Full Fundamental & Technical Analysis - BTC
Mis à jour
We are living in arguably the most interesting time for all financial markets.
Some economists, politicians, and business entities know the saying: “when America sneezes, the world catches a cold.”
Now, no matter how you interpret this statement the U.S accounted for over 20% of the expansion in world RGDP during the past two decades. Moreover, U.S' correlation coefficient for Economic Growth compared with the rest of the world is over 0.8 (impying great significance). Thereby, I will use U.S bonds throughout my analysis to explain price changes in BTC.
Bitcoin and other Cryptocurrencies are classified as high risk and volatile trading assets, and therefore the value/price of these digital assets is greatly exposed to exterior influences (news, Elon Musk's Tweets, and etc...).
The chart above shows the Log(BTC):
- Breaking-out it's long-term channel
- Successfully retesting it's old support line (or new resistance)
- Starting a new Bearish trend
For Retest Zone 1:
Global Investors' confidence has been decreasing. For maximisation of relevant content I have only attached Investor Confidence Index as proof.
https://www.statestreet.com/content/dam/statestreet/images/ICI/6091-June-2022-ICI_Web-page.jpg
Macro analysis may potentially explain these changes:
*** Short-term bond yield reflects Fed's Monetary Policy changes
*** Long-term bond yield mirrors Inflation
*** The Spread is the difference between the yield rate in the two bonds (10-2)yr
From above we may derive:
- Inflation's impact on Fed's interest rate policy
- 4 cycles of an economy
- Some use for predicting recessions
Looking at the chart we are at risk of going into a recession. This analysis stresses the extent to which Macroeconomic indicators are important in explaining, evaluating, and predicting Investors' confidence.
“Historically, a US recession tends to follow a year after the curve inverts, though the variance is large and there are occasional false positives,” said Priya Misra, head of global rates strategy at TD Securities. (Financial Times, APRIL 6 2022)
Evidence of impact on BTC:
(using average volume as an indicator of investors' confidence)
When BTC's average volume started gradually decreasing - the 10-2 Year Treasury Yield Spread reversed direction, and started heading down to 0 (Figure 1). BTC dropped by almost 75% (from ATH) at the same time the spread dropped with great momentum (Figure 2).
Figure 1:
Figure 2:
This is my first TradingView Idea, I'd really appreciate some feedback :)
I enjoyed making this post and plan to conduct further analyses on retest 2 shown on the charts above (current retest).
Thanks for your time!
Stay safe
Some economists, politicians, and business entities know the saying: “when America sneezes, the world catches a cold.”
Now, no matter how you interpret this statement the U.S accounted for over 20% of the expansion in world RGDP during the past two decades. Moreover, U.S' correlation coefficient for Economic Growth compared with the rest of the world is over 0.8 (impying great significance). Thereby, I will use U.S bonds throughout my analysis to explain price changes in BTC.
Bitcoin and other Cryptocurrencies are classified as high risk and volatile trading assets, and therefore the value/price of these digital assets is greatly exposed to exterior influences (news, Elon Musk's Tweets, and etc...).
The chart above shows the Log(BTC):
- Breaking-out it's long-term channel
- Successfully retesting it's old support line (or new resistance)
- Starting a new Bearish trend
For Retest Zone 1:
Global Investors' confidence has been decreasing. For maximisation of relevant content I have only attached Investor Confidence Index as proof.
https://www.statestreet.com/content/dam/statestreet/images/ICI/6091-June-2022-ICI_Web-page.jpg
Macro analysis may potentially explain these changes:
*** Short-term bond yield reflects Fed's Monetary Policy changes
*** Long-term bond yield mirrors Inflation
*** The Spread is the difference between the yield rate in the two bonds (10-2)yr
From above we may derive:
- Inflation's impact on Fed's interest rate policy
- 4 cycles of an economy
- Some use for predicting recessions
Looking at the chart we are at risk of going into a recession. This analysis stresses the extent to which Macroeconomic indicators are important in explaining, evaluating, and predicting Investors' confidence.
“Historically, a US recession tends to follow a year after the curve inverts, though the variance is large and there are occasional false positives,” said Priya Misra, head of global rates strategy at TD Securities. (Financial Times, APRIL 6 2022)
Evidence of impact on BTC:
(using average volume as an indicator of investors' confidence)
When BTC's average volume started gradually decreasing - the 10-2 Year Treasury Yield Spread reversed direction, and started heading down to 0 (Figure 1). BTC dropped by almost 75% (from ATH) at the same time the spread dropped with great momentum (Figure 2).
Figure 1:
Figure 2:
This is my first TradingView Idea, I'd really appreciate some feedback :)
I enjoyed making this post and plan to conduct further analyses on retest 2 shown on the charts above (current retest).
Thanks for your time!
Stay safe
Commentaire
Depending on the outcome of retest 2(support line), BTC should theoretically make a drastic move to the upside or downside. As such low prices are causing a conflict between fear over long-term price stability and lucrative awareness of such historically low prices. Over the recent years BTC has become more correlated to the Nasdaq (r=0.82), and is likely to advance in the same direction with other non-safeheaven financial markets.
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