Bitcoin Vs. Bonds: What You Need To Know.
Bitcoin is consolidating around the 25K AREA support and continues to maintain a bearish bias on smaller time frames. As we go into the 4th week of August (the SLOWEST week in terms of volume probably for the year), I continue to WAIT for the double bottom or failed low BEFORE I even consider a swing trade idea. I continue to remind my followers that this is NOT a time to be aggressive, or putting on numerous trades. In light of this seasonally tough environment, my trade scanner has actually shown a 7%+ return so far this month. Not bad for a robot.
There is not much else to write about in terms of technical analysis because everything that I wrote in my previous article is still in play.
So in this article, I want to point out the Bitcoin / bond market relationship and highlight its importance when it comes to forecasting and expectations. On this chart I compared the 10 YR Treasury Yield (orange line) to Bitcoin prices over the previous year. Can you see the relationship visually? Take note of the blue positive and negative sloping lines. The relationship is inverse.
As yields rise, it puts bearish pressure on asset prices because money becomes more expensive to borrow. Speculative assets are ESPECIALLY affected by this. It is NOT a 1:1 relationship. Yields have to move significantly and usually move first, before the Bitcoin price is affected.
How is this useful? By monitoring treasury yields, you can have a much more REALISTIC expectation in terms of market potential for the near future. IF yields are rising, then Bitcoin has a much lower probability of mounting any kind of meaningful rally ANY TIME soon. This affects alt coins exactly the same way.
So the next time your favorite frauds or news outlets start up with their misinformation, check what they say against the bond market.
Thank you for considering my analysis and perspective.
There is not much else to write about in terms of technical analysis because everything that I wrote in my previous article is still in play.
So in this article, I want to point out the Bitcoin / bond market relationship and highlight its importance when it comes to forecasting and expectations. On this chart I compared the 10 YR Treasury Yield (orange line) to Bitcoin prices over the previous year. Can you see the relationship visually? Take note of the blue positive and negative sloping lines. The relationship is inverse.
As yields rise, it puts bearish pressure on asset prices because money becomes more expensive to borrow. Speculative assets are ESPECIALLY affected by this. It is NOT a 1:1 relationship. Yields have to move significantly and usually move first, before the Bitcoin price is affected.
How is this useful? By monitoring treasury yields, you can have a much more REALISTIC expectation in terms of market potential for the near future. IF yields are rising, then Bitcoin has a much lower probability of mounting any kind of meaningful rally ANY TIME soon. This affects alt coins exactly the same way.
So the next time your favorite frauds or news outlets start up with their misinformation, check what they say against the bond market.
Thank you for considering my analysis and perspective.
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