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Alarming Macro Conditions for BTC
Liquidity issues continue and long-term holders are still selling in losses. While many on-chain cycle indicators (eg. realized price) are showing BTC is in the cyclical bottom, on-chain recovering signs are missing.
The yield curve has inverted (the interest rate spread between the 10-year Treasury note and the 3-month Treasury bill). With such inversion preceding prior 8 recessions since 1960s and correlation between BTC and SPX hovering at its all time high level, the global macro condition does not look promising. Furthermore, despite peaked in Q3, the 7.1% U.S. Consumer Price Index (CPI) remains well above the Federal Reserve’s 2% target. With Q3 real GDP stats better than that of Q1 and Q2, the Fed might tighten the leash in the months to come.
The above chart is from my June idea BTC: Don’t DCA Yet. It’s worth noting again that in the entire BTC history, most gains were generated in periods of healthy liquidity from either monetary or fiscal policies. Thus, under continued quantitative tightening and a potential recession on the horizon, the upside for Bitcoin is extremely limited.
The yield curve has inverted (the interest rate spread between the 10-year Treasury note and the 3-month Treasury bill). With such inversion preceding prior 8 recessions since 1960s and correlation between BTC and SPX hovering at its all time high level, the global macro condition does not look promising. Furthermore, despite peaked in Q3, the 7.1% U.S. Consumer Price Index (CPI) remains well above the Federal Reserve’s 2% target. With Q3 real GDP stats better than that of Q1 and Q2, the Fed might tighten the leash in the months to come.
The above chart is from my June idea BTC: Don’t DCA Yet. It’s worth noting again that in the entire BTC history, most gains were generated in periods of healthy liquidity from either monetary or fiscal policies. Thus, under continued quantitative tightening and a potential recession on the horizon, the upside for Bitcoin is extremely limited.
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