BTC - Senate Banking Committee Bitcoin Recap
Finally after weeks of Doom and Gloom in the news space for Bitcoin' we got our first positive news in weeks. First we have to separate "News" from fundamental events which are two separate things. This was a Fundamental event and with a 20%+ bounce off the low of 5900 the street appears to be welcoming a breath of fresh air.
What did we learn from the hearing.
1) The CFTC is very pro Bitcoin' and emerging technologies even creating LabCFTC to promote responsible FinTech innovation
2) The SEC is more concerned about ICO' and enforcing current regulations
3) Everyone was concerned with insuring consumers and retail investors were protected as best as possible against scam coins, and understood the risks of trading these assets.
4) There was concern with how crypto currency exchanges are not regulated in the same manner as other exchanges
5) Many senators appeared to lack knowledge of the space entirely
6) DLT is a disruptor and will have beneficial impact in the future and would not be here if it wasn't for bitcoin'
7) There were 3 concerns that the SEC had in allowing crypto ETF's which were "price discovery, custody, and volatility"
8) Big Banks are manipulating the markets and getting away with hand slaps.
9) The markets have less oversight then our current markets which could lead to market manipulation.
10) There was no mention of Banning Bitcoin
The hearing focused more on regulations to protect consumers, and what the SEC, CFTC and other agencies were doing to eliminate scams and fraud and enforcing current laws and regulations. While the SEC chief was overall Neutral to Slightly Positive, the CFTC chief was highly positive even mentioning that his kids were investing into the space. This is clearly a step in the right direction and positive for the space as a whole.
This definitely had an impact on pricing as we bounced off our low as the opening statements were ongoing. We had our strongest daily buying volume since Nov 2015. Now to be clear we are still in a mid term downward trend. If I did not own any bitcoin I would probably be adding here with a partial position. If I enter any space for the first time it is dangerous to go all in out of the box. As I updated yesterday we are testing the median of the channel and looking to find support at the 0.618 level of the overall move from 175 to 19500. What I want to see is the 0.618 to hold, and a breakout of the channel above the 8398 level which is the 0.382 level from the recent down trend. Until we break the 9860 level we are still in a bear market IMO.
Shorting this market is simply foolish whether right or wrong. Shorting on margin will result in eventual portfolio suicide as many in the ETN' markets found out Tuesday. For years they made money only to see it evaporate in one day, and some, causing a 500pt selloff at the open. Keep in mind being out of the market is a portfolio killer as well. I mentioned that 6 of the top performing DOW days happened within 1 week of the 10 worst performing days. Yesterday was the 5th best DOW day ever, one day after a 5%+ pullback. This is why market timers do not outperform buy and hold portfolios and why traders under perform long term buy and hold strategies even though they are cracking champagne bottles.
In the era of fast money it is sometimes hard to hold through these times, especially for newer investors. Having been through many crashes I am un-nerved holding here. I understand this is a highly risky market and I can lose everything. I am fine with that and SWAN. I believe long term the bull market resumes and I just wait it out. If you are not willing to lose everything you invested in this space, can not SWAN, then you are not following the rules of Smart Investing.
Interesting note by Tom Lee from Fundstrat. "Past sell-offs were followed by rallies of 150% within 84 days", "In other words, we think the risk/reward at these levels warrants adding here, even if there is additional downside".
What did we learn from the hearing.
1) The CFTC is very pro Bitcoin' and emerging technologies even creating LabCFTC to promote responsible FinTech innovation
2) The SEC is more concerned about ICO' and enforcing current regulations
3) Everyone was concerned with insuring consumers and retail investors were protected as best as possible against scam coins, and understood the risks of trading these assets.
4) There was concern with how crypto currency exchanges are not regulated in the same manner as other exchanges
5) Many senators appeared to lack knowledge of the space entirely
6) DLT is a disruptor and will have beneficial impact in the future and would not be here if it wasn't for bitcoin'
7) There were 3 concerns that the SEC had in allowing crypto ETF's which were "price discovery, custody, and volatility"
8) Big Banks are manipulating the markets and getting away with hand slaps.
9) The markets have less oversight then our current markets which could lead to market manipulation.
10) There was no mention of Banning Bitcoin
The hearing focused more on regulations to protect consumers, and what the SEC, CFTC and other agencies were doing to eliminate scams and fraud and enforcing current laws and regulations. While the SEC chief was overall Neutral to Slightly Positive, the CFTC chief was highly positive even mentioning that his kids were investing into the space. This is clearly a step in the right direction and positive for the space as a whole.
This definitely had an impact on pricing as we bounced off our low as the opening statements were ongoing. We had our strongest daily buying volume since Nov 2015. Now to be clear we are still in a mid term downward trend. If I did not own any bitcoin I would probably be adding here with a partial position. If I enter any space for the first time it is dangerous to go all in out of the box. As I updated yesterday we are testing the median of the channel and looking to find support at the 0.618 level of the overall move from 175 to 19500. What I want to see is the 0.618 to hold, and a breakout of the channel above the 8398 level which is the 0.382 level from the recent down trend. Until we break the 9860 level we are still in a bear market IMO.
Shorting this market is simply foolish whether right or wrong. Shorting on margin will result in eventual portfolio suicide as many in the ETN' markets found out Tuesday. For years they made money only to see it evaporate in one day, and some, causing a 500pt selloff at the open. Keep in mind being out of the market is a portfolio killer as well. I mentioned that 6 of the top performing DOW days happened within 1 week of the 10 worst performing days. Yesterday was the 5th best DOW day ever, one day after a 5%+ pullback. This is why market timers do not outperform buy and hold portfolios and why traders under perform long term buy and hold strategies even though they are cracking champagne bottles.
In the era of fast money it is sometimes hard to hold through these times, especially for newer investors. Having been through many crashes I am un-nerved holding here. I understand this is a highly risky market and I can lose everything. I am fine with that and SWAN. I believe long term the bull market resumes and I just wait it out. If you are not willing to lose everything you invested in this space, can not SWAN, then you are not following the rules of Smart Investing.
Interesting note by Tom Lee from Fundstrat. "Past sell-offs were followed by rallies of 150% within 84 days", "In other words, we think the risk/reward at these levels warrants adding here, even if there is additional downside".
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