Crypto’s “Meat Grinder” Breakout

Is this the beginning of the end? [Morning Reckoning] February 21, 2023 [WEBSITE]( | [UNSUBSCRIBE]( [Ed. note: Important housekeeping note: Your emails are now coming from a new email address: dr@mb.paradigmpressgroup.com. Ensure delivery of every email in your subscription by following [these simple whitelisting instructions.]( Crypto’s “Meat Grinder” Breakout Baltimore, Maryland February 21, 2023 [Greg Guenthner] GREG GUENTHNER Good morning Reader, “Tech is the dog,” reads a note I tucked away a couple weeks ago. “Crypto is the tail.” In our quest to demystify this year’s maddening market action, we’ve been thinking at length about what’s behind some of these erratic stock moves. I explored the idea a few weeks ago that crypto and tech-growth are two sides of the same coin – a Covid Bubble phenomenon that topped out in spectacular fashion in early 2021. Ark Innovation ETF (ARKK) and Bitcoin broke out (and broke down) together. They held hands during last year’s summer relief rally. When traders flip the “risk on” switch, both crypto and tech trades are activated. Ultimately, I concluded that we don't know which one’s the dog and which one’s the tail. Not yet, anyway. But several readers – like our friend above – offered their own theories. Now, this meat grinder market is in an interesting spot. [inflation…oil shocks…war…now THIS?]( [This Simple Chart]( In between inflation…war…sanctions…and rate hikes… It seems today’s market is simply bouncing from one big surprise to the next. But according to Jim Rickards… (former advisor to the White House, Congress, and the U.S. Intelligence Community)… ….[what’s right around the corner could be much bigger](. And he says if you aren’t prepared for what’s coming, then your portfolio could get blindsided (again). But if you know exactly what to do… [Then you could flip the next financial shocker into a world of fortune-building opportunity](. Bottom line? Take 1-minute to watch this brand-new [urgent briefing]( …before the next big surprise hits your portfolio. [Go here now](. [LEARN MORE]( The downtrodden tech-growth trade sprinted higher to kick off 2023, helping to spark a powerful crypto rally. But the big bounce got a little long in the tooth once the calendar flipped to February, and stocks have since chopped along in a messy range… Meanwhile, Bitcoin and the rest of the crypto-verse decided to play some mind games. Yes, crypto topped out in unison with stocks heading into January. Then, things got weird. Bitcoin and Ethereum started to slip as stocks chopped along. At one point earlier this month, it looked as if both were about to completely fall apart. But Bitcoin’s quick 10% drop was nothing but a headfake. A powerful rally appeared out of the blue last week and Bitcoin tagged the key $25K pivot I highlighted back in January. To review: Tech stocks sparked crypto’s January rally. Now, Crypto is on the cusp of breaking out while the Nasdaq is nursing its second straight losing week. Leadership hasn’t exactly remained consistent so far this year. But the big crypto lift last week isn’t something we should ignore just because we can’t pin down a precise cause-and-effect relationship between Bitcoin and tech stocks. Remember, we’ve discussed how Bitcoin bottomed out just below $16,000 in November, then went on to gain 40% on the back of a strong January rally. Now that the market has digested the initial rally off the lows, I can’t stress enough the importance of a legit breakout at these levels. Why? Because $25K marks the swing highs from last summer’s relief rally that began to fall apart in mid-August. If we witness an actual extension above $25K, Bitcoin will be at new 8-month highs. More importantly, it will officially end the ugly 2021-22 crypto downtrend, providing additional proof that the January rally wasn’t just some fluke. [Download My New Survival Guide Today!]