#BTCUSD: Long term signal potentially valid...Question is: do we get a crash together with stocks near EOY? Will $BTCUSD decouple significantly and start outperforming tech stocks?
I suspect we might start to see inflation expectations increase substantially as economic activity resumes across the globe, people certainly are saturated with the whole COVID situation, and even scientists from the World Health Organization doubt the lock downs are a good solution for the pandemic, as economic damage caused by it vastly outsizes the human lives the pandemic itself would cost if restrictions were lifted.
I can smell a significant paradigm shift, if this takes place, where big ongoing trends would reverse, like the performance of value stocks compared to growth stocks, commodities vs stocks, interest rates trending down, and inflation being muted. An interesting trade to ride this juncture is to buy cryptocurrencies when viable. That said, this was an obvious trade many followed, but recent bouts of weakness likely shook most people out before the $PYPL news came out. I'm keen on seeing what the US launch brings forth, since the recent surge in prices has a lot to do with it (together with companies acquiring $Bitcoin for their treasuries as a hedge for inflation should it manifest itself).
Tech stocks are a huge part of the S&P500 index price movement, and since the index suggests it is entering a decade long sideways bear market akin to 2000 to 2009, I would be hesitant to blindly buy and hold overvalued stocks in this environment. We do need $Bitcoin to decouple from this if we expect a major trend, else it might be gridlocked in a constant sideways range for ages to come.
I'm open to substantial declines taking place after this strength fades, and specially if $PYPL's new feature disappoints like Bakkt futures initially did (Back then people were expecting Libra and Bakkt to generate tremendous interest and buying pressure in $Bitcoin, which never happened and led to a long and brutal sideways bear market until March 2020).
This scenario is invalidated if we go below $9132.96-9049.54, else expect a relatively steady uptrend over the long haul.
Cheers,
Ivan Labrie.
