Capital Flight & Bitcoin

People often talk about “capital flight”, Bitcoin, and China.

But is it true? If it is then it must apply to Hong Kong too, right? Well…

This could be a 10K word essay, however charts tell a more detailed story with far less words.

The theory is this: Currency issues and/or restrictions in a country (notably China in the past) force the average person to seek shelter in more safe assets. One of those happens to be Bitcoin at times. So they say.

While it is true that CNY devaluations often happen with BTC prices rising, it is not true that the average citizen of a nation is trying to protect their savings.

We will quickly examine China & Hong Kong vs Argentina & Venezuela.

The first chart is Hong Kong. It shows no large deviation from the BTCUSD price chart. For comparison the second chart, Singapore, was added. It looks much like Hong Kong’s. This does not indicate that the average citizen is using Bitcoin as a channel for capital flight or as a safe haven.

The third chart is China. It shows even less interest as a safe haven. China and Hong Kong are seeing just the ripples of turbulence in their currency. Argentina and Venezuela is what happens if the damn breaks. In those countries we can clearly see Bitcoin is used by the public and is a safe haven. (see below)

Is Bitcoin a safe haven asset? Yes, but only once it’s too late. Maybe there’s a lesson to be learned here??

Disclaimer

$DASH, the MasterNode King

click chart to enlarge
click chart to enlarge

DASH is showing signs of a bottom.

Is it an interm bottom, or something better?

DASH has been the undisputed king of MasterNode coins for years. Because of that it often signals what is to be expected of the altcoin sector. We are only looking at the BTC pair as that’s all that matters for getting the best price when trying to accumulate enough for a node.

The Charts

Chart #1 shows that when there is a long legged wick to the downside price almost always retests the bottom of the wick, and then turns up into a strong bounce or even bull market. That formation seems to be coming to completion.

Chart #2 shows that when price drops 63%, or greater, from the last swing high that a bounce and/or bull market is coming soon. The 2 structural bear markets both had a grand total of roughly 90% decline. The current conditions show that the current leg down is due for a bounce AND the structural bear market has almost finished it’s downward trend.

Now what?

The question becomes, “now what?” It is very possible that the price could cut in half again. Or we could be on the cusp of a new bull market. That’s a lot of uncertainty.

The charts we reviewed are all the 1W time frame. On the 1D price needs to be breaking 0.0098 to begin leaving the sideways range it’s currently in. Bulls start getting curious at 0.00925 and 0.0098 respectively. Anything under 0.0085 will start to attract the bears again.

Disclaimer

ETHEREUM

click chart to enlarge

Ethereum is in a fairly stable price channel, for now, but…

…can Bitcoin continue to drag Ethereum upwards?

The ETHBTC pair is not doing great at all, but it’s more a function of ETHUSD not going up at the same rate as BTCUSD, rather than ETHUSD selling off, which is encouraging. If ETHUSD continues to be pulled upwards by BTCUSD then USD/Fiat/Cash traders will follow the safe” high cap altcoins like ETH.

How is the price action looking?

Price consolidated in a triangle at the beginning of the year, broke upwards, retested the breakout, then resumed the upward trend in a fashion that has made a clear price channel.

The upside target would be near the upper limits of the channel where there is convergence with the horizontal price level/retail raid starting around $450. Downside will see price action traders rethinking their strategies if the price drops through any of the 3 small red horizontal lines on the right side of the chart.

All of 2019 has the StochRSI resolving at overbought each time it has left oversold. If that trend continues then the possibility of price reaching >$450 is high.

Disclaimer

Tesla Stock Takes a Beating

Tesla Stock Chart, Tradingview, TA
Click To Enlarge

Tesla (TSLA) Stock Weighing on Elon’s Future Plans

The main thesis of the chart is based on something I have heard a fair amount regarding Tesla, Elon Musk, and debt obligations. Which is that a combination of TSLA stock price near $150 & Elon’s debt serving obligations would force him to sell about 15% of of his shares.

When looking at the chart he probably doesn’t even want to think about that. Unfortunately for him in less than half a year the price has been cut in half and is now in an accelerating selloff into a critical support level.

If this current level breaks there is open air to $140. Bears and Tesla critics would love to spend every dime they can to push that level and crush the company and its founder.

Elon knows this. So there must be great news and/or capital being raised for release asap or else Elon is forced to sell at the break of support so that bears do not break him when he is down another 30% from here.

This is the first time the current level has been tested. Bears are fiesty and they’ll likely been adding to positions. Therefore a short squeeze off this level would not be out of the ordinary.

The deciding factor is Elon himself. If he knows there is minimal capital and news to work with then he has to sell some. If that happens then traders will see it on the chart. Have conditional orders set and ride the short bus down to pound town.

Technical Bounce and/or Short Squeeze Looming?

Price has seen a 50% reduction in half a year into accelerating momentum the last couple weeks. A 50% retrace is a juicy Gann number, as is the previous support level wich has never been tested until now. Cocky Bears often add to positions on the way down, so the possibility of a short squeeze off of support is fairly common the see in an accelerated market.

It is crucial that Elon create some hype and financial support for a bounce or else he will personally feel it. We are essentially betting on his ability to save his own rear end. Good Luck!