( I’ve created a BRAND-NEW “2023 Crisis Survival Guide” that I’m making available to all of my Strategic Intelligence readers today. This short 54-page document has everything you need to know to protect yourself and your family in times of crisis. Things like what foods to stock up on now, staying safe during periods of rioting and looting and more. Inside I break down all of the coming threats you face and how to prepare. [>> To see how to download your copy, click here now](. [LEARN MORE]( Breaking the Bitcoin Bear Can Bitcoin extend above $25K? [chart] As of this writing, Bitcoin is still grinding away just below $25K. The price action is coiled tight following the Feb.15 surge back above $24K – that’s bullish! It’s starting to feel like this breakout could lead to a quick move toward $30K if and when we do get that initial surge higher. A few other important thoughts to keep in mind as the move plays out: First, I’m obviously focusing primarily on Bitcoin in this analysis. But Ethereum and other names are also on the move, as well. Since Bitcoin is the flagship, I’m using it as my crypto bellwether. Plus, Ethereum needs to rally another 15%-plus to sniff its August highs. We’ll see if it can make a run and play a little catch-up if this Bitcoin blitz materializes. Next, it’s important to note how quickly this rally is playing out so far. I speculated in January that Bitcoin might need more time to churn in a wide range between $20K - $25K before making an honest attempt at a breakout. That still might be the case! But the sheer speed of the move since Jan. 1 shows conviction from these early buyers. We’ll see if it lasts… Finally, we should keep our eyes peeled for any big, bad divergences between crypto and tech. The stock market limped into the long weekend, with notable weakness in semiconductors and other tech subsectors. The rally’s not in trouble yet. But investors are clearly on edge and the stocks have stayed choppy while crypto rallied into the weekend. Crypto-adjacent stocks are also worth watching this week as Bitcoin inches closer to breakout levels. MicroStrategy Inc. (MSTR), Riot Blockchain Inc. (RIOT) and Marathon Digital Holdings (MARA) are handy crypto trading vehicles on the equity side. The usual caveats apply. These stocks can move big – higher and lower! They’re probably not great long-term investments. Instead, use them as directional bets once this Bitcoin rally begins to heat up. Let me know what you thought of today’s article… and if you want any more topics covered by emailing me [here](mailto:feedback@dailyreckoning.com). Best, [Greg Guenthner] Greg Guenthner Contributing Editor, Morning Reckoning feedback@dailyreckoning.com [Man Who Predicted Bitcoin Warns: “Don’t Buy Bitcoin!”]( [This Simple Chart]( James Altucher first predicted Bitcoin all the way back in 2013… And ever since, he’s been one of the biggest advocates for it. But now, he’s warning Americans that buying Bitcoin could be a big mistake… [Click here now to see why](. [LEARN MORE]( In Case You Missed It… Sean Ring, Contributing Editor My Message to Chelsea Handler, With Hearts and Flowers [Sean Ring] SEAN RING Good morning Reader, I left America in October 1999, never to return. Well, that wasn’t the plan at the time, but that’s what happened. The plan was to sprinkle my resumé with international experience so I could get into a Top 25 business school. You see, I partied at Villanova more than I studied. And a 3.1 GPA – my freshman year was a complete write-off – wasn’t good enough to get into a top business school. So when I was offered a chance to move to London, I jumped at it. If there was one place I knew US b-schools loved, it was the UK. I expected to be back in the US by 2001, seated in one of the finest schools in the world. Instead, over two decades later, I’m seated in my home office in Italy. You know what they say about the best laid plans. While I’ve been away from America, all sorts of weird things happened. The Angels, Red Sox, White Sox, Phillies, Cubs(!) and the Giants each won at least one World Series title. What? They were all perennial losers when I was growing up. The Golden State Warriors went to five straight NBA finals, winning three of them. And they just won another title this past season. In my youth people knew who Chris Mullin was, but not where Golden State actually played. And of course, in the NFL, the team gleefully known as “The Pisspots” in my youth were a juggernaut dynasty with a quarterback who won more Super Bowls than Joe Montana. We never went to war when I was young, except that exercise in the Middle East known as the Gulf War. Now we’re at war all day, every day. People now cut off their body parts, claiming they were born the wrong sex. And people like Chelsea Handler got famous. [Warning: Will “Bidenflation” Destroy Your Retirement?]