2023/03/14 (190.053) Technical Analysis

The 1st Battle For Us Bulls In BITCOIN At 20000 Has Been Won
– In Order To Win In Long-Term, 30000 Must Be Reconquered Medium-Term

Joseph Stiglitz is considered one of the most renowned economists of our time.
The economist, who is also valued by me, is politically classified on the semi-left flank; from me too. Nevertheless, as with most economists, there are always a few aspects in his case that can be accepted as right – and not wrong, because he feels he belongs to a different political current. I like Stiglitz because he doesn’t beat around the bush, as we say here in Germany. The outspoken Nobel laureate’s views carry weight – mostly by the US Democrats. His comments on the Fed’s monetary policy at the beginning of 2023 are likely to be of great interest to us financial market participants.

For almost a year, the Fed has reacted to persistently high inflation rates with offensive interest rate hikes.
During this period, the US interest rate rose from zero to over four percent. Many other central banks such as the ECB, the Bank of England and the Swiss National Bank (SNB) followed suit and gave up their low interest rate policy. Even the Bank of Japan (BoJ), which has been seen as particularly dovish in recent years, has taken tentative steps towards tightening. Economics Nobel Prize winner Joseph Stiglitz, who served as chief economist at the World Bank between 1997 and 2000, considers the restrictive monetary policy to be a mistake with serious consequences. I don’t – to make it clear upfront. And with all love and respect. Because when I read, hear and/or see something by Stiglitz, I always deal with it – and form my own opinion. Whatever you should do.

In an article published in the British daily newspaper “The Guardian” at the end of January,
Joseph Stiglitz criticized the current monetary policy of the US Federal Reserve with harsh words.
In his opinion, the Fed’s interest rate rate is based on incorrect assumptions. The US Federal Reserve incorrectly thought that too much demand from consumers and companies met too little supply of goods, which caused prices to develop upwards. Interest rate increases were therefore necessary to reduce the demand for goods and services. The US economy will also have to put up with a recession, as Fed Chairman Jerome Powell emphasized several times in widely acclaimed speeches. A declining demand situation is therefore essential for restoring long-term price stability, especially since otherwise there is a risk of a wage-price spiral. However, Stiglitz has a very different opinion on how inflation came about. “There is overwhelming evidence that the main cause of inflation was pandemic-related supply shocks and shifts in the demand structure, not excess aggregate demand, much less additional demand created by pandemic spending,” the Nobel laureate said. Therefore, interest rate hikes were not necessary: “Anyone who has a little faith in the market economy knew that the supply problems would eventually be solved; but nobody could know when.” I disagree with him on this – 100% diametrically! Because he argues like an expansive fiscal policy dove from the Corona period. And in retrospect he also blames the restrictive, hawkish FED policy. And what is the FED doing? In the person of your Chairman Powell, he is too much diplomatic in public to react to such criticism. And always refers to his mandate of inflation and unemployment.

Don`t understand me wrong – or suggest a conflict between me and Stiglotz.
I simply prefer a basically an hawkish policy. So don`t understand me wrong! It`s not about who`s right! It`s all about which us fiscal policay and/or monetary policy have a majority. And I just can’t help myself zo resolve the us economy without the picture of Biden’s Cain economic policies. Because his green opposite economic policy was and is responsible for today`s us economic scenario. Just look at US inflation during Donald Trump’s time – and the rise since Biden had the final say in the White House. But at least the pressure for a higher oil price, since the beginning of this week, should be tacitly gone, if I’m not mistaken. And that regardless of the demand from China, let alone Russia’s war of aggression. Because Theran and/or Ryal seem to agree peacefully – and that thanks the help of the Chinese and not US Americans. That`s why we remain short in the oil price. But that’s just by the way.

