Update June 9th, 2022
Its been a brutal few months in the markets since last November. Nearly everything is down double digits, with some of the tech stocks losing 70-90%! Gold has held up better than most stocks and asset classes but gold sold off, too. Overall, from the top in early march at US$2,070 gold came back down to US$1,787. That’s nearly US$300. We had been timely warning, that gold won’t be able to break out this early in the year. Since the recent low three and a half weeks ago, gold is trying to stabilize and we had published a rather bullish short-term outlook, which was very timely too and seems to be playing out. However, once this bounce/recovery is done, we expect more corrective action for precious metals until early/mid of august at least.
Bitcoin and the altcoins on the other hand got annihilated and the crypto sector is in a crypto winter. This could easily take one or two years. Actually, the next halving event is expected to happen in early May 2024. That’s nearly two years from now. After the crazy boom, crypto finds itself in a brutal bust. Unfortunately, this has always been the case in bitcoin & crypto and it is the same this time. Too much crap has been growing in the crypto sector during the boom times and we are now in a dramatic and brutal cleansing & detox, which will delete all those weak projects and scammy players. But Bitcoin will survive and come back stronger than before. However, it will take time.
So far, the pullback in Bitcoin has been approx. -63%, which is compared to former cycles rather small. In the past cycles, Bitcoin always lost more than -80%! Hence, given the weak recovery since the recent low at US$25,500, we might not yet have seen the final low. Actually, Bitcoin could and might continue to correct towards US$22,500 or even drop below US$20,000 in the search of that final low. Obviously, the FED has been on a tightening spree and this is something new for Bitcoin & Co. Since Bitcoin’s invention in 2009, US money policies have always been very expansive. Due to record high inflation, the FED is now trying to tighten and fight inflation. However, since they now are responsible for a spectacular and painful ongoing market turmoil, we don’t know for how long they actually will be able to continue their tightening policies. Latest when the credit markets start to implode they will have to shift back to money printing. That’s the point when gold and bitcoin will take off. Short-term, pessimism is rather high and a surpsrising bounce in cryptos therefore has a increased probability.
All positions remain “a hold” or in crypto speech “a hodl”. Only TV-TWO (TTV) will have to be written off. We acquired this position via an ICO back in 2018. Unfortunately, the management informed us that they are having challenges, but keep pushing to get the project on track. This is a disappointment and we prefer to write if off and don’t waste any more time about this losing position. As it has been a venture position, the percentile loss is high. But small position sizing has helped us to control our risk here.
Update September 5th, 2021
The precious metals sector had a tough time since its last peak in early June. But the ABC-pullback in the gold market from US$1,916 down to US$1,676 probably cleared the sector from all the weak hands. Especially the flash crash on August 9th has likely cemented an ongoing “negative expectation attitude” among market participants. Mining stocks and in particular the junior miners signaled an extreme negative sentiment reading exactly two weeks ago. Overall we therefore assume, that the surprises will happen to the upside for precious metals and mining stocks over the next few weeks and probably even months. Hence, the ongoing summer rally should have more room and time to materialize into September and the first half of October at least.
Bitcoin and of course all the alt-coins did correct a months longer that initially expected. But bitcoin prices slightly below US$30,000 proved to be the suspected buying opportunity. Ethereum below US$1,800 was a great entry price too in retrospective. We called and caught the massive short squeeze early on (see our video with The Deep Dive on 22nd of July). Now that Bitcoin has rallied back to US$50,000 and Ethereum nearly reached US$4,000 it´s time to be more cautious again. It´s not a 100% sure, that the correction which started in April/May this year is indeed over. Bitcoin still needs to reach a new all-time high and hence has to rally another US$15,000 before we know for sure. But we also hesitate to call out a new crypto winter. We want to see how Bitcoin and Ethereum will react after this massive rally over the last few weeks. If we see more kind of a consolidating sideways and choppy prices action between maybe US$45,000 and US$52,000 we can assume that the rally will continue. In that case we will place many low and opportunistic limit buy orders between US$35,000 and US$45,000 since it would be typical for Bitcoin to flash out everyone with a quick but sharp pullback before the start of the next leg higher. If this “second leg higher in the ongoing bull market” scenario plays out, expect Ethereum to run towards around US$20,000 over the next 6 months! If on the other side, Bitcoin and Ethereum severely fall back in the coming weeks, then we know that the bull market scenario is wrong and a crypto winter has started in May already. In that case, smartly reducing exposure will be key. However, we currently rate the “crypto winter scenario” with a much lower probability.
Fundamentally, the Fed trapped market participants with their absurd bluffs. But we warned consistently over the last few months that taper will not happen. Instead, not one of the larger central banks on this planet will be able to introduce tighter monetary policies. Expect money printing to infinity! On top, the chaotic and disorganized US military withdrawal from Afghanistan has proven how dysfunctional the US government indeed works. Expect similar disasters in the economy and asset markets to come due to human incompetence and massive corruption. The result will be that foreign investor will continue to lose confidence in the US dollar. Hence, our strategy to focus on precious metals, commodities and crypto remains the royal road.
