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Interestratehike

An October perspective. 50%-67% drop potential. Worse case -94%As you can see each time we reached the first week of October we dropped a few times before going up But there are a few exceptions to consider. October 2020 up until 2021 was a year of stimulus checks. Many people who got them made sometimes more with the checks than their actual jobs. The last major rally was due to many factors. One major factor was Btc halving and the hype around it. but I will keep this short. But the key Octobers you want to be paying attention to are those in the year 2018 to 2019. These years we had interest rates from the fed at just 2.5% at its peak. As interest rates rose, Eth reacted negatively and also did BTC. To make matters worse., The macro environment of today is much worse than in 2018. Interest rates are expected to reach 4.5% by Dec. Also Russia's cuttings off oil to Europe as winter comes closer could cause people to not be able to afford risky assets while they focus on putting more of their money into other alternatives to stay warm. Now some will say BUT Look, 2018 RALLIED after the drop. Sure but this is more about rallies in October. I see no reason to be bullish this October with current macros. We cannot even compare 2018 to today's world, and things are just getting worse. I stand firm with my short position thesis for now. 50%-67% drop potential. Worse case 94% from ath (UNLIKELY)
Short
by Dtrader2020
4
Inflation & Interest Rate Series / Dollar and Gold I have started this inflation and interest rate series, in our last video, we discussed "Inverted Yield". Today will be discussing the relationship between: . Inflation . Interest rate . Dollar and . Gold Today's Content: • Why with higher interest rates, it strengthens the USD • Is USD the strongest currency? If not, then who? • Strategy to counter inflation • Interest rate higher, but a lower USD? Dollar Index: . Measure the value of the dollar against a basket of six foreign currencies. . These are: the Euro, Swiss franc, Japanese yen, Canadian dollar, British pound, and Swedish krona. . With the increase of money supply over the decades, it causes currencies dilution. When currencies weaken, inflation follows. COMEX Gold 0.1 = US$10 1.0 = US$100 10 points = US$1,000 Disclaimer: • What presented here is not a recommendation, please consult your licensed broker. • Our mission is to create lateral thinking skills for every investor and trader, knowing when to take a calculated risk with market uncertainty and a bolder risk when opportunity arises. Stay tuned for our next episode in this series, we will discuss more on the insight of inflation and rising interest rates. More importantly, how to use this knowledge, turning it to our advantage in these challenging times for all of us.
Editors' picks
ICEUS:DX1!Education
by konhow
7
NASDAQ, 21ST SEPT MEETING ANALYSIS!!- REUPDATED!!due to the hikes in interest rates, US markets are not getting that freedom to freely enter the market and make their positions. the hike is creating a fear among the people of not entering into the market, and keep on people selling their positions, making markets keep falling. "A BULL RUN can only happen when all the news has been factored". this explanation is also set for the INDIAN markets too. and people do have a good and fresh mindset to enter into the markets. when such a thing happens US markets will have a boom. and this will gonna be happening soon. support lines are too mentioned. news is much factored in the indices, if by a chance nasdaq, broke the particular drawn supports to, then the next support will be forming around 10000, which is about 10% fall, but i dont feel now there is such more news aspects lefty to cover which will make the markets to fall with such a high number. final words, do watch out for 200 MOVING AVERGE, because from past few weeks, this indicator is acting a very good support for nasdaq.
NASDAQ:NDXLong
by raghavchoudhary2016
AUD/USD: short positionAustralian Dollar/U.S. Dollar look bearish by the Australia Central Bank what make a hike interest rate 1.85%, what Australian economist predicted. Right now, Aussie look weak in front of U.S. Dollar, what we could to see a good opportunity to short AUD/USD The H4 timeframe look bearish in this side. I will put a sell order limit to $0.6940 USD, Stop Loss to $0.6977 USD (-37 pips) and take profit to $0.6868 USD (72 pips). We have this opportunity after this important event what Australia Central Bank made today. I hope that this analysis support you
Short
by harisonhbn9718
4
BTC ahead supports and compression of buy ordershello everyone according to the us CPI 8.6% and highest number in past 40 years probbably we walk throgh 0.75% interest rate increase. so we lost 25500 support and now on 23500. if we lose this level we can downward to 22000 and 20000 area and after that 18000-19000. this levels are so exciting for longterm holders and its an incredible accumulation phase. but if the inflation dont stop , we also can see lower supports like 17000 or maybe 12000! but according to the compression of buy orders in 20000 - 23000 levels i think these levels are very important and if inflation record a high level and start to go down we dont go lower from this levels.
