In all investments, including crypto, there are 3 different outlooks. They are based on the time frame: Short-term could be anywhere from 1 day to 6 months, intermediate-term is often 6 months to 2 years and long-term is 2 years or more.
And you know we are bullish on crypto long-term all day, every day. But today, we have a warning for those of you trading short and intermediate-term in this market. You may want to wait. It’s a dangerous, uncertain, and choppy market right now. And today, we explain to you why and how it’s dangerous in the shorter term your outlook.
US Economic Data Bad and Getting Worse
US Economic data is bad. And it’s getting worse. Don’t let the Instagram profiles of yachts and sportscars and moving to Dubai fool you. It’s bad. The American economy leads the world and that includes crypto so what happens here matters. Many think the US is already in a recession. The other half thinks one is coming soon.
The US Economy:
1. 63 banks on the brink of default
2. $500 BILLION of bank paper losses
3. Declining GDP growth
4. Rising inflation
5. 50% of USA believe in a recession
6. Lowest mortgage demand in 30 years
7. Record $17trillion in HH debt
8. NATO preps 300,000…— Grant Cardone (@GrantCardone) June 4, 2024
This inversion of the yield curve where short-term US bond rates pay more than longer-term bonds do is the biggest and most consistent recession signal the US economy has. And it’s been inverted for months and just “un-inverted” and went back to normal. Normal is when holding for longer, 10 years instead of 2 years, pay you more.
US Govt Treasuries and commodities signal the US is in a recession now. Although stocks are not behaving that way. Inflation is the highest in 50 years. Treasury Secretary Janet Yellen called it a risk to the economy hitting a “soft landing”. That’s slang for staying out of a recession. The US Unemployment rate is uncertain…….More on that coming up.
Treasurys and commodities signal recession, but equities and credit are not.
HY spread remains sanguine at 331bpshttps://t.co/3SovDJsy20 pic.twitter.com/cgO3BkrpV3
— Mike Zaccardi, CFA, CMT 🍖 (@MikeZaccardi) September 8, 2024
US mortgage rates for home buyers are just down from a 25-year high of 7.5% to its current 6.35%. This makes buying the same $250,000 home MUCH more expensive than just a few years ago. The result is mortgage and home buying demand is LOW. Now you may think, I live in _______, not in the US, so why should I care?
MORTGAGE DEMAND IN THE US JUST HIT A NEW 28 YEAR LOW
THE AVERAGE MORTGAGE RATE FOR CURRENT MORTGAGES IN THE US IS JUST 3.6%
MEANWHILE, IF YOU GO GET A NEW MORTGAGE TODAY IT IS AT 7.5% pic.twitter.com/tYwn3tCP7j
— GURGAVIN (@gurgavin) August 28, 2023
Well the US real estate market is one of the best and most liquid investment markets for property around the world. Aside from that, it’s a huge and important part of the global economy. Its poor performance can affect stocks, bonds, and crypto despite seemingly being unrelated. People are not moving, buying more homes, or selling. They are happy and/or trapped where they are in an expensive home at a lower interest rate they could no longer afford if they had to buy today at today’s interest rates.
This is a BIG problem. We talk about liquidity often on this channel. Global liquidity means money moving around the world. And we know some of that money will come into crypto. When money in the enormous US real estate market is not moving, that means liquidity EVERYWHERE is lower. Our market’s lack of price movement is because there is no new money is just one of the side effects of this disease.
US Jobs Data
The US jobs data is so bad, I wanted to take a minute and separate it from the rest of the economic data. Since the year 2000, the labor participation rate in the US economy has been on a steady decline. That’s the number of people working or seeking jobs.
In a healthy economy, it’s rising. In the US, it’s falling. Its high was 67% in early 2000. Now it’s only 62%. That 5% difference is tens of millions of people who are just not even looking for work anymore. This is a terrible long-term signal. It’s bad. But that’s not the worst thing. The allegedly positive US jobs data we’ve had for all 2024 so far has been revised. Downward. WAY downward.
The nation’s labor force participation rate is projected to fall in the coming years due to the US aging population. #US #lpfr #real #vs #projected #bloomberg pic.twitter.com/XBpa5laix1
— Quantillion (@quantillion_eu) September 9, 2024
Largest downward revision in 15 years. Sadly, many of the new jobs created are in Government, not the private sector where we need them. Government payrolls are on the rise, while non-farm payrolls aka the private sector, are falling.
The real economy, the private sector economy in the US, is not growing. And could your favorite project buck this trend and still grow? You bet it can. But you are swimming against the current. And the flow of the current right now in crypto is where it’s been for the last 6-ish months.
GAME OVER:
On Wednesday, the US Bureau of Labor Statistics will revise DOWN JOB numbers for the April 2023- March 2024 period by up to 1,000,000.
It means that in these 12 months, the US created 1.6 million jobs instead of the initially reported 2.6 million.
THIS IS INSANE pic.twitter.com/B2p2imBTig
— Global Markets Investor (@GlobalMktObserv) August 19, 2024
A Bitcoin bull market with choppy trading and a tough alt market. There’s a reason we call it Bitcoin Season and then Alt Season. It’s because the cycles and the currents are moving in our favor. Right now, those currents are only in your favor if you are a long-term investor. Even Bitcoin lovers have seen poor, choppy, uneven returns in the short and intermediate-term:
- Last 30 days, down 8%
- Last 3 months, down just under 20%
- Last 6 months, up 6%
- Last 12 months, up 115%
This is exactly the type of market we are talking about. Bitcoin is the leading and healthiest asset right now. And the short or intermediate term, if you are long Bitcoin you are losing money.
Do you think economic data like this matters in trading crypto markets? Or maybe data from other countries? Like who? Let us know in the comments below.
What To Do About It?
So what do we do with all this negative news? Could the market shake it off? Yes. Will the market shake it off? Probably not But that’s in the short term. You should hold what you have especially if you bought quality.
You can see why with all this uncertainty short-term and even intermediate traders could have a hard time figuring out the market direction here. Or if there will even be a market direction in a couple of weeks or months. It could continue to be slightly down but mostly choppy and sideways.
Again, if you are a long-term investor, which we recommend for the best returns for the risk over time, then you should just be strategic and wait. Wait for the dips in the projects you like most and buy them. Even in small amounts you will bring your average cost down and make $$ if the project is successful.
Disclaimer
The information discussed by Altcoin Buzz is not financial advice. This is for educational, entertainment, and informational purposes only. Any information or strategies are thoughts and opinions relevant to the accepted levels of risk tolerance of the writer/reviewers and their risk tolerance may be different than yours. We are not responsible for any losses you may incur due to any investments directly or indirectly related to the information provided. Bitcoin and other cryptocurrencies are high-risk investments so please do your due diligence. Copyright Altcoin Buzz Pte Ltd.
