Bitcoin Dives Below $20,000 Yet Again, What’s Cookin’?

August 29, 2022

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1:20 am

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Bitcoin chart courtesy of StockCharts.Com

2/3

Noted above is the NYSE close yesterday (Friday).

As this chart shows, BTC and Ether are currently lower than the NYSE close.

It is still ~30 hours until ES reopens tomorrow night, so watch BTC price action as an indicator of the ES reopening. pic.twitter.com/bDzc1m8VhR

— Jim Bianco (@biancoresearch) August 27, 2022

Bonus

Why does this matter? The SPX was hammered y’day after Powell’s “no pivot” speech. As this chart shows, it has already retraced more than .382 of the June rally.

Is SPX oversold and ready to bounce? Or is more pain coming Monday? BTC this weekend will offer clues. pic.twitter.com/4QXPN1CVtI

— Jim Bianco (@biancoresearch) August 27, 2022

Bitcoin vs the Nasdaq 100

Here is correlation between Bitcoin and Nasdaq100. pic.twitter.com/KjuRRAy8Yy

— Fibo Invest (@FiboInvest1) August 27, 2022

Bitcoin a Coincident Indicator of Risk

Not leading, coincident.

Since risk assets do not trade over the weekend, crypto can “fill the gap” and tell us what they might be doing if they were trading.

— Jim Bianco (@biancoresearch) August 28, 2022

Warren Worried About Recession

Warren and other democrats “worried” the Fed puts us into recession… looks like the word is out that it’s coming and they are getting ahead of it to scapegoat Powell https://t.co/h3CvpYuXld

— Live Monitor (@amlivemon) August 28, 2022

Advice From Jim Cramer

We dead 💀 https://t.co/rW6d60OuTW

— Live Monitor (@amlivemon) August 29, 2022

Not that you want it, but there it is.

This post originated on MishTalk.Com.

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62 Comments

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oee

1 year ago

The simplest explanation is relatively tight monetary policy. There is no money or less money to speculate with. Also, some people maybe cashing out to meet expenses. As more people sell bitcoin than purchase it , the price comes down.

Lisa_Hooker

1 year ago

Reply to oee

Then there are those few, those precious few, that have realized “what a scam” and have removed their winnings (hopefully) from the casino.

JackWebb

1 year ago

I don’t think we’ll see an ’08-style housing crash for the reasons Mish has laid out, but I wonder about crypto. No one really knows where those tentacles go, and I think that “no one” includes the Fed. If there’s a “liquidity event,” I bet that’s where it originates, just as the Panic of ’08 started in the MBS market. Every bull market is characterized by rising fraud. The longer the bull run, the more fraud. This has been a very long bull run.

Bam_Man

1 year ago

A very ugly chart.

Casual_Observer2020

1 year ago

The corporations want their slaves back in the office:

link to yahoo.com

MPO45

1 year ago

Reply to Casual_Observer2020

Yes they do but most don’t plan to go back and many (smart) are opting to move overseas.

link to cnbc.com

let’s see:

Option A: America – commute/stuck in traffic for hours, spend day in cubical farm, pay high cost for poor quality food, commute hours back home. Waste money maintaining a car and the car ‘ecosystem’ then sleep, wake up, rinse repeat. Worry about endless gun violence.

Option B: Portugal (or pick country) – Work from home, high quality meals, explore a foreign country, spend weekends traveling to even more countries. mass transit system means don’t have to bother with a car/insurance/maintenance/parking/etc. Little to no gun violence.

Which one would you choose?

Doug78

1 year ago

Reply to MPO45

You forgot other Options.

C: Win the lottery and never work again in your life.

D: Marry a rich widow.

E): Become a billionaire in two months by winning at futures strategies nine times in a row.

F): Be the son of the US President.

There are many others as well.

Casual_Observer2020

1 year ago

Reply to MPO45

Actually I think it depends on your employer. Here on the west coast, it has been normal to work from home at least a few days a week. The rules are not really enforced by most companies I’m aware of. Portugal sounds nice for awhile. Millenials are more quixotic as they should be. FWIW, I don’t think anyone who doesn’t have kids really matters anyway as they have no skin in the game. Most millenials are living in fantasy land. Companies will figure out of a way to find people that have to work and then let go of the ones they deem lazy in the next recession. This is the way it has always worked. Also the millenials that start their own business will be singing a different tune once they have to run a business and run into employees that behaved the way they did. There is a lot of reversion to the mean coming and not just when it comes to numbers. Behaviors also will revert to the mean as we enter a long recession. I really believe the Fed was pushed by corporations to raise interest rates because companies lost control of their employees and the Fed saw this in wage spirals. Companies can’t give 30% wage hikes or more and expect to survive without hiking prices equivalently. None of it was/is sustainable. Last week I found a new house cleaner for 50% lower than the current one with the same productivity. This is where the economy is headed.

