This post is not meant to offend anybody. This is not a jab at bulls or bears. Markets flow both ways, always. If you find yourself offended by this post, you're likely overextended or you're trading with heavy emotion. Both result in very poor outcomes. That being said try to take my post for what it is and use it to gain some possible perspective of the market and the way social media spins waves up and down.
The first thing I will say is I'm growing increasingly more bearish. No, I'm not reacting to red and being fearful. No, I'm not flipping bearish "at the bottom". This has been on my radar for a while now, I just have stayed overly optimistic on economic recovery. This is where my thesis will take a strong stance and where many will start to become very offended. Again this is not a doomsday post, simply a realistic outlook of economic conditions going forward.
THESIS: Economic recovery is completely separated from the belief there will be an economic recovery. In other words, even the investors at the top of the food chain have no sway in the long-term impacts of the economy. They are victims of every economic collapse because, in order to be able to predict a bubble, an investor would have to assume they know more about the economy than the most informed people in the market. My point is, while the markets are still slowly trending upwards, this is purely based on the "belief" that inflation is transitory, supply chains will recover and the economy will gain back what it has lost medium term.
Let me give you some real data of where we stand in today's economy:
The FED printed $7,000,000,000,000 in 2021. That's 222k per second. Imagine a printer that prints out over two thousand $100 bills per second.
Despite what the media tells you, Economic growth has been cut at its legs because of Covid. In March/April 2020 when the economy was initially shut down, we lost 22 million jobs. Those two months wiped out all of the accumulated job growth for the prior 9 years.
To this day, Total Employment is 3.6 million below the February 2020 peak. If you include the working-age population since then, we are 6.2 million jobs below where we should be. At a minimum.
Fears have not died down in the media to this very day and in many ways are even more escalated. Vaccine mandates, vaccine passports, lockdowns. Inflation is 7% and used car prices are more than they have been in many decades. Supply chains are more congested than I have ever seen in my life personally. A steady balance of supply and demand is what leads to economic growth, if supply is constantly behind it and even worse China cuts their supply ports, how is this issue solved?
With increased restrictions, heavy pressure on small and big businesses to comply with Covid guidelines, how can the economy ever return to normal? We have set our country back so much more than I think people want to even realize and it can only be ignored for so long.
It is a fact that fewer people want to go back to work than they did before Covid. We have a significant % of the workforce, especially for the younger generations just coming to be working age that do not want to return to work either out of fear or lack of compliance. The last time I checked over 50% of millennials were still living at home with their parents. This is absurd.
If our increased vaccination rate isn't slowing down the effects Covid has on our country, what is it that will truly bring change? Our President and his cabinet do not seem to want to ease up on restrictions, they actually just doubled down in the Supreme Court to Mandate vaccines for large private companies but the Supreme Court ruled against it today.
Listen, Covid is serious. There needed to be precautions to save lives and protect the people. This was an absolute must. Vaccines are just as important and people should take them if needed.
But life is not a place with no risk. Our country and the world are seemingly seeking out to eliminate all risks from our lives. You can't go outside and be in contact with someone because you risk infection. If we lived our lived in this respect with all things that can cause us harm and/death, we would live underground and in bubbles. The simple fact is life is all about risk. Every single day each and every one of us is at risk of whatever outcome we are faced with.
Investing in its very principle is a perfect example of this. You can not gain if you do not take risks. Same with starting a business. Same with any real innovation in the world, it all starts at the moment someone decides to take a risk.
Humans beings do not have a long time to walk the earth and if we take away our short time to live because of fear, it will be something we will look back on and regret until we are 6 feet under.
Think about it truly, have we ever seen such an extreme global impact other than comparably the two previous World Wars?
