Hey guys, this is a market update, a very pivotal time for bitcoin right now, because it seems to have shaken its correlation with the stock market, and this is obviously a good sign, because the stock market is just going. Nuts and people are losing their minds. Everything’S. Getting sold off in stocks but bitcoin looks super strong. You can actually see it here up.
You know 0.6 on the day, but considering the massive sell-off in the nasdaq and the s p at different areas, bitcoin has actually held up pretty well and hasn’t capitulated like some people were expecting. I want to go through some of the reasons why that’s happening, because there’s a there’s just a ton of stuff right now that is super confusing the market is confused and that’s why the stock market is selling off bond uh bond yields are much higher. How does all this play into the price of bitcoin ethereum, um kind of over the short term? There’S a lot to get through?
So, let’s get right into the video and um we’re going to look at the bitcoin price, ethereum price charts. Just now so, firstly, like i said bitcoin, it’s held up pretty well right: 42 000, we’re not going anywhere. Volatility has decreased, but considering the capitulation. That’S happened in the nasdaq, which has been obscene for a lot of those names. You know bitcoin has had a massive sell-off but seems to be stabilizing, and this is quite positive news for bitcoin, and it really is because i think bitcoin is not just a risk-on long-duration asset with lots of cash flows in the future, like those nasdaq names bitcoin.
For some people is literally a lifelong store of value, and so it’s a very different asset to the nasdaq, and that is why it’s very good to see that the correlation – basically it’s not selling off like the nasdaq, is so. Let’S have a look at the price chart, uh, initially um, so this is bitcoin. You can see we’re just stuck in this range right, so what’s happening now is obviously you know we’re in a risk off mode uh really so what we actually saw. If you look at the the price chart on bitcoin yesterday, as you got this spy cup – and this was great – but obviously it got sold off now – that’s just happening in the market right now, any bid any kind of up moving prices just gets sold into. So if you are looking to accumulate cryptocurrencies kind of in the first half of this year, just know that you do not have to chase prices ever.
If you see a price that is going up – and it’s maybe up for a couple of days – just wait because it is probably going to get sold into at some point and you will have a better lower entry, just my opinion, of course. But that’s what we’re seeing and i think i think that’s going to kind of roll out at least uh for the next few weeks, probably months. What we can see in bitcoin really is that it’s just consolidating around this level. This is actually good news, considering the sell-off in the nasdaq so 42, 000
This key level at 40 still holds we’re quite away away from it. I’Ve got another level down here at kind of 37 and a half if we really do see some sort of sell-off, and there may be one scenario where that happens, which i’ll touch on in a second but for now bitcoin really is just behaving itself.
We’Ve had a massive sell-off from the high, but to be honest overall, this isn’t a massive sell-off in the big scheme of things it looks fairly stable now, considering what’s happened in happening in the wider market, what we can also see with ethereum and ethereum’s, a very Different investment than bitcoin for a lot of people bitcoin is that buy and hold forever, whereas ethereum is slightly more risk on right, so people use ethereum when they’re. You know when the economy is going well and they have a bit of money in their pocket and they want to do some web 3 stuff. They want to buy some nfts. Maybe they want to. You know, lend out some money.
You know to get some extra yield and stuff all that d5 stuff. When you’ve got a bit of extra money in your pocket, that’s where ethereum might come into play. You can see it’s kind of faring. You know a little bit worse than bitcoin it. It’S uh off more this week, but again there is a very strong support around this kind of 3000 level, just above and we’re kind of not near it now so in terms of the capitulation from the nasdaq and everything that’s going on there.
These two names uh look fairly, you know fairly decent to be honest and not capitulating. This is a really great chart from will clemente on twitter um. You can go and follow him. Some great analysis. You can see exactly what we’re looking at in blue is the nasdaq and in orange is bitcoin, and you can see essentially they’ve been very correlated over the last few weeks, both selling off right.
So a risk-off move, and you know money coming out of risk assets going into cash basically and so they’re correlated they’re both selling off. But this huge move here – and this is really interesting to say – you know what the market has obviously changed. Some of its thinking in what’s going to happen and there’s a few reasons for this. First one is uh treasury yields and i’ll get on to that later on the video and the second one is with the variant kind of coming down. People are thinking there may actually may be quite good growth in the kind of next upcoming figures – economic figures.
There might actually be decent growth coming kind of into the spring because of all the lock downs kind of ending, and so you might see bitcoin doing this because it essentially is seems to react a lot quicker to these things than the nasdaq, which is influenced by A lot of different things than bitcoin, if you want to use buy bit like you saw me using here, you can actually get a deposit bonus when you sign up for buy bit i’ll leave that link in the description, if you deposit, some crypto on account or Just put a deposit on account: you can get up to four thousand dollars worth of a deposit bonus in your futures trading account if you want to go ahead and take advantage of that i’ll leave the link in the description. I want to talk about interest rates and the yield curve and why it’s important for markets also just a quick update on my crypto investor course. Uh 25 new videos are coming to this course um this sunday on the 22nd of january, everyone that is in the course and in the private groups. You will get these videos for free on sunday, so look out for those. The price is going up, probably the first week in february um, if you want to get involved in the course uh see my portfolio and my trade alerts.