( [This Simple Chart]( If you’re like most Americans, you’ve worked hard for decades to build your financial legacy. And now, as a result of Biden’s disastrous money printing policies, that’s all at risk. According to one top retirement expert, “Bidenflation” threatens to destroy your retirement and make your hard-earned savings worthless. That’s why you must take action right away to protect yourself… [Click here now to get the simple, step-by-step actions to survive “Bidenflation.”]( [LEARN MORE]( Who Are Ya? Who Are Ya? That’s the chant English football fans sing when a substitute of no repute is sent on. Without Googling who she is, this is everything I know about Handler. She’s a blonde comedian who’s friends with Jennifer Aniston. She once had to remind ex-boyfriend 50 Cent that he was black so he wouldn’t vote for Trump. Handler is also thrilled she had an abortion at 16 so she was able to live the life she has. That’s it. That’s all I know. To be clear, that’s no reflection on her professional capabilities. It’s just a stroke of luck that I haven’t lived within earshot of vapid American entertainment for over two decades. Now before I get into what Handler posted that aroused such opprobrium from the Right Twitterati, let me be clear on a few things. A Really Sticky Subject Though I was born Catholic, I never attended church regularly. But for reasons I don’t understand, I’m not a fan of abortion. Never was. But this really isn’t about abortion, per se. It’s about much larger, intertwining geopolitical considerations, which I’ll get into later. With that said, the intense fury about abortion, or even anti-natalism, that involuntarily rises in those who can’t, for whatever reason, have children is one I totally sympathize with. And to be completely transparent, Pam and I tried for years to conceive. About five years into our marriage, Pam finally got pregnant. Micah was born in 2017. To this day, I marvel at that stretch of my life and how it changed every part of my life going forward. You see, I thought much more like Handler. Though we weren’t rich, Pam and I lived in a penthouse apartment with a view of the sea in Singapore. The digs got smaller in Hong Kong, but we still lived that young, married couple life most people envy. When I traveled around the world doing my corporate training, I’d take Pam with me. Just through my teaching gigs, we’ve been to Japan, Taiwan, Hanoi, Melbourne, India, Abu Dhabi, Dubai, London, and Paris. I got so used to it, I wanted it to last forever. But Pam wanted kids. Well, until we had Micah. Then suddenly, one child sufficed. [[CHART] Could Inflation Hit 20%+ In 2023?]( [This Simple Chart]( Take a close look at this scary chart pictured here… What you see is the money supply in America… And as you can see, the number of dollars in circulation has exploded in the last few years. In fact, more than 80% of all dollars to ever exist have been printed since just 2020 alone! Which is why some say inflation could soon explode even higher than it is now, to 20% or more. And if you’re at or near retirement age you must take action now to protect yourself… otherwise you risk losing everything. [Simply click here now to see how to survive America’s deadly inflation crisis](. [LEARN MORE]( What Did Handler Post? But back to Handler… She posted a video for a skit she did on The Daily Show. [tweet] Credit and watch it here: [@chelseahandler]( Did I think it was the funniest thing ever? No. But to be fair, I lived in England for too long to think American comedians are funny anymore. Was it the most offensive thing ever? Of course not. But by the Right’s reaction, you’d think she was shilling for Stalin. All she did was write the perfect ad for not having children (if you’ve got the money to party like she does). And that’s why most people have a hard time taking the Right seriously. Because the Right overreacts to even the most innocuous stuff. Take Matt Walsh, Ben Shapiro’s right-hand man, who tweeted, “Chelsea Handler wants you to know that she's really happy being a childless 47 year old. Like seriously happy. She's so happy, you guys. Okay? Nobody says she's sad. She's not. Definitely not.” I, Hypocrite tweeted, “Weapons grade copium.” Gad Saad tweeted, “Being a parent can be difficult and painful but I would not trade being a father to my children for anything. My daughter just gave me a box of chocolate and flowers for Valentine’s. I’m the richest man for it. [Also retweeted]” Even Princeton-educated all-around good guy and Superman Dean Cain tweeted, “I never know more happiness and fulfillment