Summing Up The Week
The stock market started weak on Tuesday and only got worse as the week went on as investors’ hopes for a “Santa Claus Rally” appeared to be exchanged for tax-loss harvesting, instead.
On Thursday, the market experienced a bit of a relief rally only to flip over again on Friday and finish out a terrible year on yet another down day.
What is Tax-Loss Harvesting? Tax-loss harvesting is the process where an investor or trader takes a loss on a losing position by selling it to offset capital gains or income taxes earned elsewhere. Since the sale must take place within the calendar year, years without a “Santa Claus Rally” see even more significant selling in the final few days of the year.
Market News
China reopens to international travelers
On Wednesday, China announced that it would be removing restrictions preventing international travelers from entering the country, reported Yahoo! News. While many view this next step to China’s reopening as a positive sign for the global economy, others worry that the lack of quality vaccines and a significant aging population could result in not only a rapid spread of COVID-19 but also the potential outbreak of new variants.
While initially, the market continued its selloff on Wednesday, stocks turned around on Thursday, with some analysts attributing the positive price action to China’s potential reopening having positive effects on the global economic conditions.
Next Week’s Gameplan
Congratulations! You just survived one of the toughest years in stocks in DECADES and lived to make it through to 2023.
So, what do I see for 2023? Well, rather than go into it here in the Week in Review, check out my 2023 Gameplan Video that I’ve posted below. I share what I see as headwinds facing the market in the next year as well as potential positive catalysts that could turn this Bear Market upside-down.
In the meantime, let me wish you and your families a very Happy New Year, and I’ll see you back here next year!
This Week in Play
Stay tuned for this week’s episodes of my two portfolios Investments in Play and Speculation in Play coming online later this weekend!
Crytpo Corner
Important Disclaimer
Get Irked contributors are not professional advisers. Discussions of positions should not be taken as recommendations to buy or sell. All investments carry risk and all readers must accept their own risks. Get Irked recommends anyone interested in investing or trading any asset class consult with a professional investment adviser to determine if an investment idea is suitable to them and their investment goals.
Bitcoin Price (in USD)
%
Weekly Change
Bitcoin Price Action
Not with a bang, but a whimper…
Another lackluster week in crypto left Bitcoin rangebound once more with no real interesting price action in any direction. Both weekly high and the weekly low remain unchanged at $17,060.86 and $16,273.40, respectively. The next big move will come when either of those are broken.
The Bullish Case
Bulls continue to point to the lack of price action as consolidation before Bitcoin begins its next Bull Market. Bulls refer to the length of prior Bear Markets as a good sign, as Bitcoin’s current bear market has lasted more than 13 months if you consider the start where the crypto hit its $69,000 all-time high back in 2021.
The Bearish Case
Bears believe Bitcoin has a lot more downside left. With the FTX debacle ongoing and many rumors in the space that Binance and other crypto exchanges may not be as stable as they claim, there are certainly a lot of potential negative catalysts out there as we head into the new year.
Bitcoin Trade Update
Current Allocation: 18.513% (+0.026% since last update)
Current Per-Coin Price: $22,582.74 (-0.005% since last update)
Current Profit/Loss Status: -26.746% (-1.133% since last update)
The week looked pretty dull until Friday saw a quick dip south which triggered my next tiny buy order at $16,373.70. The buy lowered my per-coin cost -0.005% from $22,594.45 to $22,582.74 (hey, I told you it was a tiny buy!) and increased my allocation +0.026% from 18.487% to 18.513%. Such is the life of a slow-moving asset class.
Bitcoin Buying Targets
Using Moving Averages and supporting trend-lines as guides, here is my plan for my next ten (10) buying quantities and prices:
0.028% @ $16,139
0.028% @ $15,829
0.028% @ $15,511
0.057% @ $14,842
0.057% @ $14,587
0.085% @ $13,938
0.113% @ $13,158
0.113% @ $12,827
0.113% @ $12,468
0.113% @ $12,075
Not Your Keys, Not Your Crypto…
In light of everything happening with brokerages, I no longer keep any of my crypto on an exchange and I only keep enough USD on the exchange to execute my next few buys. I use multiple cold wallets from the brands Ledger and Trezor to hold my crypto (click the links to access the direct sites, and I receive no affiliate benefits from these links).
Additionally, I have now divided my allocated USD between two different exchanges – Gemini and Coinbase – in case one (or both) becomes insolvent. Disclaimer: We both receive a bonus if you use either my Gemini or Coinbase referral links to open accounts.
Given everything that happened with FTX and Sam Bankman-Fried claiming customer funds were safe only to have it go completely bankrupt, I do not trust anyone in the space, even with Coinbase (COIN) being publicly traded (and one of my own Investments in Play positions).
No price target is unrealistic in the cryptocurrency space – Bullish or Bearish.
While traditional stock market investors and traders may think the price targets in the cryptocurrency space are outlandish due to the incredible spread (possible moves include drops of -90% or more and gains of +1000% or more), Bitcoin has demonstrated that, more than any speculative asset, its price is capable of doing anything.
Here are some of Bitcoin’s price movements over the past couple of years:
- In 2017, Bitcoin rose +2,707% from its January low of $734.64 to make an all-time high of $19,891.99 in December.
- Then, Bitcoin crashed nearly -85% from its high to a December 2018 low of $3128.89.
- In the first half of 2019, Bitcoin rallied +343% to $13,868.44.
- In December 2019, Bitcoin crashed -54% to a low of $6430.00 in December 2019.
- In February 2020, Bitcoin rallied +64% to $10,522.51.
- In March 2020, Bitcoin crashed nearly -63% to a low of $3858.00, mostly in 24 hours.
- Then, Bitcoin rallied +988% to a new all-time high of $41,986.37 in January 2021.
- Later in January, Bitcoin dropped -32% to a low of $28,732.00.
- In February 2021, Bitcoin rallied +103% to a new all-time high of $58,367.00.
- Later in February, Bitcoin dropped -26% to a low of $43,016.00.
- In April 2021, Bitcoin rallied +51% to a new all-time high of $64,896.75.
- In June 2021, Bitcoin crashed -56% to a low of $28,800.00.
- In November 2021, Bitcoin rallied +140% to a new all-time high of $69,000.00.
- In November 2022, Bitcoin crashed -78% to a low of $15,460.00.
Where will Bitcoin go from here? Truly, anything is possible…
What if Bitcoin’s headed to zero?
The only reason I speculate in the cryptocurrency space is I truly believe Bitcoin isn’t headed to zero. I am prepared for that possibility, however, by knowing I could potentially lose all of the capital I’ve allocated to this speculative investment. Professional advisers recommend speculating with no more than 5% of an investor’s overall assets. Personally, I’ve allocated less than that to speculating in crypto. I feel that anyone who doesn’t fully believe in the long-term viability of cryptocurrency would be better served not speculating in the space. On a good day, this asset class isn’t suitable for those with weak stomachs. On volatile days, the sector can induce nausea in the most iron-willed speculator. If a speculator isn’t confident in the space, the moves will cause mistakes to be made.DISCLAIMER: Anyone considering speculating in the crypto sector should only do so with funds they are prepared to lose completely. All interested individuals should consult a professional financial adviser to see if speculation is right for them. No Get Irked contributor is a financial professional of any kind.
