Hello everyone.
This is an update from my previous BTCUSD idea, as we have some more insight we can use from our previous ideas. Some things to note.
BTCUSD followed the d support trend as expected, losing momentum quickly from the $21,000 level to $19,000, and quickly bounce back to just under $21,000 at the moment. This movement continues to confirm our idea of previous market movement before capitulation below $30,000 when many were calling a bottom. This movement was caused by anticipation of the CPI data that was released on Wednesday. Many did not hold their breath, and for good reason, and fears of further rates and recession caused BTCUSD to hit support at $19,000 and ETH at exactly $1,000.
On the daily TF, we can see the important key prices for BTCUSD. Note that we have yet to significantly test even the $22,000 price level. This is yet again bad news for BTCUSD, as it shows the institutional investors that bring in the large volume and fast momentum are simply not here. Volume has been decreasing on the current d support level trend, which signals a weak attempt from the bulls so far.
Macroeconomics
So the U.S. just came out with the hottest CPI release since November 1981, what now? Well, many investors are shaken up at the possibility inflation may take too long to come down, leading to stagnation, or the fed drastically implelmenting further rate hikes, leading to a recession. The fears, as we have seem, are NOT over. Lets take a look at history for a bit.
- S&P 500
Since the current inflation was last seen to be this bad in the early 1980s, we will use this period as an example. The early 1980s recession was a severe economic recession that affected much of the world between approximately the start of 1980 and early 1983. It is widely considered to have been the most severe recession since World War II. It caused the stock market, risk-on assets, and indicies to plummet. From our chart, we can see that from the start of the economic turmoil to the end, it took a total of 577 days for the S&P 500 to bottom out. We can think about how this may reflect on our current, similar, situation. The inflation we see currently has only lasted a mere 5-6 months (182 days).
How does this affect BTC?
BTCUSD is a risk-on asset.This means it is susceptible to high volatility, especially in times of uncertainty. More and more investors will be looking for "safe-havens" such as the U.S. Dollar in times of economic turmoil (the DXY has gained more than 11% in just the first half of 2022 alone). Other examples of risk-on assets are equities, commodities, high-yield bonds, real estate, and currencies. BTC also currently moves much more in tandem with indicies such as the S&P 500 and NASDAQ now than before, in times of market prosperity and growth. This could affect the price of BTC to extreme amounts, as it has never faced any economic turmoil like this before.
Let me know what you think.
This is an update from my previous BTCUSD idea, as we have some more insight we can use from our previous ideas. Some things to note.
BTCUSD followed the d support trend as expected, losing momentum quickly from the $21,000 level to $19,000, and quickly bounce back to just under $21,000 at the moment. This movement continues to confirm our idea of previous market movement before capitulation below $30,000 when many were calling a bottom. This movement was caused by anticipation of the CPI data that was released on Wednesday. Many did not hold their breath, and for good reason, and fears of further rates and recession caused BTCUSD to hit support at $19,000 and ETH at exactly $1,000.
On the daily TF, we can see the important key prices for BTCUSD. Note that we have yet to significantly test even the $22,000 price level. This is yet again bad news for BTCUSD, as it shows the institutional investors that bring in the large volume and fast momentum are simply not here. Volume has been decreasing on the current d support level trend, which signals a weak attempt from the bulls so far.
Macroeconomics
So the U.S. just came out with the hottest CPI release since November 1981, what now? Well, many investors are shaken up at the possibility inflation may take too long to come down, leading to stagnation, or the fed drastically implelmenting further rate hikes, leading to a recession. The fears, as we have seem, are NOT over. Lets take a look at history for a bit.
Since the current inflation was last seen to be this bad in the early 1980s, we will use this period as an example. The early 1980s recession was a severe economic recession that affected much of the world between approximately the start of 1980 and early 1983. It is widely considered to have been the most severe recession since World War II. It caused the stock market, risk-on assets, and indicies to plummet. From our chart, we can see that from the start of the economic turmoil to the end, it took a total of 577 days for the S&P 500 to bottom out. We can think about how this may reflect on our current, similar, situation. The inflation we see currently has only lasted a mere 5-6 months (182 days).
How does this affect BTC?
BTCUSD is a risk-on asset.This means it is susceptible to high volatility, especially in times of uncertainty. More and more investors will be looking for "safe-havens" such as the U.S. Dollar in times of economic turmoil (the DXY has gained more than 11% in just the first half of 2022 alone). Other examples of risk-on assets are equities, commodities, high-yield bonds, real estate, and currencies. BTC also currently moves much more in tandem with indicies such as the S&P 500 and NASDAQ now than before, in times of market prosperity and growth. This could affect the price of BTC to extreme amounts, as it has never faced any economic turmoil like this before.
Let me know what you think.