In a note today with a target for a 7% return in the S&P 500, strategists at Goldman Sachs today said bitcoin is “perhaps the ultimate risk asset.”
Today, it’s tracking the risk trade in equities closely. Bitcoin was higher earlier and hit $47,500 when sentiment was upbeat but it’s lost altitude alongside stocks. It’s now trading at $46,069, roughly flat on the day.
What has me worried is that bitcoin didn’t follow the recent rally in the stock market. Seasonally, bitcoin has fallen in 5 of the past 6 Januarys from -7%-30%. The lone exception was 2017 where it climbed a measly 1%. The reason for the consistent January selling could be tax-related.
I don’t like the look of the chart as it sits right on a key area of support. If that gives way, it’s easy to envision a very quick retest of $42,000. If buyers are going to step up and buy, it had better be soon but so far there hasn’t been much appetite at $46,000.
If it breaks down further, that’s a potential head-and-shoulders top.
I believe that bitcoin might be the single-most asset or technology that’s ready for disruption. Crypto is here to stay but in the world of technology, the best technology wins.
Some statistics to start the year:
During 2021 Bitcoin consumed 134 TWh in total, which is comparable to the electrical energy consumed by a country like Argentina.
Related CO2 emissions were ~64 Mt; enough to negate the entire global net savings from deploying EVs.
— Digiconomist (@DigiEconomist)
