pablo heman btc analysis

[harryg]

It doesn't look as if the idea that BTC is seen as a digital store of value akin to gold is borne out by price action.

It behaves as a risky asset, not as a safe store haven - when markets crash, people come out of it, not into it.

Of course they could have been buying on margin, so are forced sellers, I don't know.

[Yodean]

It behaves as a risky asset, not as a safe store haven - when markets crash, people come out of it, not into it.

BTC is a _speculative_ store of value. In time, it will become more stable - like digital gold. Right now, it's basically behaving a bit like TQQQ, a proxy for "risk on" sentiment.

Tbh, I am quite surprised BTC has held up this well. My models suggested that if Nas. Comp. broke 13k to the downside, BTC would be testing 25k. This may yet happen, of course, but for the time being, BTC is looking pretty antifragile.

That 28k - 32k support zone is pretty solid - not even Russian bombs could break through, it would appear.

[harryg]

Speculative store of value, that's a good one

[Yodean]

Speculative store of value, that's a good one

BTC's probably several years away from being seen as a true flight-to-safety asset like the USD or gold, but it'll most likely get there in some fashion. The underlying trend is pretty strong, this one.

My personal view is that once a given investment portfolio reaches a certain size, it should generally contain a certain allocation to USD, gold, and BTC. The allocations could be small, depending on the macro-economic cycle, but they shouldn't be zero.

At this point in its life cycle, BTC has to be viewed separately from the other cryptocurrencies - it should not be lumped together with all the alt. coins.

The 10k+ alt. coins - most of those will die, at some point.

[harryg]

Agreed.

I also like ETH, for different reasons.

On another matter, you will remember some excitement about Ravencoin "halving"? Now I know what that means.
It was 12, now it's 6

Volatility: Gold isn't always a smooth curve either...

Gold.JPG

[Yodean]

Agreed.
I also like ETH, for different reasons.
Volatility: Gold isn't always a smooth curve either...

Yeh, ETH has both more upside potential, as well as downside risk. Other than holding some BITW, I don't play with the small cap. alt. coins, so no RavenCoin for me, lol.

As for gold (beautiful cup and handle pattern on your chart), my previous prediction for gold mostly trading between 1720 and 2000 for '22 is holding up fairly well. Some chance of upside break to 2.1k or thereabouts. At this point, to my eyes, gold is a pretty decent buy at under 1850, and especially under 1820. For a long-term allocation, of course.

You've got a wealth of TA and market experience, so I thought you might find the following potentially interesting, wrt BTC:

Besides my little EBI, which is a bit hard to explain in a post in terms of its calculation, I also keep an eye on the BTC/Nas. Comp. ratio. Generally, BTC should be sold when that ratio is > 4 or so, and conversely, BTC is at a decent buy/accumulation range when the ratio is under 2.3 or so.

This is, of course, assuming that one's Nas. Comp. projection is half-decent (i.e. there isn't a huge crash coming in the Nas. Comp.).

[harryg]

I have a few of the alts, like SOL (ha), ADA, DOT, luckily only in tiny amounts.

Thank you for sharing your BTC/NQ idea. Did you come up with 4 & 2.3 by observation? I ask because these things can change over time.

I like the idea of not looking at things in isolation, eg Gold/Lumber and so on, provided there is a rationale. Used to have a book called Intermarket Technical Analysis that looked into all sorts of relationships.

Looks like BTC has been a bit of a safe haven recently...

[harryg]

(beautiful cup and handle pattern on your chart)

I call that one the Rightward-Facing Labrador...

GoldLab-sm.jpg

[Yodean]

Thank you for sharing your BTC/NQ idea. Did you come up with 4 & 2.3 by observation? I ask because these things can change over time.
I like the idea of not looking at things in isolation, eg Gold/Lumber and so on, provided there is a rationale.
Looks like BTC has been a bit of a safe haven recently...

Regarding the previous graph, you have underrated artistic talents, lol.

Yeh, the BTC/NQ idea was something I came up with, simply by observation, and as a consequence of tinkering with my little EBI. Like you said, these types of ratios and indicators may not hold up over time, and I generally never trade based on one single indicator. With that said, the BTC/NQ ratio, as well as the EBI, tend to perform fairly well at the extremes.

The lumber:gold ratio I stole from someone else. The basic rationale is that it's a measure of risk appetite. Very high values do not imply that a correction is due necessarily, but merely that the conditions for one are starting to form (say, above 0.77 or so). The reverse is also true - i.e. values less than 0.27 or so favour the macroeconomic environment supporting some sort of equity market bottom. As with the other indicators, the L:G tends to perform best at the extremes.

[SOL]

(beautiful cup and handle pattern on your chart)

I call that one the Rightward-Facing Labrador...

GoldLab-sm.jpg

I see the humour switch is back on. Hope you are feeling better. Life is short but stupidity seems to be everlasting, and you do have some artistic skills. That vodka bottle design was a classic

[SOL]

Well here is an idea take a bullish ETF and plot it against a bearish ETF, extreme divergences should help shed light on market direction.

Another one is the Gold to Silver ratio, extreme deviations mean its time to buy or sell

The sexy factor is something we have playing around with. The sexier women dress up the better the economic outlook. One way to measure this is to possibly look at skirt length or the number of women dressing up provocatively you run into per week. Strip clubs don't count

[harryg]

I remember having a very heated discussion in Costa Rica about 20 years ago with some 'silver bugs'. They were convinced that silver would quadruple at any minute due to the gold/silver ratio reverting to 16. I didn't know a great deal about it, but my antennae always prick up when I'm told that something *must* happen for such a bizarre reason. They are of course, still waiting for Gold/Silver 16, whereas if they had adapted a little they could have used the ratio more sensibly, looking for more recent extreme levels like 25 & 80 or whatever.

In my view, one of the reasons that TA can fail is that practioners don't adapt their approach.

[AstuteShift]

Well here is an idea take a bullish ETF and plot it against a bearish ETF, extreme divergences should help shed light on market direction.

Another one is the Gold to Silver ratio, extreme deviations mean its time to buy or sell

The sexy factor is something we have playing around with. The sexier women dress up the better the economic outlook. One way to measure this is to possibly look at skirt length or the number of women dressing up provocatively you run into per week. Strip clubs don't count

Don’t forget the social media factor, the more outrageous selling of crap and the fake positive comments, the more we heading to a feeding frenzy.

My favorite is twitch streamers with their army of retards, asking which stocks to buy? That’s always a great indicator lolol

[harryg]

I see the humour switch is back on. Hope you are feeling better. Life is short but stupidity seems to be everlasting, and you do have some artistic skills. That vodka bottle design was a classic

Thanks Fighting melancholy with silliness.

[Yodean]

80 or whatever.

A gold:silver ratio of over 80 is as good as ... gold, actually. Lol.

In all seriousness, when the G:S ratio hits 80 or higher, I always buy some PMs in some form ... it has never failed me. You may have to wait a bit, but it's always profitable. How much? That's a whole other discussion, i.e. when to sell. It's one of the best PM buy signals I've ever come across.