There is a massive global macro set up coming together. Bitcoin is in a large symmetrical triangle. Appears, July may be the breakout month, August is always possible. We cannot rule that out. The Stochastic RSI bullish cross is about to happen, if RSI confirms above 20, a 10X type leg up could ensue. This will take time to develop. We are really watching the Bitcoin stochastic RSI! Here is the big picture view:
In the meantime, when looking at global macro. We find Debt to GDP is at WWII levels and still climbing:
Once the $6 trillion stimulus package is passed at whatever level that may be, US national debt will pass $30 trillion and head toward $34 trillion over the next 6 months or more. What would push the Fed and the Congress/Senate to make the final push for more stimulus money? The next two charts would.
First, we have bond yields. Without the Fed printing constantly through QE (quantitative easing), bond yields would be higher. This pushes up interest rates. Interest rate hikes in this weakened state of the economy, would kill the stock market and the real estate market bubble would be popped. Here are bond yields on a zoomed out chart. They are now pushing higher:
The next chart is of the DJIA. It has been in an elongated upward channel since corona virus hit. It is showing serious signs of weakness and looking to break down. This rally has been held up 100% by Fed monetary policy. The Fed is considering a weakening stock market and higher bond yields. If Jerome Powell sounds dovish on monetary policy when the Fed announcement comes out, markets will react. The Fed is trapped. They have to push the envelope. They need more stimulus, QE, they need to send the message of outright market manipulation, and if they don’t the penalties will be high. Too high! Here is where the DJIA is on a zoomed out chart:
One of the main mantra’s of the Fed has been:
Keep unemployment and interest rates low! As treasury bonds are purchased by the FED, they are put in the TGA (treasury general account) as bank reserves. Those reserves are used to loan money back to fortune 500 companies to buy back stock, pump the price. This feed back loop creates negative incentives for executives to keep doing this. The stock market and real estate bubble keep growing and the FED is at the center of this. Meanwhile, inflation grows unchecked. How does this end? Those citizens who do not own real estate and scarce assets will lose. Those who do will win. Scarcity is the way out for the individual or family. We cannot control the Fed. We control our personal decisions. Neutral ATM sees more of a slow grind, stagflation period coming for the US economy. Not a deflationary bust. Inflation will be a major problem. Bitcoin scarcity will win in 2021, while the supply shock of the May 2020 halving is still in play. FUD in the news, only affects the price short term. Long term holders keeping their Bitcoin held offline, miners holding their Bitcoin, they’re all waiting for this breakout! Demand is created by the monetary policy, combined with the supply shock of the halving. It is coming to a head. Culminating in a 3rd and 4th quarter bull run to $200K +! We still predict $160K to $220K as the top. Next year, we will begin discussing strategies for the bear market that comes later on. We have some good ones. Now is not the time. Get ready for the next leg up in this bull run. Bitcoin is coiling!
Not to mention, what happens if or when more countries vote in favor of Bitcoin as a legal tender? Things are going really well in El Salvador. Jack Mallers of Strike is developing relationships there right now. Proof, Bitcoin is humanitarian!
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