Short
by TraderAmin-KZ
4
BTC: Don't DCA YetMacro conditions couldn’t be any worse. Starting this month, the Fed unleashed its quantitative tightening (QT) plans, trimming the $9trillion balance sheet at an unprecedented scale (current run-off cap: $47.5bn/month initial; $95bn/month 3 month later; 2017 run-off: max $50bn/month). The last two quantitative tightening led to a sharp rise in yields in 2013 and a repo crisis in 2019 respectively. Unfortunately, this time around, the Fed has to deal with a much larger balance sheet and all-time high inflation rate since 1982. Without the ability to print real world supply of goods and services (factories, natural resources), the Fed has lever on the demand side, but lowering demand means hikes in unemployment (which the Fed is already targeting). With a 7% gap between short-term rate and inflation rate, can the Fed “just rise unemployment a little bit” without causing a recession? Extremely hard unless real world supply of goods and services picks up. For us crypto traders and investors, the question is - isn’t bitcoin an inflation hedge, and if global market enters a recession, wouldn’t bitcoin be the risk-off asset of choice? My take on this is not in this cycle. Bitcoin has not experienced a proper traditional finance bear market yet and has performed poorly during past tapering and quantitative tightening environments. Different phases of quantitative easing, tapering, and quantitative tightening are marked on the chart above. After three rounds of quantitative easing from 2010, the start of tapering in 2014 marked the beginning of bitcoin’s 2-year bear market. In 2017, quantitative tightening started in October, and the 2018 crypto crash soon followed. In other words, bitcoin’s inflation hedge narrative hasn’t been officially tested or widely accepted. With arbitrage opportunities, scams, hack risks, and run-on-bank fear, the crypto market is no doubt in its early stage. While superior security and scarcity give bitcoin the potential to replace gold in a new era of currency, early-stage demand side volatility makes bitcoin subject to wild price swings. The current reality is we see rising correlation between bitcoin and the equity market year after year, and the volatility is further heightened by the derivative market. In the current cycle, bitcoin’s inflation hedge value is overpowered by its volatility, and it is hard for bitcoin to rally under gloomy global macro conditions before the market matures and stabilizes. Do you agree? What’s your take on crypto under the current global macro? Support and comment below!
BITSTAMP:BTCUSDShort
by Phi-Deltalytics
18
NZD/USD - BUY SET UP AS INTEREST RATES IN NEW ZEALAND RISE We are highly likely to see a strong recovery in the New Zealand Dollar Against the U.S Dollar as interest rates in New Zealand continue to rise. Markets expect the Reserve Bank of New Zealand to raise the cash rate to 3.50% by year-end, which will be a premium 0.75% to 1.00% Interest rate over the U.S. This means any investors holding short positions in NZD/USD will lose money holding the position open overnight. The U.S Dollar has been strong in recent weeks as stock markets have fallen due to the Federal Reserves' commitment to raising interest rates aggressively to contain inflation running at 8.30%. When stock markets fall globally, investors historically sell international currencies and flood into the safety of the U.S Dollar, as its the worlds reserve currency. However, when stocks recover as they always do, investors will quickly sell dollars and move back into international currencies as they invest globally in equities again, causing the dollar to weaken in exchange rates and push up NZD/USD.
Long
by KayansMarkets
EUR/JPY - BUY SET UP ON ECB RATE HIKES The Euro is now highly likely to catch a strong bid against the Yen after the European Central Bank President Christine Lagarde said the Central Bank is likely to start raising interest rates in July and exit sub-zero territory by the end of September 2022. Interest rate differentials on Government Bonds will support the EURO higher. In this video I breakdown the historical relationship between the difference in Japan and Europe's interest rates and how the currency pair follows the negative or positive change in European Bond Yields relative to Japan.
