Bitcoin BTC Technical Analysis | Has Cryptocurrency Bear Market Started? When Will It End?! Jan 2022

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Bitcoin's trend and price action are signaling a top and market psychology is likely soon to follow as we transition into the anxiety phase of the cycle.

There is a macroeconomic headwind that supports our findings as we noted the delta in yields is causing strength in the dollar.

We noticed that high yield junk bonds and emerging market bonds are likely to see a huge sell off and spike in yields there also.

The federal reserve is tapering and is talking about both raising interest rates and reducing the size of the balance sheet after the tapering is concluded in the near future.

This means they will not only not be here to back stop markets like we have seen in the past, they will be adding to the problem as time goes on.

The supplemental leverage ratio exemptions are expired which has been a net tightening even with increase reverse repo inflow limits.

While the build back better plan is facing head winds itself, the debt ceiling limit was increased by a similar amount to the proposed size of the bill suggesting a capitulation at some point getting it signed through.

If this does happen this is going to add to the supply being added to the market which is going to take yields even higher.

Remember the federal reserve said their reason for intervention in 2020 was because the markets had become illiquid.

Im not sure what makes them think the markets won’t become illiquid again this time around with everyone trying to add more supply to the market, but that’s where we're at for the time being.

The federal reserve is known for pivoting on what they say so I expect this will eventually lead to that.

Having a crashing economy going into the 2024 election cycle would be a major head wind for Joe Biden getting elected.

Therefor if the economy does take another big spill Biden is going to go on a crusade to prop up asset prices and I’m sure Jerome Powell will be in a similar boat himself and in no position to argue.

This plays into my theory we will probably get our next bull market sometime around 2024 with the election cycle and halving events.

The incredibly high amount of reserves in the system is one of the major problems for the economy at the moment

Because of this I believe the build back better plan is going to be an event that really puts stress on the economy as this plan includes direct monthly checks that would be deposits and reserves at a depository agency.

This would last for a whole year providing a consistent flow of deposits and reserves each month that need to be addressed.

This is when I believe we might start to see policy changes like seeing reserves exempt from the SLR or the inflow limit to Reverse Repo markets completely removed.

There for I think Bitcoins sell off will begin to accelerate in the near term and will continue back into a bull market sometime around 2024.

Until we see what really happens, it's hard to tell exactly how things play out.

I try to use game theory and probabilities to make guesses about what the economy might do next, but when it comes down to it, it's all speculation.

Hopefully this perspective can be valuable to all of you out there watching.

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