Quarterly Shifts In my opinion and own analisis I think Bitcoin should continue bearish for the month of June finding the deep bottom and probably having a bullish scenario.
Macro
BTC Macro SupportI thought this was interesting, in the past both bear markets formed a falling wedge , touched the support trend line of the pattern once, touched the 200 MA, also touched and stayed above the red logarithmic line other than the black swan event but it still kept above the line. In both cycles after these happened, a bull run occurred right after. It seems right now, we still haven't found support within the wedge, which has me thinking we might still go down during the month of june 2022 and possibly finding support around july 2022 or august 2022.
As well, the blue vertical lines shows when BTC picked up the most momentum right before it blast off to all time high.
DXY UPDATEToday at 17:20 GMT Fed chairmen J.Powell will make a speech volatility is expected across the markets, generally speaking on such macro economic news events the price will tend to reverse the price action from the current week to hunt liquidity, the news is usually used as a catalyst to do so. With that being said taking a look at the USD index we can identify price has been making a bearish correction since the huge rally we have recently seen. There is a strong level of4H demand identified on the chart be cautious to see a strong bounce from this zone which will of course effect all the markets . Remember the opposite correlation between BTC and USD
Market outlookThe S&P500 has done exactly as I feared.
Thesis: The US is transitioning. The US dollar was the reserve currency of the world. We exported dollars and it either sat in banks or was imported back as investment (Bonds and stocks). When we locked up Russia's money we made EVERY country re-evaluate their relationship with us. A significant pivot is happening on the macro scale. The US's future lies in how we make use of the US coming back home. I expect production of goods and base commodities to begin to truly take over for years to come. I do NOT expect to invest significantly in the S&P500 again until 2028-2032.
Things to keep in mind:
1. Valuations are still absurd. and either significant inflation or a drop in price is needed to bring them back to levels I would purchase at.
2. Relief rally should happen soon. Remember bear market rallies rip harder and faster than rallies in a bull markets.
3. The fed is squeezing the economy trying to reduce inflation. Until they pivot, expect lower lows.
4. There is a non-zero percent chance we enter a sustained bear market until 2028 ish. The first "real" one in 40+ years.
5. Commodities are looking great. They may drop for a bit longer but if you look back 50 years and adjust for inflation we are in the initial innings. For reference silver is 21.93$ and based on my calculations of inflation, its high was above 800.00$.
6. I am forecasting gold to go to 8000 over the next 6 years even if everything goes "well" for the west just due to the USD being revalued lower. If things get truly dicey I am expecting gold to reach 25,000 an ounce.
7. Remember the insidious nature of inflation. Even if we assume official levels of inflation are accurate and expect 5% for the next 5 years, cost of living will increase by at LEAST 29%. I expect levels closer to 80-300% increase cost of living based on my macro thesis.
Large unknown factors:
1. Europe is looking terrifyingly weak. If Europe begins to destabilize I expect a rush into the dollar for a time. This will have many unpredictable problems. We may see inflation cool for a time due to that but it just makes the problem bigger down the line.
2. If the US gov suddenly finds a cause that allows them to bless off on 50-200T in money printing I expect that to drastically shift what happens. It may prop up the stock market or it may be the final proof to investors they lost control and create a global bank run.
3. Contagions: in 2008 we saw one of the largest expressions of a contagion event. The entire financial world locked up. There are 100X's more dangers of similar events now than there where in 2008 because we never fixed the underlying problem and allowed it grow exponentially.
4. Food and energy are becoming huge global risk factors. Don't underestimate the global effects of wide spread starvation and loss of energy augmentation to humanity. My call is just based on the worlds Covid response. This is not even factoring in Russia and Ukraine. Western countries will be buffered from both of these trends but we will still strongly feel this through second and third order effects. Don't underestimate the power of starvation and lack of energy to produce large scale contagious risks unlike we have ever experienced in anyone's memory.
DXY bearish divergenceThe dollar is showing bearish divergence on top of dropping under longterm resistance. Headed lower?
ETH Weekend Forecast (May 19, 2022 - May 22)(Fibonacci Analysis on Ethereum)
3 Ideas:
Short (2) , Long (1)
All ideas are predicted to terminate by the end of the weekend (May 22 into May 23).
