This is a market update. This is a very important week for bitcoin because we have inflation figures coming out, which is going to dictate where this price chart goes. We’ve been kind of bumbling around at $30,000 waiting for the inflation figures and how they’re going to impact the price of bitcoin. It is going to go to one of the other support and resistance lines. We’re at 30k now. We have a support line at $25k and a resistance line at around $32k to $33k.
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The inflation figure that comes out this Friday is going to bring us into one of those lines depending on the figure. When it comes to bitcoin, we’ve been having a few Bart Simpson sessions. I’ll get on to that later. What I mean by that is, essentially, we are hitting a really important level of support right here. So, even with everything going on and the economy getting worse, you know, we’re seeing financial markets actually get a little bit of a bid up and, you know, bitcoin has certainly found a lot of support at this level. This is such a key level. Is this genuinely going to be the bottom for bitcoin and it’s actually going to start making some higher lows? It depends all on the inflation figure and how inflation starts coming down, and we’ll look at the inflation figure that’s going to come out at the end of this week and where it should be. If you’ve got some trades on, it’s really important to understand when that figure comes out, what it is, and how it’s going to affect the market from now on. We’re at $30,000 and over the short term we could go to one of these two levels.
This is the 10-year treasury chart in the states. What you can see is that we are in basically a 40-year downtrend in rates. I do not believe we are entering into a new type of macroeconomic situation. Yes, inflation is high for various reasons. Number one, the United States of America printed 40% more dollars in a matter of years and put interest rates down to zero. So yes, you’re going to get inflation, and, of course, interest rates will then have to react to bring that inflation back down to a reasonable level, but look at this 40-year trend. I do not believe the interest rates are going to start printing higher lows and start edging up to you know, five to six percent. It is just not going to do that in my opinion.
The demographics and the fundamental demographics of the US and the West are just not going to make this a scenario possible. As government bonds yield less and less and less over time, I believe we’re going to just see this come up and then eventually carry on in this downtrend, and this means essentially that rates just go down and down and down for, you know, essentially dollars. This is essentially telling me as well, you look at the reverse of this. Bitcoin is essentially the reverse of this. a solid asset. You know, next time the economy goes down and goes into recession, what they’re going to do again. They’re just going to start lowering rates again, just like Japan has done.
I’m not going to go against a 40-year chart like this to tell us where we are in the current cycle for bitcoin in terms of being at the end of the bear. This chart on Twitter from TechDev is really good right now, basically showing us the top of each bull market and the bottom of each bear market for each cycle.
As we know, bitcoin cycles still dictate the price to a large extent. Now what you can see is that searches for bear markets actually come essentially at the bottom, so the bottom range of searches for bear markets is really like a bottom signal where the chart starts bottoming out and you can see that bitcoin is actually doing this again now.
Well, it seems like it might be that I can’t actually predict the bottom. We are now 67 bars away from the high, which is usually a good indicator of some sort of bottom. Actually, in terms of the bitcoin chart, are we going to see further bottoms and further kinds of lowering prices in bitcoin? I think that is down to the inflation figures that come out, so it’s an interesting chart to see that essentially we are around 67 bars away, which is in previous cycles somewhere near the bottom, and obviously bear market searches come at the bottom. If you can actually see the other side of this, uh, crypto market, searches come all the way near the top. When you have a search, interesting crypto is biking, that’s telling you it’s essentially the top of the bull market and you need to get out, so you need to take the opposite side of what the herd is doing. If people are searching for bear market in bitcoin.
That’s probably something where you want to be buying into and then you just sell into the bull market when everyone’s searching for crypto and it’s the next best thing and everyone’s going to get rich. You take the complete opposite side of what the market is doing. If you actually want to buy low and sell high now, we have to get into the Bart Simpson charts because that’s what’s been happening this week, a lot of indecision. I posted this the other day. It’s a perfect Bart Simpson setup.
There are many more right now that are happening. Why are we getting Bart Simpson charts essentially because of the CPI coming up? People don’t know what is happening, so if you go down to maybe like the four-hour chart on bitcoin like this. You can see a lot of Bart Simpsons that are happening, especially in the last few days. People are trading around the CPI figure.
So the price is going to go up at the end of the month when I add that new section. Everyone that’s got it already, you’ll be getting it this month. But what I want to really get to is why we’re seeing all these Bart Simpson charts and it’s down to the CPI. So the CPI comes out this Friday. This is the inflation figure. This is what is going to dictate where the market goes on June 10th. You can see the may figure coming out, so people expect this to be around about eight percent. You can see that the percentage is around 8%.
This is what the market expects the consensus to be for CPR inflation. If inflation is under this, that’s probably a good sign for the market. If it comes in with a seven handle, like 7.9%, I think the market is going to really rip because the market wants to see inflation coming down. If inflation comes down, it means the Fed doesn’t have to bash the market and raise interest rates and take money out of the system like it has been threatening to do. The Fed doesn’t want to do that because it would spark a recession. So that’s not what they want to do, but they have to keep inflation from coming down. If inflation comes in at around 8.2% or 8.3%, they expect the market to dump further because they expect the Fed to come even harder on top of the market and raise interest rates. Um, come out as hawkish and say we’re going to raise interest rates. We’re going to smash the economy. Everything’s going to go into a recession. Everything’s going to go down. If that happens, if inflation is below this figure, especially with a 7% handle, expect the market to do very well. If it’s above this, expect the mark to do very badly. This is why we are printing lots of Bart Simpsons at the moment.
If stocks go up, then crypto will go up right now, but that’s bad for the market because then they think if stocks are going up, then there’s going to be a ton of inflation. Inflation is bad for the market. So when they think there’s inflation in the market and inflation in prices, then stocks and cryptos go down. They sell off because they think the Fed is going to be really hawkish and they’re going to smash the market, and so we’re going to preempt them doing that by selling off all of our stocks because we’re going to get them back lower. Inflation is bad but then stocks go down, so then people think, “Well, wait a minute.” If stocks go down and we’re seeing all of these consumer businesses in the states like Target slashing forecasts and the stocks are coming down, that means that the economy may be slowing down and possibly even going into recession. Right now, that’s kind of good because it means the Fed is not going to be as hawkish. They’re not going to raise interest rates as much. So they’re not going to take as much money out of the interbank market, so that’s good. That means the Fed will be dovish, so stocks go up on that because they think they’ll hold on. If the Fed’s going to be more dovish, then we’re going to buy because they essentially are going to, you know, kind of support the market and have a put in there that we can just buy stocks and go up. Then stocks go up and people worry. Hold on, if stocks are going up and things are getting better, that means inflation isn’t going to go down. The Fed isn’t going to be as dovish and it’s just this cycle going round.
What is the thing that is going to change these Bart Simpsons and essentially this circle of going up and down and up and down? Well essentially it is the fundamental facts about inflation. So if inflation is coming in lower than expected, that is good. The market may rip and actually start printing higher highs. But inflation is still way too high. It’s really a very complex picture about how much it will go down, how fast it will go down, and how much central banks around the world actually have to do in terms of how hawkish they have to be to get that down to the figure that they want in the states. Anyway, around two percent this Friday, is an extremely key level and it’s going to dictate where the price of bitcoin goes, whether we actually go lower and, you know, start testing this support or whether we potentially actually rise into resistance, so watch out for that figure on Friday.
[This article is a transcription of a video made by MoneyZG]
Original video: https://youtu.be/vm_9_qqBaqA ]