TECHNICAL ANALYSIS:
I haven't even touched on the TA specifically with the BTC chart this message is paired with here. The levels lost here on this downtrend should not be understated. It took a lot of consolidation and buying pressure to break above those levels since May but as you can see it has lost arguably the most critical level. At this point in time, even with a break above that red downtrend line, there is no reason to believe BTC will not just make a Lower High and continue its slow rocky uphill battle. The market will not make it obvious and it will string you along. Trap after trap after trap. This is where big money uses volatility to prey on small money.
Pay attention to the possible paths going forward and most notable that Blue Channel indicated by the Blue lines. This is the Primary Bullish channel. It's important to note that each move up or down will be met with a certain narrative. These narratives arise because social media has connected all of us to a point never before seen in investing. If you rewind 15 years and someone asked you to find retail investors talking about investing on social media, it would be like chasing the rainbow. It didn't exist. Now social media is more saturated by "experts" than ever before.
The best rule I can give in this respect is to understand that by the time you are reading a narrative or speculation, it is likely either priced in or it is a completely false narrative that happens to coincide with a particular market structure. Another narrative is that BTC is the safe haven for inflation and monetary struggles. This while it does hold small truths, doesn't explain the deep connection Bitcoin has to risk assets. When the economy is weak, money flows out of the risk market and into the safe haven market, most notably Bonds. If you pay attention and remember these narratives after a while, you begin to realize you were never really that informed and the market played the majority like a fiddle.
RSI is on a definite downtrend and is showing less momentum over time. This can sustain for quite a while but it is concerning nonetheless. This was one potential warning sign before the May Crash. The path to creating another Higher High is far and full of resistance. This paired with all of the information above make the future very murky.
This post is not to create fear, if this is something you experience after reading the post there are steps you need to take to ensure that reason for fear is removed or mitigated. As an investor, this is your responsibility.
CONCLUSION:
With all that being said, no matter what anyone says the future is incredibly unpredictable. We can only use the information we have to make the most informed decisions possible. Thank you if you made it this far into the analysis and I hope even if you don't agree with what I say, maybe you can use it to gain an alternate perspective on things. If you stay zoned into only your beliefs or predictions, you are believing that you are the most informed person around. If that's the case, have you ever successfully predicted a bubble before it popped? Be honest.
Happy Living! Happy Trading!
The first thing I will say is I'm growing increasingly more bearish. No, I'm not reacting to red and being fearful. No, I'm not flipping bearish "at the bottom". This has been on my radar for a while now, I just have stayed overly optimistic on economic recovery. This is where my thesis will take a strong stance and where many will start to become very offended. Again this is not a doomsday post, simply a realistic outlook of economic conditions going forward.
THESIS: Economic recovery is completely separated from the belief there will be an economic recovery. In other words, even the investors at the top of the food chain have no sway in the long-term impacts of the economy. They are victims of every economic collapse because, in order to be able to predict a bubble, an investor would have to assume they know more about the economy than the most informed people in the market. My point is, while the markets are still slowly trending upwards, this is purely based on the "belief" that inflation is transitory, supply chains will recover and the economy will gain back what it has lost medium term.
Let me give you some real data of where we stand in today's economy:
The FED printed $7,000,000,000,000 in 2021. That's 222k per second. Imagine a printer that prints out over two thousand $100 bills per second.
Despite what the media tells you, Economic growth has been cut at its legs because of Covid. In March/April 2020 when the economy was initially shut down, we lost 22 million jobs. Those two months wiped out all of the accumulated job growth for the prior 9 years.
To this day, Total Employment is 3.6 million below the February 2020 peak. If you include the working-age population since then, we are 6.2 million jobs below where we should be. At a minimum.
Fears have not died down in the media to this very day and in many ways are even more escalated. Vaccine mandates, vaccine passports, lockdowns. Inflation is 7% and used car prices are more than they have been in many decades. Supply chains are more congested than I have ever seen in my life personally. A steady balance of supply and demand is what leads to economic growth, if supply is constantly behind it and even worse China cuts their supply ports, how is this issue solved?
With increased restrictions, heavy pressure on small and big businesses to comply with Covid guidelines, how can the economy ever return to normal? We have set our country back so much more than I think people want to even realize and it can only be ignored for so long.
