The Diminishing Benefits of Diversification: Rise in Correlations Signals Vulnerability to Systemic Fluctuations The SPX 1-Month Realized Component Correlation saw a considerable increase on Friday, which is a significant development in the financial market. This suggests that the benefits of diversification, which are typically provided by assets that are not correlated, are diminishing. In other words, the market is becoming more interconnected, and as a result, the potential impact of systemic fluctuations is increasing. This development could have far-reaching implications for investors and financial institutions alike. Historically, diversification has been a fundamental principle of risk management. The idea is that by investing in assets that have low or negative correlations, investors can reduce their overall portfolio risk. However, if the correlations between these assets increase, the benefits of diversification diminish, and portfolio risk increases. Furthermore, this rise in correlations could also have implications for the broader economy. Systemic fluctuations, which are more likely to occur when correlations are high, can lead to significant economic shocks, such as recessions and market crashes. As a result, policymakers and regulators may need to take steps to mitigate the impact of these developments and ensure the stability of the financial system.

Food for thought: When to Be Contrarian Financial markets are often seen as a reflection of reality, but in reality, they can be quite different. The reason for this is that markets tend to project out linear valuations based on recent trends, which means that they can become disconnected from the underlying reality. This is especially true in times of bull or bear markets when the market is either above or below reality. The best time to sell in the market, therefore, is not necessarily when reality is bad but when everyone is doing well in real life. This is because the market has applied an exponential multiple for things to continue, and it is only a matter of time before the market starts to come back down to earth. Similarly, the best time to buy is when we are in a depression, and a linear down projection is multiplied out. In this way, being contrarian can be a wise strategy because the consensus at extremes in financial markets causes the market to be at the furthest place away from reality, which then starts swinging back. However, being contrarian is also wrong because you are sitting at a place that is also far away from reality in the other direction. The market moves in a pendulum, and so you benefit inversely. In other words, you need to be mindful of where the market is relative to the macro environment and what the consensus pricing is, and then decide whether or not to take a contrarian approach. The key takeaway is that learning macro is not just about investing based on the findings themselves, but understanding where financial markets are relative to macro and what is the consensus pricing out linearly in which direction. At the extremes, being contrarian works well, but in the middle, the trend is your friend. In summary, financial markets can often be disconnected from reality due to the linear projections they make based on recent trends. Being contrarian can be a wise strategy when the market is at an extreme, but in the middle, it's best to follow the trend. Understanding macro can help investors make informed decisions about where the market is relative to reality and the consensus pricing out linearly.

$FIL: Currently at $8, ATH at $200. How far can it go up again?

Crypto Narrative Trading Basics: Critical Thinking In recent times, narratives have become a significant topic of discussion in the world of trading and investment. As someone who considers themselves an early narrative submitter, I believe it is essential to understand the basics of narratives and how they are often misunderstood. First and foremost, let's start with the definition of a narrative. A narrative refers to a spoken or written account of connected events; in other words, a story. In the world of trading, narrative trading involves placing high-risk bets on tokens based on a story. To illustrate, when Facebook rebranded to Meta, many people believed that the "story" of the Metaverse being the next big thing in tech was plausible. Crypto traders, in turn, connected this story to coins and began speculating heavily in tokens like $SAND$ and $MANA$ in October-November 2021. As a result, these tokens rallied 8-10 times within a few weeks, purely based on the belief that they represented the next big thing. However, it is crucial to note that narratives do not always play out as expected. In the case of Metaverse-based tokens, the price eventually retraced to pre-pump levels. As a result, it is always advisable to have an exit plan when engaging in narrative trading. Every narrative will eventually die down, and the tokens will retrace, so traders should practice caution. It is also important to note that narrative trading is not investing; it is more of a short-term strategy that requires traders to be early to a good enough story. Critical thinking is, therefore, essential when it comes to identifying narratives. Traders need to assess if any major news, even if unrelated to crypto, can be connected to crypto and if so, what coins are likely to be affected. By being faster and working harder than everyone else, traders can gain an edge in identifying and capitalizing on narratives. Another recent example of a narrative is the hype around AI coins. The story here is that AI is the future, and the best way for crypto traders to speculate on this is through unrelated AI-based crypto tokens like $FET$, which has rallied 875% so far. In conclusion, narratives can be a powerful tool for traders looking to make quick gains. However, it is essential to practice caution and have an exit plan. Traders should also practice critical thinking to identify potential narratives and gain an edge in the market.

