Waiting In The Wings
Apart from actually holding a decent allocation in stablecoins, I also have a number of passive income mechanisms that are generating dollar holdings. You want to be earning both Crypto and USD during a bear market. Crypto, because you earn more coins due to the dollar valuation being lower, and USD because you also require a backup. You know, when those unexpected dumps ravage the market and leave everyone wondering what the hell just happened. Having dollar allocations at hand during these moments is incredibly powerful. It is so powerful that I don’t even mind if I don’t get to deploy that capital. The reason is, at some point, a massive correction will provide the “perfect opportunity”. One thing you can always rely on is for the market to experience an “unexpected” correction. As you will most likely be aware, even bull markets are not void of heavy corrections. These retracements are a guarantee in both bull and bear markets.
The DXY Pushes Higher
As I mentioned a few days ago, I am expecting the S&P to hit resistance at around the 4200 to 4300 mark. The 4160 mark is already proving to be somewhat of a hurdle with a recent top of 4167, which suggests that it could already have topped out just short of my target. The DXY is also on the rise as expected.
The DXY has retraced from recent highs but is currently sitting on support, which means that we cannot factor out the possibility of it making another move higher. It appears as if there is a massive disconnect between data and the appropriation of that data.
A stronger dollar, combined with a stock market losing steam is likely to create a “buying opportunity” within the Crypto space. When you consider that Bitcoin is facing strong resistance at $24K, it becomes even more apparent that a correction is on the horizon. Don’t be distracted by 5%, or even 10% pumps to the upside. When the tide turns it sucks everything with it. I think that there will still be a few good opportunities to utilize stablecoin holdings in the short to medium term. Bear markets have a way of deceiving the market into thinking that the direction has indeed shifted. Lower lows do not necessarily need to be experienced in order for months of gains to be washed away.
Even if the market were to experience significant upside, a correction is always the next step in the process. Having dollars on hand, as well as a few “dollar machines” makes a lot of sense and shouldn’t be downplayed, especially by a “bullish bias” in a bear market. As always, this is not investment advice. Enjoy your weekend, and hopefully, we experience a little volatility!