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Does the bitcoin price rising over 10% in a week suggest an end to the bear market is near?

Since the beginning of the year, the dollar exchange rate of Bitcoin is up 27%. The original and leading cryptocurrency, it still…
The post Does the…



Since the beginning of the year, the dollar exchange rate of Bitcoin is up 27%. The original and leading cryptocurrency, it still accounts for over 41% of the total cryptocurrency market’s value, has recovered alongside the tradition assets classes of stocks and bonds this year.

The strong start to the year, which has seen the Bitcoin price top $21,000 again from a recent low of $15,757.2 set on November 9th 2022, has raised hopes among bulls that the “crypto winter” could prove far shorter than feared. Bitcoin and other riskier assets have benefitted from growing confidence that global inflation rates, recently running at decades-long highs, are starting to cool.


Last week, the US consumer price index posted an inflation rate of 6.5% in December, the sixth consecutive month of decline. Aggressive interest rate hikes by the Federal Reserve and other major central banks like the Bank of England appear to be having the desired effect.

While Bitcoin was once put forward as a hedge against inflation, its movements in the past year have tended to be in line with interest rate expectations. Like other riskier asset classes, investors have been moving out of Bitcoin and other cryptocurrencies when the expectation has been for interest rates to rise.

When market sentiment has started to favour the likelihood of slower rate hikes and a lower high point being required to bring inflation under control, the Bitcoin price has dropped. Bitcoin began to tumble from its record high of nearly $70,000 in November 2021 when investors reached the conclusion soaring inflation would not be the short term post-pandemic phenomenon economic consensus first expected it to be.

Positive economic sentiment supporting Bitcoin price recovery

Nikolaos Panigirtzoglou, JPMorgan’s managing director for alternative and digital assets commented this week that the rally across most major asset classes this year has been based on hopes for ‘soft landing’ for the U.S. economy and also boosted crypto sentiment. He sees the softening of the dollar from 2022 highs are another factor in favour of further Bitcoin price rises. The trend has catalysed rising prices for commodities including gold which has, he says, helped “reprice Bitcoin as a substitute asset class”.


Bitcoin’s positive recent momentum is being mirrored by other major cryptocurrencies such as Ether, which is up almost 30% since the beginning of January. Unlike Bitcoin, Ether is seen as a utility coin rather than a potential alternative to fiat currencies or store of value. It is used to pay for computing power bandwidth on the Ethereum platform which many crypto and blockchain projects are built on. That ties demand for Ether tightly to overall crypto and blockchain-sector activity.

Overall, the market value of the top 500 crypto tokens has risen back to $1tn from $830bn at the end of last year but remains well off its November 2021 peak above $3.2tn. That upward momentum has, details a report from crypto investment service BitStacker, saw Bitcoin shorter lose in $386.74 million in position liquidations between January 10 and 16.

Kris Lucas, an analyst at BitStacker quoted by the Independent newspaper, comments:

“While it’s always sad to see traders losing money on their investments, the study does show that cryptocurrencies might finally be bouncing back. 2022 was a very tough year for cryptocurrencies with the collapse of several major exchanges, as well as the Terra stablecoin. However, the fact that bitcoin is starting to regain its value could suggest that the so-called crypto winter could soon be over.”

Could Bitcoin’s recent upward momentum prove to be a bear trap?

Despite a positive start to the year, confidence in crypto markets remains fragile. Investors remain wary of further sudden shocks after the collapse of Sam Bankman-Fried’s FTX. Another potential shock on the horizon is the fate of Genesis, one of the biggest lenders in the crypto market.

It froze customer withdrawals at its lending unit in November after FTX’s failure, blaming “unprecedented market turmoil” and owes its creditors more than $3bn. Its parent, crypto conglomerate Digital Currency Group, is trying to raise the capital required to prevent Genesis being forced into bankruptcy. However, some analysts believe that Genesis collapsing has already been priced into the crypto market so that fate being confirmed would not have a major negative impact on prices.

There are also analysts who believe a good part of Bitcoin’s gains this week are a direct result of short sellers being forced to liquidate positions.