🎯Trend: Why is XRP so famous in Japan? Let’s find out in the video. 🤔Thought: No wonder if most of you believe that ETH will rank the second to BTC in most part of the world, but not with Japan. So far, it was not clearly known why XRP has a strong community base in Japan. The altcoin‘s popularity in the country is on similar levels with that of Bitcoin, trumping Ethereum, which is only third most popular cryptocurrency in Japan. The study found XRP was favorite cryptocurrency for 25% of respondents while Bitcoin’s popularity stood at 26%. Ethereum stands as a distant third coin in terms of popularity.

Trend: ‘The Financial Revolution Is DeFi’ Unpopular opinion: DeFi is the new revolution and really just taking all the middleman out of the financial eco-sys-tem. It can happen with inflation. Bitcoin, I think, is the best hedge against inflation out there far none and better than gold.

Food for thought: SVB Collapse & Unanswered Questions Silicon Valley Bank [SVB], founded in 1983 and currently the 16th largest bank in the United States with $210 billion in assets, has collapsed in the second-largest bank collapse in American history. This article will discuss what happened, how it will affect the economy, and particularly the crypto industry, which is heavily backed by venture capitalists [VCs]. SVB primarily supported small- and medium-sized businesses [SMBs] with financial solutions such as loans for acquisitions or projects. However, it recently took strategic actions that would take a $1.8 billion loss on bond sales. This was due to the unfavorable macro environment, including a sharp increase in interest rates over the past year, a decrease in the value of bond investments, balance sheet management errors from overallocation into long-term bonds, and heavy exposure to the tech sector. The ripple effects of this collapse will be felt in the SMB-driven economy, particularly among companies that are VC-backed and rely on SVB for loans and to hold their operating cash. This is particularly relevant for the crypto industry, which is heavily backed by VCs. The collapse of SVB has made it apparent how this affects crypto. - Several crypto firms are involved, including BlockFi, a failed crypto lender that has $227 million in funds held at SVB, not insured by the FDIC. - Circle, the issuer of the world's second-largest stablecoin USDC, claims that its operations will continue as normal, but SVB was used to manage USDC's cash reserves. - Pantera Capital may have an unknown amount of exposure to SVB's collapse, as SVB is a custodian of its funds. - Avalanche has $1.6 million exposure to SVB, while Yuga Labs claims to have "super limited exposure" to SVB. - Proof Collective, a leader in NFTs, claims that the potential loss would not affect the security of customers' assets or Proof's roadmap. - Nova Labs, the startup behind decentralized network and internet provider Helium, has an undisclosed amount in SVB. This collapse comes at a time of startup turmoil, as Silvergate Bank was the first to fall on March 8th, and SVB began to show signs of trouble shortly after. This could put some crypto companies in limbo as they now have restricted banking facilities. Negative momentum is growing, as USDC cut ties with Silvergate Bank. It is unclear how far this contagion could spread within the VC-backed industry and on a macro level. In conclusion, diversification is essential in times of economic instability. As the collapse of SVB has shown, it is critical to spread risk across multiple banking institutions to prevent heavy losses if one collapses. The ripple effects of this collapse will be felt across the economy and particularly in the crypto industry, which is heavily backed by VCs.

🎯Digest: Mysterious Untouched ETH Wallet Sees Staggering Growth, Holding Since Ethereum ICO 🤔Thought: Imagine the mental fortitude of holding through multiple bull and bear markets. Though the far more likely outcome is they lost their keys, or maybe the person is dead.

$ETH$: Bearish on the 1hr 🐻 (but bullish on the weekly 🐂) What happened: $ETH$ has entered a range-bound period [1,510 - 1,658] since Jan. 18, meaning bulls have been struggling to push it higher for at least 10 days. On the 1hr chart, there have been two “lower-high” formations formed since Jan. 29 20:00 UTC. RSI, on the other hand, has only just returned from the oversold area a couple of hours ago, meaning the relative strength is still weak. What will happen: As a good rule of thumb, always follow the micro-trend when trading on the hourly charts. The latest momentum implies a 3rd leg down is plausible but not definitive. However, RSI is awaiting an imminent trendline breakout followed by another one not too far off, which means this is pretty risky. But looking at the PL ratio [3.93-to-1], this is a pretty good bet. The Swing Play: 12-48 Hours 3.93-to-1 Profit-to-Loss Ratio. Entry: 1,566; Target: 1,512; SL: 1,580. Hourly Resistance Zones 1. 1565.30 - 1569.97 2. 1579.43 - 1580.64 3. 1595.14 - 1603.75 Hourly Support Zones 1. 1556.06 - 1546.93 2. 1546.18 - 1538.38 3. 1535.92 - 1532.90 TA Methodologies: 1. Supply & Demand Theories 2. Price Momentum 3. Fibonacci Retracements & Extensions SR Zones 4. Trendline Breakout 5. RSI Movement Strengths

Дані Jinshi, 14 червня, інвестори ставлять питання на платформі взаємодії: чи успішний запуск четвертої лінії виробництва? Коли очікується повне виробництво? Far Xing Energy відповідає, що робота з випробування четвертого виробничого ланцюжка фази першої проекту натурального соди Аларшан триває, дата досягнення повного виробництва ще не визначена.