Follow on Twitter: @YRN_BRANDO
BTC Idea: May 19, 2022 (Fibonacci Analysis) Intraday Idea:
LONG
When price gets near, around & below $27K handle, look to buy . Targeting $30K handle
The .50 level of the Fib Retracement & .75 level of the Fib Resistance Fan act as static & dynamic support levels.
Price Target : $30,000.00 BTC
SHORT
When price gets near, around, & above $30K handle, look to sell . Targeting $27k handle
The .236 level of the Fib Retracement & .618 level of the Fib Resistance Fan act as static & dynamic resistance levels.
Price Target : $27,000.00 BTC
Bond - Equity Correlation: The Most Important Question?TVC:US10Y TVC:NYA
A reminder that falling bond yields are synonymous with higher bond prices. In other words, a downtrend in yield equates to a bull market in bonds.
In January, bonds were still in a technical bull market as defined by the broad declining channel that had contained the 40 year bull market. In March the break of that downtrend turned the macro trend from bullish to neutral. Now, all that is left to define a bearish trend is a substantive violation of the 3.25% pivot zone. More recently, after testing the major macro pivot in the 3.25% zone, ten year Treasury yields have fallen sharply. The decline begs the question: Is the decline the result of the decades long negative correlation between equity and fixed income reasserting itself on the back of equity weakness or is it simply the beginning of a relief rally created by the combination of major support and a deeply oversold condition? While it is too soon to answer the question with any degree of certainty, it is clear that the outcome will have vitally important macro/portfolio implications. My guess is that if equities continue to weaken, that the bonds will continue to do better, but that without the bid provided by flight-to-quality that the outlook for bonds will quickly deteriorate as the oversold condition is alleviated. In future posts I will provide a deeper dive into the shorter term technical and fundamental outlook for bonds, but the posts from January 2, 11, and February 9 should provide adequate background for now.
Early in the year I published a five part market overview detailing my macro technical and fundamental views of the "Big 4" asset classes: Equities, Rates, Commodities and the Dollar. As part of that series I discussed the importance of the correlation between equities and bonds and the central role falling inflation played in creating the relationship.
This inverse correlation is a historical anomaly, yet it drives much modern portfolio construction. The idea is that when equities decline sharply, flight to quality in bonds pushes rates lower (bond prices higher). In other words, gains in the bond portion of the portfolio partially hedge losses in the equity portfolio. Variations of the 60/40 portfolio construction (60% equities and 40% bonds) and risk parity strategies are intended to shield investors from the worst of equity declines and indeed have had an admirable track record of reducing return volatility. After decades of success, the amount of assets devoted to this strategy, both overt and passive, is staggeringly huge. If the historic positive correlation is reasserting itself due to a change in the trend of inflation (stocks down and bonds down), the subsequent unwind has the potential to create massive dislocation.
In my view, the combination of extremely negative real rates (nominal rates less inflation), an inflation cycle that has turned from virtuous to vicious, and equity markets, that at least at the index level, are extremely overvalued, may be setting the stage for a polarity switch in which bond prices and equity prices fall and rise together. That has clearly been the case so far this year. Year-to-date (YTD) the bond composite has returned approximately -12% while the S&P has returned approximately -1%. In other words, both sides of 60/40 and risk parity portfolios have lost considerable value. If the year were to end now, it would be a historically bad year for the strategy. Is the switch in correlation a short term phenomenon or the start of something much larger? To my mind, this is the central question for the remainder of this year. I think the next few months will be telling.
There is also the tension between high inflation and the growing odds of a significant recession. Not only does high inflation serve as an inhibiter to real economic growth, but so will the Federal Reserves (Fed) effort to return inflation to its long term trend. Paul Volcker had to create twin recessions to beat the great inflation. I doubt very much that this Fed will escape without having to make a similar choice.
Notes:
It is worth remembering that in an economy that is overly financialized and debt burdened, rising rates often break the weakest link in the economic chain. Weak links can be systemically important institutions, sectors or simply a dramatic sell off in the equity markets. That markets are currently in distress is clear. What isn't clear is that the distress is enough to create a systemic risk event.
