I had an interesting observation that Bitcoin paves the way for broad stock market and creates chart patterns that markets eventually follow. When economic conditions seem strong, people buy, and when they aren’t, people sell. What they buy or sell is a matter of preference, and how much they buy or sell depends on broad availability of capital.
If you move your cursor across the chart, you will see that Bitcoin peaked first in February, bottomed first in March, and then again peaked first in May. SPY and broader stock market was lagging by a week, but eventually followed the same pattern.
Overall stock market sentiment is screaming that upward movement is unjustified, but because the stock market continues to rise, people fall blind to obvious facts and negative economic forecasts from IMF and governments. People want to make easy money in stocks and this is what drives the market. As long as it goes up or stays the same, nobody is going to sell and market will not fall.
Today, Stocks and Crypto chart patterns are created by the same forces. No one is analyzing and the market is driven solely by emotions. And for some reason, Bitcoin completes price patterns faster than SPY. If this trend continues to take shape, I expect Stocks to be flat until end of summer.
In Autumn, because of weather conditions, immune system is weaker and we are likely to see spike of COVID-19 cases and deaths. Moreover, because of the damage that has been done to the economy so far, we are likely to get very much negative economic data for Q3 2020. All of which will shake investor and household confidence, and result in selling.
If you move your cursor across the chart, you will see that Bitcoin peaked first in February, bottomed first in March, and then again peaked first in May. SPY and broader stock market was lagging by a week, but eventually followed the same pattern.
Overall stock market sentiment is screaming that upward movement is unjustified, but because the stock market continues to rise, people fall blind to obvious facts and negative economic forecasts from IMF and governments. People want to make easy money in stocks and this is what drives the market. As long as it goes up or stays the same, nobody is going to sell and market will not fall.
Today, Stocks and Crypto chart patterns are created by the same forces. No one is analyzing and the market is driven solely by emotions. And for some reason, Bitcoin completes price patterns faster than SPY. If this trend continues to take shape, I expect Stocks to be flat until end of summer.
In Autumn, because of weather conditions, immune system is weaker and we are likely to see spike of COVID-19 cases and deaths. Moreover, because of the damage that has been done to the economy so far, we are likely to get very much negative economic data for Q3 2020. All of which will shake investor and household confidence, and result in selling.
