At a closer look:
- Bitcoin is divisible to a much higher degree than gold. This means even small purchases can be made in dire times.
- It is also scarcer than gold since a maximum of twenty-one million coins defines it, while gold supply is speculative and continuously mined.
- Where bitcoin truly shines is in its portability. A long-distance payment in gold can provide quite some hurdles, while a bitcoin transaction is verified typically within less than an hour anywhere in the world.
- Verifiability is an easy one for bitcoin on a computer, and not so easy for gold. From a security perspective, a tiny “USB-like” stick can hold all your wealth when it comes to bitcoin, while a Fort Knocks is necessary for a more extensive gold amount for protection.
Now that we have established bitcoins validity to measure up to the big boys, let us look at its desirability from a chart perspective regarding acquisition timing.
Housing Sector Index in US-Dollar, Daily Chart, Clouds on the horizon:
Housing Sector Index in US-Dollar, daily chart as of October 4th, 2021.
With China’s real estate bubble in bloom and markets intertwined throughout the globe, early warning signals also start to show in the US. The daily chart above of the HGX (Housing Sector Index) gives such an indication clearly. We see a similar picture of a previous swift decline (-50%) setting up at the 200 moving average (orange line) right now. The index, composed of companies whose primary lines of business are directly associated with the U.S. housing construction market, already lost more than 18% from its recent top last May.
Gold in US-Dollar, Monthly Chart, Everything is possible:
Gold in US-Dollar, monthly chart as of October 4th, 2021.
Most of the time, real estate is the first turning point for the market to come undone. Closely followed by the Russel 2000, then the S&P500, Dow, and Nasdaq 100. Precious metals are not spared since money is needed to pay for margin calls. All asset classes get in motion, and so will Bitcoin; rather sooner than later, since “exotics” typically are cannon fodder. No worries, though; it will be in turn also in the early recovery field alongside precious metals.
A look at a monthly gold chart shows a ten-year bullish uptrend followed by a ten-year wide sideways range. Consequently, we are left with two likely scenarios. A trend continuation initiated by a breakout to new highs. And equally a possibility after the wide double top built in August last year that prices decline further down. This especially if Gold comes under pressure of an altogether market crash.
BTC in US-Dollar, Weekly Chart, Bitcoin is an equal wealth preserver to gold:
Bitcoin in US-Dollar, weekly chart as of October 5th, 2021.
China isn’t just the forefront threat regarding real estate but also an insight into how strong regulation of a market, in this case, bitcoin, can have detrimental effects on a market already in a retracement. It is likely that the crypto space and bitcoin will see a second wave of regulatory attacks in the US.
The weekly bitcoin chart illustrates that price is stuck in a distribution zone, with a second resistance zone right above (red squares). We find these price levels less attractive from a market low-risk entry perspective. Consequently, we see a more attractive entry point once the market has shown its hand. Now is the time to keep the powder dry and act sensibly after the possible storm shows first signs of clearing skies.
Bitcoin is an equal wealth preserver to gold:
Evolution churns slowly, and gold outperforms bitcoin by far when it comes to established history. But as much as change might come slowly to human behavior, it is yet a fact that once fuel injection was outperforming carburetors, that sooner or later, everyone wants the better performing car. What we did not mention yet is bitcoins advantage over gold in the aspect of decentralization—a new element to money that could come to the forefront of importance faster than assumed just yet.
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This article does not contain investment advice or recommendations. Every investment and trading move involves risk, and readers should conduct their own research when making a decision. The views, thoughts and opinions expressed here are the author’s alone. They do not necessarily reflect or represent the views and opinions of Midas Touch Consulting.
By Korbinian Koller|October 5th, 2021|Tags: Bitcoin, bitcoin consolidation, Bitcoin mining, crypto analysis, Crypto Bull, crypto chartbook, crypto mining, low risk, quad exit, technical analysis, trading education|0 Comments
About the Author: Korbinian Koller
Outstanding abstract reasoning ability and ability to think creatively and originally has led over the last 25 years to extract new principles and a unique way to view the markets resulting in a multitude of various time frame systems, generating high hit rates and outstanding risk reward ratios. Over 20 years of coaching traders with heart & passion, assessing complex situations, troubleshoot and solve problems principle based has led to experience and a professional history of success. Skilled natural teacher and exceptional developer of talent. Avid learner guided by a plan with ability to suppress ego and empower students to share ideas and best practices and to apply principle-based technical/conceptual knowledge to maximize efficiency. 25+ year execution experience (50.000+ trades executed) Trading multiple personal accounts (long and short-and combinations of the two). Amazing market feel complementing mechanical systems discipline for precise and extreme low risk entries while objectively seeing the whole picture. Ability to notice and separate emotional responses from the decision-making process and to stand outside oneself and one’s concerns about images in order to function in terms of larger objectives. Developed exit strategies that compensate both for maximizing profits and psychological ease to allow for continuous flow throughout the whole trading day. In depth knowledge of money management strategies with the experience of multiple 6 sigma events in various markets (futures, stocks, commodities, currencies, bonds) embedded in extreme low risk statistical probability models with smooth equity curves and extensive risk management as well as extensive disaster risk allow for my natural capacity for risk-taking.