Bonds and equities frequently move into and out of positive and negative correlation in shorter time frames. When I talk about historical correlation I am referring to the very long term.
Good Trading:
Stewart Taylor, CMT
Chartered Market Technician
Shared content and posted charts are intended to be used for informational and educational purposes only. The CMT Association does not offer, and this information shall not be understood or construed as, financial advice or investment recommendations. The information provided is not a substitute for advice from an investment professional. The CMT Association does not accept liability for any financial loss or damage our audience may incur.
ETH Forecast (Fibonacci Analysis)Hedge Idea
( Long ):
Entry: $1899.00
Entry Date: July 4 - Sept. 07
Price Target: $4,000.00
Target Date: Q4 22' - Q1 23'
( Short )
Entry: $4,000.00
Entry Date: Q4 22' - Q1 23'
Price Target: $1899.00
Target Date: Q2 23'
USDJPY (Hedge Idea) With all financial markets preparing for the upcoming summer rate hikes, I predict markets will consolidate within a larger than usual range presenting great opportunities for investments.
Next Hike: June 15-16, 2022.
Hedge Idea (Scale / Intraday):
Short:
Scale into positions when price breaches 130.000 handle up to the top third end of the range (131.500)
Long:
Scale into positions when price breaches 128.250 handle & below to the bottom end of the range (127.000)
POST FOMC HIKES (Mid-Term Forecast):
LONG
Target Price: 140.000
Target Date: End of July / Beginning of August
US Economic Outlook ___ update (Spectral Analysis: SPX) Continued Thoughts & Ideas from previous post:
Accessing the Risks of US recession
~ Credit & Growth Concerns
~ FED will not Put
~ Equity Revaluations
"Bubbles" that have already bust
~ Used cars
~ Precious Metals.
~ Equities, Yields, Bonds
~ Crypto
"Bubbles" pending...
~ Housing
~ Agriculture
~ Credit
~ Unemployment
Whatever your long term count, we just hit a golden zone.Pull from any major pivot and you get the same thing, golden zone. Does its really get much better? Plenty of other add ons too. Accumulate.
Bond yields Circumventing inflationary pressures From 0.39% to 3.20%, bond yields made their largest climb in history. This kind of move and at these levels, bond yields are also tightening financial conditions. Bond yields have also circumvented some of the inflationary pressures. However, they must come down to stimulate growth and prevent an ugly recession.
Another update, didn't touch the trendlines.I publish this from time to time without changing the trend lines. I just like to see how close I am to having seen how it would all play out.
Bitcoin Macro Bottoms Market UpdateCMF: Hit
MFI: 3 points from floor
RSI: 2 points from floor
CCI: Hit
Additional updates:
S&P Bollinger Bands 1D: Historically leaving these bands meant we were close to the bottom in BTC.
S&P RSI 12D: Historically hitting ~44 meant we were very close if not at the bottom (currently 47.25).
BTC DVDI 6D: We've started getting red candles on the 4D, so we're getting very close to what has historically been a bottom. I'm watching the 6D DVDI as it seems to capture the absolute bottom candles and nothing above - getting close to crossing.
BTC: In order to hit the RSI floor, price would need to reach further down than 2 points initially, but then the 3 week close would be right about 42. That could mean a wick down to 25k.
No guarantees we see further downside. DCA into the lows and DCA out the highs.
A Potentially Life-Changing Opportunity Most People Will MissToday I'm going to address my perspective on Bitcoin. I see this as a potentially life-changing opportunity for a lot of people, but I also understand that many people will simply overlook this opportunity. I'll talk about the overall macro structure of what I'm seeing for Bitcoin's cycle, the force behind this bearish price action, and the most logical and reasonable approach to the market.
This post is not financial advice. This is for educational and entertainment purposes only.
Macro-Cycle Chart
- Above is the macro cycle chart for bitcoin that I have been referring to for almost a year now.
- I've explained this in multiple other posts, but just to reiterate some of the key points: Bitcoin demonstrates diminishing returns and extended cycles due to its tokeneconomics supply structure.
- After the halving event takes place, it takes longer and longer for Bitcoin to reach its cycle peak, as demonstrated in the case of 2012 and 2016.
