BITCOIN, CRYPTO, STOCK MARKET UPDATE!!!
But markets are up about a half a percent across the board, one and a half percent on the nasdaq, almost one percent on the s p and point four four percent on the dow jones and uh nothing major in financial news. Today, uh bond yields are slipping. A little bit as investors uh, you know, are more concerned about potential recession uh. So you know the bond yields are slipping, meaning uh. You know theres more people flooding into bonds for that safety. The nasdaq composite added one percent as bond yield slipped and wall street continued to weigh recession, risks the tech, heavy nasdaq outpaced. Other averages, as market participants continued to mull over the likelihood of economic downturn. So what is priced into the markets right now? One of the questions is, you know if recession is imminent, and you know all of this that were going through now, uh you know is, is somewhat predictable, then what exactly is priced in as a recession price in the market yet well its not because we arent Officially, in a recession, yet, according to the data that weve received, a lot of economists are saying that were not in a recession. The politicians obviously are saying and the fed that were not in a recession right now, although weve already had one quarter of negative gdp, so well just have to wait and see what the next quarter gdp uh says and of course we have inflation cpi coming out Again, next month and uh, you know if thats hot the feds going to continue to raise rates, as they said uh, which will bring another leg down, so the markets cant really price in in a recession without the fed, without economists pretty much you know, analysts everybody Across the board, agreeing that um, you know that the countrys in recession or the you know global economies in recession, um economies around the world – and there are investment.
Analysts like jp morgan, came out and said that they see the they see. Um inflation easing by uh middle of the year, which is kind of like right now saying that the s p is going to rebound to 4 800, just crazy predictions out there. I dont know where they get these people or these analysis, and the only thing i could think of when the full article comes out well, look at. It is obviously they are facing a lot of redemptions. They need people to invest money, so theyre trying to talk people into putting their money in the market. So when you hear a lot of investment analysts on wall street things like that fund managers, you know you have to understand that theyre talking their book, they make their money uh on either assets under management or trading fees volume. Things like that, so they need people to continue to trade, continue to put money in the market, so they can make money. So you got to kind of qualify that information, so bitcoins continuing to range. This price action is on the hourly right here, looks a lot like you know what we saw uh last month and during this consolidation – and you know this little trading range was around 12 overall, you know from top to bottom, with a couple of these nice bounces And right now, once the price settled into this range, its its dancing around a nine nine and three quarters, almost a ten percent range might get a little bounce again back up to the 22 as it kind of ranges along waiting for the next cpi print uh And to see that the fed follows through, on that rate, hike and then well, look for that next leg down and then price could potentially consolidate somewhere in that um.
You know range down, so if it, if it takes another, you know kind of ranges in here and then takes another step down in this area. In that you know probably 15. 16. 17. 000 to you know: eighteen thousand dollar range it could range down in that area. Next and, as you can see, i am no technical analyst i use um. I use the charts mainly to kind of um. You know confirm the trends and the thinking and the thought processes that im looking at so thats thats, one of the main reasons uh, if i can get this stupid thing to quit, drawing here but thats. One of the main reasons that uh, that i use charts is just kind of confirm. The trends confirm the thinking, uh and the stuff that im looking at in terms of the overall markets, uh and price action price direction, but heres something thats interesting. To take a look at that, i havent looked at in a while is the logarithmic growth curves uh, so lets pull this up right here and bitcoin is well below the bottom line of the logarithmic growth curve. We havent looked at this in a while. This is bitcoin on the daily and you can see back in 2009 during the pandemic. You know it dropped well below and lets measure that move right there, so that was about lets, see what that is. 49, 50 below and right here, weve got another 46 blow right now.
So you know its kind of borderline running with the pandemic low below the range and thats really pretty much in the history of bitcoin, the only time its really dropped significantly below that lower band of the logarithmic growth curve, and what this really tracks is. Obviously, you know the history of the price action of bitcoin through its cycle, and you can see that you know generally in the history its always touched. The top end of the range at you know the market cycle peaks and then found support at the lower end of the range it kind of consolidated on those lower ends. You know for a number of months uh and you know a little over a year. Sometimes, two years before it went on, but this last time you know bitcoin did not quite get to the top, and obviously this was a you know. Even though this was a higher high than here, it looks lower on the logarithmic growth curve, and you can see its starting to condense as bitcoin continues to drop below same thing with the stock to flow model. If you look at the stock to flow model, its well below the bottom levels of that stock to flow, which is really you know, measuring the amount of bitcoin in circulation and the uh, you know supply coming online and creating you know a formula to chart price Action based on you know, supply and uh. You know in the current um flow thats in the market.
You know the supply coming to market. In the current you know, coins in circulation, which nobody knows the exact number, because some of them may be lost um. You know things like that that may never come back into circulation, but you know just kind of interesting to look at uh how far below that logarithmic growth curve that bitcoin has actually dropped right now as it works into you know, more of a consolatory. You know consolidation down below that range. There lets go ahead and turn this off. Now i cant. Where is the air? It is right there. Okay, so well turn that off again im, no technical analyst! I just like i said i use these charts to kind of you know just kind of look at trends right because its all about trends, its all about ranges. So you know in terms of the history of bitcoin. You know you have the overall um cycle of bitcoin, you know its been in a bear market cycle since existence. Basically, and within that cycle you have ranges, you know you have basically bear market ranges, bull market ranges and then you have trends right. You have uptrends and downtrends and obviously weve been clearly in a downtrend. So for me i like to look at the charts just to kind of confirm thinking on the trends. You know draw some trend lines that kind of give you some areas to watch in terms of you know what price action could potentially do and some of the levels it needs to break, and you know this is kind of a new trend here and really you Have to you have to kind of expect price.
