This is a market update. Some important data about inflation came out today. We’re going to look at that and how that affects the price of bitcoin and potentially central banks in the future starting to ease policy, not make it tighter. We’re still in the tightening phase. I’m bearish. I think you just have to have a bearish mindset if you’re trading here. This was a potential trade setup I was looking at, which is a bearish flag, which is the ascending wedge, especially in a bear market. A couple of profit targets here that both got hit. That would have been a good trade on that one. So please, make sure you’ve register at Jet-Bot trading platform. It has a great offer that you can take advantage of. You can earn APYs ranging from 200% to 2,000% with this option. You may choose from the best-performing traders and immediately copy trade crypto on the platform.
We saw bitcoin come off a little bit today on the news that 3AC has basically gone into official receivership and liquidation. Also, the Grayscale bitcoin ETF was rejected again. They have now filed an official lawsuit against the SEC to essentially put the bitcoin ETF on hold, which could take 12 to 18 months before they get some clarity on that. I don’t think that’s going to affect the price of bitcoin too much anyway, but in any case, any news during a bear market is basically an opportunity for people to sell off, but this would have been a good short trade right here using best crypto trading bot.
What we can see is that potential support levels around the $17,500 level could be tested again, especially with the stock market falling off a cliff every single day. The data suggests that you should maintain your bearish bias. If you’re trading but obviously looking out six months into the future, things are going to look very different and we’re seeing some bond guys and some macro guys thinking that rates of interest may have peaked and they’re actually starting to come off now.
I’ll look at that data in a second. First, though this data came out today, the main thing is to highlight right here that spending U.S. consumer spending was up year on year but way less than expected and this feeds through to some other data that tells us that potentially the inflation story is going to start turning into a recession story.
Recession and rates
Also, something they’re looking at which is coming out tomorrow on Friday is the PMI figures purchasing managers index. Now if this is in the low 50s, ever in history, it has predicted a recession every single time and so that’s what people are looking at now. This is coming out tomorrow, so an important figure to watch for is if it’s in the low 50s and it hangs around there, that’s a recession essentially and that is why bond guys are saying they think that rates are going to be coming down in the second half.
Rates being lower is generally good for equities but not during a recession because business incomes are at full price and earnings are at full and so that could continue to be a weight on the bitcoin price. The bitcoin miners are also capitulating now that the profits they’re making for mining bitcoin have evaporated. They’re actually selling their mining rigs way cheaper than before, and they’re just selling bitcoin to fund the loans that they took out to buy the rigs.
I just see continued weight on the price of bitcoin and therefore copy trading crypto, but these are rates. These are interest rates. You see, they peaked up here at three and a half today on the PCE and the other figures, and you can see they’re coming down, so actually testing support. This is really important if rates continue to fall. You know, throughout the second half, what the bond market is telling you is that they think the Fed will not be able to raise rates anymore. The recession is going to be here and they’re going to have to actually start at least pausing the rising rates or potentially cutting them as well.
The bond market is going to test the Fed’s uh to see how kind of forthright they are in actually raising rates, but what we’re looking at is the recession data coming through. So that could be pretty painful over the next few months.
I just have to remain bearish at this point because there are still a lot of recessionary figures that have to come out, including job losses and lower earnings and everything like that. I don’t think we’ve seen the bottom yet. We’re going to be testing lows. It’s really the only outcome that I can see, but moving into next year, the market is thinking that cuts are going to be coming because the recession has happened, inflation has come down, and then they’ll start easing again. It depends who you are as a trader. Bearish in the short term. Long term, you know, I’m super bullish on bitcoin.
I’d like to leave you with some good news: the Bank of International Settlements may be saying that banks should hold some bitcoin. I think this is absolutely massive news. This is the type of news that gets lost in a bear market just because the bank of international settlements literally proposes letting banks hold one percent of their reserves in bitcoin.
You can see in Bitcoin magazine that one percent of reserves is 1.8 trillion. Almost two trillion dollars could be poured into bitcoin as a reserve currency. You can see these things:
If you are a long-term investor, you can see the general crypto trading, but during a bear market, things like this get lost. However, I think it’s important to see these long-term drivers for growth as well, because during a bear market, you often forget about these, but this is a long-term driver. If banks, we’re seeing central banks of small countries, do this, if larger bank countries do it as well, I think it’s big news.
[This article is a transcription of a video made by MoneyZG]
Original video: https://youtu.be/669t3a9TXHU]