Crypto Signals – 3 Bearish, 3 Bullish
Curated Thread #9
Crypto, like most risk-on assets, is currently facing major macro headwinds, leading to increased volatility and fear.
Despite these challenges, Bitcoin and blockchain’s strong value proposition support a long-term bullish outlook.
Short to medium term, expect potential challenges. Focus on staying safe, remain open-minded, and cautiously seizing opportunities.
Here are three bearish and three bullish signals to consider.
Bearish #1 - Gold Breakout:
In 2019, BTC peaked when gold broke out.
This pattern surfaced again in March 2024.
Could the market cool off for 6-9 months before picking up again in 2025?
Source: Intocryptoverse
(i) Why Is Gold's Breakout Bearish?
Gold, a safe haven, tends to outperforms in a risk-off market.
Currently, macro uncertainty is high due to geopolitical conflicts, an unclear US election, and the Yen carry trade.
While BTC may follow gold, high-risk altcoins likely won't.
Bearish #2 - Rate Cut Environment Rate:
Rate cuts can be bullish long-term, but their immediate effects often hurt risk assets.
Last rate-cut cycle (2019), ALT/BTC pairs suffered heavily.
As oscillators, these pairs may face more pain if the market stays risk-off.
Source: Intocryptoverse
(i) The 2019 Parallel - Bull Market Hasn’t Started?
Key thought leaders like Cobie & Chris Burniske also see 2019 parallels. Here are the core views:
BTC Dominance rises until liquidity picks up
We aren’t in a bull market yet (2023/2024 was a echo bubble)
March 2024 was a mid-cycle top
Bearish Signal #3 - Sahm Rule :
The Sahm Rule predicts US recessions (based on unemployment data).
Since 1950, every time it exceeds 0.5, a recession follows.
It flashed again last week.
Source: saxena_puru
(i) Beyond the Sahm Rule:
Note, the Sahm Rule triggering is not the end all be all.
What's crucial is how global banks respond with monetary policy & liquidity provisions.
The next few months will be crucial for shaping the market's 2025 trajectory.
Bullish #1 - Stablecoin Inflows:
Stablecoin supply is nearing ATHs despite plummeting crypto prices.
Stablecoin supply is up over 25% this year.
With capital flowing into the system, a long-term bearish outlook is hard to justify.
Source: Binance Research
(i) Why Is A Rising Stablecoin Supply Bullish?
An increase in stablecoin supply indicates more liquidity flowing into crypto.
Stablecoins represent available capital ready to invest in crypto assets.
Historically, rising supply has reliably predicted higher crypto prices.
(ii) Rate Cuts & The Rise Of Stablecoins:
While rate cuts may hurt high-risk assets in the short-term, they're long-term bullish for stablecoins.
As traditional asset yields fall, on-chain yields become attractive.
This could potentially driving stablecoin expansion in the coming months.
Source: SplitCapital
Bullish #2 - Pro-Crypto US Regime:
Positive regulatory adoption is snowballing for crypto.
Key evidence is the growing likelihood of a pro-crypto US regime. Several notable developments include:
More BTC held by US corporations
A crypto-friendly Democratic party and pro-crypto Republican party
BTC fair accounting rules live in 2025.
While short-term hurdles may arise, the trend remains positive and strong.
Bullish #3 - Record Global Debt :
Global debt hit a new ATH of $315T earlier this year. With over 50 countries holding elections in 2024, governments are likely leaning towards:
Tax-cutting
Cash-splashing policies
(i) Why Is Rising Debt Bullish?
BTC acts as a hedge against currency debasement and geopolitical uncertainty.
“I believe $BTC goes up if the world is frightened” – Larry Fink (CEO BlackRock)
Source: Andre_Dragosch
(ii) Central Bank Liquidity & Stimulus:
Altcoins could benefit from liquidity injections in response to the debt issue in the medium/long term.
Central banks are likely to stimulate economic activity to mitigate recessions.
Rate cuts are beginning and fiscal policy may follow soon.
Source: Zerohedge
(iii) Macro Summer In The 4-Year Liquidity Cycle:
Lastly, you can view the ‘debt issue’ through the 4-year liquidity cycle.
Since 2008, this cycle is based on governments refinancing debt.
We're currently in "Macro Summer" with earnings expected to rise gradually.
This phase usually leads to a "risk-taking" Macro Fall.
Source: Raoulgmi
Disclaimer:
All content is for informational purposes only and does not constitute financial advice. Crypto investments are highly risky. For more details, see the full disclaimer.