Bitcoin; consolidates as collapse looms in Equity Markets

We are short term BEARISH, and longterm BULLISH on Bitcoin.  How did we get here?  That is what we will explore today.  We need to step back and look at where we really are in the economy.  It is ugly!  Not only that, a major War in Taiwan looms.  When that starts, all bets are off what markets will do.  We just sold ALL Ethereum!  We are waiting to go deeper into Bitcoin when this flush out is ending.  As for how we got here.  This chart below explains it well.  

 

The FFR (Fed Funds Rate) has had a tech bubble, housing bubble, and an everything bubble in 2000, 2008, and 2020.  Now the FFR is climbing again.  Red line in the chart below.  Notice each bubble was at lower FFR rates.  Notice the blue line in the chart, the Nasdaq.  Everytime the Nasdaq crashes, FFR rates crash with it.  Rates stay low and the Nasdaq soars!  This is a fake economy.  Money printing, or M2 money supply growth is fueling all of it.  Here is the chart:

 

 

The Fed was hawkish and now they are having second thoughts as the Nasdaq is down -32%.  The bond market is draining the equities market as equities slide.  The only way to stop that, is for the Fed to reduce the FFR!  This exacerbates inflation!  High inflation while equities soar, created the largest wealth gap in US Economic history.  Since 2000, this has been the case!

 

Petroleum inventories from the SPR (Strategic Petroleum Reserve) in the US.  Supply shock in Petroleum, will create Gas and Diesel price increases.  $10 Diesel by year end, which will create massive spikes in inflation.  This is true since, all major commodities are shipped via Diesel Truck or fright train, in a vast majority of cases.  As freight costs inflate, that will pass down to consumers of all pharmacueticals, food, goods and services, transportation, construction materials, and real estate, rent.  Petroleum inflation causes all inflation!  So, as the drilling leases are ended, construction of oil pipelines halted, tax breaks for Oil companies ended.  This inflates Oil, which kicks off everything else.  Below is the SPR inventory chart:

 

 

Now look at the DXY chart, which is rolling over and heading back towards 100.  If QE starts back up and the FFR rate begins dropping later this summer (July / August), that will create inflation.  Here is the DXY chart below:

 

 

Until this QE actually starts.  We need to remember, the equities markets will keep dropping.  See the chart below on the Nasdaq future forecast.  If this is accurate, the Nasdaq could fall to 8,000 or below and then spring back up in the fall.  Expect Bitcoin to have a similar trajectory.  Here is the Nasdaq chart below predicting further crash and a fast recovery, due to QE, money printing:

 

 

This scatter chart below shows how more equities investors are moving investment over to bonds as a safehaven.  Below the red line, is where bond investments are.  Equities investment has moved below this red line, as this crash has worsened in 2022:

 

 

The crash has begun impacting home prices.  Home sales are down -19% year over year compared to 2021:

 

 

Compare that carnage to Bitcoin.  It is holding steady, but we do expect it to break down below $20K.  Then, once QE and money printing is back.  Bitcoin will turn and move up again.  We will see, but this is setting up, and we know the Fed cannot afford for stocks to truly crash.  They have to drop the FFR %, and allow stocks to run again.

 

12 Million Bitcoin have not been moved out of storage in over a year.  The hightest HODL wave Bitcoin has seen.  This has been, and still is significant:

 

 

Panama has just issued a bill to make Bitcoin and other Cryptos Legal Tender.  We will report if and when this passes their legislature.  Here is a list of the other 44 countries in attendance in El Salvador learning about Bitcoin as legal tender.  This will make an impact for decades to come.  As more nation states make Bitcoin legal tender.  This will influence the SEC to allow the Bitcoin ETF to be issued.  Not to mention the Grayscale lawsuite.  Bitcoin is not going anywhere.  It is here to stay, and although we do think it gets below $20K this year.  We also think it could possibly break the all time high this year as well!  Time will tell.  2022 is going to into the history books as one of the most tumultuous years in US history.  Especially if Chine invades Taiwan.  This list of 44 nation states taking freedom seriously, is a breath of fresh air.  Each of them learned about making Bitcoin legal tender in El Salvador last week.  We expect several or even a majority of them, to eventually accept Bitcoin as legal tender:

We are not financial advisors and this is not financial advise.  If we see obvious signs Bitcoin price is dropping fast over the next few weeks, we will advise quickly.  For those that just HODL longterm (our suggestion), that does not matter anyway.  

 

Neutral ATM is here to get everyone off of zero Bitcoin.

 

Give Neutral ATM a try.  We have low rates, convenient locations and we are expanding. Contact Neutral ATM, we will answer all your questions about Bitcoin and using our ATM machines. Find a Neutral ATM Bitcoin machine location near you.