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Wednesday, September 16, 2020

The state of crypto and global macro! What's coming next?

The state of crypto and global macro! What's coming next?

Ethereum / U.S. dollar BITSTAMP:ETHUSD

Starting with the USD! In my opinion EM currencies are going to get stronger vs the USD in the next few months. I think that from here USDZAR and USDMXN could drop another 4-5%. That's bullish for the world and most assets. On the other hand people should be careful with their positions as EURUSD is looking extremely weak and USDCNH is about to fill the gap and hit a support combo (Yearly S1 + Monthly S3 + gap + support). USDTRY is going to go much higher as Turkey is facing more and more issues with their debt. GBPUSD is showing some strength here, but is at resistance. In my view GBPUSD will go to 1. 40 in the next 1-2 years when all the Brexit nonsense is over. Its chart looks quite a lot like Silver especially when you look at the weekly since 1970s.

For stocks I am getting more bullish , but still not in a position. I still believe NDX could hit 10200-10600 and SPX 3180-3270. The reasons are:
a) correction wasn't large enough. In 1998-1999 NDX fell 13-16% 3 times before going parabolic, b) still below the trendline, c) some double bottoms that are begging to be swept on some contracts, d) cheeky SFP on SPX right at the monthly P, e) several Nasdaq stocks look a bit shaky

For Crypto, most shitcoins are clearly now in a bear market. The first of the three parts of the mega cycle (first mini cycle) has come to an end. Many went up 5-10-50-100-200x and are now going down. We've seen this many times before and it was time for a correction. Most of that money will now probably flow into BTC , especially all the stablecoins that have come onto the market. We already see it as Bitcoin is going up and alts are suffering massively. After 3.5 months of alt season a few months of a downtrend for alts is likely. In my view BTC will probably hit 15-20k by the end of the year no matter how low it goes in September as right not is close to a key resistance zone and going sub 10k again isn't impossible. There are several reasons why I think such a dip is likely but won't go into it now, as all that matters is that if BTC hits 7-8k within the next 3-4 weeks, Q4 is going to be explosive (money flowing back into BTC for alts, stablecoin flood, following S2F / 4 year cycle / 4-5 months post halving with inflation comparable to gold's).

An update on my recent trades/positions. I stupidly got out of my GBPUSD long very quickly after pretty much getting at the bottom. Same with USDMXN from 21.4 to 21.2... I had a BANDUSDT short on which should had been BANDBTC so had to cut it as BTC went up without putting it back on. Just got out of my BTC long from 10650 to 11080. FInally when I saw the SFP on SPX I put a short on with a tight stop at 3420, which I then moved to break even and got stopped out. One key realization is put any positions on as they are technically sound and don't worry much about correlations as long as you aren't overexposed. Mixing positions with opposite correlations might also be benefitical and across different markets. Right now looking for some potential longs on alts vs BTC & BTC shorts in the 11.1-11.5k range, which are short term only and looking to exit near 10.5-10.6


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