On Monday of this week (Labor Day holiday in U.S.) I was having what can only be described as an “animated” discussion between myself and a friend. It had nothing to do with them trying to rile me up (which is often the case) but was more along the lines of me doing it too myself!
As we were discussing different “market” machinations, I just became infuriated with the overarching consensus of, “Nothing bad can happen because, the Fed’s got our back!” attitude for complacency.
Personally, I’m far more sick and tired of the drivel I need to sort through to stay current than I’ve ever been. And, it showed, for it was hard to constrain my absolute disgust. So much so, for the first time in I don’t know how long, my friend was actually trying to get me onto another subject rather than, to keep going, which is usually the case for their sheer enjoyment purposes.
But, this time, was truly different, and they knew it. Yes, I was in that type of mood.
Now, the above isn’t to somehow “highlight” my holiday activities. Why I’m expressing it is for context, because of what came only a day or so later, regarding Bitcoin™.
Here’s what I said (well, maybe a bit more strongly with a few expletives thrown in, than just said)…
If I’m correct in my hypothesis, you’re not going to see some gradual stair-step down or something akin to it. No, what you’ll see is you’ll either wake up to a headline or you’ll be going about the day, and they’ll be some out-of-the-blue ‘market’ reversal that will take everyone by surprise, causing either a limit-down type price action or something more.
That’s precisely what happened in Bitcoin the other day. (Note: I was implicitly talking about the overall “markets” in my discussion. Bitcoin was also discussed, but was an afterthought.)
For those that may not follow the machinations of the crypto space, Bitcoin dropped nearly $10,000 in the course of about an hour. Again, completely out-of-the-blue, but more importantly, was the exact opposite of what the entire “smart-crowd” had pontificated.
In other words: The El Salvadorian government institutes legitimacy as to accept Bitcoin as legal tender. And rather than going up (which was all but guaranteed by the cryto-soothsayers) it plunged, and plunged hard.
Again, I was not directing my initial conversation at Bitcoin. However, I do strongly believe that the same is now, more than ever, a very real possibility for the “markets” in general.
Below is the latest edition (~12:00PM ET) of the “$4Trillion Line” observations I’ve been using. As you can clearly see, as I’ve been pointing out, we are now no longer even able to spend one day above it and are now falling away further. To wit:
As always, we shall see. However, Bitcoin may be a precursor to what awaits. After all…
All the so-called “experts” said that wasn’t possible either. And there it is.
© 2021 Mark St.Cyr
Note: This is not trading or investing advice of any sort. This commentary is for “big picture” discussion purposes only. Please read, or re-read the “About This Site” page for any questions or clarifications.