$QNT$: Bullish 🐂 [Extended Analysis] What’s up: Trade entered at $136.14. SL should be far enough to cover any volatility. Expecting 10% - 20% profit within 2 weeks. The Short-Term Play: 2-4 weeks 4.58-to-1 PL Ratio. Entry: 136.14; Target: 162.86; SL: 130.30. Hourly Resistance Zones 1. 139.05 - 140.64 2. 141.66 - 142.99 3. 144.01 - 146.44 Hourly Support Zones 1. 137.44 - 136.14 2. 134.96 - 133.78 3. 130.98 - 130.62 TA Methodologies: 1. Supply & Demand Theories 2. Price Momentum 3. Fibonacci Retracements & Extensions SR Zones 4. Trendline Breakout 5. RSI Movement Strengths

$C98$: Bullish 🐂 [Extended Analysis] Feb. 17 Update: What’s up: Trade entered and immediately shot up from the 61.8% Fibonacci Extension level which is also the edge of a demand zone. However, a further pullback is likely but my SL should be far enough to cover the volatility. The Short-Term Play: 2-4 weeks 3.93-to-1 PL Ratio. Entry: 0.29395; Target: 0.43235; SL: 0.25875. Hourly Resistance Zones 1. 0.3099 - 0.3200 2. 0.3244 - 0.3363 3. 0.3413 - 0.3592 Hourly Support Zones 1. 0.3029 - 0.2963 2. 0.2940 - 0.2889 3. 0.2827- 0.2728 __________ Feb. 16 Analysis: What’s up: $C98$ saw initial rejection at descending channel on the daily timeframe. I am anticipating a retest very soon. Currently looking for entry at the 38.2% Fibonacci Retracement level [0.29252], which is also situated at the edge of a supply zone, with an SL set at 78.6% level [0.25875]. I am expecting 45% - 70% profit within 2-4 weeks. The Short-Term Play: 2-4 weeks 3.93-to-1 PL Ratio. Entry: 0.29395; Target: 0.43235; SL: 0.25875. TA Methodologies: 1. Supply & Demand Theories 2. Price Momentum 3. Fibonacci Retracements & Extensions SR Zones 4. Trendline Breakout 5. RSI Movement Strengths

Navigating Uncertainty: Fed Boosts Rates, Warns of Stricter Credit Conditions On Wednesday, Mar. 22, the Federal Reserve, commonly known as the Fed, made an announcement that they have increased the interest rates by 25 basis points. This means that the cost of borrowing money has become slightly more expensive for individuals and businesses alike. The decision was unanimously made by the Fed, and it reflects their confidence in the strength of the US economy. The side-by-side dots plot, which is a graphical representation of the Fed members' forecasts for future interest rates, did not reveal any significant changes. However, the spread of forecasts for 2024 and 2025 was quite wide, indicating a lack of certainty. The Fed members have acknowledged that it is difficult to accurately predict the state of the economy that far ahead. The Federal Open Market Committee [FOMC] statement released alongside the decision affirmed the stability and strength of the US banking system. The statement acknowledged that recent developments may lead to tighter credit conditions for households and businesses. This tightening could potentially impact economic activity, employment, and inflation, though the extent of these effects is uncertain. As a result, the committee remains highly attentive to the risks of inflation.

📊Trend:🔥Based AI, Woke AI, Closed AI: What does Elon Musk mean?😱 ♻️Whether it’s crypto, social media giants, electric cars, or going to space, nothing has been able to stop him so far. So now it’s time for artificial intelligence? #AI# #WokeAI# #BasedAI# #ClosedAI# #Elon#

Food for thought: US Dollar Breakout Warning The US Dollar is currently in a crucial position as it attempts to surpass a significant resistance level [known as S1] despite being technically overbought. This level has previously acted as both a support and a barrier for past movements. We are continuously monitoring the correlation between the US Dollar [white] and all other asset classes [orange] in the hopes of detecting a shift from the current negative trend, but there has been no significant change so far. If the US Dollar does break out, all other asset classes may react violently.

🎯HOT: Is the SEC trying to help? How far behind are we? 🤔Thought: For all of the people who were clamoring for regulation to “legitimize” crypto, this is always where it leads. The government is not the solution. We need more people to fight for us🥹🙏🏼