The Complex Relationship of Bitcoin and 10-year Yields: Part 2
This is a strange and complex relationship. So let's delve right into it!
In my previous study of Bitcoin and US10YU, I mentioned that the "Crypto-market is reacting to the global market and appears to be predicting the future of the stock market by moving their funds in and out of the big crypto."
But this relationship is evolving! Now, let me explain:
My recent analysis of S&P500 indicates that the US market might be heading toward some degree of a corrective move in a near future. The uncertainty of this idea is extremely high but still worth the caution!
We are hearing similar ideas from other chartists, and now, both Bitcoin and US10Y may be pointing us in the same direction. Knowing the role of Bitcoin in the US economy, its recent price action could be a cause of concern and a hint about the future of S&P500 and Nasdaq.
If you read the article above, you know that Bitcoin is working as a hedging asset against inflation, market correction, or any sort of economic instability. In addition, its return is almost double of any other assets especially US bonds. So it makes sense to hop on the crypto train whenever there is fear in the air!
As you can see in this chart, US10Y first bottomed 2 weeks ahead of BTC's completion of its triple-bottom. It almost seemed like Bitcoin took a lead on predicting the recent economic uncertainties, and US10Y is catching up with some delay.
However, when they were both hitting their previous high, Bitcoin did not tip over until US10Y was on its way down. As if, as soon as the fear of inflation was lowered, Bitcoin had less value and the sell-off began.
These days, we are experiencing a volatile period in the US stock market due to a variety of reasons. And it's causing a lot of doubt and fear in the heart and mind of investors. But the recent unstabilizing factors (debt ceiling, delta variant, etc.) don't seem to be fading away any time soon. Therefore, by this notion, Bitcoin shall keep rising until the US10Y starts dropping while SPX gets on track to hit a new ATH. In that case, it makes sense that hedging assets will not stay in such high demand!
What are your thoughts?
Please share your ideas in the comment section below.
In my previous study of Bitcoin and US10YU, I mentioned that the "Crypto-market is reacting to the global market and appears to be predicting the future of the stock market by moving their funds in and out of the big crypto."
But this relationship is evolving! Now, let me explain:
My recent analysis of S&P500 indicates that the US market might be heading toward some degree of a corrective move in a near future. The uncertainty of this idea is extremely high but still worth the caution!
We are hearing similar ideas from other chartists, and now, both Bitcoin and US10Y may be pointing us in the same direction. Knowing the role of Bitcoin in the US economy, its recent price action could be a cause of concern and a hint about the future of S&P500 and Nasdaq.
If you read the article above, you know that Bitcoin is working as a hedging asset against inflation, market correction, or any sort of economic instability. In addition, its return is almost double of any other assets especially US bonds. So it makes sense to hop on the crypto train whenever there is fear in the air!
As you can see in this chart, US10Y first bottomed 2 weeks ahead of BTC's completion of its triple-bottom. It almost seemed like Bitcoin took a lead on predicting the recent economic uncertainties, and US10Y is catching up with some delay.
However, when they were both hitting their previous high, Bitcoin did not tip over until US10Y was on its way down. As if, as soon as the fear of inflation was lowered, Bitcoin had less value and the sell-off began.
These days, we are experiencing a volatile period in the US stock market due to a variety of reasons. And it's causing a lot of doubt and fear in the heart and mind of investors. But the recent unstabilizing factors (debt ceiling, delta variant, etc.) don't seem to be fading away any time soon. Therefore, by this notion, Bitcoin shall keep rising until the US10Y starts dropping while SPX gets on track to hit a new ATH. In that case, it makes sense that hedging assets will not stay in such high demand!
What are your thoughts?
Please share your ideas in the comment section below.