The Financial Times quotes David Moreno Darocas, research lead at data provider CryptoCompare, also injects a word of caution on how long lived the early 2023 Bitcoin rally may prove to be:

“Some upside volatility was due to come eventually and does not mean that this move upwards will be sustainable.”

The fragility of recently more positive crypto sentiment was also highlighted this week when the U.S. government announced a press conference for some major crypto-sector news, resulting in a $1000 Bitcoin price flash crash in less than an hour. In the end, it turned out the news was positive, announcing the breakup of a major crypto crime network and the Bitcoin price quickly moved into a bullish trajectory again.

However, the sharp movement down demonstrated the fragility of positive sentiment and calls into question if the current bear market’s bottom was indeed reached late last year. Despite that, January has been the best few weeks from the crypto market in nearly a year.

Nigel Green, CEO of financial advisors deVere Group told the Independent he believes improved inflation data points to better times ahead for Bitcoin:

“We are technically still in a bear market, but the signs are the bulls are beginning to take back control.”

Bitcoin bears are convinced it’s not a question of when the leading cryptocurrency goes to zero, not when a bull market returns

Crypto market sceptics, however, remain convinced any current upwards momentum for Bitcoin is simply delaying its inevitable decline towards irrelevance and a value of zero. While the American banking giant JPMorgan is very much hedging its position on cryptocurrencies, it is actively developing blockchain technology being integrated into its services and has created its own token (JPM Coin) used for intraday repurchase agreements, its CEO is a vocal critic of the sector.

In a wide ranging interview for the CNBC show Squawk Box given at the World Economic Forum in Davos, Dimon responded to a question on Bitcoin with his own, querying what they would “waste any breath” discussing the cryptocurrency. He then did waste a little more breath to disparage Bitcoin as “a hyped-up fraud, a pet rock.”

Pressed further on whether he considered the entire crypto sector a Ponzi scheme, Dimon responded:

“You guys have all seen the analysis of TetherUSD and all these things, the lack of disclosures, its outrageous. Regulators should have stopped this a long time ago. People have lost billions of dollars if you look at its lower-income people, in some cases retirees.”

The dissonance between JPMorgan the bank’s active hedging for that cryptocurrencies will make a comeback and establish themselves as fixture of financial markets, it even registered a trademark for a cryptocurrency wallet in late 2022, and its CEO labelling the whole sector a Ponzi scheme, can be seen as a microcosm for broader attitudes. Individuals have their opinions but when the future of corporations are at stake, few are willing to bet too heavily on either camp being proved right.

It’s still very hard to call if, in the long term, Bitcoin’s days are numbered or if it will finally establish itself once and for all. In the meanwhile, barring any major new developments not yet on the radar of investors and market observers, it seems likely that the Bitcoin price will continue to show close correlation with other riskier asset classes.

If economic data continues to improve and the U.S. avoids a painful recession, that is likely to continue to support the positive momentum Bitcoin has enjoyed so far in 2023. If it, and crucially market sentiment, turn more negative again, the recent rally could quickly run out of steam.

The post Does the bitcoin price rising over 10% in a week suggest an end to the bear market is near? first appeared on Trading and Investment News.

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Are You The Collateral Damage Of Central Planners?

Are You The Collateral Damage Of Central Planners?

Authored by MN Gordon via,

The Conference Board – a nonprofit think…



Are You The Collateral Damage Of Central Planners?

Authored by MN Gordon via,

The Conference Board – a nonprofit think tank that delivers cutting edge research – recently published its latest Leading Economic Index (LEI) for the United States.  The findings were a giant bummer.  In December, the LEI dropped for the tenth consecutive month.

The LEI, if you’re unfamiliar with it, consolidates various measures of economic activity, including credit, interest rate spreads, consumer expectations, building permits, new orders of goods and materials, and several other items, to assess which way the economic winds are blowing.  Over the past six months, the LEI has fallen by 4.2 percent.  This is the fastest six-month decline since the great coronavirus panic.

This week, the Bureau of Economic Analysis provided its advance estimate of Q4 U.S. gross domestic product (GDP).  For the final quarter of 2022, real GDP increased at an annual rate of 2.9 percent.