It is a fact that fewer people want to go back to work than they did before Covid. We have a significant % of the workforce, especially for the younger generations just coming to be working age that do not want to return to work either out of fear or lack of compliance. The last time I checked over 50% of millennials were still living at home with their parents. This is absurd.
If our increased vaccination rate isn't slowing down the effects Covid has on our country, what is it that will truly bring change? Our President and his cabinet do not seem to want to ease up on restrictions, they actually just doubled down in the Supreme Court to Mandate vaccines for large private companies but the Supreme Court ruled against it today.
Listen, Covid is serious. There needed to be precautions to save lives and protect the people. This was an absolute must. Vaccines are just as important and people should take them if needed.
But life is not a place with no risk. Our country and the world are seemingly seeking out to eliminate all risks from our lives. You can't go outside and be in contact with someone because you risk infection. If we lived our lived in this respect with all things that can cause us harm and/death, we would live underground and in bubbles. The simple fact is life is all about risk. Every single day each and every one of us is at risk of whatever outcome we are faced with.
Investing in its very principle is a perfect example of this. You can not gain if you do not take risks. Same with starting a business. Same with any real innovation in the world, it all starts at the moment someone decides to take a risk.
Humans beings do not have a long time to walk the earth and if we take away our short time to live because of fear, it will be something we will look back on and regret until we are 6 feet under.
Think about it truly, have we ever seen such an extreme global impact other than comparably the two previous World Wars?
TECHNICAL ANALYSIS:
I haven't even touched on the TA specifically with the BTC chart this message is paired with here. The levels lost here on this downtrend should not be understated. It took a lot of consolidation and buying pressure to break above those levels since May but as you can see it has lost arguably the most critical level. At this point in time, even with a break above that red downtrend line, there is no reason to believe BTC will not just make a Lower High and continue its slow rocky uphill battle. The market will not make it obvious and it will string you along. Trap after trap after trap. This is where big money uses volatility to prey on small money.
Pay attention to the possible paths going forward and most notable that Blue Channel indicated by the Blue lines. This is the Primary Bullish channel. It's important to note that each move up or down will be met with a certain narrative. These narratives arise because social media has connected all of us to a point never before seen in investing. If you rewind 15 years and someone asked you to find retail investors talking about investing on social media, it would be like chasing the rainbow. It didn't exist. Now social media is more saturated by "experts" than ever before.
The best rule I can give in this respect is to understand that by the time you are reading a narrative or speculation, it is likely either priced in or it is a completely false narrative that happens to coincide with a particular market structure. Another narrative is that BTC is the safe haven for inflation and monetary struggles. This while it does hold small truths, doesn't explain the deep connection Bitcoin has to risk assets. When the economy is weak, money flows out of the risk market and into the safe haven market, most notably Bonds. If you pay attention and remember these narratives after a while, you begin to realize you were never really that informed and the market played the majority like a fiddle.
RSI is on a definite downtrend and is showing less momentum over time. This can sustain for quite a while but it is concerning nonetheless. This was one potential warning sign before the May Crash. The path to creating another Higher High is far and full of resistance. This paired with all of the information above make the future very murky.
This post is not to create fear, if this is something you experience after reading the post there are steps you need to take to ensure that reason for fear is removed or mitigated. As an investor, this is your responsibility.
CONCLUSION:
With all that being said, no matter what anyone says the future is incredibly unpredictable. We can only use the information we have to make the most informed decisions possible. Thank you if you made it this far into the analysis and I hope even if you don't agree with what I say, maybe you can use it to gain an alternate perspective on things. If you stay zoned into only your beliefs or predictions, you are believing that you are the most informed person around. If that's the case, have you ever successfully predicted a bubble before it popped? Be honest.
Happy Living! Happy Trading!
My thesis is if we do see a 42k rejection, this means all other broader markets are heading lower as well. NASDAQ, SPX, etc.