Bitcoin & Hyperinflation
This weekend Jack Dorsey CEO of Twitter and Square warned about impending hyperinflation. Main Stream Media economists roasted him. However, he is right. The US may not ever hit the official accredited hyperinflation statistic of 50% per month. 10% per month inflation would do the trick!!! Can you imagine all the goods and services you buy doubling every year? Thus, Bitcoin is all we have to fall back on. Gold, Silver and TIPS cannot keep up with that!
Below are two inflation charts. First one is US September 20’ to September 21’ inflation on goods and services:
Africa is known for it’s inflation: This is Sierra Leon, Billionaires are starving there, due to currency devaluation.
On the below chart, is St Louis Fed chart showing M2 money supply in blue, GDP growth in red, and balance sheet total assets in green. What we can see here is balance sheet assets and M2 money supply going parabolic, while GDP growth is down. In fact, we saw today GDP for the 4th quarter is showing 0.2% growth so far. Very low! This is a chart of stagflation! As M2 money supply keeps growing, a crack up boom ensues which leads to hyperinflation. By definition, rising asset prices from a devaluating currency, is a crack up boom. The boom is the deflationary crash at the end of the cycle. Unfortunately, the US is in for a few very hard years!:
Yet, we see Bitcoin forming a bull flag after what some thought was a head and shoulders pattern. See this chart:
Actually, here is the pattern we see if you zoom out. Check out this chart:
A reverse head and shoulders. Bear trap. Shorts about to be liquidated! Bitcoin should moon soon, based on the charts! Hopefully, tomorrow, we missed our deadline to buy the dip this afternoon. Soo busy!!
On chain analysis is always helpful as well. Thanks to Will Clemente for these charts below. Illiquid supply shock ratio in blue below, and highly liquid ratio in red, somewhat track the Bitcoin price. The illiquid supply ratio especially tracks the Bitcoin price. No dips in that ratio. The charts say Bitcoin set up a bear trap!:
Bitcoin in the below chart, has a low supply shock ratio compared to previous bull market tops in 2017 and 2013. There is TREMENDOUS upside according to this chart. Very bullish!:
This next chart is from Willie Woo. Top cap model, is more of a top measuring model. We still lean more towards RSI and stochastic RSI. However, this model shows if there is a parabolic turn up this fall, Bitcoin could hit $204K +. If it is more of a slow grind up, well into 2022 the price could get a good bit higher than that. See this chart below:
We have had $160K to $220K predictions and just lowered it to a very conservative $135K to $160K prediction. We will wait and see how this plays out. Right now Bitcoin is still consolidating. The charts are always historic and the trend tells us where it is going. Yet, if we consider the potential for hyperinflation in the next few months, this could prolong the bull market cycle. It could drag it higher too. Bitcoin is DIRECTLY coorelated to inflation metrics! If hyperinflation creeps in to the picture by December or January, this bull run would likely extend out. Although we don’t want to see goods and services hyperinflate. The population needs to grasp, Bitcoin is the life raft!!! Better get in before it’s too late!
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