Update June 22nd, 2021
Gold and silver did pull back sharply over the last two weeks. Gold is down US$155 from the recent top at US$1,916. A correction/pullback was due but the current phase of liquidity tightening and risk-off in combination with the lockdown in India during April and May (=dramatic slump in physical gold demand) have turned this little pullback into a bigger correction which seems to be still ongoing. Gold is weak and doesn’t want to come back on its feet. We expect more downside pressure in the coming days and probably weeks. Yet, the remaining downside should be limited to something between US$50 to US$150 which gives us a potential bottom between US$1,720 and worst case around US$1,620.
Bitcoin & Co. just experienced another sharp sell-off. We had anticipated the correction in May and posted a strong warning and sell signal in our Live-Telegram channel. However, the depth and sharpness of the crypto crash surprised us somehow too. But of course, “Ethereum doubling” in just a few weeks between mid of April and early May was a clear and serious warning signal. We still see an open gap in the Bitcoin future around US$24,500 which could get filled, but looking at sentiment numbers the crypto sector is in panic mode since a few weeks already. Hence, we believe today’s low at US$29,250 might have marked an important intermediate low from which Bitcoin could now stage at least a larger multi-week recovery.
Update April 6th, 2021
It looks like gold and silver have finally found their bottom after a long and tenacious 8-months correction. With its recent double low at around US$1,676 and 1,678 gold is looking rather promising again. However, it could also take a few weeks or even up to two months until the typical “gold market bottom building phase” is over and gold can launch a new uptrend. To me it feels like August/September 2018 in the gold market…. I now expect some fireworks starting in June or July.. Silver has held up rather well during this multi-month correction but will likely lag gold at the beginning of a new wave up in the sector..
At the same time, Bitcoin and the whole crypto sector clearly remain in a bull-run and have certainly not topped out at all. Instead, I expect an acceleration phase to arrive soon. We are in an alt-season, hence most smaller coins are showings signs of life or have already started to explode. I remain a bitcoin and crypto bull. I think it is just a question of time until Bitcoin will take out its recent high at around 61,3k. Hence, I am patiently hodling and adding on any weakness.
Update March 8th, 2021
Over the last two months, Gold and Silver corrected deeper than anticipated in late December. Now they are becoming very oversold on their weekly charts, while sentiment moves more and more into capitulation territory. This is a good and healthy 7-month correction now. And it is building the launchpad for the next strong advance and up-wave in the precious metals sector. Even though it might be a bit uncomfortable and frustrating, there is noting to fear. We stick to precious metals and think that especially the mining stocks have now become a contrarian buying opportunity again.
Bitcoin and Ethereum on the other side have seen massive gains and are consolidating over the last two weeks on high levels. This rally seems to have more legs and it should only be a question of time once Bitcoin will take out its new all-time high at around $58k.
Update December 30th, 2020
Gold and Bitcoin had a very good 2020. Investors, worried about currency debasement from all the currency creation (money-printing), sought stores of value. Gold surged over 25%, its best year in a decade, while Bitcoin was up more than 300%.
The precious metals sector has likely finished its 4-month correction and should be on the way to a strong 1st quarter 2021. Most mining stocks have not yet really moved as tax loss selling just has ended. At the same time, Bitcoin is reaching a new all-time high above US$28,000 and we recommend to simply continue to “hodl”. The same is true for our Ethereum position. And we are patiently waiting for higher prices to get rid of the alt-coins IOTA and Steem.
Update November 14th, 2020
Gold, Silver and the mining stocks continue to correct as expected. However, there might only be a few more weeks left before the precious metals sector will turn around. As we expect a very strong 1st quarter 2021, we look to add exposure to the sector within the next three to five weeks up until around mid of December. In the meantime, Bitcoin has been taking the lead and it seems as if the whole world suddenly has become “short Bitcoin”. Without a doubt, many new players are running behind the bitcoin train. Generally, chasing runaway prices is not a good strategy but Bitcoin is, as we all know, different. Anyway, we continue to simply “hodl” our bitcoin holdings. The alt coins IOTA and Steem however are becoming more and more questionable. We would like to get rid of them once their prices move at least one level higher.
Update October 11th, 2020
Gold, Silver and the mining stocks did correct as expected. Gold came all the way back down to US$1,850. At that time the uncertainty about a new stimulus package as well as the US-election had reached a short-term top in pessimism. hence since about two weeks all markest move step by step back into risk on mode simply because the perception was to one-sided and too cautious. However, we are not yet sure if the correction in Gold, Silver and Mining stocks is indeed over. But we definitely see Gold recovering further in the short-term. A first potential target size is US$1,965 to US$2,220. All precious metals and all mining stocks as well as Bitcoin remain a hold position.
Update August 14th, 2020
Gold, Silver and our two mining stocks had a nice run up and are now likely to correct over the next few weeks or even 2-4 months. They all are a hold at this time. Bitcoin and Ethereum pushed higher as well and remain a hold as well. IOTA is coming to life and moving towards our entry price. Steem and Hive are a question mark. If they continue to recover we might sell them at some point as those two social media crypto projects don’t really seemed to gain traction. TTV continues to be a total loss on paper however after an in-depth conversation with one of their founders we continue to believe into the project and are willing to give them more time.
Update July 18th, 2020
Gold, Silver and our two mining stock are up.