How could it be that GDP is expanding while the LEI is contracting?

The most probable answer we can think of is the massive expansion of consumer debt.  For example, credit card balances hit a new record of $866 billion during Q3 2022.  That marks a year-over-year increase of 19 percent.

Americans are borrowing from their future to make ends meet today.  This may give GDP the appearance that it’s expanding.  But, in reality, the GDP expansion is merely a measurement of the rate that consumers are going broke.

The fact is the U.S. economy is traversing headlong into a recession at the worst possible time.  We expect things will get especially ugly, as consumers are operating in a world of chaos

World of Chaos

In a centrally planned economy, decisions are not made between individuals through free market mechanisms.  Instead, they’re made by politicians and bureaucrats through policies of mass market intervention.

The elites pass down their edicts.  Thou shall not use gas burning stoves, for example.  Or though shall burn corn in their gas tank.

The central planners, many of which are unelected administrators, force the decrees upon the populace.  Programs, forms, penalties, and whatever else are imposed.  Pounds of flesh must be exacted at every turn.

The real tragedy, however, the very thing that makes ultra-mega governments possible, is the monopoly on the control and issuance of money that’s granted to central bankers.  Without the Federal Reserve, the central bank to the U.S. government, and its seemingly endless supply of fake money, it would be impossible for Washington to cast its wide nets across the entire planet.

Feeding the Leviathan is only a small part of what the Fed does.  Through its control of the money supply the Fed causes a world of chaos to storm through the economy and financial markets.  When the money supply is inflated, a false demand is signaled.  Businesses and individuals change their behavior to exploit the apparent demand.

Then, when the money supply is contracted, and the rug is yanked out from under the false demand, disaster strikes.  Businesses go bankrupts.  People lose their jobs.  Stocks and real estate prices crash.

In short, the Fed’s money games make it exceedingly impossible for a wage earner to save, invest, and build real wealth.  The uncertainty this provokes turns regular wage earners into speculators and gamblers.  Here’s why…

Uncertainty and Instability

In a centrally planned economy, like America and most countries today, where people are compelled by legal tender laws to use fiat money, people must work, save, and invest with the recognition that the government will continue to arbitrarily change the rules.  The Fed may command ultra-low interest rates one year.  The next year it’s jacking them up by hundreds of basis points.

We know that central planners change course at whim and often for political reasons.  Where did the most campaign contributions come from?  Their decisions can be downright suicidal.

The 1930 Smoot-Hawley tariffs, for instance, turned a routine recession into the Great Depression.  Likewise, Fed tightening of monetary policy in 1987 drove interest rates up and triggered a massive stock market crash.

The great consumer price inflation of 2021 into the present marked the highest rate of inflation in 40 years.  And now it’s providing an instructive lesson to individuals and organizations about the uncertainty and instability that’s inherent to centrally planned economies.

As the Fed hikes rates and tightens its balance sheet in the face of a recession, many overleveraged businesses and individuals find themselves wholly unprepared for the central planner’s new set of rules.  Decisions were made in 2021 under a framework that’s radically different today.

Consider real estate investors.  Over the last decade, as interest rates were artificially suppressed by the Fed, their businesses flourished.  They could easily borrow money to buy properties to refurbish and resell at a profit.

But then raging consumer price inflation, which was manufactured by the Fed in the first place, became politically indefensible.  So, the Fed had to move to rein it in by restricting the money supply.  This pushed interest rates relatively higher and undermined the real estate market.

Investors who had planned for mortgage rates at 3 percent are being absolutely destroyed by mortgage rates at 6 percent.  Suddenly their investments don’t pencil out.  Real estate agents and mortgage brokers may find the years ahead to be extraordinarily challenging.

Are You the Collateral Damage of Central Planners?

When the Fed inflates the money supply it also inflates asset prices, including stocks, bonds, and real estate.  When it then yanks the rug, and contracts the money supply, businesses and investors face big losses.  And employees become collateral damage.

