Bitcoin

Bitcoin Can’t Escape The Bearish Global Market Problems

The world is full of old guys predicting the end of the world and I’m not one of them, in one simple way—I can be a bull.

However, I keep my position that everything is currently hugely bearish.

The only things that might go up are all the currencies that are not the dollar, because the dollar has been so strong it’s breaking the world economy and the U.S. might reverse course a little to take the dollar’s boot off everyone’s neck. However, it might go the other way if the wheels come off, so that is probably a 50/50 situation.

Strong dollar = weak bitcoin

Strong dollar = weak everything.

Here is the bitcoin chart:

That is one bearish chart. It’s bearish because this tile of “floor” is broken to the downside four out of five times. The holders sit and pray but no one comes to the rescue and then in the end down it goes.

So this is the way history is likely to repeat:

The situation is extremely dire in the global economy and that is creating fragility in the markets. Bonds are collapsing because interest rates are going up because of inflation caused by the “Covid Economic response.” First world countries now have emerging market balance sheets, and bond market problems will blow back into either depression or high inflation or both. The U.S. stock market is on the edge of another 20%-plus fall. So the dominos are all line up.

Bitcoin
BTC
cannot escape this configuration if the dam bursts. If the dam bursts then it will be a sideshow in a $100 trillion avalanche.

This economic crisis is not fate, but the U.K. government bond bail out, the South Korean QE move, the dollar/yen situation are all flares from the economic volcano stirred up by the U.S. Federal Reserve’s tightening which has still only just got underway.

Here is the chart of Federal Reserve tightening:

That baby bend in the end of QE/QT is what has the world by the throat. It’s not surprising because the world took a two year economic sabbatical where it borrowed to pay its way. Now that’s a financial hole it has to dig itself out of and that process has reached an ugly stage that is set to get uglier.

It doesn’t take a charting genius to be bearish about the S&P 500:

I’ve written before that the bottom would be 3,500 and that worked out well, but now I’m less than sure. My calculation was that the Federal Reserve would not be too hawkish and would simply raise interest rates little and often and not slap them higher in a way that yanks the chain of the market and the economy. That is not what they are doing; they are actively going ‘old school’ and planning to control inflation through punishment not money supply control. That is bad.

The implication of a bearish view on the US stock market is that there will soon be hell to pay. If the world has levered up sovereign bonds then this will be an undoing.

Bitcoin will not be a safe harbor.

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