BTC & DXY Divergence
Prior to inflation spiraling out of control, Bitcoin demonstrated real strength as a risk on asset against the US Dollar showed continued weakening.
Central Bank QE & unfettered money printing (seen in money supply charts and bloated central bank balance sheets) were obscuring the impact of extremely loose/dovish monetary policies as overnight reverse repo activity has skyrocketed (currently running at >$1.8 Trillion). This irresponsible market manipulation has shielded the front end of the yield curve and is likely going to result in a more severe market correction.
Since mid/late March, the markets have begun to realize the global economy is unhealthy and there are limited safe haven, risk-off positions to mitigate the fallout of the impending global economic headwinds.
These economic headwinds are seen early in the 2yr/10yr yield curve initially and equities are slowly coming around to this, as the institutions move towards a principal protection position.
USD is by far the least risk position globally and we're seeing DXY increase in the face of inflation as "smart money" around the globe begins to take action.
This trend will reverse but not until the markets adapt and the global economy finds a new equilibrium.
Expect to see a continuation of USD gaining strength and assets like Gold and Bitcoin to weaken against the dollar until the market corrects.
Once the market corrects, Gold will spike to new all time highs (possibly up to 2.5k-2.7k) and we will then see Bitcoin enter a mark-up period... but in the near-term expect BTC to continue to lose steam and test 30k support, with a breakdown below highly likely that first.
Central Bank QE & unfettered money printing (seen in money supply charts and bloated central bank balance sheets) were obscuring the impact of extremely loose/dovish monetary policies as overnight reverse repo activity has skyrocketed (currently running at >$1.8 Trillion). This irresponsible market manipulation has shielded the front end of the yield curve and is likely going to result in a more severe market correction.
Since mid/late March, the markets have begun to realize the global economy is unhealthy and there are limited safe haven, risk-off positions to mitigate the fallout of the impending global economic headwinds.
These economic headwinds are seen early in the 2yr/10yr yield curve initially and equities are slowly coming around to this, as the institutions move towards a principal protection position.
USD is by far the least risk position globally and we're seeing DXY increase in the face of inflation as "smart money" around the globe begins to take action.
This trend will reverse but not until the markets adapt and the global economy finds a new equilibrium.
Expect to see a continuation of USD gaining strength and assets like Gold and Bitcoin to weaken against the dollar until the market corrects.
Once the market corrects, Gold will spike to new all time highs (possibly up to 2.5k-2.7k) and we will then see Bitcoin enter a mark-up period... but in the near-term expect BTC to continue to lose steam and test 30k support, with a breakdown below highly likely that first.
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