- We can also use the fibonacci retracement tool to understand key support and resistance zones.
- The 1.618 fibonacci level first acts as support, before Bitcoin marks the cycle top at the 2.272 fibonacci level.
- After the cycle ends, it then acts as support, and the price forms a bottom near those levels, where smart money accumulated before the beginning of the next rally.
- Applying the same logic to the chart we see today, we have only tested the 1.618 fibonacci level, and are yet to test the 2.272 fibonacci level.
- From an elliott wave perspective, I think that one last impulse wave is still a probable structure, despite how dire the situation is.
Driver Behind Bearish Price Action
- So what's causing Bitcoin to crash so hard?
- Recently, bitcoin has been heavily paired to the equities market, which has been hit with the sentiment of fear regarding rate hikes.
- Additionally, the Terra ecosystem's crash offered an appealing arbitrage opportunity for traders, incentivizing them to sell, which led to a market crash.
- It's important to understand that sentiment is the key driver behind this price action.
- Fed rate hikes, contrary to popular opinion, does not have a direct impact in the financial markets (click on the post below)
My Thoughts on the Best Course of Action
- Personally, I believe selling (or cutting losses for most) at these levels is the most imprudent move one can make.
- Have the fundamentals changed? Is Bitcoin not what we used to know anymore? Has the network been hijacked to create more than 21m in supply?
- If the answer to the question above is 'no', the investment thesis shouldn't change.
- I think $30k is a very appealing region of interest, and I continue to accumulate at these levels.
- On a personal level, this gives me vibes of when Bitcoin was at $9k, and Ethereum at $350.
Conclusion
Eventually people will do what they feel like doing, so I really have no intentions of convincing anyone to buy Bitcoin. But before you press that short button, take a minute to think about exactly why it is that you're shorting. What makes you bearish on the most innovative invention of the 21st century? The simple fact that prices have gone down significantly? I'm looking forward to the next 3-5 years in the crypto space and making decisions today based on it. I'm either overlooking a simple fact that most people (except myself) are aware of, or I'm possibly on a path to making generational wealth. I think I'm leaning more towards the latter. Regardless, I hope this post helps you in adjusting your view of the market to be more objective, so that you can make better decisions today for your well-being in the next few years.
If you like this educational post, please make sure to like, and follow for more quality content!
If you have any questions or comments, feel free to comment below! :)
BTC Macro time Bullish reversal. Bitcoin is seeking 200 Weekly Exponential Moving Average. This is is an area of confluence with static Fibonacci retracement to 61%-65% golden pocket region. If we look left for clues, we can see region also acts as support for the previous covid low. Price is expected to set lower lowers on micro timeframes until confluence with 200 EMA before a strong bullish reversal.
BTCUSDT VOL SQUEEZE + FALLING WEDGEImportant things to note:
There are actually reasons to be short term bullish right now, yay!
Bullish Divergence is building right now on the lower timeframes.
Falling Wedge should push price into my box.
Watch for creation of inverse H&S on push up.
IH&S would likely lead to retest of top trendline.
Price is holding up well given the circumstances.
Large buyers have been stepping in on spot. Futures still getting rekt. Likely covering spot purchases.
On chain data shows very low supply.
A supply shock would lead to a decoupling from QQQ.
Macro situation still very uncertain.
I am macro bearish until the Fed switches gears and implements yield curve control (which they will).
Tradfi getting rekt hard. I do not see an end to the macro situation until the Fed breaks the credit market.
