When investors were fearful of the growing inflation they were looking for an asset to hedge against this madness. They used to buy gold back in the days, but recently they found Bitcoin. So now whenever investors lose confidence in the market they drop bonds driving the US10Y up and buy bitcoin instead.
Who is in charge?
Crypto-market is reacting to the global market and appears to be predicting the future of stock market by moving their funds in and out of the big crypto. Or is it the other way around?
There are two unique features in these charts:
1-These charts are out of sync and there is some degree of delay between them. It appears that Bitcoin is a few weeks ahead of the yields so perhaps investors move their money in and out of the bitcoin before biding on the bonds.
2-Both charts seem to be moving in a specific proportion. It looks like for every 3 points movement in Bitcoin, US10Y moves 1 point (See the blue arrows). When Bitcoin broke below its trendline and dropped nearly 33%, while when US10Y broke below its trendline it dropped around 11%.
Now what?
Considering the death cross on daily and the massive head and shoulder that are about to complete on the BTC chart, Bitcoin may not be done dropping:
So if it drops another 48%, US10Y should also drop but as much as 16%. Although, we are already anticipating a drop in the yield considering the CPI report released on June 10th:
What does it all mean?
1-Apes are going to have another run
2-The growth market should gain momentum
3-The speculative stocks should go up.
Please share your thoughts and theories in the comment section below.
Who is in charge?
Crypto-market is reacting to the global market and appears to be predicting the future of stock market by moving their funds in and out of the big crypto. Or is it the other way around?
There are two unique features in these charts:
1-These charts are out of sync and there is some degree of delay between them. It appears that Bitcoin is a few weeks ahead of the yields so perhaps investors move their money in and out of the bitcoin before biding on the bonds.
2-Both charts seem to be moving in a specific proportion. It looks like for every 3 points movement in Bitcoin, US10Y moves 1 point (See the blue arrows). When Bitcoin broke below its trendline and dropped nearly 33%, while when US10Y broke below its trendline it dropped around 11%.
Now what?
Considering the death cross on daily and the massive head and shoulder that are about to complete on the BTC chart, Bitcoin may not be done dropping:
So if it drops another 48%, US10Y should also drop but as much as 16%. Although, we are already anticipating a drop in the yield considering the CPI report released on June 10th:
What does it all mean?
1-Apes are going to have another run
2-The growth market should gain momentum
3-The speculative stocks should go up.
Please share your thoughts and theories in the comment section below.
Comment:
I do believe yields will go up eventually but this is a near-term analysis.
Comment:
Here is a simplified summary of how Bitcoin fits in the whole economic cycle:
