2020-09-28 19:30:08
Now there is a lot of discussion about the second wave of coronavirus.
The most popular expected scenario is that the second wave will come and everything will collapse. It will be like in March 2020. At first glance, it looks like it. The dollar index is rising, gold and funds are falling, Bitcoin follows.
But I think that a scenario with a massive plum is unlikely to happen.
First of all, there was no real reason to introduce quarantine and to drop the economy even in the first wave. Some countries did it to solve political and economic problems, others did it under the herd instinct (everyone ran and I ran also).
I already said- in Europe only the Swedish and Belarusian leaders had the brains not to introduce quarantine. There was no apocalypse there, which once again confirms that there was no need for such a restrictions.
Secondly, about 10 trillion dollars have been added to the economy over these six months. This mass of liquidity keeps markets afloat, and there is nowhere else to go. Markets are falling and they are being bought back. And below they will buy back even more.
Thirdly, there was fear in the spring. And the financiers didn't know how it would end, because this never happened, and ordinary people went crazy. I saw people wearing gas masks going to the shop or wearing masks swimming in the sea in May. And even quite adequate people were affected.
When a person is in this condition, he can sell Bitcoin for 5K. And to buy toilet paper, masks and buckwheat (and this is not a joke, the real story). Now the financiers roughly know what will happen - the drain and panic will start - and they will generate money, stop the fall and move on to growth. That's why it will be difficult to push the big players to panic sales. You can push the small ones. But what they pour out will buy back the big ones. Ordinary people have also realised that the coronavirus is slightly more dangerous than the usual flu and there will be no millions of deaths and corpses on the street.
Fourthly, the regulators, who have already poured trillions into saving the economy, now have no choice but to continue the process. If they delay and let it collapse, demand will come from them. So they will use a well-known and proven recipe - to generate money and inject it into the markets.
The combination of these factors, in my opinion, virtually eliminates a collapse like that of March. I am talking about the stock market.
According to the crypto, we see a strong correlation with the stock market. On the one hand, in the month that Bitcoin spent above 11K, the quality of the audience has greatly deteriorated. This is what we are talking about here. And this is in favour of the plum.
But Bitcoin is hard to let go down. They first held 5 attacks at 9,800 in the first half of the month, now they are also quite resistant to both negative and rising dollar indexes. So I see two options in the medium term - either the correlation will continue and Bitcoin will find a bottom somewhere around 9300-8900, or Bitcoin will stop correlating with the fund and become a protective asset. This is the scenario that I talked about in today's Review.
It's not as difficult as it seems - the correlation with the fund started in March 2020, before that in 2019 Bitcoin was growing as the fund was falling. To achieve this effect now, all you have to do is buy back within 5-7 days what hamsters and deer will pour out when the funds fall. From there, everything will go on by itself.
If this option is not turned around, it means talking about "whales that control the course" - fairy tales for deer).
For the next couple of months, I expect high volatility on both the stock and the crypto. And a decrease in the Bitcoin correlation with the S&P 500 I see a possible bottom of Bitcoin at 9300-8900. And we may not even go there. Leaving below will cancel the growth option by the end of this year.
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