Long
by KayansMarkets
How Developing Countries Predicted the Rise of the MetaverseThe market is down right now but these are also good times to take a look at what might be the "next big thing". Had you got into the metaverse a year ago, you will most likely be up right now. Otherwise, you're probably in the red. (Yes, even Bitcoin and Ethereum.) The metaverse is this year's clear winner in terms of performance, and it's not too surprising that a lot of big name brands have decided to try to get in on it, too. A lot of people claim that Zuckerberg's "Meta" was what sparked the metaverse craze, but if you look at AXS's chart it's pretty clear that the coin was climbing way before the media gave the idea any attention. A lot of innovations and early-adoption activities happen in lesser-known (often non-English speaking and developing) countries before making its way into the "mainstream", so to speak. Predicting long-term trends is not magic - you just need to know where to look.
COINBASE:MANAUSDLong
by RyanTanaka
EuroDollar Futures CurveThe EuroDollar futures market is pricing in rate hikes as seen by the upward slope on the left, but the peak of the curve (contracts which expire in June and September of 2023) suggests that investors believe rates will reach their high and then go down after that and keep going down well into the foreseeable future. This is an ominous sign that the Federal Reserve, and likely central banks all over the world, will be forced to abandon their current monetary policy tightening cycles and go back to near zero or zero rates once again (and likely quantitative easing of an unprecedented magnitude as well. $200B per month in treasuries?). Bottom line, the downward slope in yield marks the approximate time of the next recession, according to the bets that are currently on the table. As always, anything can happen and opinions can change. Buy the dip < Sell the rip
G
by The_Arena_Trader
9
Inflation, bond yields, the dollar and the Fed! Macro series pt1Part 1 Hello everyone! It's been a few weeks since my last update on the markets, and this one is going to be a very special one. Will go through many different aspects of most major markets, by using both technical and fundamental analysis. It will be an in-depth analysis with lots of charts of several instruments, that have the potential to give us a clear picture of where we are and what is going right now in the global landscape. Because there are so many things I'd like to mention, I've broken the analysis down in different parts, all of which you will be able to find on the links down below. The first and most important pieces of the puzzle are the US Dollar and interest rates, as together they are one of the largest components in essentially every market as they partially determine the liquidity and demand, by ‘setting a price for money’. In 2020 many forecasters predicted that the value of the dollar would collapse and said it was dead as it had lost 10-15% of its value relative to other fiat currencies. Yet they were very wrong in 2021 as the dollar bottomed and started rising along with interest rates, despite inflation skyrocketing in the latter part of the year. At the same time many claimed that the bond market would collapse, yet even though long term US bond yields had been rising from Aug 2020 up until Mar 2021, just to barely get to pre-pandemic levels where bond yields were already really low. Then went sideways until the end of 2021, where they started rising again. During that time short term US bond yields were close to 0 and only started rising at the end of Sep 2021 as inflation started climbing fast and the market started anticipating the Fed raising rates. Therefore, as those yields were rising due to inflation going up, so did the USD which might seem counterintuitive. Why would it go up if it’s losing purchasing power? Well fiat currencies are trading against other fiat currencies and the world is heavily interconnected, so it’s a relative game and inflation wasn’t just US phenomenon. However most importantly it was clear that inflation didn’t come due to the Fed doing QE or lowering rates, but due to several other factors. To name a few 1. Government spending, 2. Credit creation during Covid, 3. Deferred loan/rent payments, 4. Wealth effect due to stocks/housing going up, 5. Supply chain issues, 6. Supply shortages due to labor shortages or businesses closing, 7. Pend up demand, 8. Higher demand for goods than services, as well as demand of new types of goods, and finally and most importantly 9. Issues in the energy sector and particularly due to the fact that many oil and natural gas wells got shut and weren’t reopened. Now you might be thinking ‘wait a second, where does QE fit into all of this?’. Unlike what most people believe about QE or low interest rates, the Fed doesn’t print money. It simply creates reserves which the banks can’t use to buy anything and low interest rates are a sign that the economy is in trouble as banks aren’t willing to lend to anyone other than big institutions. QE isn’t inflationary as it is just an asset swap and the Fed doesn’t determine anything aside from short-term rates. So, what does the Fed actually do? Essentially, they are trying to push banks to lend, yet banks refuse to do so, and in turn the Fed tries to manage expectations. It all boils down to the Fed making people believe they know what they are doing and that they are a powerful institution that can either create or fight inflation. Therefore, in the list of factors there is another one (no. 10) which is that the Fed convinced everyone that they flooded the world with cash and that affected the spending/investing habits of the people that believed them. Yet there was a market that hasn’t really believed them, and that is the bond market. The bond market keeps indicating that we are stuck in a low growth environment where inflation isn’t a long-term issue, just a short term one. It is also telling us that there is too much debt and too many problems, many of which policy makers haven’t been able to solve. Not only that, but many of the policies have been making things worse and worse, and that in 2022 it looks like inflation is probably going to slow down. Hence if markets and the data are telling us inflation