All of that will um is on moneyz dot academy i’ll leave the link in the description. If you want to go ahead check it out, so this is treasury yields, and this is what’s really moving the markets and what can tell us what the market is now thinking is going to happen in the future to economic growth and also the fed’s response to It so in 2020, in 2021, really the fed came out and said we’re going to move interest rates to zero and we’re going to print lots of money and buy assets, basically by bonds, their own bonds. The market is very certain when this happens, so the market knows. Okay, all we have to do is just buy everything, because everything’s going up risk assets are going to go up in value, bonds are going to go up in value because the yield’s going down bond prices go up, the yield goes down because they um redeem at Par, which is a hundred, so obviously you have to work out the yield um, so everyone knew where they stood now. What the fed has done is said, we’re not doing that anymore and the market is uncertain and when the market is uncertain, this type of thing happens.
These sell-offs, these rotations um, and that is what has um – has happened in the stock market in the nasdaq and in crypto. To be honest because crypto um is very uncertain as well, and so that’s why you see this sell-off. What these are are treasury yields. So these are the official rates for us treasuries and you can see down here on the 18th. You can see that the price was fixed for the 10-year at 1.
7. Why? This is important is essentially to borrow money in bonds. Um, you have to pay 1.87.
That’S moved up from 1
63, just a couple of weeks ago, which is a huge move in treasury yields over such a short period of time, treasury yields can tell us exactly what the market is thinking of. What’S going to happen, so here’s how the yield curve works, every single risk asset bitcoin, the nasdaq everything that you’re looking at is priced off of this. So this is the most important thing to know. So what usually happens is you’ll, get a risk or a yield curve. That looks a little bit like this.
So basically you have duration and up here. So this is duration, um and this is yield or the percent that the bond yields right. So what you do is obviously the longer the duration of the bond, the higher the yield that you’re you’re supposed to get and then, as the duration is shorter, like a two year or one month right. If that’s one month, you get a very low yield right. So this has to do with the time um you know time value of money and obviously risk um.
You know the longer that you borrow money or lend money right, so the more that you need. So this is like a normal yield curve, but also you can get changes in the price of interest rates, so this would be an inverted yield curve. This means that the price uh, the the the price that you pay for money in the short term, is much higher than the price that you pay uh, for you know, borrowing long term. This is not good. This means that people or the market think there’s going to be a massive recession, because when a recession hits you have to drop interest rates stimulate the economy.
This is not good right, an inverted yield curve. We don’t have that yet, but what you can see by treasury rates is essentially there is a bunch up in the middle of the curve right. So if it what’s actually in the real world happening right now, um is what we’re seeing is kind of normal on on the short end. But then you get this kind of bump here um and then it’s kind of flat, flattish, again um. So what we’re seeing kind of here in the kind of five to ten year is a bunching of rates right.
So the five year is 1.65. The seven year is 1.82 um, so kind of a big move. The 10-year 1.
7, you can actually see the 30 year is actually cheaper. You know, pays less yield than the 20 year. So what this means to me really is that the market is kind of uncertain and doesn’t know what’s happening because the fed has said hey. Do you know we’re going to raise rates right now, but we’re not going to tell you how much we’re going to raise them by could be 25 basis. Points could be 50 basis points if inflation gets out of hand we’re going to really hit the market hard, but it may not get out of hand.
The market doesn’t know those figures yet so everything the market is telling us is we’re kind of uncertain right now and that’s what we’re seeing with all of these risk asset prices just setting off why this relates to cryptocurrency do not expect any upside. Whilst the market is uncertain about, what’s happening, we’re gon na get the fed coming out in probably march and raising rates. My opinion on this: if they raise rates by 25 basis, points we’ll probably get a nice push-up 50 basis points is going to be a big whack to the market and probably we won’t get a nice rise up at that time. So that’s a a time to to watch out for and also um the rates height to watch out for either 25 basis points or 50 basis points right now. Consensus definitely is at 25 basis points.
So what i want to come to as well is that bitcoin is going to be a worldwide store of value asset, and this proves it if we ever needed any more proof intel. Obviously, intel are not going to buy bitcoin, it’s not their business to buy bitcoin they’re, not an investment company, they’re, a chip chip maker and a technology company that makes chips of various types. So this is their business and if intel one of the biggest chip makers in the world is getting into making bitcoin mining chips, then you know this is big and you know it’s going to be a big, solid industry that is regulated and around for a very Long time it’s news like this that just keeps me hooked into the crypto market, especially bitcoin, knowing that i can put big chunks of wealth into bitcoin, because it’s not going anywhere, it’s only getting stronger more companies. Literally, some of the biggest companies in the world are getting into bitcoin and obviously it’s intel’s business to make chips but they’re getting into this space. So you just have more companies coming in.
You have more diversification of the asset base. You have more diversification of the industry in general. This is such a positive news story for bitcoin, so there is huge, short-term uncertainty right now and i think some of that uncertainty is probably helping bitcoin a little bit but, like i said you do not need to chase asset prices in the first half of this Year, if it’s a green day, i would leave it and just wait for the inevitable red day that will sometime uh come in the future. Okay, if you want uh up to 4 000 as a deposit bonus from buy bit, definitely check out that link in the description just deposit, some krypton there and get up to 4k. Like i said, 22nd of january uh, 25 new videos for the crypto course for free uh for existing users and the price is going to go up uh on the first week of january as well check that link in the description get into our private discord groups.
If you want to talk to me and all the other people in there, i’m james, it’s money, cg cheers for watching and i’ll see you in the next one.