In Bitcoin We Trust

Compass 136

Do what they do, not what they say.

• Markets tend not to be reactive environments responding solely to immediate events; rather, they typically price in expectations. The ongoing market correction is pricing in the possibility of an escalation in current global conflicts.

• When euphoria fades and fear spreads, retail investors are often the first victims on the edge of geopolitical conflict and market turmoil. Meanwhile, whales, institutional portfolios, and smart money absorb the “leftovers” from panic selling and forced liquidations.

• This teaches us a very important lesson: Do what they do, not what they say.

• Meanwhile, as Bitcoin’s dominance reaches a three-year high, JPMorgan warns that investors, in light of the geopolitical risk landscape, could turn to Gold and Bitcoin as a debasement strategy. Additionally, a Forbes article highlights the integration of Bitcoin within the TradFi (traditional finance) framework, where there is a mutual adaptation dynamic at play. These are significant confirmations of Bitcoin’s strengthening macroeconomic role that we cannot overlook, especially at a moment when doubt is spreading.

• In this context, our indicators clearly show the following: price momentum has weakened, although Bitcoin hasn’t breached the $60k support, and the risk remains at zero, while the fundamentals have significantly improved. Let’s dive deeper.

  

  Speedometers indicating the current state of BTC. The full dot represents the current reading and the white dot represents one week ago.

Liquidity chain reaction.

• As we’ve observed, Bitcoin is currently strongly correlated with the S&P 500 and Nasdaq indices, meaning that if the traditional financial markets react and take a direction, Bitcoin and the crypto ecosystem are highly sensitive to those movements.