Price action in the digital asset space continues to dominate with fear and loathing the drivers like a bad acid trip to Las Vegas. The initial financial failure of the 1998 film based on Hunter S. Thompson’s novel is a good analogy for the mood in digital assets.
Today, the Terry Gilliam film is a cult classic. Fear and Loathing in Las Vegas trailer on YouTube. The free-spirited dreams of decentralized money clashes with the pump-and-dump reality of hype.
This last week was about the demotion of the entire space to being a risky asset rather than a store of value. This is about the doubts of private money being able to replace the U.S. dollar. This is about new technology find economic limits. The biggest problem for investors isn’t the momentum in the price downtrend, but in the correlation to equities, particularly to the technology sector.
The hope of bitcoin (BTC-USD) becoming electronic gold has faded with the correlation of BTC to the S&P 500 (SPX) rising and the correlation to gold falling.
A new low for bitcoin in 2018 last week at $3269 from its January $19,862 highs – off another 14% for the week and 84% for the year – leaves the market respecting $4300 as the new key top as it was the last rung of the Fibonacci retracement support along with $3700 the failed hope for a double bottom Thursday.
The bears remain in control with $2800 and $1500 the next targets. MarketWatch: Bitcoin bear market is far from over, says analyst Monday,
Technical oversold conditions are not sufficient to spark a sustainable rally back. The reality for crypto winter shifting to spring requires some good news and some price bounces beyond the current resistance to restart the “flywheel up” cycle.
Price dynamics in the crypto coin space matters for investors. The hope that blockchain technology and its use will over time convert investors and gain traction in the real economy still requires capital now. The death of the ICO and the return of the VC to the space are the key for reversing the present fear and loathing mood.
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