Realamh

Bitcoin and U.S. Bond Yield: A True Love Story (revised)

COINBASE:BTCUSD   Bitcoin / U.S. Dollar
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.
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:

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Regards,
Amir H.

Comments

This is an interesting analysis to read and we look forward to seeing what others say in the comments. It was featured in Editors' Picks
200 coins
+3 Reply
Your signature made me think I had done an anonymous post! Anyway, thank you for the information - I think today/this week the BTC will rise slightly, followed by a significant decline in the following 2-3 weeks.
+4 Reply
@AaronHynninen please follow me back! I am trying to build up my Reputation. Thanks.
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Interesting view that you have here, we think Bitcoin is ready to rise but we'll see!
+1 Reply
I draw your attention to in the crypto market most of the head and shoulder patterns fail to complete. we should wait for confirmation!

Sincerly,
+1 Reply
Exact same view I've posted nearly one month ago. Glad to see that I'm not alone in my view. With Biden policies going to tax BTC and other Cryptos It makes sense that I will start slowly losing value.
+1 Reply
VIP_Trading_Technologies VIP_Trading_Technologies
@VIP_Trading_Technologies, And this one was published today.
+2 Reply
asguj908724e0touokajhsdgo98a7u VIP_Trading_Technologies
@VIP_Trading_Technologies, This is the dumbest chart I've ever seen.
+20 Reply
ianmaclean asguj908724e0touokajhsdgo98a7u
@asguj908724e0touokajhsdgo98a7u, this does feel like we're trying to force a head and shoulders pattern at any cost...
+2 Reply
VIP_Trading_Technologies asguj908724e0touokajhsdgo98a7u
@asguj908724e0touokajhsdgo98a7u, Thanks mate, glad you liked it.
Reply