JackWebb

1 year ago

Reply to Casual_Observer2020

If I had kids, I’d make sure that they picked a trade and learned it along with their conventional schooling. I’d steer ’em toward anything electric. HVAC is forever, and if a kid is bright, electricity is a superb foundation for a whole lot of other STEM.

Lisa_Hooker

1 year ago

Reply to Casual_Observer2020

Just be thankful you never had to manage software engineer/coders. There is quite a range of acceptable proficiency.

Lisa_Hooker

1 year ago

Reply to MPO45

Someplace where I don’t have to leave for 6 months every 6 months. Work visas are difficult to obtain in countries that respect and enforce their own borders.

8dots

1 year ago

JP increased good collateral in the o/n market to prevent panic. NQ already retraced 56% of the move from Mar 2020 low. ES retraced 44%. What can the Fed do if NQ retrace 80%-90%, or breach Mar 2020 low.

Can that happen : yes. Is the Fed ready : we don’t know.

Salmo Trutta

1 year ago

Crypto was a pyramid scheme.

Lisa_Hooker

1 year ago

Reply to Salmo Trutta

Perhaps. Social Security IS a pyramid scheme.

Billy

1 year ago

Crypto mining uses way too much electricity. There is no way our gov can keep allowing it if they want to keep selling us the conspiracy theory of Climate Change.

Well maybe so. Have you seen the latest babbling Joe videos? People believe he’s still running the show.

KidHorn

1 year ago

Crypto currencies are stupid beyond belief. They have no value and cost a fortune to produce. The only reason anyone buys them is because they think they can sell it for more to someone even dumber than them.

PapaDave

1 year ago

Reply to KidHorn

You mean: like baseball cards?

KidHorn

1 year ago

Reply to PapaDave

No. Baseball cards are more like art. Costs very little to produce and can eventually be worth a lot because of uniqueness and people like looking at it.

Doug78

1 year ago

Reply to KidHorn

Collectors often have OCD.

JackWebb

1 year ago

Reply to PapaDave

Funny you mention baseball cards. One of my brothers passed away 6 months ago, and aside from my share of the estate I inherited an AR-15 (as if I needed another one) and about 350 baseball cards. Found a good website to check values, and it looks like they’ve been rising. Scoff at cards, but there’s at least an asset, trivial as it might be. Looks like only 5 or 6 of them are worth $100 or more. It depends heavily on condition, so at some point I will have to pop for a grading service because ungraded cards ain’t worth squat.

By the way, that $12+ million Mantle card is quite rare, and in perfect condition. My brother’s collection includes a couple of 1964 Mantles, and the preliminary values are $750 to $1,600 depending on the grade. The grading standards get quite picky as you go up the the rating scale.

Maximus_Minimus

1 year ago

Reply to KidHorn

Everything has turned into a speculative casino thanks to the central banking cabal, why not bitcoin?

Casual_Observer2020

1 year ago

Reply to KidHorn

Crypto uses lots of energy. They are actually a huge power bill for data centers. Some have limited them due to power consumption.

PapaDave

1 year ago

Everyone should have bought baseball cards. A Micky Mantle rookie card just sold for 12.6 million.

Scooot

1 year ago

Reply to PapaDave

Bought for $50k in 1991. So a compound rate of return of 19.52% over 31 years. Easy to see why the Fed and all don’t want inflation to get out of hand.

Casual_Observer2020

1 year ago

Reply to Scooot

If they were more concerned about inflation, they would take money out of the money supply.

Scooot

1 year ago

Reply to Casual_Observer2020

I expect they will eventually.

KidHorn

1 year ago

Reply to PapaDave

It will appear in an episode of pawn stars in a few years. Rick will offer $3 million. Claiming he has to have it framed, he has overhead costs and there are auction fees.

MPO45

1 year ago

Reply to PapaDave

Everyone should be buying food, rice, beans, canned tuna and meats that can be frozen, ideally with a vacuum sealer. With all this inflation supposedly going away, my grocery bill seems to keep climbing. I noticed store made salads keep shrinking while costing more. Beef portions now seem to come in 4 ounce portions instead of 8 or 12.

Geez, I make a lot of money but even I’m concerned about food inflation and availability plus water shortages mean poor crop yields.

Steve_R

1 year ago

There was hint last week that the market was going to go down when over 50,000 sept16 apple $150 calls contracts were sold for $22.00 on Wednesday.

80% of all trading is done by algorithms.

It is amazing to watch, as of 7am eastern today, why is it that futures markets rally all together(including bitcoin and ether), if you have the ability to watch bitcoin, the S&P 500 futures etc, it is no coincidence that this happens.