isn’t going to be a major issue in 2022 and the sources of inflation are elsewhere, why will the Fed raise rates? Can it raise rates? By how much? What impact will that have on the economy? For the first question there are some pretty clear explanations. One of them is that Fed wants to raise rates is so that people keep believing in that they can control inflation and that they aren’t just there to pump the stock market. Many believe in the Fed put, which is the belief that the Fed doesn’t want to do anything to upset the markets and that if things go bad the Fed will support the stock market because it can. However, another one is that there are also many people who are upset about inflation and want someone to do something. These people demand the Fed to act, as the Fed itself claims to have the tools to fight inflation and that it created the inflation in the first place. Hence at the moment the Fed is stuck between a rock and a hard place, as markets are at ATHs, housing at ATHs, the economy is slowing down and overall is in a pretty bad place, while for most people the costs of living are up by 10-20% compared to 2 years ago. By the Fed’s own mandates and admissions, inflation above 2% is high (CPI was at 7% YoY) and their reasoning for QE + low rates has been their goal of full employment… and as we’ve reached a point where unemployment is very low and there are even labor shortages as many people haven’t gotten back to the labor force since the pandemic begun. This in turn puts pressure on wages and inflation, hence the Fed has to act based on its own ‘goals’. Yet if they act, and especially if they act quickly, the markets could crash and this could have even more implications on the economy. It is pretty clear that they have to walk a fine line, except it’s also pretty much impossible for their actions not to affect the markets which are overleveraged and are showing signs of weakness. On the one hand they need the markets to come down a bit, in order to slow down the wealth effect which affects inflation, as well as prevent excess speculation from going even further… and on the other hand they must not overdo it because the whole system could grind to a halt. Keeping all of the above in mind, it seems pretty hard for the Fed to significantly raise rates. Yesterday when Powell started answering questions, he was pretty hawkish because people aren’t taking the Fed seriously, but there is a long way between them talking about being serious and them actually doing it. Doing both QT and raising rates more than 3 times this year, something that the market seems to be expecting at the moment seems a bit farfetched. Like Alex Gurevich said on his recent appearance on ‘The Market Huddle’ podcast (and I am paraphrasing a bit), the most likely scenario for the Fed is to raise rates once. In his view they could do one and not hike again for a decade. Maybe they get two or more, but 1 is more likely than 2, and 2 are more likely than 3… and so on. He also mentioned that he thinks we in the late stages of this cycle, and I happen to agree with both views. My reasoning is that the inflationary factors mentioned earlier seem to be weakening substantially and slowly giving their place to the disinflationary/deflationary factors like supply chains issues being slowly resolved, less government spending, debt accumulated during the pandemic having to be repaid and so on. Inflation in 2021 was really high, though towards the end of the year several data points started showing that it was slowing down and in 2022 we could have 2-3% inflation or even outright deflation. To sum it all up, the Fed will start raising rates too late, as real rates have already started coming up and could go up even higher inflation starts going lower. The impact this could have on an overleveraged market is substantial, something that could force the Fed to stop raising rates and even stop its talks about reducing its balance sheet… or maybe even force them to go back into cutting rates and doing QE. Up to this point we’ve only talked about rates, but haven’t mentioned anything about the USD and how it could affect entire financial system. This is another very important factor that the Fed needs to be aware off, even if they haven’t been explicit about it recently. The USD is the global reserve currency and most of the world’s debt is denominated in USD, which means that when it goes up relative to other currencies, then debt repayments become harder especially for those who don’t earn USD. At the same time when US interest rates go up AND the USD goes up relative to other currencies, that creates immense pressure on the financial system. That’s because people/institutions have to pay more interest on their loans, while the currency they are earning and need to convert into dollars to repay their debt, is worth less and less. These two factors create some serious deflationary pressures as someone might be forced to cut their spending or even outright sell assets in order to keep up with his obligations. Of course, in a situation where the entire globe is doing well and rates go up because the economies are booming, debt is low, and it just happens that the USD is going up as it happens that the US is doing better than other countries, then the dollar going up isn’t really an issue and neither are rates. However, the dollar going up, especially along with interest rates really is an issue when the world is drowning in debt, economies aren’t doing well, markets are overleveraged and optimized to work well in a low-rate environment. Another thing to keep in mind is that the dollar going up might create a vicious loop by accelerating the sell-off in traditional markets as more and more people sell in order to meet their obligations, or take a risk off stance or to take advantage of higher interest rates or to take advantage of its rise relative to other currencies. At the end of the day the US isn’t an economy that functions in isolation and it isn’t the only one that uses or CREATES dollars. That’s something crucial that many people forget, as even if the US economy is doing great and higher rates might be appropriate for the US, the actions by the Fed could create issues in other parts of the world, which in turn could damage the US economy.
