The ride goes up and down, around and around
It has thrills and chills and it's very brightly coloured.
Weekly musing: Rome wasn’t built in a May.
Bitcoin is back around $29k after failing to reclaim $32k and crashing to $27k in a single day - a risk anticipated in the last email. Major US stock indexes also paused their rise but they just topped the level they were at then. What will May bring us?
As Delta remarks, many are feeling afraid of the upcoming month and of the popular saying “sell in May and go away”, given that many markets get cooler in the summer as traders go away for holidays muting demand and prices.
But even if the seasonality exists it is stronger in certain contexts. This year the picture looks very different from May 2021 because there’s already a lack of demand for trading crypto in a bear market, so the effect should be weaker.
After all, we can’t forget that stocks and crypto are at historically low levels and even if 2023 continues to be choppy - and thus full of trading opportunities - the long-term potential is quite interesting. We just need the Fed to clear the path.
Because it seems that the US economy is now finally showing signs of a recession, meaning Powell and his central banker friends will stop hiking interest rates, as recently admitted to a couple of pranksters pretending they were Zelensky.
However, more than the end of the hikes, for asset prices to recover we need rate cuts to be clearly signalled - which will surely come when the recession stops being friendly and the people start forcing politicians to bring back the printer.
Overall, the fact that April’s close wasn’t volatile could be explained by traders waiting for the Fed’s FOMC meeting this Wednesday. And let’s see if the banking situation calms down after JP Morgan bought out the remains of First Republic!
Chart art: the number doesn’t go up alone.
Three things: a fool and his money.
Digits shares some lessons from a friend who traded $1.2 million away.
Pledditor covers some key bitcoin stories that aren’t seeing the limelight.
Brendan Malone goes down the rabbit hole of “moneyness in the digital age”.