According to tech job tracker, there have been more than 200,000 technology jobs lost since the start of last year.  What’s more, in 2023 alone, not even one month into the New Year, technology companies have laid off over 67,000 employees.  What’s going on?

Right now, technology companies like Meta, Google, Microsoft, and Amazon, are discovering that the world they knew and loved over the last decade no longer exists.  As the supply of money has tightened, and the flow of speculative money into technology stocks has dried up, these companies have learned they have far too many employees who produce far too little value.

Coding senseless applications and widgets may be a viable job when there’s a seemingly endless supply of the Fed’s cheap credit being pumped into financial markets.  Take the money away, however, and those jobs are incapable of standing on their own two feet.

The point is in a centrally planned economy people are continually misled about how they should go about working, saving, and investing for the future.

Just asked the former code cruncher who was RIFed after two decades of Googling all day.  They thought they were set for life.

Instead, whether they know it or not, they’re the collateral damage of central planners.  Are you the collateral damage of central planners too?

*  *  *

You may not know it.  But you could unwittingly be wiped out be the schemes and designs of central planners.  One way to avoid becoming their collateral damage is to significantly increase your wealth.  The decks stacked against you.  But it can be done.  If you’re interested in learning how, take a look at my Financial First Aid Kit.  Inside, you’ll find everything you need to know to prosper and protect your privacy as the global economy slips into a worldwide depression.

Tyler Durden Sat, 01/28/2023 - 17:30

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Schedule for Week of January 29, 2023

The key reports scheduled for this week are the January employment report and November Case-Shiller house prices.Other key indicators include January ISM manufacturing and services surveys, and January vehicle sales.The FOMC meets this week, and the FO…



The key reports scheduled for this week are the January employment report and November Case-Shiller house prices.

Other key indicators include January ISM manufacturing and services surveys, and January vehicle sales.

The FOMC meets this week, and the FOMC is expected to announce a 25 bp hike in the Fed Funds rate.

----- Monday, January 30th -----

10:30 AM: Dallas Fed Survey of Manufacturing Activity for January. This is the last of the regional Fed manufacturing surveys for January.

----- Tuesday, January 31st -----

9:00 AM: FHFA House Price Index for November. This was originally a GSE only repeat sales, however there is also an expanded index.

9:00 AM ET: S&P/Case-Shiller House Price Index for November.

This graph shows the Year over year change in the nominal seasonally adjusted National Index, Composite 10 and Composite 20 indexes through the most recent report (the Composite 20 was started in January 2000).

The consensus is for a 6.9% year-over-year increase in the Comp 20 index.

9:45 AM: Chicago Purchasing Managers Index for January. The consensus is for a reading of 44.9, down from 45.1 in December.

10:00 AM: The Q4 Housing Vacancies and Homeownership report from the Census Bureau.

----- Wednesday, February 1st -----

7:00 AM ET: The Mortgage Bankers Association (MBA) will release the results for the mortgage purchase applications index.

8:15 AM: The ADP Employment Report for January. This report is for private payrolls only (no government). The consensus is for 170,000 payroll jobs added in January, down from 235,000 added in December.

10:00 AM: Construction Spending for December. The consensus is for a 0.1% decrease in construction spending.

Job Openings and Labor Turnover Survey10:00 AM ET: Job Openings and Labor Turnover Survey for December from the BLS.

This graph shows job openings (black line), hires (purple), Layoff, Discharges and other (red column), and Quits (light blue column) from the JOLTS.

Job openings decreased in November to 10.458 million from 10.512 million in October

10:00 AM: ISM Manufacturing Index for January. The consensus is for the ISM to be at 48.0, down from 48.4 in December.

2:00 PM: FOMC Meeting Announcement. The FOMC is expected to announce a 25 bp hike in the Fed Funds rate.

2:30 PM: Fed Chair Jerome Powell holds a press briefing following the FOMC announcement.

Vehicle SalesAll day: Light vehicle sales for January. The consensus is for light vehicle sales to be 14.3 million SAAR in January, up from 13.3 million in December (Seasonally Adjusted Annual Rate).

This graph shows light vehicle sales since the BEA started keeping data in 1967. The dashed line is the December sales rate.