AMEX:SPY
by BitcoinMacro
2
Bitcoin and the Stock MarketDisclaimer: This is written for entertainment purposes only. I am not licensed or certified to give financial advice, an no publication may be interpreted as such. I am not responsible for any financial loss or damages. You are responsible for doing your own research and forming your own ideas and theories. Thanks for reading! Bitcoin has been all over the place lately, it is important to understand why and what has been driving its price movement to decide if you are bullish or bearish in the short term. There is a lot of speculation lately regarding whether the bottom is in and the next bull cycle has already started, or if the downtrend will continue. BTC tends move with, and sometimes even lead, the NASDAQ. The correlation certainly isn't perfect, and it wouldn't make sense if it were perfect given the different trading ecosystems of the former and latter. Bitcoin has the opportunity for its price action to react to market news immediately 24/7, whereas the NASDAQ is only active a portion of each day. That being said, according to Bloomberg, Bitcoin's 40-Day correlation coefficients with the NASDAQ are at all time highs: 0.66. One cannot help but wonder if it is a coincidence that the stocks in the NASDAQ trade for about .58 of a full day compared to BTC. The chart below helps us visualize the markets over the last 6 months. The DOW, S&P, abd NASDAQ have all been in a short term downtrend, and currently stand around close to zero net change over the last 6 months approximately. Interestingly, Bitcoin and the NASDAQ topped in November of 2021, followed by the S&P's and DOW's tops in January. There are two major questions we need to ask ourselves regarding Bitcoin in my opinion: 1) If the stock markets continue to decline, will Bitcoin decline also? 2) What could catalyze these markets to turn around all together right now? 1) This does seem likely. Given the recent high correlation between BTC and stocks, and if we assume a catalyst is required to change this, we can speculate on what might trigger this kind of change. We need to form our own opinions on this. In my opinion, there are two potential catalysts that could realistically make this happen in the short term: -Bitcoin SPOT ETF Approval by the SEC -Positive SEC regulation/guidance regarding crypto 2) To answer this question, we need some context first: The FED, led by Jerome Powell, was previously on team transitory for months, and it seemed somewhat logical. There was a major (deprecating) catalyst prompting an enormous pivot from retail to online shopping (COVID-19.) This sudden market pivot spiked the rate of inflation, and as time goes on, prices would theoretically revert to a normal rate of inflation if team transitory were winning. The FED expected inflation to spike by late 2021 in this model, which has not happened, and this is why they no longer use the term transitory. It is speculated by some that this model was correct and dirsupted by the Delta variant. The FED has been punctual recently regarding its plan on fighting inflation. Jerome Powel has said time and time again that the FED does not want to disrupt the jobs market, which has seen increasingly strengthening reports. A bad disruption could lead to a wage-price spiral, hyperinflation, and then ultimately the destruction of the US dollar, if not handled correctly (this would be a worst case scenario and the FED's strongest priority is preventing this.) The FED has been tapering off quantitative easing (injecting massive amounts of newly created money into the economy via the purchase of mortgage-backed securities,) and the taper is almost complete. The time to transition to quantitative tightening is rapidly approaching, and it is widely speculated that the first interest rate increases will result from the upcoming FED meetings. The overall lack of certainty and confidence that the FED has inflation under control is the primary driver of market FUD currently. Fear of a recession is extremely powerful, and if the FED does not respond appropriately, the consequences may be severe. If you believe the FED will raise rates, then you must speculate on whether or not the stock market has already priced this in. It is in the general view of the FED that valuations are very high, which implies that