Is this US01Y wick going to crash the crypto market ?!
Obviously as money flows into cash it flows out of assets
If rates on US bonds rise then the incentive to hold cash increases which dries up liquidity almost everywhere else. We are seeing very bullish signs (current data/can fail and reverse) for both US Dollar and US Yields. Which of course correlates to bearish signs for assets prices (bitcoin/stocks/real estate).
US administration may want to have the pain now before US election year
Rampant inflation is not great for an administration to have during an election year.. so having that curbed as much as plausible before election year is important. Which allows an administration room to create stimulus during election cycle (to win votes). Essentially get inflation in order now so they can create more inflation('stimulus') later. This would be the outlook of pushing asset prices down now so theres room to push them up coming into elections.
If that US01Y wick is filled then crypto should fall
Filling that wick would likely not only increase the yield curve inversion but also force asset prices lower. If it can be timed then we may see BTC price fall pre election but allow US01Y to fall come election. Which in turn allows BTC price to rise come election. This all of course overlaps with BTC halving.
The important thing is to be liquid both financially and mentally to changes. If USD and rates continue to rise then dont want to be too(!) asset exposed and missing out on the USD/rate rise benefits. That said.. if USD/rates fail this break out of course dont want to miss out on asset price boom. Need to be okay either way this goes.. whilst looking for low risk opportunities to rebalance exposure with changes in the flow of capital (and data)
If rates on US bonds rise then the incentive to hold cash increases which dries up liquidity almost everywhere else. We are seeing very bullish signs (current data/can fail and reverse) for both US Dollar and US Yields. Which of course correlates to bearish signs for assets prices (bitcoin/stocks/real estate).
US administration may want to have the pain now before US election year
Rampant inflation is not great for an administration to have during an election year.. so having that curbed as much as plausible before election year is important. Which allows an administration room to create stimulus during election cycle (to win votes). Essentially get inflation in order now so they can create more inflation('stimulus') later. This would be the outlook of pushing asset prices down now so theres room to push them up coming into elections.
If that US01Y wick is filled then crypto should fall
Filling that wick would likely not only increase the yield curve inversion but also force asset prices lower. If it can be timed then we may see BTC price fall pre election but allow US01Y to fall come election. Which in turn allows BTC price to rise come election. This all of course overlaps with BTC halving.
The important thing is to be liquid both financially and mentally to changes. If USD and rates continue to rise then dont want to be too(!) asset exposed and missing out on the USD/rate rise benefits. That said.. if USD/rates fail this break out of course dont want to miss out on asset price boom. Need to be okay either way this goes.. whilst looking for low risk opportunities to rebalance exposure with changes in the flow of capital (and data)
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