Timing new trends is exceptionally hard. An investor who has a ten year outlook certainly brings a different perspective to buying the NASDAQ Composite compared to a day trader who is likely maneuvering in the index with short term wagers using CFDs.

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Current market conditions in the NASDAQ and other major global equity indices remain challenging and this will likely continue into early this summer. The U.S Federal Reserve will be conducting an FOMC meeting in mid-June and another interest rate hike is likely being considered. A potential rate hike of 0.50% may be seen. The potential of this additional hike to the current interest rate of 1.00% has likely been digested into the marketplace by financial institutions, but that is not the end of the troubling concerns.

Technical traders who watch the daily results of the NASDAQ Composite and other indices may attempt to speculate on the gyrations of their moves based on short term volatility. These traders should understand they are also battling large institutional traders who use complex algorithms to pursue their positions. The combination of nervous equity markets caused by uncertain economic outlooks, while it waits on the pronouncements of the U.S Federal Reserve are bound to deliver more nervous results in the NASDAQ Composite and other global equity indices.

While it may be accepted that the U.S Fed will raise interest rates again in June, the greater question that financial institutions want answered is what the U.S central bank’s outlook on additional interest rate hikes in the summer and fall will be. Inflation in the U.S remains troubling high. The rising costs of logistics, food and consumer goods are largely a manifestation of higher energy costs.

Yes, coronavirus has been a large ingredient too, regarding inflation and its current effect on employment and the resulting lack of workers is a component in the equation due to new perspectives among the workforce. The shortage of employable labor has also sparked concerns about demographics for the future. While the virus and its effects seem to have eroded in the West for the time being, unfortunately there are concerns regarding a potentially large problem in China if coronavirus infections continue to occur there. Shutdowns in China due to the virus can affect supply and commodities prices globally.

The costs of higher energy and commodity prices are something that companies and consumers will have to deal with in the months ahead. Disinflation is likely to come, but it may take a handful of months more. It is a complex puzzle and traders who want to bet on short term results will have to endure sudden storms of volatility which are likely to arise. Unanswered questions await and because of the shadows that hover over the economic landscape, clarity is not going to be delivered soon.

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BTC/USD: Bitcoin Remains near Troubling Support Levels

BTC/USD: Bitcoin Remains near Troubling Support Levels

The price of Bitcoin continues to create perilous adventures for short term speculators as it moves below 30,000.00, while threatening to flirt with even lower values.

BTC/USD is trading a couple of hundred dollars above the 29,000.00 realm as of this morning. After being able to consolidate and provide speculators with a more tranquil environment last week, Friday’s price action saw the 28,800.00 juncture challenged, this as the NASDAQ Composite also suffered a red slash of selling. However, as Friday came to a close Bitcoin recovered some of its value, along with the major indices. Yet, BTC/USD certainly did not create a sudden change of opinion among most traders. Its bearish trend remains the flavor of the month.

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This weekend has seen consolidation, but the past day has also brought an incremental decline again into Bitcoin’s trading landscape. This is not your grandparent’s speculative haven, BTC/USD trades all day and every day, there are no vacations. While this allows short term wagers for folks who need to feel the thrill of price action at all times, it also allows the same people to watch their money evaporate into thin air just like at a Las Vegas casino.

As BTC/USD hovers dangerously close to the 29,290.00 vicinity this morning, traders who lean towards technical perspectives and have long positions will likely not want to see Bitcoin break below the 29,000.00 price. Weekend trading for Bitcoin over the past handful of months, and for most of the major cryptocurrencies, has been a battlefield which has witnessed some of the strongest selling action during this long bearish trend which began in earnest November of 2021.

If the 28,800.00 price range were to begin having its values tested once again, this would not be a welcome sight for short term bullish folks who simply refuse to be short sellers. Long term holders of Bitcoin might relish what they consider lower prices and exclaim the digital asset needs to be bought. Folks like Michael Saylor may see current prices as a buying opportunity for his corporate treasury at MicroStrategy, but losses are mounting for many people and if Bitcoin continues to struggle the question arises if long term believers of Bitcoin may have to capitulate to create cash flow that has suddenly been hurt.

Short term traders need to contemplate the trend and the dangers that Bitcoin poses. Folks who decide to use leverage and are looking for dramatic price changes need to be braced for bad outcomes if the direction of Bitcoin goes against their wager. The choice of the word ‘wager is not a mistake, Bitcoin is a betting environment for day traders – simple as that. Yes, the right direction may be chosen periodically, but trading BTC/USD is not an endeavor which should be treated without careful consideration.