the markets are generally overbought (in their opinion.) The FED uses monthly Consumer Price Index reports, amongst other tools, to track inflation. CPI reports are still indicating increasing rates of inflation. To answer the question, the markets would want see the FED keep rates at zero for the market to bottom. More specifically, we would need inflation to decline without intervention. Ultimately, you need to make up your own mind and do your own research. I write these summaries to provide context on what is going on, it is your responsibility to decide what you think will happen and trade/invest accordingly with your risk tolerance. Technical Analysis Bitcoin is trading at interesting price levels currently. The 500 Day moving average (orange) is just above $41,250. Bitcoin has not traded below this level since March of 2020, and this level may indicate an extended bear market for Crypto if support does not hold. The 12 day moving average(light blue) has also converged to a similar price level, leaving us in a very pivotal time. The descending channel is drawn out in red, and we will discuss what a bull and bear market may look like. The Bull Case Bitcoin needs to find support. If we find support at the 12day/500day moving averages, then we may expect a retest of the upper bound of the descending channel drawn in red. A clean upwards break of this channel is bullish, and then Bitcoin would need to set a new local high over 45,850 to establish an uptrend. The Bear Case Bitcoin does not find lasting support at the 500 day moving average, and tests the yellow trendline. If the yellow trend does not hold up, then we may see a test of the lower bound of the current downtrend around $27,000 Final Remarks It will be wise to closely monitor the actions of the FED over the several weeks and months. They have the power to move markets, their number one concern is inflation, and monthly inflation reports are coming in high. Interest rate hikes are the primary combat to inflation for the FED, and if you think that is what they will do, you need to determine how you think the market will react. We have some decent trendlines to use for guidance, and time will soon tell where the trend will go. Thanks for reading, good luck!
COINBASE:BTCUSD
by CryptoRichCrypto
10 Year Rate: Price keeps moving up!Quick Analysis on 10 Year Treasury Yield on a 1D Linear Chart. 1) The US 10 Year Treasury Yield has been respecting a falling channel for multiple decades going back to the 1980s. 2) It has broken out of the top trendline of the falling channel with a recent re-test of the S/R line. 3) The measured move of the falling channel would bring it back to Pre-2008 ranges (LONG-TERM). The measured move is noted. 4) There was a Bull Flag Pattern forming on the charts within the falling channel pattern, which helped the price move higher. The measured move for the SHORT-TERM is noted. 5) I discussed this breakout in the first week of December 2021 when the price was still at around 1.40ish. PAY ATTENTION! What are your opinions on this? If you enjoy my ideas, feel free to like it and drop in a comment. I love reading your comments below. Disclosure: This is just my opinion and not any type of financial advice. I enjoy charting and discussing technical analysis. Don't trade based on my advice. Do your own research! #cryptopickk
TVC:TNX
by MillionaireEconomics
3
US 10 Yr Treasury: Weekly Chart UpdateQuick Analysis on 10 Year Treasury Yield on a 1W Linear Chart. 1) The US 10 Year Treasury Yield has been respecting a falling channel for multiple decades going back to the 1980s. 2) It is currently headed to the top trendline of the channel with a possibility to break in the coming months. 3) The measured move of the falling channel would bring it back to Pre-2008 ranges. 4) This may fall in line with the US Dollar strengthening (in the idea section below). 5) If US 10 Year Treasury Yield goes lower, there is not much more room for it to get to 0. What are your opinions on this? If you enjoy my ideas, feel free to like it and drop in a comment. I love reading your comments below. Disclosure: This is just my opinion and not any type of financial advice. I enjoy charting and discussing technical analysis . Don't trade based on my advice. Do your own research! #cryptopickk
TVC:TNXLong
by MillionaireEconomics
4