BitcoinShort
Bitcoin: Is $17.6k the next stop?
BTC remains firmly in a bearish descending parallel channel. In spite of negligible volume and price action, risk-off market behavior remains.Bitcoin has never been below the 300 week moving average, until recently that is.
Atlanta Fed's Q2 GDPNow posted -2.1% on July 1st, reflecting 2 consecutive quarters of economic contraction. Multiple "well-regarded" hedge funds and crypto exchanges have faced liquidation and margin calls due to significant overleveraging, the broader markets posted the worst 1st half performance in well over 50 years, and BTC's Q2 was the second worst performance in its short history (late 2011 being the worst).
Before thinking the bottom is in and there's sufficient blood in the streets, consider there's still significant downside risk.
The Federal Reserve FOMC continues to higher rates and inflation is not under control. In fact, if the Fed reverses course too soon, the economy will likely realize increasingly higher inflation peaks similar to the 1970's.
Meanwhile, Wall St analysts have not adjusted earnings estimates significantly and markets have yet to price in a global recession in spite of significant financial turmoil across the globe.
Reality:
- Past 5 years, EPS -2.4% compared to estimates during a quarter
- Past 10 yrs, -3.3%
- Past 15 years -4.7%
The US labor shortage is like nothing we've experienced since WW2, worse, it's in a decades long decline with declining birth rates and an aging population. It's far beyond "persistent." The US simply does not have sufficient labor resource.
There will be bad market rallies with plenty of volatility for short-term traders, but the bottom is not in... there's far more downside risk to navigate.
Keep an eye on higher timeframe volumes and look for EMA's to begin reversing on at least a 3-Day chart before thinking the best market is over.
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