All about that bias
Cryptic ball: bear flag or flat?
The trading channel I highlighted yesterday is holding so far. But remember such bear flags typically resolve downwards, even if that isn't an inevitability. Stock market indexes are also bouncing, but does that mean we're out of the woods?
- To put it simply, no. But not all is lost as of now, even if stonks (i.e. equities for the less Millenial of our readers) are indeed approaching peak fear territory.
- To be fair, that's the kind of situation that prompts traders to change their biases and shift from bear to bull, or vice-versa in peak euphoria moments.
- But that's just some nice hopium. After all, this relief bounce is likely due to an unexpected contraction in the American economy, with GDP falling this Q1.
- Naturally, if one recalls the economy was high on pandemic recovery drugs then this was a normal prospect as soon as the Fed started its tightening.
- But the surprise factor plays well into bulls, who may start to believe the Fed will be more careful as it can't be blamed for a recession, which is formally declared when the economic output declines for two quarters in a row.
What to do in the crypto land, then? Well, I just saw a lame comment on Twitter claiming it's unreal how many bullish news we're seeing yet prices keep on falling.
Well', that's exactly the definition of a bear market. While I don't know how long it will last - and I'm still hopeful for a rally starting around Q3 - for now we must wait for the stock market to find a trend before making our next move.
Chart art: hash-rate ATH is bullish or natural?
Three things: efficient or pretty efficient?
- Pseudo Theos explains the economics of blockchain.
- Jason Choi and Javier Ang explain the NFT lending market.
- Jump Crypto explains why markets for new tokens are pretty efficient.
Tweet tip: a few countries or a few worlds?
Meme moment: not sleeping or DYOR?
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