Looking at BTC charts measured against the USD is confusing since the value of the dollar fluctuates significantly. This is like trying to measure your height over time, but the measuring tape keeps shrinking.
Instead, look at a ratio of Bitcoin against the MUCH less volatile store of value, gold. Here we can see very well defined tops and bottoms for the various BTC halving cycles. The current cycle double topped at 37:1, and is quickly headed back to 16:1. Gold may sell off as we approach the first rate hike, like it did for the beginning of the majority of the recent rate hiking cycles. Gold has strong support at $1,680 and $1,750, which gives BTC downside support between $26,880 and $28,000 at the 16:1 ratio support line.
I am near-term bearish on the crypto space as our government focuses on bringing inflation down by ending QE and hiking interest rates. Our economy is not as robust as the Fed believes, and most of the growth is from YoY baseline effects (they love bringing this up when trying to talk down inflation concerns) and the sugar rush from consumers dumping all of their stimulus funds. Combined with misguided green energy initiatives that will fuel a global energy crisis, the governments of the world will be facing massive stagflationary pressure with suffocating debt obligations.
Once the markets correct 20-30%, the Fed will have to choose between letting the stock market and the economy fall sharply into a deep recession, or let the value of the US dollar plummet. Politicians always choose the latter because the effects of inflation are not as well understood by the voting public. This is mid and long-term bullish for cryptos, real estate, consumer staples, and most commodities.
Instead, look at a ratio of Bitcoin against the MUCH less volatile store of value, gold. Here we can see very well defined tops and bottoms for the various BTC halving cycles. The current cycle double topped at 37:1, and is quickly headed back to 16:1. Gold may sell off as we approach the first rate hike, like it did for the beginning of the majority of the recent rate hiking cycles. Gold has strong support at $1,680 and $1,750, which gives BTC downside support between $26,880 and $28,000 at the 16:1 ratio support line.
I am near-term bearish on the crypto space as our government focuses on bringing inflation down by ending QE and hiking interest rates. Our economy is not as robust as the Fed believes, and most of the growth is from YoY baseline effects (they love bringing this up when trying to talk down inflation concerns) and the sugar rush from consumers dumping all of their stimulus funds. Combined with misguided green energy initiatives that will fuel a global energy crisis, the governments of the world will be facing massive stagflationary pressure with suffocating debt obligations.
Once the markets correct 20-30%, the Fed will have to choose between letting the stock market and the economy fall sharply into a deep recession, or let the value of the US dollar plummet. Politicians always choose the latter because the effects of inflation are not as well understood by the voting public. This is mid and long-term bullish for cryptos, real estate, consumer staples, and most commodities.
Comment:
The double top at 37:1 is likely the top for this cycle.