As far as bitcoin it is no worst off then netflix, shopify, zoom etc. Hedge funds own the product and sell the futures against it.

vanderlyn

1 year ago

great post and analysis. hat tip.

Captain Ahab

1 year ago

Seems to me that when the Fed sponge soaks up faux wealth, the things that dry out first have no to low value.

JackWebb

1 year ago

Reply to Captain Ahab

Same for real estate. Surest sign of a bubble when crappy land and/or houses suddenly hit the market. I saw it a couple months ago with two friends who came close to buying a piece of land that they were going to build on. They were so enthusiastic that I just didn’t have the heart to dump on what they were doing. Fortunately, the bank wouldn’t originate the loan. At that point, I told them that, as much as they were disappointed, they’d dodged a bullet.

Doug78

1 year ago

Bitcoin has turned out to be a measure of speculative exuberance since its practical uses are rather limited. Now I would say that looking at bitcoin there is still too much exuberance out there and indicates that the bear market is not over by any means.

8dots

1 year ago

DXY monthly, Nixon fractal zone : 103.66/109.50 on Jan 1974.

Salmo Trutta

1 year ago

Reply to 8dots

The E-$ market is contracting, in spite of any “flight-to-safety”, or interest rate differential. The removal of reserve requirements and the transition to SOFR are incentives

Maximus_Minimus

1 year ago

Reply to Salmo Trutta

How does transition to SOFR provide incentives?

What replaced reserve requirements if anything?

Doug78

1 year ago

Mish’s Diner

link to thefarside.com

8dots

1 year ago

DX breached July 14 high and reached 109.44 early this morning. DX weekly breached July 11 high @109.14. If it close above by Fri, bad news for ES. If below, “F” DX ==> “A” for ES. Twenty years high, but losing it’s thrust…

8dots

1 year ago

ES option #1 : Aug 16 high minus Aug 23 low = 200. Aug 26 high minus 200 = 4,000. Option #2 : Aug 23 low minus 200 = 3,900.

ES might stay under Apr 29 close @4,127.50 by Wed close. If not, DM #7 monthly cancelled. Cancelled ==> Santa in Aug.

Blue zone, wall street whales between 90Y – 100Y, are all over the place with Bitcoin. They are still in the game.They gang together on utube, predicting the end of the world. They want to play : buy at the lows, dominate the lemmings who trust them. They don’t need the money. For fun, for Biden, before Nov election. Dem run the world.

Webej

1 year ago

Some more news from the price front:

€003.510 2020-05-28 TTF nat gas futures front month /MWh

€249,902 2022-08-26 TTF nat gas futures Nov 2022 /MWh

€0033,90 2020-03-18 EEX German year-ahead baseload electricity /MWh

€1130.00 2022-08-26 EEX French year-ahead baseload electricity /MWh

€1580.86 2022-08-26 EEX French year-ahead peakload electricity /MWh

So nat gas is up 100× and electricity is up > 45×

Yes I’ve cherry picked the first date. Nevertheless.

(I’ve included the cents just to show this is an actual quote: at the close, not intra-day)

Sunriver

1 year ago

Reply to Webej

$2,000 rents. $3,000 mortgages. $500 electric bills. $600 car payment, etc……… wages still suck.

A 1930s style economic cleansing is coming right up. Should have happened in 2008 but the FED created QE infinity to quell the possibility of civil unrest.

Times up.

Casual_Observer2020

1 year ago

Reply to Sunriver

I see deflation ahead. Bitcoin may be portending that. Maybe the real money system hasn’t caught on yet. After years of preferring inflation over deflation the Fed is effectively reversing course. The air is now seeping out the bubble.

Jack

1 year ago

Reply to Casual_Observer2020

Asset deflation, but expect inflation for consumable goods and food will continue. Rents need to catch up with mortgages.

Jack

1 year ago

Reply to Sunriver

FED would would quell civil unrest this time if need be quicker than in 2098.

All people have become snowflakes due to the pampering received over last 15 years – especially over last 2 years.

Felix_Mish

1 year ago

I’m trying to wrap my head around this idea that BitCoin (and/or Ethereum) can be used as a proxy for USA stock market levels during times useful stock pricing information is not available. At 5AM Sunday morning, am I going the think, “Oh, gosh, I just got X dollars. I should buy another X dollars of stocks right now, so, since I can’t, I’ll just buy X dollars of Coin.”

That’s how it sounds.

1) Who is awake on 5AM Sunday? Are we talking about computers primarily doing this trading?

