Archives of “October 17, 2019” day

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Bitcoin : Sometimes the reaction is the tell

  
Analysis, BITCOIN

Bitcoin technical analysis chart

The classic expression is that: “The bigger they are, the harder they fall”.
For markets, it might be “the harder they fight, the weaker they are.”
I’ve written about markets for more than a decade and often the articles that generate the most-surprisingly lively reactions are the when a market is weak and you say it’s going lower. Or write something negative about something that’s already beaten up.
It’s true that the most-ardent defenders of something are those who have suffered the most pain.
Bitcoin has been falling for a week and it’s down almost 25% in the past month and 41% since the June spike. The bulls are licking their wounds.
Today’s decline is probably just a continuation for the building bearish sentiment after the failure to break the 38.2% retracement of the Sept fall. Bitcoin is the most-technical market I know of; probably because there is a dearth of fundamental news.
Bitcoin
However I wrote about a tangential fundamental story today as US authorities used Bitcoin to bust 338 people who used it to pay for child porn on a South Korean website that was one of the largest of its kind. It highlights that people who were using Bitcoin thought they had some level of anonymity.
Was the news responsible for today’s 3% fall in Bitcoin and a similar decline in the larger crypto space? No one knows. It’s the same in every market. You can’t get into the head of every seller.
What was different? The post generated a surprising amount of anger. The bulls tell me that everyone knows Bitcoin isn’t anonymous. Well the 338 people who are in jail now certainly didn’t know. In addition, there are still many ways to make Bitcoin anonymous and crypto is used in illicit activities (so is the dollar, I know).
Without getting deeper into the argument, I think the takeaway is the reaction. it’s the kind of reaction you often see in a market that’s weak.
I’m going to take all the anger directed at me as a sign of growing FUD. I’m not writing anything that hasn’t been said before. The vitriol is probably a barometer of the jitters in the market, and weakness.
Watch out for a break of $7700.

Fed’s Beige Book: Economy expanded at slight-to-modest pace

  
  Analysis
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Highlights of the Fed’s anecdotal economic summary:

That’s a downgrade from modest previously.
Highlights:
  • Businesses see expansion continuing, many have cut outlook
  • Business activity varied across the country
  • Districts in south and west were more upbeat that midwest and great plains
  • Spending was solid on balance, housing market conditions changed little
  • Some districts suggested persistent trade tensions and slower global growth weighed on activity; early impact of GM strike was limited
  • Most expect economic expansion to continue; however many lowered their outlooks for growth in coming 6-12 months
  • A number of manufacturers reduced headcount because orders were soft, some cut hours rather than reduce staff
  • Wages rose moderately in most districts, with upwards pressure noted for lower-skill workers
  • Employers continued to use bonuses and benefits to attract and retain talent
  • Most districts characterized the recent pace of prices increases as modest
  • Retailers and manufacturers noted rising input costs
  • Shipping rates remained lower than they were earlier in the year because of excess capacity

Americas largest underground coal miner is headed for bankruptcy

  
  Analysis
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Murray Energy didn’t make interest payments due yesterday

Murray Energy didn't make interest payments due yesterday
Coal isn’t back.
Murray Energy was granted extensions to renegotiate debt deals but they appear to have come up empty. Bloomberg reports that the company failed to make an interest payment due yesterday.
The failure of this company highlights the limited power of even the President of the United States in battling against economic forces. Many coal companies have already filed for bankruptcy, although none as big as Murray. The company employs nearly 7000 people and the largest underground coal miner in the United States.
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