Expansion of broader marketIt’s been a while here since my Bitcoin bottom analysis in December’22.
As mentioned, every time inflation tops - the stock market gets excited and rallies.
Interest rates have reached their initial peak. The market has been assuming for a year that the era of restrictive monetary policy will soon come to an end and that we will see dovish rate cuts and money printers again.
The SP:SPX is at all time high but only a few stocks are pushing it, which is a major signal. Investors worry about weak market participation because it makes the market vulnerable. Currently the top 10 biggest stocks in the S&P 500 contributed to 77% of the index's total return in H1. That is the second highest ever reading of that number. Only time it’s been higher was in 2007.
When many stocks participate in a rally, it provides a strong foundation. In times of economic uncertainty and risk aversion, the market has consolidated into few large cap companies ( NASDAQ:NVDA NASDAQ:AAPL NASDAQ:MSFT NASDAQ:GOOGL NASDAQ:AMZN NASDAQ:META ). However, when there‘s optimism about the economy and people want to take risk on smaller caps and growth, we see the whole market expand together.
Optimism about the whole economy is needed. Not only large cap companies but TVC:RUT needs to be breaking out into new all-time highs. There is going to have to be a triggering event, a spark that gets set off and that’s what we are currently waiting for.
Last week we saw the first sign of rotation…
For INDEX:BTCUSD , it’s not the halving but the expansion in broader markets that sends crypto with all the other risk-on equity assets higher. There is no doubt that we will have a crypto bullrun without the Russell2000 breaking out into new ATHs.
So is the market going to extend or not?
It has been a mandatory requirement for each of the past bullruns 2013, 2017, 2021 that expansion and breath opens throughout the market. But the scary thing: TVC:GOLD broke out, which is not the typically behavior of Gold when expansions and risk-taking occur.
Rising precious metals is a concerning red flag of the economy and we should hope for more ranging behaviour in TVC:SILVER and Gold before we go to expected 110$+ and 2800$+ predicting the future what lies economically ahead of us. Indicating the FED is no longer in control of the situation, with market being concerned of the stability of the system and waiting for inverted yield curve and unemployment rate to jump into recession as a product of their policy.
Getting back to the current Crypto Market:
I informed about this CRYPTOCAP:OTHERS in speaker keynotes in Germany last year and posted on X(Twitter) the overall Altcoin bottom in October’23.
BITSTAMP:BTCUSD 3 months sideways after the halving isn’t unusual for us to frustrate people and test their patience.
Looking into Google Trends BTC Isn’t on people’s radar yet and on-chain indicators signal strong comparison to 2017.
Even CRYPTOCAP:BTC.D and CRYPTOCAP:USDT.D are showing weakness, which is bullish for the overall market.
With liquidation event (highest since FTX Dec’22) on 05th of July and Fear and Greed Index back to 26 (lowest since Dec’22) we got our bottom. With Mt. Gox fear and Germany actually selling their BTC reserves we got our news catalyst.
Based on historical data, we can argue that buying after a big liquidations flush proves to be an interesting strategy, especially if you think that we are in a bull market.
Altcoins are forming a bottom formation in this region indicating possible impulsive wave 3 beginning in August.
At the end of 2012, 2016 and 2020 market ramped up after the US elections were done. Election years end with expansion. All that is needed now is for the safe haven, the DXY, to break below the level of 104, leading to rotation in risk-on small caps.
We have reached that time window of when broader market expansions actually did take place. And what usually happens whenever you finally enter that you are going into it with a little fear as people are scared and wrong-footed by it, if it were to show up.
This is the moment we‘ve all been waiting for. This is the moment you put all the years of hard work into. Everything has lined up. It’s time. More sleepless nights ahead. Traditional markets are seeing a final parabolic blow-off top in a decades-long bull cycle.