2) Are stocks and Coins such commodities that they can be treated like a bushel of wheat or a ton of coal or whatnot? “Yeah, gimme X dollars of (flips coin, spins wheel) Swiss Francs, please. Hold the Mayo.”

3) Are the intra-weekend price changes for both just noise from a mondo machine that can’t be stopped? If so, how is it that both Coins and stocks output the same noise? Noise, after all, is, by definition, unpredictable.

Jack

1 year ago

Reply to Felix_Mish

5AM Sunday is near the end of the first working day of the week in Middle East.

Workweek there is Sunday-Thursday (was changed about 10 years ago when working week was Sat-Wed).

Yes, Sunday is like Monday for others.

hmk

1 year ago

Barrons ran an article on Cramer which concluded that shorting his picks was more profitable that buying them.

JackWebb

1 year ago

Reply to hmk

I was living in Seattle when Cramer told the fools who take him seriously (and those like me who never did) that Seattle houses were doing just fine. Right before they got a 30% haircut. LOL

Sunriver

1 year ago

Does Cramer have to let out his sleeves if the NASDAQ drops below $5,000? He really should have to.

Cramer must be on J.P. Morgan’s payroll as J.P. Morgan said the S&P will be at $4,800 by year end. Something about corporate buybacks leading the way.

Mish, its time for a poll. S&P level at year end.

Christoball

1 year ago

Reply to Sunriver

S&P 2,263.69 at end of year.

Esclaro

1 year ago

USD is rocketing to a 20 year high. Gold is getting annihilated as usual!

KidHorn

1 year ago

Reply to Esclaro

Gold is up

PapaDave

1 year ago

Bitcoin is down. Just like gold. How are oil and gas doing?

Christoball

1 year ago

Reply to PapaDave

In inflation adjusted dollars oil is about flat with 2010 oil prices. The difference is that purchasing power amongst a broader basket of goods was stronger at that time. Remove the “War of European and US Kibitzing in Ukraine” from the picture and oil would be flat with a much earlier date in inflation adjusted dollars. Perhaps as early as 2004, 2005. Today’s Oil Prices are a product of Pump and Dump economics.

PapaDave

1 year ago

Reply to Christoball

Lol! I was thinking about 2022 so far. Oil up 23%. Oil stocks up 50%. Or since the 2020 lows. Many stocks up 5x to 10x. Hard to calculate oil since it hit a low of minus $20.

The price of oil, though volatile on a day to day basis, is ultimately the result of supply and demand. Like all commodities.

However. You are free to believe whatever you want. Based on your constant complaining, I’m guessing you missed out on the opportunity in oil and gas stocks that was continuously outlined in the comment section of this blog for the last two and a half years.

And all you can do now is whine.

Christoball

1 year ago

Reply to PapaDave

My other investments are doing as good or better than oil. By your constant bragging about oil you must have missed out on those. So many things have had their ups and downs. Oil has been on a roll for the last two years but so where many other things up until 6 months ago. Oil will get it’s turn in the barrel it always does. No pun intended. Oil is cyclical just like gold. In inflation adjusted dollars gold is not flat but actually up in the same time period I mentioned. I hold neither gold or oil, so not rooting for either one. In a sense everything is up because of inflation, and somethings are up more than the inflation rate. People get excited about all the money they make but it is just a number, and inflation takes it’s cut. It is important to accumulate wealth because it has a tangible component. Your timing with oil seems to be good so far, congratulations. Everything is cyclical that is why there is a market.

PapaDave

1 year ago

Reply to Christoball

“My other investments are doing as good or better than oil.”

Yet you won’t tell us what they are. Why not? Is it because you are a selfish pr*ck who is unwilling to share his investment ideas, or because you are lying pr*ck who is just making sh*t up?

PapaDave

1 year ago

Reply to Christoball

“In inflation adjusted dollars gold is not flat but actually up in the same time period I mentioned.”

Wrong.

Gold is down over the last two years, never mind that its down even more after you take inflation into account.

link to bullion-rates.com

I’m beginning to think that you just make everything up.

Irondoor

1 year ago

“The walls are closing in”.

MPO45

1 year ago

I just check the Asian markets for a clue to Monday. Nikkei getting slaughtered at open in the land of the rising sun.

link to cnbc.com

Jack

1 year ago

Reply to MPO45

Asia markets often just mimic what happened on the NA markets the day before.

JackWebb

1 year ago

Reply to Jack

Usually, after a big whack like last Friday’s the next trading day will have at least a dead cat bounce. Didn’t happen today. That’s a very crude observation, but still, the stock indexes never reached positive territory today. Instead, they did what I’ve seen in the past: Rallied in late morning and early afternoon, then rolled over. Not a good sign for the longs.

Bitcoin Dives Below $20,000 Yet Again, What’s Cookin’?

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