Hello everyone! I hope you are all doing well! My last box was hit perfectly. It took a little longer than expected due to earning season for tradfi. I have some good news. I have been keeping my eye on supply and it looks very promising. So, we have large buyers stepping in on spot which is keeping the price from falling into goblin town with the rest of Tradfi. Futures are still putting a lot of sell pressure on BTC at the moment, but the spot buys are offsetting it. This is causing a vol squeeze which can either push price up or down. I can see RSI bullish divergence building on lower timeframes and we can see a nice falling wedge. I will be looking at the PA on the way up to my new green box. Specifically, I am looking for the formation of an inverse H&S pattern which would bring the price up to test the top trendline. Though I am short term bullish, I am macro bearish until I see the Fed pivot on their hawkish stance. The Fed is currently breaking the credit market, which is breaking the equity market. Eventually, they will need to reverse course and implement yield curve control to stop the bloodshed. When this occurs, the market will have bottomed and pump rather hard. I can see this happening in the next 6-9 months, so stay tuned. The good news is that if BTC can push itself a bit higher, you will not have to worry about BTC breaking 30k when Tradfi bleeds. I think the supply shock coming into BTC along with short term bullishness can act as a good buffer against the macro environment. This is bitter sweet for me because I would love to purchase more BTC on the cheap. I have been buying steadily since the last drop to 32k. I will continue to update you once my box has been hit! Keep an eye on the price action! Thanks everyone!
So tell me what you think?
Not financial advice. Do your own research.
USDCNH Update - Major Breakout UnderwayIf you bought this pair when I first featured it here, you have made money. If you were leveraged 50:1 - which - often is the case in forex, you have likely returned more (% returned) in this trade than what you can expect in three years of investing in a vanilla benchmark-tracking 401K.
I remain long USDCNH and will continue to cover it for the foreseeable future.
Something to consider: such a rapid deterioration of the Yuan is reason to speculate the Chinese economy is becoming increasingly decoupled from anything that resembles the last 10-12 years of price action. For example, if the Yuan were to surpass $7.20, I would start to suspect two possible (again I can't "predict" anything) situations:
1. The Chinese economy in severe distress (hopefully not).
2. Intentional disregard for participation in the global economy, as it exists currently (hopefully not).
Again, we are not there YET; all we can do is read the chart and analyze information / data as it becomes available.
Pray for peace.
God Bless
My current T/A on the NASDAQThis needs more time to play out in my opinion. 12400 is a major support. Equites are in a bear market but its not crashing.
BTC/USD Bullish DivI'm looking at some on-chain metrics such as dormancy levels, and I think if we can manage to decouple, it looks like a possible entry to accumulate. I see some bullish div on the RSI, so I'm going to be searching for some confluence in the upcoming days. On my previous weekly chart, I showed an Elliot wave scenario and mentioned I'm going to be looking for more confirmation on the shorter time frame. This is a hint of confirmation for me.
MOS: Trading the ChannelBuilding on the prior idea, this stock remains good but fundamentally is priced well. I think we have seen a fundamental shift in demand for the shares and they will remain channel bound upward until we see a significant change. Institutions have been re-balancing their portfolios (ETFs/Mutual Funds etc) with names like MOS giving it a boost in demand (and removal of supply). However, this is a double edged sword as this will mean that as their portfolio sells off (let's say from individuals selling the ETF - or just a broad risk reduction) MOS will get picked up in the beta (as their portfolios naturally have positive beta to the major indices). For this reason, I think we can revise our view to be slightly less bullish and apply more of a longer term channel trading program. If the shares sell off institutions will top off the trade, and if it rallies it will get sold as part of risk management procedures. I will look to buy/sell channels and top off the trade by legging into strangles as they approach the channel top and bottom.
The original "Bullish Breakout Trade" remains profitable for me and I see no reason to take profits here. I don't think the agricultural crises gets resolved any time soon (or possible in the next 5 years as we enter a new cold war era) and structurally this remains a bullish trade. The latest sell off establishes the channel range.
I marked 2 interesting points to comment on how the trading structure of the stock changed. The first is the revised upward slope in an otherwise general multi-year downtrend indicating some slowing down in sellers. The other is a total change of character (capitulation at the end of the trend), marked by a long bar that clearly looks like a reversal, with good volume behind it and then little effort to move the stock up. Most likely at the end of this upward channel we will see something similar of the like.
BTC Macro - Is $20,000 REALLY Likely?$29,000/$30,000 is major support. If breached, expect $20,000. If THAT is breached, expect $12,000 or lower.
However, I am skeptical about the $20,000 level being potential support. Building support over a previous peak from 2017 could be a little far-fetched. I see that there was MORE resistance at the $12,000 level, and the break of that level led to the 2021 all-time-high. That seems like a logical level to target for support if not lower.
