📊S&P500: recession vs growth in 2022! Prediction for BTC!Hi friends! In this idea I will share my point of view about the stock and the cryptocurrency market in 2022. Perhaps you have noticed how they are linked? Will 2022 be the year of the big fall or the price will renew ATH? Well, let's start one by one.
📊The stock market. As you can see from the chart, it has been rising for about 100 years now. The 2020 covid-19 crisis looks like a local correction compared to the Great Depression of the 30s. Back then, the market fell by 89% and was only able to recover after 23 years. After the pandemic crisis began, the market recovered 3-4 months only to its previous ATH. Remember how much panic there was in the market? It is your choice to take advantage of such opportunities or to panic.
After the abandonment of the gold standard, the dollar lost its peg to gold reserves and the new financial system let the opportunity to print fresh money to loan to creditors. There are many pros and cons, but that the U.S. remains the world's economic leader by a wide margin is a fact. It also led to the 2000-2001 .com bubble and the 2008-2009 real estate crisis. But 12 years later, the S&P500 is already up 3x.
🚩Fundamental analysis:
1️⃣ the growing inflation is bad for the the stock market growth. Rising price of the oil, gas and food (wheat, corn, sunflower, soybeans etc.) starts hiking inflation rate. But USA will start to accept Venezuela oil after the several years ban. For your understanding, Venezuela has the largest oil reserves in the world so it will allow to keep the oil price at the previous levels.
2️⃣ The unemployment rate is 3.6%, which is a pre-crisis level! This is an indicator, which shows that the economy is in good condition.
3️⃣ Investment outflows from the EU in February alone amounted to $15 billion! This is the largest outflow in a decade. Investors are looking for safety, so all that money has been flowing into the U.S. stock market for three months.
🚩Technical analysis (TA):
1️⃣ The first value zone is $380 to $400. Such value zones are always a huge support for the price.
2️⃣ The key $400 level. Even though the price broke it down, the whales collected a lot of liquidity to open long positions. Of course, there were a lot of stop-losses of retail traders here, most of the margin positions liquidated.
3️⃣ Volumes we haven't seen in over two years. As you know, there are two sides in trading: those who buy and those who sell. If such volumes appeared, someone has accumulated a huge position for the first time since 2020. During the first volume growth, those who bought at market ATH were liquidated, and during the second volume growth, those who bought back from the first fall were liquidated also.
Fundamental and technical analysis says the market should be rising. Even despite the reports about a new pandemic (🙈 pox) the world has adapted and is ready for new challenges.
✅Why is it so important for us that the stock market grows? As we have seen over the past few years, Bitcoin has not yet become a reserve asset and often copies the movements of the U.S. stock market. While the stock market is still growing, the cryptocurrency market is growing as well.
📊The cryptocurrency market. The indicator of the cryptocurrency market is Bitcoin. The price of 99% of all altcoins depends on BTC cycles. As you can see from the Bitcoin chart, it has been in a rising cycle for over 10 years. How to understand it? It makes higher highs and lows, which is a very positive signal.
🏁Will Bitcoin fall to $20,000 or has it already started it`s rise to $100,000? It doesn't matter in the long term. As long as the crypto industry grows and Bitcoin makes HH and HL, growth will continue. Learn how to trade now, use the ideas I post, ask the questions in the comments!
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P.S. Personally, I open an entry if the price shows it according to my strategy.
Always do your analysis before making a trade.