Stiglitz is considered a neo-Keynesian economist
who generally advocates low interest rates and financial generosity on the part of the state.
What the US inflation demands, yes even conjures up, is the logical consequence if US production, i.e. the supply of goods and services, namely material goods and non-material service offers, is not at least as high. Because when US inflation overruns US GDP in the truest sense of the word, then we will all experience what we are experiencing together in the USA; namely an US stagflation. Hardly anyone talks about it in public – except for Nourinel Roubini. In this sense, Stiglitz calls for a generally low level of interest rates and government stimulus packages. On the other hand, there are some economists who think the Fed’s interest rate policy doesn’t go far enough. For example, the “Black Swan” author Nassim Taleb accuses the Fed, ECB & Co. of having created “malignant tumors like Bitcoin with their ultra-liquid monetary policy in recent years.“ Therefore, all central banks urgently need to return to an interest rate of four to five percent as quickly as possible and maintain this higher level. This is the only way that future stock market excesses can be avoided and investors’ investments can once again achieve greater economic benefits. “Dr. Doom” Nouriel Roubini is a notorious critic of the Fed’s interest rate policy, which he sees as a major reason for the escalating debts of states and “zombie companies”. A less liquid monetary policy is not only necessary to reduce inflation, but also to tame the ominous speculation frenzy of many investors. I agree. But roday 2023 we currently have several generations of financial market participants who only know US inflation from books. As well as a generation that only knows low interest rates. And that`s why I assume that we will deal with us inflation, even us staglation, longer as we would like. And I let myself be persuaded to formulate a BITCOIN long 4XSetUp. How exactly? That every day this week in the Technical Analysis 4XSetUps…BITCOIN Future Surges Above $26,000 As US Inflation Stays Around 6 Percent
Bitcoin Has Managed To Top $26,000 While The US CPI Is Up 0.4 Percent In February 2023

Bitcoin surged above $26,000 as the US released the latest CPI data for February 2023. The CPI rose 0.4 percent last month. Overall inflation has risen by 6 percent over the last year. That’s the lowest 12-month increase since December 2021, according to the data report. CNBC reported that traditional markets were highly volatile following the release, while the crypto market reacted positively. Bitcoin and Ether are up sharply, according to data from CoinMarketCap.

The consumer price index measures the average change in consumer prices across a basket of goods and services. This is used as an indicator of inflation.
CPI reflects consumers’ spending patterns on items and services, such as food, housing, transportation, clothing, medical care and recreation. It is used to adjust wages and government benefits for inflation, measure economic development and set monetary policy. The data report said the so-called Shelter Index, which looks at housing in general, was the largest contributor to the rise over the month. This alone accounted for 70 percent of the CPI increase for February 2023. Indexes for food, recreation, household appliances and utility costs also contributed. The food index is up 0.4 percent last month, the food index (home) is up 0.3 percent. The energy index shrank 0.6 percent, while the natural gas and gasoline indices also fell in February.

The overall digital currency market rallied to around $1.1 trillion over the past day
Last week’s flash crashes were easy to digest. Bitcoin has meanwhile shot to its highest level since June 2022.
Nevertheless, there are controversial discussions about the sovereignty of interpretation of the Bitcoin price forecast. While a top trader sees massive risks and a bull trap, Cathie Wood seems more bullish than ever. In the last 24 hours, bitcoin has recorded a significant increase and has not only broken through the important psychological mark of 25,000 US dollars, but also briefly set an initial anchor above 26,000 US dollars. Bitcoin last traded above $25,000 about three weeks ago. Back then, the bears quickly regained the upper hand, and this time too, bearish participants were able to nullify the breakout in the short term. In comparison, the last price increase above $26,000 was much longer – in June 2022 the world’s most valuable cryptocurrency reached this price level. Bitcoin is currently trading slightly above $25,000 – in the daily charts we have seen a consolidating movement in the last few days after profit-taking began.

Cathie Wood bullish: Banks crash, Bitcoin stays
In the current financial crisis, confidence in the traditional financial system is dwindling, and regional banks in particular are struggling with customer flight. Currently, it is still the big banks that are partially benefiting. But also cryptos & especially Bitcoin have recently shown a significant outperformance. The advantage of bitcoin over fiat money lies in its decentralization and independence. In addition, there is a limited number of coins, there will never be high inflation with BTC. Cathie Wood has now criticized the recently advancing crypto-focused regulation by the SEC. Because now it was the problems of centralized banks that affected cryptocurrencies and the stablecoin USDC in the short term.Yassine Elmandjra also recently highlighted the inherent advantages of Bitcoin and refers to 600,000 transactions over the weekend.
At the same time, 2000 more BTC were mined. While banks crashed, BTC functioned flawlessly. In contrast, crypto influencer and bitcoin trader @CryptoKaleo says it is still active on the short side. It is currently the largest bull trap he has ever seen. “Biggest bull trap I’ve ever seen.” @CryptoKaleo tweeted today.

Should you still get into Bitcoin now?
In the short-term, bitcoin traders have had to steer lower again in the past few hours.
BTC dipped below $25,000 again. Profit-taking ensued after the pump. Investors don’t have to rush anything at the moment. The momentum in Bitcoin increasingly weakened as a result of the setback. The clear outperformance compared to the stock market was particularly exciting in the past few days. While TradFi had massive problems, BTC was hawking – a sign of where Bitcoin is headed in the medium term? A key focus should now be on the $25,000, the 200 weekly MA and the multiple resistance zone at $25,500.