Summing Up The Week

Holiday-shortened trading weeks are notoriously dull due to the number of professional traders who take the entire week off. While, from time to time, the substantial reduction in trading volume can lead to wild swings in the market in both directions, typically, a week before a holiday is a giant yawn.

This week was the latter, not the former, as stocks continued to grind higher in a slow and methodical manner.

Let’s take a look at the news that moved the markets (not much) this week…

Market News

Binance CEO to plead guilty to Federal charges, step down

On Tuesday, the U.S. Department of Justice brought criminal charges against crypto exchange Binance and its founder CEO, Changpeng Zhao, reported CNBC. As part of a $4.3 billion settlement, Zhao will step down after being charged with the Bank Secrecy Act.

Zhao failed to implement effective anti-money protections and willfully violated U.S. economic sanctions. In addition to the $4.3 billion settlement, the DOJ is advising that the court fine Zhao for $50 million.

Despite the additional negative news in the crypto sector, while initially pulling back in the morning, Bitcoin returned to a price level over $37,000, near its 2023 highs, early in the afternoon.

Fed minutes show no indication of possible rate cuts

When the Federal Reserve released the minutes from their last meeting at the end of October / beginning of November, investors were disappointed to discover that there was absolutely no indication of potential rate cuts coming any time soon, reported CNBC.

Instead, the Fed once again reiterated that they would stay “restrictive” on policy until inflation dropped down to their 2% target goal. “In discussing the policy outlook, participants continued to judge that it was critical that the stance of monetary policy be kept sufficiently restrictive to return inflation to the Committee’s 2 percent objective over time,” the minutes said.

While the markets were generally soft on Tuesday, this price action had little to do with the minutes since the markets had rallied substantially the week prior and even continued the bullish price action on Monday.

Next Week’s Gameplan

As we head into the last week of November and the first trading day of December, the Bulls predict the rally we’ve seen so far will continue through to year-end. Some Bears concede that possibility, however others believe December could bring extreme volatility following the incredible upward momentum the markets experienced in November.

Given the fact that the Federal Reserve has made it clear that they will keep rates high for longer, many analysts believe that regardless if we see the rally continue into the end of 2023, the beginning of 2024 will nearly certainly bring pain to the markets as they adapt to the lagging effects of the rate hikes.

Accordingly, I’ve been aggressively taking profits in some of my portfolios to lock in gains before a potential selloff. The high interest rates paid in money market funds makes cash a very viable alternative to risk assets, particularly with so many stocks trading at frothy valuations.

As always, I maintain my plan for both directions: if we do see a decent selloff in the coming weeks, I’ll add to positions. If the market continues this incredible rally, I will take profits where appropriate.

In the meantime, I’ll see all of you back here next Friday, friends!

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

Bitcoin Price Action

The Bitcoin Bulls drag the Crypto to Year-to-Date Highs

On Monday, the SEC sued the Kraken exchange for operating a crypto platform without registering, reported Reuters. For a few moments, I thought I had time-traveled back a year to when the FTX platform declared bankruptcy in November and sent Bitcoin careening down to $15K.

Later on Monday, the U.S. Department of Justice announced it was seeking a $4 billion settlement from crypto exchange Binance to end the long-ongoing criminal case the DOJ had in place against this international exchange, reported Reuters.

On Tuesday, the DOJ announced Binance CEO and Founder, Changpeng Zhao, would be stepping down as part of the settlement, reported CNBC. Somewhat surprisingly, similar to the Kraken news above, the Binance story had little effect on the price of Bitcoin.

Despite all of this news, Bitcoin broke through to a new year-to-date high, further cementing the potential bull rally as the crypto continues to make higher-highs and higher-lows as it seeks to turn the Next Support of Last Resort trendline into support instead of resistance.

The Bullish Case

Bulls maintain the upper-hand. Despite the negative news catalysts and so much potential Black Swan Event material, Bitcoin continues to rally and exhibits incredibly strong bullish analytics. Bulls continue to predict that Bitcoin will finish 2023 strong with some believing it could actually make a new all-time high before year-end.

The Bearish Case

Bears struggle to find support for their case. Despite all of the negative news that came out this week, Bitcoin just keeps getting stronger and strong. There are Bears out there who argue Bitcoin will surely pull back to at least $31K as this rally has been so immense, and some of the more ludicrous Bears argue that not only will Bitcoin crash through $20K, but that it will break through its 2022 low at $15K. I’ll be the first to agree that anything is possible, but, at this point, the most Bearish case feels highly unlikely.

Bitcoin Trade Update

Current Allocation: 2.783% (+0.250% since last update)
Current Per-Coin Price: $37,650.70 (-0.30% since last update)
Current Profit/Loss Status: +0.68% (+5.19% since last update)

With Bitcoin’s whipsawing with volatility, it filled a series of buys starting at $36,852.90 on Monday (before fees) and left me with an average buying price of $36,634.06 (after fees). When Bitcoin hit a new year-to-date high on Friday morning, it triggered a sell order at $37,995.26.

The combined orders lowered my per-coin cost -0.30% from $37,762.25 to $37,650.70 and raised my allocation +0.250% from 2.533% to 2.783%.

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:

0.014% @ $36,929
0.028% @ $36,467
0.028% @ $36,053
0.028% @ $35,701
0.028% @ $35,231
0.028% @ $34,969
0.028% @ $34,424
0.028% @ $34,217
0.028% @ $33,879
0.028% @ $33,513

Not Your Keys, Not Your Crypto…

In light of brokerage failures in 2022, I no longer keep any of my crypto on an exchange and I only keep enough USD on the exchanges I use 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.

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, Bitcoin crashed -54% to a low of $6430.00 in December 2019.
• In February 2020, Bitcoin rallied +64% to $10,522.51.
• In March , 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 2021, Bitcoin dropped -32% to a low of $28,732.00.
• In February, 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 , Bitcoin rallied +51% to a new all-time high of $64,896.75.
• In June , Bitcoin crashed -56% to a low of $28,800.00.
• In November, 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.
• In April 2023, Bitcoin rallied +101% to a high of $31,050.00.
• In June, Bitcoin dropped -20% to a low of $24,750.00
• In July, Bitcoin rallied +29% to a high of $31,862.21.
• In September, Bitcoin dropped -22% to a low of $24,900.00.
• In November, Bitcoin rallied +53% to a high of $37,999.00.

Where will Bitcoin go from here? Truly, anything is possible…

What if Bitcoin’s headed to zero?

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.