Bitcoin and crypto: is everything really about to collapse? Here’s what’s happening.
Is there an anomaly? It’s too early to tell, but there’s definitely something interesting happening within the markets as it relates to interest rates. For months all or almost all the leading analysts on social media have had us diseased about the recession that would come and that would wipe out every dream of a bull run. The case is still open, but given that we often look at what happened in the past on the graphs to predict the future, this is a good time to do some reasoning.
What kind of reasoning? What should put some doubt on the table as to whether the markets are ready to correct because it actually started pivotor the reduction of rates within this cycle.
This is also interesting Bitcoinwhich as many point out, has always or almost always been nourished by monetary expansion on a global scale. However, the graph causes some doubts – and it will be good to think about it. If you are a trading enthusiast Bybit is giving you $500 worth of positions here, EXCLUSIVELY for readers of our site. Sign up and enjoy the first of a long series of bonuses!
When rates are cut
Even if you invest mainly in Bitcoin and crypto, it will be useful for you to analyze what is happening at the level macro. The main theme remains that of rates, which are still at very high levels in the USAdespite having already started with rather substantial cuts (50 plus 25 basis points).
In fuchsia, the badgers. The other is SPX500
The most knowledgeable, those who always have few doubts, had warned: we start with the cuts and shortly after comes the dumpthe powerful market correction. This, at least for now, has not happened Bitcoin e crypto and if you look carefully – pay attention to the graph we posted above. However, it is a graph that only tells about the shortest period. And where you see a sharp drop in rates accompanied by a significant correction of the SPX500 (the most representative of the US stock market indices), you will find the COVID crisis, where the cuts were emergency and out of the cycle.
Since this is a very particular and exogenous situation, it is of little interest to those who invest and want to read the markets. And we will therefore need a broader analysis that also takes in other periods.
The two school cases
2001 case: the cuts came when the stock markets had already started to correct heavily. That case now seems to be 100% ruled out. The cuts arrived with the bags still in shape. And they set new records after the cuts.
Case 2007: that’s what worries you the most. There the cuts actually came shortly before the stock market crash. That is, at the point where you find the cross in our graph. This is the case that those who remained as Cassandra and strongly believe in the arrival of the recession continue to support.
First important point: what does this mean for Bitcoin and cryptocurrencies?
Bitcoin and cryptocurrencies have never faced, in their short history, a real US recession and therefore what could happen is extremely difficult to anticipate.
Our intention remains that of a possible period difficile per Bitcoin e cryptocurrencies in case the US economy falters.
No, Bitcoin as an asset it is not yet ready to act as safe haven asset when everything goes to pieces. And in any case it would be an option we would prefer to avoid testing now.
The second point: what if Powell was right?
We had already indicated this in an old live broadcast of ours, which you will find attached: Jerome Powell, who made a huge blunder on inflation, then went on to focus on the narrative of specificity of this cycle. Which would not be an economic cycle like the others, because it is conditioned by 1 year or more of the COVID crisis.
Jerome Powell seems to be very confident in the possibility of intervening and correcting the markets until directing them towards a soft landing.
Could this really be the case? Who knows: patterns are often only in our heads and we like them so much because they satisfy our primary need for simple explanations.
If we were to go back a little, even the 1998 was characterized by a significant delay by FED in intervention. But it was another… geological era for the world of markets. And therefore little will be able to help us understand.
The markets – which are not always right in the medium and long term – would appear to be confident for now. And although the path of rates is uncertain, there is confidence in a possibility soft landing there would seem to be more of them than yesterday.
