Bitcoin dropped below one year low but this should not be a concern for those who are in this game for a long term. Theresa May has secured a deal while members of her party have prepared a plan to push her out of the office.
The king of cryptocurrencies Bitcoin, is facing a turmoil as investors have started to ask the question how low will we go from here?. This was the conversation we were having with our investors. What we said was; put some cash for the crash. There is no doubt that crypto giant, Bitcoin has a major support but it is currently under pressure, but so is the heavyweight of tech giant, Apple.
Bitcoin is here to stay and that is what you should keep in mind. Most importantly, make sure that you put some cash aside for the crash. The first rule of investment is that you don’t sell when everyone is selling and you don’t buy when everyone is buying. This is the major philosophy which has worked for decades. So why sell Bitcoin now?
Looking at the daily chart of Bitcoin, yes it has broken some meaningful levels and the current move was mainly due to the trigger of many stop levels which were sitting at one year low and of course, the psychological level of $6,000.
The simple fact is that I am not selling Bitcoin in my portfolio. In fact, I am not even interested in this day to day market action. So the recent sell-off has not changed my view about the technology or the potential it has. Wait for the currency or the debt crisis and the day it knocks on the door, guess who is going to answer the door? Bitcoin.
Back into our traditional markets, we have seen another slide in the U.S equities over on Wall Street yesterday and this was led by the tech sector. The forceful; Apple dropped below the critical level of $190 as more and more analysts dropped their sales estimates. These guys are way behind the curve and the market is necessarily reacting to Apple’s feeble sales outlook. Apple hasn’t produced anything meaning in a long time and we all know that, so just waking up to this situation is really dramatic. Apple has been in a different business cycle for some time and that is just the reality of it. As long as the public is willing to pay a higher price for it’s product and the company can maintain this, there is nothing dull here.
However, the tech sector isn’t the only aspect to blame for the sell-off in the equity markets because it was the speech of the Fed president which also made investors a little cautious. During his speech yesterday, he dropped hint for another interest rate hike during next month. The Fed President literally turned a blind eye to the recent spike in the volatility. In fact, the Fed President played down the recent spike in the volatility.
Theresa May; the British Prime Minister was able to pull a miracle. She was able to secure a backing (for now) from her Cabinet last night, however she will be fighting for her political life. The coordinated plot to oust May as the prime minister of the country is taking place and the coming days will be the toughest days of her political career. But the silver lining among all of this is that at least business and finance leaders have some sort of idea which defines boundaries under which they are can work with. Of course, that is only true if May’s agreed plan remains alive.
What she has achieved wasn’t an easy one, the prime minister had to fight for two years and battle with the EU block’ 27 members. The current nature of the Brexit deal is fragile and this is keeping the investors somewhat confused because if May is pushed out of the office then most likely the outcome will be no Brexit or leaving the EU without any deal, which will be no short of a catastrophe for the UK’s economy.
In terms of economic data, we have the UK retails sales number due this morning and we expect the numbers show a little improvement. The forecast is for 0.2% vs the previous reading of -0.85. Later in the day, we have the U.S core retail number followed by another speech by the Fed Chairman Jerome Powell.
