Fear
Daily Ramble
COVID. If you’ve not found yourself in either the: “we need to protect each other” or the “why are you trying to take my freedoms?” camp when it comes to COVID, I salute your ability to unplug and live outside the popular narratives. As someone who has walked through both camps, starting in February last year and entering the second last fall, I’ve been stewing on the differences between the two and concluded that fear is the differentiator.
It was early spring last year, with reports of Italian hospitals running out of beds and morgues overflowing in China, that my mortality fear was triggered. Our household flew into bunker mode. N95 masks, food storage, prepping for the end of days…typical mortality fear reactions. As time passed into summer months, I kept looking for data to validate the harsh reactions I’d taken and governments were mirroring. Meanwhile, our household went through at least one bout of COVID, and likely two. By late fall, I couldn’t find data to justify the actions being taken to shut down society at large.
I’m used to getting to the punchline quicker than society, so I’ve been patiently waiting for society to catch up. Largely, it has here in the Sintra region of Portugal, where maskless gatherings happen, and people are interacting more or less normally, but respectfully, of other’s mortality fears. Sure, the COVID dance is alive and well when you meet someone whose stance is unknown, but I know no one who is planning to be vaccinated, including a 66-year-old dentist who says the same of all his patients. We’re not talking anarchists and hippies here. When I talk to my US family and friends, I get a very, very different reaction.
All I can surmise is that the US media has flogged the mortality fear into a full-fledged fire fanning across screens and into ears, eyes, and throats. Even the most sensible folks I know seem to have been hit with the fear hammer and are walking in a collective stupor. Basic facts like the lack of effectiveness at masks preventing COVID’s spread, mortality rates of those who contract COVID, a lack of statistical uptick in death rates of ANY country regardless of policies implemented, and vaccine efficacy and reactions just don’t seem to be known. Even Florida, Texas, and Sweden’s lack of COVID problems seems to be conveniently set aside to justify the continuation of the stupor. What is 100% known is that the COVID vaccine is the way out. Black and white. Problem and solution.
Now, I’m not here to harp on these facts. Facts come after the fact, after all — we’re emotional creatures who rationally justify emotional decisions afterwards. My point is to ask you to ask yourself some questions: if you don’t have a grasp of basic COVID facts but are pushing in a certain direction, why? Is it fear of being societally ostracized or for your own mortality? If so, do logic and facts bear out your fears? If not, is it your fear? Or did you pick it up through the emotional resonance we all share? If so, are you propagating it to others? More importantly, do you want to continue? And when was the last time you picked up a dictionary to look up the definition of courage?
mental or moral strength to venture, persevere, and withstand danger, fear, or difficulty
If there was any single message that Jesus, arguably the most famous man in human history, gave to humanity it was “fear not,” which he uttered more than any other statement. Timeless wisdom that doesn’t decay or die seems like the best vaccine from where I sit.
Favorite Things on the Interwebs Today
In honor of new all-time highs for Bitcoin, a poignant reminder that Bitcoin is slowly but assuredly eating the banking system.
Bitcoin Price Prediction
Yesterday: $58.5k - $65k
Today: $59.8k - $66k
Tomorrow: $61k - $70k
All-time high day!! After almost two months of ranging price action, Bitcoin has broken out to new all-time highs today. There’s been much speculation about this range in comparison to previous cycles, so I’d like to take a moment to share some insights I’ve gleaned. First, this is likely to be the biggest expansion we’ve seen since we broke through $20k in December 2020. The $20k breakout lead to a 250% price increase, for reference. I suspect we’ll be in the $80k region before we see the next serious pause. Second, $40k-$60k has secured itself as a critical support region for the future. If history repeats, there will be a blow-off top followed by a serious drawdown. The $40k-$60k region is a likely place for a future cycle bottom. Third, we are about to move into the meat of the bull market now. Again, based on history, we’re completing the first serious impulse and are heading into the mid-cycle, which should run through most of the summer. Fall is when the cycle top should occur. Again, this is all based on history.
What about the price action in the short term? I’m anticipating that the $62k breakout will hold. We may see a retest around $61k, but more likely is a fairly strong impulse into the $70k region over the next couple of days.
Bitcoin Q & A
Q: How are the Bitcoin markets different than equity markets?
A: They are more transparent.
Bitcoin trading offers more transparency than the traditional equity markets like the NASDAQ or NYSE. Unlike equities, both derivative and spot exchanges offer their data freely to the public. Recall that spot exchanges trade Bitcoin itself while derivative exchanges use collateral to trade a derivative product like options, futures, or perpetual swaps.
Besides exchanges offering freely available data, the Bitcoin blockchain itself is fully transparent, allowing deep fundamental analysis. There is no comparable in equity markets. Identities of the various actors are unknown unless their wallet addresses have been tied to their identities. This data, known as onchain analytics, offers a deep dive into what various actors are doing. It strips all the noise away from market narratives and leaves only the actions being taken. Two of my favorite resources are CryptoQuant and Glassnode.
Thanks for reading,
Kent
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