Today is the day everyone in crypto has been waiting for: the popular Bitcoin exchange Coinbase has been publicly listed on the stock market for the first time.
The entire industry is buzzing, still euphoric from the months of nothing but green candles. However, the euphoria could blind market participants to the fact that the dollar could be poised to reverse.
Crypto Market celebrates Coinbase trading day with new Bitcoin record highs
“The line between investment and speculation, which is never clear and clear, blurs even further when most market participants have recently enjoyed triumphs,” Buffett wrote in a 2000 shareholder letter. “Nothing calms rationality like large doses of effortless money.”
Effortless money has been the theme of cryptocurrency for the past year, at a time when it is difficult to get money for so many suffering from the effects of the pandemic.
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The crypto market Fear and Greed Index is on complete greed, which other Buffett quotes indicate is a time to be scared. But investors are not at all afraid.
They roll the dice on altcoins, throw millions at NFTs and more without worrying about putting money away for the future – which is what Bitcoin was supposed to be about in the first place.
All this exuberance has blinkered most crypto investors unaware of a possible dollar reversal that could overwhelm them in the coming days.
The TD 9 indicator has perfected a sell setup on an 8-count | Source: DXY on TradingView.com
How exuberance has blinded investors to a possible dollar reversal
The Dollar Currency Index, a weighted basket of top currencies trading against the dollar, is now higher than lows set earlier this year, but it is plunging to re-test that previous resistance turned to support.
Related reading | The Bearish Bitcoin Chart Bulls absolutely don’t want to see
Along the way, the DXY has perfected a sales setup on the TD Sequential indicator. However, the indicator is only counting 8 instead of the typically deadly 9 as signals on the other hand have shown that a perfected 8 works fine.
Major dollar reversals have ended Bitcoin bull markets | Source: BTCUSD on TradingView.com
Looking at the bigger picture, Bitcoin bull markets have ended when the dollar finally reverses, and after this renewed support test, another step up could be devastating for the crypto space.
What’s worse is that investors are currently too exuberant to ever see it coming. Institutions are here, Coinbase has gone public, and the stock-to-flow model is predicting $ 100,000 BTC or more – what could go wrong?
Featured image from Deposit Photos, Charts from TradingView.com