You know to continue downward here and then, ultimately, as it as it journeys along. You know, to kind of work. Its way consolidate eventually its going to meet this trend line and then potentially break back above it and then possibly work its way up once it kind of consolidates down along the bottom kind of like its done. You know all along in the history of bitcoin. During these cycles – and you know this is 2017 2018 and if you look at from the base to obviously you know im going to say right in this area, you know about two years uh that it spends a little over. You know just under two years that it can spend in that area. This was the march pandemic here and i think you know bitcoin was on its way to a new bull market here before that happened. Obviously, like everything else um, you know that kind of side track markets and then, when the fed came out with that liquidity, we had that huge run. You know the question is: how far would it have gone without the fed jumping in we dont know. How far will it go uh once we get to the other side? Yeah we dont know well just have to wait and see, and how far can it go down? Well, we dont know we just have to wait and see so uh. You know right now were dealing with a lot of things that were not uh factored into the market uh with the russian invasion of ukraine, uh, putting pressure on food and energy prices, and just you know, stressing the markets in general.
That was our initial one of our big initial drops and then, with the fed having to react and respond to inflation rising as rapidly as it did again. You had to expect that to come to a head at some point, uh and then you know they ignored it for as long as they could and then they finally realized wait a minute. We got a problem, we have to act, we have to act fast, so thats what the markets doing so it cant really price in favor of a recession yet because we havent even fully priced in what the fed has to do yet, because the fed hasnt really Even done anything yet theyve only raised rates 75 basis points so youre, just at 100 basis points. They want to be at 350 basis points. They want inflation back to two percent and the fed came out and said uh. You know. Powell has been testifying before congress and senate here recently in committees and everything and reinforcing their um fight against inflation, their conviction on bringing inflation down and also saying that hes still looking for hoping for a soft landing, meaning he hasnt landed yet so thats not priced In you cant price, in something that hasnt occurred so again, what is the likely scenario uh if we just kind of look at some of these moves here from these bases you know these are these are 30 moves on these levels, each time that price bases 20 To 30 percent kind of drops down on these levels and just kind of bases out, so what happens? If you have another thirty percent down from here – and these are just rough numbers, then that puts you in that, like i said around, that fifteen thousand dollar range.
So if price fell down and based it, you know fourteen and a half fifteen thousand and just kind of ranged from there. You know it could look something kind of ranges here and then kind of works. Its way down. You know into that range obviously thats a little bit lower there, and then you know just kind of ranges around in that area here until we get more of an understanding of where inflation is, if what the fed is doing is going to work um in terms Of uh, you know their long term plan in fighting inflation uh. You know whether theyre gon na be able to really affect things and get that inflation back down to that two percent target. So market will just you know, continue continue to sit here and range along. The way uh until you know we get a little bit more clearance, and it could be you know, could be definitely through the end of the year that it could just kind of work its way down to this last level. Uh, you know if the markets happy with what the fed has to do at that level. Uh, you know theres, you know whats. The worst case scenario is that uh, you know another 30 down from there. If the market kind of ranges in here a little bit lets say that you know 15 16 000 range is another. You know area that the market is happy with, and you know then youre down to that ten thousand range and then it can range down in there and see what happens.
So. There could be a couple more legs left to this downward move here. Theres no catalyst out there right now until inflation is under control, the fed can pull back and get back to business as usual, pumping the markets up and providing liquidity to the markets because thats what this really is between the markets, crypto everything its all about liquidity. You know at the end of the day, thats what this is all about is liquidity and again, like i always say, watch the markets into the closer about 15 minutes away from the market close right. Now markets picked up a little bit steam into the clothes, so thats a good sign uh. Whenever the markets are, you know, uh pumping into the close thats. You know good from this. You know standpoint of investor sentiment, of course, its not much its keeping the market kind of flat. We didnt really look at traditional markets here, but you know we can go ahead and take a peek real, quick on the dow, and you can see its just kind of continuing its journey down nasdaq kind of continuing the journey, definitely unwinding that you know pandemic liquidity. Thats been pumped into the markets kind of shedding that liquidity working its way back to pre pandemic highs. So i think the markets are definitely headed in that direction were going to test those pre pandemic highs and then see where it goes from there. So i think, in terms of all of the markets right now, bitcoin uh traditional stock market.
You know bitcoin all that i think we have to look for another 10 down in traditional markets potentially, and you know like bitcoins next leg could be that 30 35 down uh, because its generally amplifying what happens in the markets – and you know the markets are most Most of them are about 10 away from pre pandemic, high, so 7 to 10, depending on what index youre looking at. So i think, thats kind of what were looking at all eyes are on inflation and on the fed, and hopefully they can um. You know get to the point where inflation is under control. They said specifically, we want it back down to two percent before theyre going to you know change course or think about slowing up or doing anything like that, so um thats, giving the market the opportunity to steadily unwind de lever uh, as we have seen and again Recessions, not priced in yet its not imminent, its, not certain its, not guaranteed. We dont know how deep, how far all that theres still a lot of questions out there and still a lot of uncertainties out there, but thats the one thing that market cant price in right now, because the fed really hasnt done anything. Yet we havent really seen the real effects of what theyre doing so uh. Well just keep watching.