THEY DON'T RING THE BELL AT THE CRPTO MARKET TOP!
Stock-Markets / cryptocurrency Dec 20, 2024 - 01:59 PM GMTBy: Nadeem_Walayat
Dear Reader
Latest Market Brief 20th Dec 2024
Crypto's are dumping, Bitcoin $94k, Solana $180, Doge $0.28, AVAX $34, COIN $260 can be very enticing to buy the dip for the next FOMO rally but I have always considered crypto's to be fairy dust, easy come easy go, so this is a warning that the TOP for crypto's could be in, so as I've been saying in the comments I would be very wary of buying the dip as the plan since the Trump pump began has been to disinvest from crypto's. Those who have followed should by now should have banked profits, I mean my exit strategy in recent articles could not have made things any clearer of what I am doing.
MSTR top's first - check
Then all of the other crypto's one by one - Check, check, check.
So whether folk like it or not the top could be in for crypto's, thus what one buys now one could be left holding for several years, as ever things will only be clear in hindsight, i.e. we could yet get lucky with one last hurrah pump into 20th of Jan, which is what I have been banking on to exit 90% of my crypto on, as things stand I've cashed out what I put in and banked a some profit, so IF the top is in it would not be great but having followed my rules I have cashed out with a profit and what's left is still in profit which I could disinvest during a relief rally, the mistake to make right now as I keep repeating is to commit fresh cash to the crypto meat grinder, a bit like the Russians sending North Korean troops into Ukraine, you know they are all going to get killed, that's what buying crypto's is like right now.
Remember bitcoin bottomed 2 years ago! So buying now is a bit insane, but's that's what it's like at the top folk who would not buy a year ago are eager to buy AFTER crypto's have 10xd!.
What about stocks, could they also have topped?
Well depends on which stocks?
I mean AMD FOMO-ing to $230 in March was a bit unreal, thus I always state that I doubt AMD is going to get back to those levels anytime soon. Now at under $120, it is cheap, does not mean it can't get cheaper but a much better buy here than at over $190 that some dudes in the comments were asking if it was now a good buy not so long ago!
So it all depends on the stock and it's valuation, most recent stock to go nuts to the upside was AVGO! $250! Which I trimmed into.
And then there is TESLA! Which I trimmed hard in its run to $488, pure FOMO mania, now trading at $415. In fact I shorted it on it's run higher.
I had an exchange with a patron the other day who stated he was going to HODL Tesla for some fantasy price to sell at in a few years time, I tried to talk some sense into the dude, HELLO $488, HELLO! ANYONE at HOME? Three years of perfect earnings growth baked into the price! Then there were folk clinging on to sell at $500 ignoring the fact that there will be many tens of thousands others also waiting to sell at $500 which means that the chances of getting there are pretty slim, it was like a potential 2% gain vs the risk of a 35% retracement which is what sub $300 will be.
So the tops could be in for some stocks, it's because their tops were nuts! Tesla at 700% of it's PE range is nuts! AMD at 250% was nuts, AVGO similarly at 250% was nuts! Those are FOMO price levels.
Whilst numero uno at $130 trading at 57% of it's PE range whilst not cheap is NOT nuts! I.e. it can deliver a new all time high during 2025 even if it dipped to under $100 again as is the case for many others hence why I say focus on the stocks rather than the indices.
Anyway this message is to those eager to buy the dip in crypto's to remember you are well over a year late to the party! At the time of my Last chance to board the Crypto Gravy Trains article Bitcoin was $27k, Solana $23, so buying bitcoin at $94k or Solana at $180 is VERY VERY LATE! Same for all of the other crypto's. Just because they have fallen +30% off their highs does NOT make them cheap!
October 2023 - Last Chance to Get on Board the Bitcoin Crypto Gravy Train - Choo Choo!
Whilst stocks should still see a bullish 2025, especially all those that are fairly valued right now as the AI mega-trend is REAL unlike crypto's! Though the stocks top will be similar, no one rings the bell at the top, or perhaps just one person will ;)
Your eager to sell all of his remaining crypto on one final pump analyst.
Nadeem Walayat
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My most recent analysis - Trump Stocks and Crypto Mania 2025 Incoming as Bitcoin Breaks $100k Barrier
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Micro Strategy Ponzi
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Nadeem Walayat has over 35 years experience of trading derivatives, portfolio management and analysing the financial markets, including one of few who both anticipated and Beat the 1987 Crash. Nadeem's forward looking analysis focuses on UK inflation, economy, interest rates and housing market. He is the author of five ebook's in the The Inflation Mega-Trend and Stocks Stealth Bull Market series that can be downloaded for Free.
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