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Chinese Crypto Scam Unwind Suggests Bitcoin Risks Extending Drop

Published: 11:14 18 Dec 2019 GMT

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18 December 2019

 

Video commentary for December 17th 2019

 

Eoin Treacy's view

A link to today's video commentary is posted in the Subscriber's Area. 

Some of the topics discussed include: bitcoin and altcoins breaking downwards, stock markets steady to rising, Pound enters consolidation, Treasuries at potential area of support, gold steady, palladium briefly hits $2000. China firming. 

 

 

Johnson's Brexit Is More Slow Deal Than No

This article by Therese Raphael for Bloomberg may be of interest to subscribers. Here is a section:  

And there’s unlikely to be any certainty until well into 2020. Neither the EU nor the U.K. have set out clear negotiating objectives nor agreed the sequencing of the talks. A shortened time-frame means plenty of thorny issues — from services to data — probably won’t be tackled. Nor is it clear that negotiators in Brussels will work in quite the same way as during the withdrawal talks. Michel Barnier is still running the discussions, but this is a new European Commission with major reforms and budget talks of its own to worry about. And trade talks offer more opportunity for differences to emerge between EU member states.

There are two slim silver linings. First, the worst-case scenario isn’t the economically cataclysmic “No Deal” we worried about for much of 2019. The terms of the divorce are already agreed, EU citizens rights secured and the Irish border question resolved (in a fashion). There have been plenty of preparations by governments and business for extra customs and regulatory checks.

What is more likely is what one might call a “low-deal Brexit” — or even a “slow-deal Brexit” since the first trade deal may agree a few basic areas and leave the door open to forging closer ties on others later. 

The second reason not to panic is that Brexit deadlines tend to be delayed. Whatever blocks against extending the transition are passed in Parliament, nobody really thinks that the EU and U.K. governments, if they chose, couldn’t find a way to give themselves more time. It’s been done before.

 

Eoin Treacy's view

There are many reasons for sticking to the objective of a December 2020 timeline but perhaps the most significant is politicians work best when up against a clock. The USA’s negotiations with China and the conclusion of a first phase deal with lengthier discussions to follow offers a potential template for what a UK trade deal with the EU may look like.

 

 

Chinese Crypto Scam Unwind Suggests Bitcoin Risks Extending Drop

This article by Olga Kharif and Zheping Huang for Bloomberg may be of interest to subscribers. Here is a section: 

Chainalysis estimates that PlusToken conspirators have sold about 25,000 Bitcoins and another 20,000 Bitcoins are spread out across more than 8,700 anonymous crypto addresses. Additional coins such as Ether were also used to bilk investors.

“That’s certainly something to consider when you are thinking about where the price is going, at least in the short term,” Kim Grauer, senior economist at Chainalysis said in a phone interview. “It could be, according to our research, continued downward pressure.”
 

 

Eoin Treacy's view

Bitcoin and the other cryptocurrencies do best when there is a clear supply inelasticity argument. The liquidation of the Mt. Gox bankruptcy hoard was a significant contributing factor in the decline posted in 2018 and the unwinding of the PlusToken stash may be a factor in the current downtrend.

 

 

Gundlach Sees Bad News for Treasury Bulls in This Metals Ratio

This article by Katherine Greifeld for Bloomberg may be of interest to subscribers. Here is a section:

Rallying copper tends to indicate demand for home-building and other industrial inputs -- all signs of a reasonably strong economy, a message reinforced by range-bound gold prices, according to the billionaire bond manager. The gauge has worked “phenomenally well” as a short-term predictor of where Treasury yields are headed, Gundlach said.

“It’s one of the best indicators for near-term movement -- for the next month or next couple of months -- for 10-year Treasury yields,” Gundlach said in a phone interview. “It’s remarkable how well it’s worked and as time goes by, I feel more and more inclined to follow it and act on it.”

He said in September that markets had likely seen the low of the year in yields after the 10-year rate plunged to 1.43% that month, the lowest since 2016. So far that’s panned out.

Bond strategists largely see the 10-year Treasury yield struggling to breach 2% in 2020. On the bullish side, Citigroup Inc. predicts the rate will hit a record low of 1.25% next year, and Societe Generale predicts 1.2%.

 

Eoin Treacy's view

At the American Association of Technical Analysts conference last March, when I opined 10-year yields were going all the way back down to 1.5% there was a lot of push back from delegates that a rally of that magnitude was even possible let along probable. By the time the rally peaked $17 trillion in bonds had negative yields. Today that figure is closer to $11.7 trillion and the trend points towards further contraction.

 

 

Eoin's personal portfolio: precious metals long increased December 11th

 

Eoin Treacy's view

One of the most commonly asked questions by subscribers is how to find details of my open traders. In an effort to make it easier I will simply repost the latest summary daily until there is a change. I'll change the title to the date of publication of new details so you will know when the information was provided.

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