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BESOMEBODYFX
CRYPTO GLOBAL MACRO Q1 2024
STILL LONG AND BULLISH. sO, WHERE DO WE want to see to take profit?
Alright.
Now it’s time to start talking about what to look for to start taking profits.
In the previous crypto update we have mentioned how dip buying was the way to go for the quarter.
Both for fundamental reasons:
The fundamental context with FED’s monetary policy and the overall growth context still suggests higher prices on BTC at the moment, 35k first and then from there we can think about whether 40k is achievable as well or not#BTCUSD #BTC #Bitcoin
— BeSomebodyFX (@BeSomebodyFX) August 14, 2023
But also, seasonally:
What about BTC? Any seasonality there? Well yes, NOT as much data as the S&P500 obviously but fairly notable here too anyway, the average 30% move higher would reach the 35k level in this case#BTCUSD #Bitcoin #BTC pic.twitter.com/1C7UjAo6y6
— BeSomebodyFX (@BeSomebodyFX) October 5, 2023
Now…
MONETARY POLICY CONTEXT:
Remember rate cuts?
Seems such a distant thing, isn’t it?
I mean, the FED hasn’t been cutting rates since 2020.
And at the start of the year it looked like they weren’t going to cut for a long long while either.
But that’s not the case.
Inflation is almost back near FED’s target in the US.
And it’s basically already at the ECB’s target in Europe.
That’s to say…
Rate cuts for most central banks are NOT a distant thing right now.
At all.
The FED with their latest dot plot is also officially expecting to deliver at least three rate cuts this year:
And Powell confirmed that at the latest FOMC:
So…
What do we need to know about that?
Well, to illustrate the point correctly, let me show you just two charts.
Two simple but VERY important charts…
Alright.
First, here’s BTC in 2019 with some notes attached about the fundamental context in that period:
Sounds familiar, right?
Yes.
It’s similar to the price action and the context over the past two quarters.
It sure is.
FED stopped hiking rates, and BTC started a small bull run.
Same exact fundamental story.
Same exact price behaviour.
That’s fundamental analysis.
Now, let me show you the part that matters right now.
Here’s how that chart continues…
Interesting, right?
I mean, rate cuts are…
Bearish?
Yes.
And no.
But also… yes.
Think about it this way…
Usually, when the FED starts cutting rates, the economy is about to tumble.
And that brings down risk assets with it.
The reason?
Because the FED lags, a lot.
So when they do see the need for rate cuts, that means that the economy behind the curtains has taken a turn already and a recession is not that far.
And that’s when it’s time to take profit.
Makes sense?
Awesome.
So with that said.
what to keep in mind…
Whether that’s crypto, equities, and whatnot.
When the FED thinks it’s time to cut, we square the longs.
That simple.
So keep that CONTEXT in mind and you will be able to take profit on this bull run at the right timing.
But also keep in mind…
Until the FED starts seriously talking about cuts, we remain long and bullish.
I mean, the FED will likely start cutting rates in March.
So there’s still soom room for a bit more upside until the first rate cut.
Meaning, we can still ride a bit more upside.
And that’s all there’s needed to know right now.
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