You can trade TSLA with BTC at SimpleFX by clicking here

Charts are powered by the SCMR Analysis Suite

Disclaimer: http://www.coinstreetnews.com/disclaimer/

Congress to Debate Gold and Silver Income Tax Exemption

 The battle to end taxation of constitutional money has reached the federal level as U.S. Representative Alex Mooney (R-WV) today re-introduced sound money legislation to remove all federal income taxation from gold and silver coins and bullion.

The Monetary Metals Tax Neutrality Act (H.R. 1089) backed by the Sound Money Defense League and free-market activists – would clarify that the sale or exchange of precious metals bullion and coins are not to be included in capital gains, losses, or any other type of federal income calculation.

“My view, which is backed up by language in the U.S. Constitution, is that gold and silver coins are money and are legal tender,” Rep. Mooney said.

“If they’re indeed U.S. money, it seems there should be no taxes on them at all. So, why are we taxing these coins as collectibles?”

Acting unilaterally, Internal Revenue Service bureaucrats have placed gold and silver in the same “collectibles” category as artwork, Beanie Babies, and baseball cards – a classification that subjects the monetary metals to a discriminatorily high long-term capital gains tax rate of 28%.

Sound money activists have long pointed out it is inappropriate to apply any federal income tax, regardless of the rate, against the only kind of money named in the U.S. Constitution. And the IRS has never defended how its position squares up with current law.

Furthermore, the U.S. Mint continuously mints coins of gold, silver, platinum, and palladium and gives each of these coins a legal tender value denominated in U.S. dollars. This formal status as U.S. money further underscores the peculiarity of the IRS’s tax treatment.

A tax neutral measure, the Monetary Metals Tax Neutrality Act states that “no gain or loss shall be recognized on the sale or exchange of (1) gold, silver, platinum, or palladium coins minted and issued by the Secretary at any time or (2), refined gold or silver bullion, coins, bars, rounds, or ingots which are valued primarily based on their metal content and not their form.”

Under current IRS policy, a taxpayer who sells his precious metals may end up with a capital “gain” in terms of Federal Reserve Notes and must pay federal income taxes on this “gain.”

But the capital “gain” is not necessarily a real gain. It is often a nominal gain that simply results from the inflation created by the Federal Reserve and the attendant decline in the Federal Reserve Note dollar’s purchasing power.

Under Rep. Mooney’s bill, precious metals gains and losses would not be included in any calculations of a taxpayer’s federal taxable income.

“Inflation is a regressive tax that especially harms wage earners, savers, and retirees on a fixed income,” said Jp Cortez, policy director at the Sound Money Defense League. “We are encouraged to see legislation targeting the evils of the Federal Reserve System.”

“The IRS does not let taxpayers deduct the staggering capital losses they suffer when holding Federal Reserve Notes over time,” said Stefan Gleason, president of Money Metals Exchange, a precious metals dealer recently named “Best in the USA” by a global industry ratings group.

“So it’s grossly unfair for the IRS to assess a capital gains tax when citizens hold gold and silver to protect them from the Fed’s policy of currency devaluation.”

Source

Is Ripple Still on Repeat?

Ripple, XRP,

The pattern of price movement on the XRPBTC chart has been on auto-pilot repeat mode for 22months now. Therefore we currently have a VERY simple market view :

Bear: wait for the support to break and short it. Likely to be a short sell for a few months. Bullish tilt would emerge after sideways to play a relief rally.

Bull: long a breakout of resistance. This would also lend itself to the price pattern finally stopping its repetition after almost 2years of easy trades. Bearish tilt would be reactivated under the breakout of resistance.

Charts are powered by the SCMR Analysis Suite
Disclaimer

Is Ethereum in the Midst of its Seasonal Trend?

The Ethereum / Bitcoin pair seems to be in the midst of its seasonal trend…for now. If the Bitcoin bear market proves too strong then it will suffer and follow Bitcoin lower.

Ehtereum 1Day Chart | 12-30-2018
1-Day Chart

The ETHBTC 1D chart should be making the blue box formation now. The break in direction out of that blue box has been the “set up” trade versus the December 6th “knife catch” trade the past few years.


Ehtereum 1Day Chart | 12-30-2018
1-Week Ethereum

The 1W chart shows much of the same. In this one we are also taking note of the momentum as it is also making the same pattern as previous years. If ETHBTC can get a 50 to 100 day trend then the first hedging opportunity is: the close after the blue bar prints on the weekly.

It seems like the blue box on the daily should coincide with the weekly momentum reaching overbought. That confirms the view that the break in direction will form a new trend. That being bearish until it is oversold again, or bullish until the blue bar prints, and then reevaluate the market conditions.

Charts are powered by the SCMR Analysis Suite
Disclaimer

Litecoin

Litecoin Chart from 12-18-2018

Not sure what to say about Litecoin other than the bleeding obvious.

  • Lots of similarities in the downwards channel post all time highs. They are relentless in their resistance to upside movements.
  • All buys during accelerated selling events, aka when price goes below support, have turned into a profitable trades.
  • A year and a bit of downtrend is market by a halving event in both cases.

Will history repeat? It usually does in crypto, but if Litecoin does not go up in the Spring of 2019 towards the Summer halving event then that could be viewed as a bad sign for Bitcoin’s next halving.

If history does repeat then buying LTCUSD in the $20’s and selling when the LTCBTC ratio nears 0.018 – 0.019 is a potential trade to keep an eye on.

Charts are powered by the SCMR Analysis Suite
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