----- Thursday, February 2nd -----

8:30 AM: The initial weekly unemployment claims report will be released.  The consensus is for 200 thousand initial claims, up from 186 thousand last week.
----- Friday, February 3rd -----

Employment Recessions, Scariest Job Chart8:30 AM: Employment Report for December.   The consensus is for 185,000 jobs added, and for the unemployment rate to increase to 3.6%.

There were 223,000 jobs added in December, and the unemployment rate was at 3.5%.

This graph shows the job losses from the start of the employment recession, in percentage terms.

The pandemic employment recession was by far the worst recession since WWII in percentage terms. However, as of August 2022, the total number of jobs had returned and are now 1.24 million above pre-pandemic levels.

10:00 AM: ISM Manufacturing Index for January. The consensus is for the ISM to be at 50.3, up from 49.6 in December.

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US gov’t $1.5T debt interest will be equal 3X Bitcoin market cap in 2023

The U.S. will pay over $1 trillion in debt interest next year, the equivalent of three or more Bitcoin market caps at current prices.



The U.S. will pay over $1 trillion in debt interest next year, the equivalent of three or more Bitcoin market caps at current prices.

Commentators believe that Bitcoin (BTC) bulls do not need to wait long for the United States to start printing money again.

The latest analysis of U.S. macroeconomic data has led one market strategist to predict quantitative tightening (QT) ending to avoid a “catastrophic debt crisis.”

Analyst: Fed will have “no choice” with rate cuts

The U.S. Federal Reserve continues to remove liquidity from the financial system to fight inflation, reversing years of COVID-19-era money printing.

While interest rate hikes look set to continue declining in scope, some now believe that the Fed will soon have only one option — to halt the process altogether.

“Why the Fed will have no choice but to cut or risk a catastrophic debt crisis,” Sven Henrich, founder of NorthmanTrader, summarized on Jan. 27.

“Higher for longer is a fantasy not rooted in math reality.”

Henrich uploaded a chart showing interest payments on current U.S. government expenditure, now hurtling toward $1 trillion a year.

A dizzying number, the interest comes from U.S. government debt being over $31 trillion, with the Fed printing trillions of dollars since March 2020. Since then, interest payments have increased by 42%, Henrich noted.

The phenomenon has not gone unnoticed elsewhere in crypto circles. Popular Twitter account Wall Street Silver compared the interest payments as a portion of U.S. tax revenue.

“US paid $853 Billion in Interest for $31 Trillion Debt in 2022; More than Defense Budget in 2023. If the Fed keeps rates at these levels (or higher) we will be at $1.2 trillion to $1.5 trillion in interest paid on the debt,” it wrote.

“The US govt collects about $4.9 trillion in taxes.”
Interest rates on U.S. government debt chart (screenshot). Source: Wall Street Silver/ Twitter

Such a scenario might be music to the ears of those with significant Bitcoin exposure. Periods of “easy” liquidity have corresponded with increased appetite for risk assets across the mainstream investment world.

The Fed’s unwinding of that policy accompanied Bitcoin’s 2022 bear market, and a “pivot” in interest rate hikes is thus seen by many as the first sign of the “good” times returning.

Crypto pain before pleasure?

Not everyone, however, agrees that the impact on risk assets, including crypto, will be all-out positive prior to that.

Related: Bitcoin ‘so bullish’ at $23K as analyst reveals new BTC price metrics

As Cointelegraph reported, ex-BitMEX CEO Arthur Hayes believes that chaos will come first, tanking Bitcoin and altcoins to new lows before any sort of long-term renaissance kicks in.

If the Fed faces a complete lack of options to avoid a meltdown, Hayes believes that the damage will have already been done before QT gives way to quantitative easing.

“This scenario is less ideal because it would mean that everyone who is buying risky assets now would be in store for massive drawdowns in performance. 2023 could be just as bad as 2022 until the Fed pivots,” he wrote in a blog post this month.

The views, thoughts and opinions expressed here are the authors’ alone and do not necessarily reflect or represent the views and opinions of Cointelegraph.

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