We've been saying that Bitcoin is a macro commodity instrument on steroids. Commodities trade on momentum and Bitcoin even more so.
There are a few oscillations that we focus on, short and medium term.
Medium term despite, all the 'negative' inflation prints from CPI and PCE, Bitcoin's holding very nicely above it's 200-day. The BTC future's 200-day is 21,000.
The longer it stays above 21,000 the more chance it has to go to our next technical target which is 40,000. It's building energy to run.
We called out Bitcoin as our top pick this year publicly on January 10th much lower and earlier to subscribers. That was when inflation was slowing.
So you have to ask me, now that inflation has reaccelerated how can you be still bullish?
Well after these 'terrible' inflation prints, did you notice that Bitcoin was still hanging on, not getting crushed. You'd think if the Fed had no patience for inflation they'd kill Bitcoin with more giant hikes.
But we've been seeing more evidence from the Fed, for whatever reason, they are not getting more aggressive after those inflation prints. They are letting inflation run.
Until that changes, and until we start hearing about 50 and 75bp type-hikes, I think inflation assets have a window to run.
For those that think Bitcoin actually does something, that's nice. I'd guess that most holders of Bitcoin aren't paying attention to the Fed so much. But the Fed's moves are probably the most important driver to this macro instrument on steroids. So following the Fed is I believe an edge in trading Bitcoin. And so if you want to trade the Fed, which is what we're focused on, there's probably no better instrument right now than Bitcoin.
And shorter term (I like using the ETF for modeling purposes) BITO above 15 would be a confirm that this has the ability to go nuts shorter term.
Very near term I think the slow down action is bullish. When you have 'bad news' and it doesn't hit something, there's something else offsetting that's good underlying. I think that's thanks to the Fed letting inflation run.
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