When will we see BTC volatility return?
crypto has been stuck within a tight trading range for around 120 days. This represents one of the longest time periods of price compression in BTC history.
Large compression = large breakout 🧵🧵👇
Major endogenous market moving data: 🧠 - 12th Oct - US PPI and FOMC minutes - 13th Oct - US CPI/Core Data for Sept
See below a brief overview of how I trade CPI/Core data:
More info on PPI and aggregating data confluences:
Major exogenous macro factors in play: 💡
1. China - Xi will cement his 3rd term on Oct 16.
We’ll find out if the zero-covid policy will be relaxed, how China will deal with the real estate deleveraging crisis, and where things are heading with Taiwan and US/China relations.
2. Biden’s SPR releases are coming to an end and he needs to figure out how to refill the reserves.
Last month a report stated they would be buying oil below 80, but we will hear something more official about the strategy soon.
3. Ukraine - Rus is losing despite the 300k mobilisation = key inflection point. Putin must either negotiate or follow-through on tactical nuke threats.
The war has not impacted portfolios for a while, but the conflict is quickly coming to a crescendo.
4. Italy - PM Meloni is likely to enact a populist fiscal policy = expand the fiscal deficit and trigger inflation.
This may trigger a blowout of the Italian BTP/German Bund spread + force the ECB to activate the TPI. This would be -ive for European risk assets and euro FX.
5. The BOJ and YCC which I summarise in the below attached article alongside the associated (potential) ramifications for risk assets and BTC.
From the technical backdrop there are a few signs that we are nearing a bottom in equities.
The AAIIDIFF (difference between bulls/bears) touched then bounced back from levels that typically precede rallies on ES
I still want a move below 3500 but this may be macro bottom.
In calmer times, trading global macro is like playing 4D chess - which is difficult enough. Today with all the added variables, we are playing 10D chess.
Be careful when trading these conditions, play the data and preserve capital. Better times are on the horizon.
This post is based on this twitter thread.