than being a father to my son. (and your shooting form is for shit)” It wasn’t until I ran into this tweet, that I guffawed loudly: [tweet] Credit: [@VDAREJamesK]( Finally, someone got the joke! The Best Part About The Left Is They Don’t Reproduce But the worst part of the above observation is that the political spectrum itself, in virtually all the Northern Hemisphere, let alone the West, has shifted left. And that means no one is having enough kids. But The Left cooks up population issues all day long. And you can’t get more left than communism. So let me show you the most egregious example of communist idiocy: China’s One Child Policy. My goodness, The Cultural Revolution only killed up to twenty million people. But the One Child Policy? That’s next level stuff. The One Child Policy was introduced in 1979 to slow China’s rapid population growth and was formally phased out in 2015. During its implementation, the policy was enforced differently in different parts of China. There were cases of forced sterilization, forced abortions, and infanticide. In 2013, China's National Health and Family Planning Commission reported that since the introduction of the one-child policy, it had prevented approximately 400 million births. All those souls… It’s a mind-blowing number. And it’s easy to see why the Right gets so bent-out-of-shape about these things. What’s the result? China is no longer the most populous country on Earth – that’s India – and its population pyramid looks like this: [chart] Credit: [( Too many old people and not enough young people. And too many men and not enough women. While people like Peter Zeihan have been predicting China’s imminent collapse for years now, I think it’s a slow burn. But one thing we can agree on is that the One Child Policy was a disaster for China. Let’s contrast that with India, the new most populous nation on the planet: [chart] Credit: [( Now that’s more like it! Lots of young people. Few old people to support. Old Indians know when to exit stage left gracefully. It’s great for the social welfare system. From Macro to Micro I think eugenics are plain awful. However, if someone says they’re unfit for parenthood, believe them. If someone says, “You guys fill your house, but I’m not into it,” then fine. It worked for Helen Mirren. And Candace Bushnell. If women follow Handler’s example only to be disappointed later, that’s their fault. Not Handler’s. Or yours. Remember, [I don’t believe society is savable](. But people are. Especially you and your children. I’m positively thrilled Micah won’t have to deal with Handler’s would-be progeny. I wish all leftists thought like her. Ninety percent of the world’s problems would disappear immediately. So let’s get selfish. Encourage those who want children to have them as soon as possible. (Boy, I wish I was ten years younger.) And let’s quietly tolerate those who don’t. They’re probably leftists anyway… who would give birth to more leftists. As for the gift of parenthood… I remember not so long ago when Micah, after a long day of playing, was exhausted and laying in my arms on the couch. As he was about to fall asleep, he looked up at me and said, “Daddy, I love you… with hearts and flowers.” And off to Dreamland he went. Thank goodness someone else had a plan for me. If you have any feedback or topics you want covered, be sure to click [here](mailto:feedback@dailyreckoning.com) and drop me a line. Till next time! All the best, [Sean Ring] Sean Ring Contributing Editor, The Morning Reckoning feedback@dailyreckoning.com Thank you for reading The Daily Reckoning! We greatly value your questions and comments. Please send all feedback to [feedback@dailyreckoning.com.](mailto:dr@dailyreckoning.com) [Greg Guenthner] [Greg Guenthner, CMT,]( is chief strategist at Forge Research Group. He has spent the better part of the past two decades developing long-term and short-term strategies with a single goal in mind: to help everyday investors generate outstanding returns and control their financial futures. Greg’s charts, analysis, and insights have appeared in Marketwatch, Forbes, Yahoo Finance, and many other financial publications. [Paradigm]( ☰ ⊗ [ARCHIVE]( [ABOUT]( [Contact Us]( © 2023 Paradigm Press, LLC. 808 Saint Paul Street, Baltimore MD 21202. By submitting your email address, you consent to Paradigm Press, LLC. delivering daily email issues and advertisements. 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