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Multiday Crypto Dips = Major Crash Predictor?

Cryptocurrencies have many potential benefits, but falling crypto prices can be difficult to get angry with.

Ian King, my colleague and crypto expert at Banyan Hill Publishing, states that crypto is the most volatile market he has ever traded in his career.

This week Ask Adam anything, I address a question from a reader who is worried about a price crash for a few days.

Let’s see what’s happening in the wild crypto market.

Green Zone Fortune When Cryptographic dip

mat: This question comes from your subscriber Green Zone Fortune service.

Thomas asks:

Hello, I’m a subscriber to Adam’s Green Zone Fortune And I feel panic.Can you tell me what Adam and the brain are Money & Market Will you make a continuous drop of 11% and 6% in the crypto market over the last two days? Is this the beginning of a major crash like March 2020? If that continues, would you recommend selling or holding?

Adam: The question has considerable complexity and many veins. I’m glad I unpacked it.

First, I want to talk about what we are trying to do Green Zone Fortune.. We are building a balanced equity portfolio that we plan to hold for as long as possible for six months to three years.

We are looking for companies with above average growth and operating on megatrends at the forefront of new and innovative technologies. These companies are opportunistic in the destructive field.

Let’s use energy as an example.

The traditional energy market has entered a catastrophic period with the March 2020 crash. We have recommended several traditional energy companies.

We are very bullish on electric vehicles (EVs) and green technology, but the turmoil in the traditional oil and gas sector was so lucrative that we couldn’t miss it.

We are building a balanced portfolio aimed at overcoming the ups and downs of the market.

We use a green zone rating system that looks at momentum, size, volatility, quality, value and growth. So we are looking for a balanced stock.

As a result, we are not trying to predict the next market downturn.I don’t think it’s the best way investment.. It’s not easy to predict a big dip, so we don’t try to do so.

Difficult to predict asset crashes

How many people have seen or didn’t see the March 2020 crash? It was one of the fastest and sharpest bear markets in history.

Therefore, I advise this reader not to worry too much about whether a 11% or 15% decline in the crypto market over the next few days will weigh on the stock market.

This is an volatile market. Remember that Ian called Crypto the most volatile market he has ever traded in his career.

I started trading forex with considerable leverage, so that’s certainly how the crypto market feels to me.

Ian said something else I think it’s better to put it behind your mind if you’re soaking your toes in crypto water.

Unstable assets such as stocks often take three steps and then one or two steps back. Well, you can think of the crypto market as less stable by a few or four orders of magnitude. That is, you will probably take 9 steps forward and 4, 5, or 6 steps back. Maybe it’s 15 steps forward and 10 or 12 backwards.

That is why we are studying trends.

Cryptographic trends

I’m looking at Bitcoin and Ethereum prices, but we’re still on the rise. We are still in a bullish market. Both coins recently made new highs. This latest pullback is basically just a retest of these highs.

Therefore, with Bitcoin, the long-term upward trend remains even if it remains above $ 30,000 to $ 40,000.

The important thing is to size the position. If you place yourself small enough so that these big shakes do not affect your psychology and your daily life, you can be there in the long run. You can put yourself in a different asset class, which has a lot of potential.

If you want to learn more from Ian Click here to see his “Crypto’s Third Wave” presentation now..

Personally, I don’t really care about the current trends and momentum in the crypto and stock markets.

How about stocks?

mat: What if we look at this on the inventory side? What if I see this on S & P or Dow? Will it change the perspective a bit?

Adam: Well, sure.

In the stock market, a typical correction is a 10% move from a high. The typical bear market is, by definition, a 20% move.

If you see this kind of volatility in the stock market, you need to be more worried. It’s all relative and that’s the point.

So if you look at the 50-day and 200-day moving averages of the crypto, you’re basically showing the same trends and momentum as using those averages in a stock index like the S & P500. ..

So, as we are recording this now, Bitcoin is down 15% from its highs. However, it is still above the 50-day moving average and above the 200-day moving average. It is making higher highs and higher lows.

As a technical analyst, it’s a bullish trend for me that I want to invest in. When the lows are given, when the lows and highs are lowered, and you will start to manage the risk. There is a difference in momentum.

But nevertheless, it’s just the magnitude of the movement. You can’t see the numbers. You need to check the trend line and the moving average. It will give you the same type of analysis you can do on the stock market.

For good profit

Adam Odel

Chief Investment Strategist

Multiday Crypto Dips = Major Crash Predictor? Source link Multiday Crypto Dips = Major Crash Predictor?

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