Bitcoin is strengthening and accumulating well above it’s $17,500 bottom. Blackrock is now offering it to their institutional investors, and in it’s physical form inside of a Trust. This will expand adoption into Bitcoin. Especially, as inflation spikes. Sadly, inflation is hurting middle class and below middle class Americans and Europeans. Here is a quote from Kohl’s regarding their economic outlook for the rest of 2022:
Kohl’s Marketing director is quoted as saying, Kohl’s has:
“slashed its financial forecast for the year, saying that its middle-income customers have been particularly pressured by higher inflation, putting a damper on sales of apparel, shoes and other discretionary items.”
In addition, Mark Moss recently did a video showing this slide which is CPI inflation since 2005. Recessions are the greyed out vertical columns:
Inflation has consistently gone up and gotten much worse, since 2020. The USD is on the final stage of it’s reign as global reserve currency. The Fed cannot raise rates high enough to truly control inflation. If they did, the cost of debt repayment would be too high, plus raising rates kills tax revenue. Tax revenue is what the Government requires to stay afloat. The Fed will eventually have to slow down rate hikes, and when they do. The DXY index will fall off at a steeper pace than it has been. The DXY has already dropped a lot since it’s high last month (109). It is back to climbing now, we think this may be short lived before it drops again. Here is the chart below from Crypto Zombie:
The strength of the DXY explains why Bitcoin has cooled off this week as well. We expect Bitcoin to accumulate range bound under $25K. However, it has to break through eventually. Perhaps in September. Steve Courtney shows in this next chart. Bitcoin has a MACD cross happening now. That is the blue line crossing the red line in the MACD chart below:
However, the price action of Bitcoin at the top of the chart continues to show a downtrend. This proves bullish divergence. It will likely take time to play out. Perhaps the rest of 2022, by year end we believe the price will be well above where it is now. Everytime in Bitcoin history that a MACD cross has happened, it marks that the bottom is in and soon, the bull market resumes. These trends give a high level picture of where Bitcoin is going. MACD crosses happened in 2015 and 2018 after those bear markets began to turn. We are seeing that now for this 2022 bear market. A welcome sight indeed! We must be patient. We are not saying Bitcoin will break $50K this year. Just that it won’t drop below $17,500 and it will be in an uptrend to close out the year. We also see rate hikes still existing but getting smaller. September 21 is the next FOMC meeting. Time will tell but CME is predicting a 25 to 50 bps rate hike. With 25 bps being most likely. It was 75 bps at the last FOMC meeting in July. So this would be a turn. Maybe not a full pivot but a turn. The Fed knows they cannot control inflation. They have to keep tax revenue high. Look back at the Mark Moss chart above. Inflation has not been controlled since before 2005. We contend since the 90’s. Bitcoin has institutional investor adoption now. It just needs the DXY to fall and inflation to swing up again. We have no historical evidence to show us that this will not happen. We know it will happen. We just don’t know when. Hedging against inflation works. It works in Real Estate, Bitcoin, Art, Classic Cars. It really works, because these assets have scarcity, but none to the degree of Bitcoin. Remember, only 21 million coins will ever be produced. The market is calm right now. The calm before the storm. Buy Bitcoin while this is true. You do not want to FOMO in to Bitcoin when it is going vertical! Ask anyone that bought the top big in 2021. Dollar cost average on the way up! We are not financial advisors, and this is not financial advise. The MACD cross may not be well understood by a lot of investors, but it IS historically significant. Buying at these cheap levels will pay dividends long term. Ignore market sentiment and invest long term. Real inflation will be much higher than this in 10 years, and further out. Prepare now!
Neutral ATM is here to get everyone off of zero Bitcoin.