Bitcoin cannot escape the bearish global market problems
The world is full of old boys predicting the end of the world, and I’m not one of them, quite simply – I could be a bull.
However, I maintain my view that everything is currently hugely bearish.
The only thing that can go up is all the currencies that are not the dollar, because the dollar has been so strong that it is breaking the world economy and the US can reverse course a little to take the dollar boot off everyone’s neck. However, it could go the other way if the wheels come off, so it’s probably a 50/50 situation.
Strong dollar = weak bitcoin
Strong dollar = weak everything.
Here is the bitcoin chart:
It is a bearish chart. It is bearish because this “floor” tile is broken to the downside four out of five times. The keepers sit and pray but no one comes to help and so eventually things go downhill.
So this is the way history is likely to repeat itself:
The situation is extremely serious in the global economy, and it creates fragility in the markets. Bonds are collapsing because interest rates are rising due to inflation caused by the “Covid Economic Response.” First world countries now have emerging market balance sheets, and problems in the bond market will blow back into either depression or high inflation or both. The US stock market is on the verge of another 20% plus drop. So the dominoes are all lined up.
This economic crisis is not destiny, but the UK Treasury bailout, the South Korean QE move, the dollar/yen situation are all eruptions from the economic volcano stirred up by US Federal Reserve tightening, which is still only just getting started.
Here is the Federal Reserve tightening chart:
That baby bend at the end of QE/QT is what has the world by its throat. It’s not surprising because the world took a two-year financial sabbatical in which it borrowed to pay. Now there is a financial hole it has to dig itself out of, and that process has reached an ugly stage that is going to get uglier.
It doesn’t take a charting genius to be bearish on the S&P 500:
I’ve written before that the bottom would be 3500 and it worked fine, but now I’m less than sure. My calculation was that the Federal Reserve would not be too hawkish and simply raise interest rates little and often and not push them higher in a way that jerks the chain of the market and the economy. That’s not what they do; they actively go “old school” and plan to control inflation through punishment, not money supply control. That is bad.
The implication of a bearish view of the US stock market is that there will soon be hell to pay. If the world has lifted government bonds, this will be doom.
Bitcoin will not be a safe haven.