Stocks Plunge, Cryptos Continue To Hold Support

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Stocks Plunge, Cryptos Continue To Hold Support

By Tom Whitbread
October 25th, 2018

The DOW shrunk 600 points yesterday ending the day down 2.5%, US Tech stocks and Asia stocks also plunged as the global stock market sell off continues to intensify, 

Selling continued to accelerate yesterday with huge drops on stock market indexes, whilst gold gained $8 on the oz, up half a percent trading near the $1240 level again. 

Crypto markets have been overly placid with most timeframes resembling a sideways line with very little play, and just some chop. Overall a tight range of mostly dojis has caused day trading to become quiet sporadic and largely profitable only from being in the trade long enough to profit from jolts to the market, or by playing emerging alt-coins such as Raven Coin (RVN) which rallied this week trading up 150% from 2 dollar cents to now be at 5.  

Basic Attention Token (BAT) also moved up 30% this week, on the back of speculative news coinbase will be listing the ERC20 token on their popular exchange, due to a screenshot that emerged showing 0x (ZRX) Maker (MKR) and BAT on their Toshi Wallet application. Making some to draw conclusions that after ZRX, BAT will now be listed.

As Bitcoin continues to trade in such a tight range, we can only await a catalyst from outside factors to bring crypto into mainstream attention once again. 

With the FED aiming to bring at least 3 rate hikes next year, a strong dollar is something we may have to endure for a while longer yet. Only if the Presidents original plan of a cheap dollar for easy access to credit continues to play out could we see the DXY (The dollar index, measuring the buying power of the US currency to a weighted basked of foreign major currencies) continue to hold above 95 and even reach 100 again. 

As we see through history - a strong currency will put a weight on markets in that it is expensive to access, and debt is more expensive to acquire. Balanced correctly, inflation can be controlled and the status quo continue, although currently there is some debate on where that balance exists, especially with the unwinding of the FEDs balance sheet and continued interest rate hikes. 

Should the stock market sell off intensify further, whilst the US economy continues to find its feet during the presidents current phase of global trade arrangements - a panic phase due to uncertainty cannot be rulled out. 

In case of a panic period in the stock and bond asset classes, a run to safety could see precious metals such as gold, land banking in property development, housing and real estate purchases and of course crypto become the apple of many an investors eyes. Unless of course everyone decides to buy the dip, and continue this record breaking 9 year bull run in US stocks for another year. Some say the earnings have topped out, we will see as Q3 reports are published.

As always - anything can happen, just remain vigilant to make the call and don't bet the farm.