Bitcoin is languishing at around $62,500, and the altcoins are haemorrhaging. It looks as though crypto could crash lower, and the bull market might even be over. Isn’t this the time to buy?
Sell and become defensive?
Economic data looks pretty awful and the clouds of war are still black and threatening. This is the kind of environment where investors sell their crypto and buy the typical risk-off assets such as US treasuries and gold. Or is it?
For the risk averse investor this may be exactly what is going to happen. Protecting your wealth is far more important than taking the risk of losing more of it. It is totally understandable in the dire times in which we are living, to want to sit in defensive positions, where once the dust settles, he who has lost least, is he who comes out best.
Buy when there’s blood on the streets
On the other hand, it might be argued that playing it safe in this kind of economic environment is also a very dangerous play. Getting out of crypto and into dollars, is like swapping one melting ice cube for another. Except your dollar ice cube is guaranteed to continue melting, while the crypto ice cube may freeze up again.
The famous quotation of “Buy when there’s blood on the streets”, attributed to Nathan Rothschild, might be applied to the current very unstable situation for currencies, banks, and assets.
For the small investor, things are even more complex and dangerous. Sitting tight with money in the bank is tantamount to accepting the loss of around 12% a year due to inflation and diminishing purchasing power of the currency.
Therefore, for those brave souls wishing to save themselves from the economic collapse to come, some kind of risk will probably have to be taken. Of course, this doesn’t mean buying all the risky altcoins. There are altcoin projects that could form the backbone of the next financial revolution, but which ones is still very much uncertain in this regard.
Total altcoin market cap at support
Source: Coingecko/TradingView
Looking at the weekly chart for Total 3 (market cap of all cryptocurrencies, excluding $BTC and $ETH) it can be seen that the altcoin market cap has reached support and also the trend line taken from near the top of the last bull market.
Should the price fall through both of these lines, then it would certainly look like a real capitulation for the altcoins, and possibly even an end to the bull market. That said, where there’s life there’s hope. The stochastic RSI on the weekly is currently at the bottom, and therefore a bounce must be coming soon, which might well change the whole sentiment for crypto back to very positive.
Our monetary future is about to be decided
It’s in times such as these where fortunes are won and lost. The Fourth Turning is upon us, and what we have known as our financial world since we were born, could be about to change. Will it be the financial straitjacket of central bank digital currencies (CBDCs), or can crypto free us all?
Disclaimer: This article is provided for informational purposes only. It is not offered or intended to be used as legal, tax, investment, financial, or other advice.
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