Risks Remain for More Dumps Next 3 to 6 Months for 2022

NYu
3 min readJul 11, 2022

The Sharp Rallies that Occurred since June 17,2022 opens up to the possibility of a continued rejection and a sharper continuation to the downside with struggling resistances continuing for the next 3 months.

Despite crypto-linked stocks falling massively year to date (between 50–75% losses), we note that in a week’s time frame, some of these have counter-trend rallied between 22–54% within just a week’s time which opens up a possibility to short for another dump as we haven’t validated that the June bottoms are the actual evidential bottoms for crypto-markets in general.

$MARA rallies are considered shorts especially near 10–12.
The thing to note about $MARA is that it owns 5 dollars cash/share which should cushion any potential downside below 5.

$MARA $MSTR $RIOT $COIN $BITF $SI are showing chances for another selloff.

The Bearish Context of the Crypto-linked stocks:
1.) DEFI Systemic Risks
Bitcoin plunged to the lowest in about 18 months after the freezing of withdrawals by the Celsius lending platform added to concern that systemic risk in the crypto ecosystem will accelerate the digital-asset market meltdown.

2.) Aggressive pace of Federal Reserve tightening of interest rates amid Persistent High Inflation

3.) Overall state of Cryptocurrency remains in primary decline to new lows.

$BITW (Top 10 Cryptocurrencies remain in a downtrend)

$TOTAL Cryptocurrency marketcap deflated from 2.8 Trillion to 887Bil but we still have leeway to correct another 300B or 30–40% lower given $BTC and $ETH downside hasn’t been cleared, and if history’s a guide, nascent industries usually on average fall 80% or more from its peak.
$BTC Downside risk Towards 12K or 15K is still not to be avoided given high correlation with Nasdaq falling to new lows as well.

If Nasdaq goes new lows to 9000
We then expect bitcoin, ethereum to fall 30% or 40% lower, which means $MSTR can fall 50% or 60% lower. This is why we would continue advocating shorting MSTR COIN MARA SI in the short term as the risks remain to the downside.

If you do this right, you will be able to win simply by avoiding losing next 3 months. Recessions are always a good thing for the marketplace. It removes all the excesses and the money goes only to the highest quality assets which happens to actually still be building wealth in the top 2 crypto assets which is $BTC at 12,000 below and $ETH at 600 below. That also means if $COIN goes 30, we’ll obviously be looking on to capitalize that.

My 2023 Shopping List

$TQQQ at 10

$TSLA at 400–500 areas.

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Howard Marks said if you wish to outperform the market, you have to expose yourself to being wrong, and it is far better in my view to be wrong for not commit to the long side in a bear market too early, than to commit early and too soon, only to get my savings get halved next 3 months.

  • Wait for your perfect pitch and sit on your hands.

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NYu

I’ve been trading stocks for awhile but understandably I’m likely to trade or invest for the rest of my life. Here’s my way of thinking about things