Hope everyone had a wonderful 4th of July weekend. Today, we are getting straight to the point. Yes, the economy is in shambles. There are raw material supply disruptions, food shortages, Gas and Diesel are trending sharply higher, shortages of fertilizer threaten food supply for the future, inflation is NOT under control, the Fed is raising rates into a recession, and high unemployment. Russia, Saudi Arabia, and China are selling Oil for there own currencies not US Dollars. There is a commodity super cycle underway right now. However, regardless of any of that. Bitcoin is extremely close to, if not past the bottom of this bear market. Why? Because historic charting patterns say so, and Bitcoin has never broken these trends since 2009. True, Bitcoin has never lived through a crisis like this. However, global fiat currencies have likewise, never lived through a crisis like this! The BRIC (Brazil, Russia, India, China) nations are accepting payment for their raw materials in Rubles, Riyal, and Yuan. There are definitive plans underway in those nations to make international settlements in Bitcoin. The BIS (Bank of International Settlements) just announced last week. Global Banks can hold 1% of their assets in Bitcoin. If every bank did that by August 5th, Bitcoin would be $342K per coin by then. Mexico has a bill under consideration to make Bitcoin legal tender. Mexico! Global Fiat currencies are in trouble. The Fed cannot really control inflation. If they pushed the FFR (Federal Funds Rate) above 9%, which is above CPI Inflation. The US economy would crumble in weeks or months! CBDC is the answer the globalists will use for these problems. The BRIC countries will use Gold and Bitcoin. CBDC cannot beat out Gold and Bitcoin! Scarcity, fungibility (Bitcoin) and most importantly, Trust will go to Gold and Bitcoin. Currency is changing and will never return to the old ways, in the future. This may still take a few years to play out. However, we do not see a long term future for fiat currency. One can scoff at this, let’s see how it plays out. Central banks are in serious trouble. Hard money will win over the will of the people.
Now, as for the charts. This is really why we believe that Bitcoin has had it’s bottom, and will trend up from here. We spent the rest of our dry powder (cash) buying Bitcoin today! We put our money where our mouth is! Capital outflows are -2.73 standard deviations below the mean in the Bitcoin market. That is lower (see the red arrows below), than the 2018 and 2020 lows. Bitcoin capital outflows have drained out more capital invested in Bitcoin than past bear markets have. That is a clear bottom signal. Thanks to Crypto Zombie for this chart. See the chart below:
June was -40% after the month closed last week. Thank goodness it’s over! Worst month in Bitcoin history! Also a bottom signal:
Steve Courtney shows more charts below whereby, there was a death cross last week on the 210 day moving average, on a 4 day chart as opposed to a 3 day chart. Historically, these types of death crosses are very close to the bear market bottom. Often, just beyond it:
Then he showed this chart whereby, Bitcoin has now dropped below the 200 day moving average, below 40 RSI, and below 20 Stochastic RSI at the same time. A clear bottom signal from last week: