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 me position that everything is currently hugely bearish.
The only things that might go up is all the currencies that are not the dollar because the dollar has been so strong its breaking the world economy and the US might reverse course a little to take the dollars boot of 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. Its bearish because this tyle of ‘floor’ is broken to the downside 4 out of 5 time. 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 markets. Bonds are collapsing because interest rates are going up because of inflation caused by the ‘Covid Economic response.’ Ist world countries now have Emerging market balance sheets and bond market problems will blow back into either depression of high inflation or both. The US stock market is on the edge of another 20%+ fall. So the dominos are all line up.
Bitcoin cannot escape this configuration if the dam bursts. If the dam bursts then it will be a sideshow in a $100tr avalanche.
This economic crisis is not fate, but the UK Government bond bail out, the South Korean QE move, the Dollar/Yen situation are all flares from the economic volcano stirred up by the US Federal Reserve’s tightening which is 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. Its not surprising because the world took a 2 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 SP500.
I’ve written before that the bottom would be 3500 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 harbour.