Shallow corrections are the trademark of a strong bull market rally - and/or of blow-off tops. In the last couple of weeks, we pointed out the possibility of a potential pullback to $24-$25k. That has not materialized, as bitcoin blew higher and reached $30k in a few days. This is a very clear signal of the strength of momentum and higher prices are expected.
We have pointed out $35k as the next major target – before $47k. This is still the outlook just as we expect much higher prices into late Q2 and Q3. But we still need to ask the question of the possible consequence for bitcoin if/when DXY moves to 105-107. Will we see some consolidation or has the momentum become self-propelling? With RSI currently >70 on the daily chart something could point to the latter.
DXY showed more weakness this week and just dipped below the low from early February. The trend is down, and we expect to see DXY reach the 91-93 area later this year. However, nothing moves in a straight line and Elliott Wave Theory gives us, that we should see wave c of wave b developing. This is the bounce, which makes analysts believe, that DXY has now reached the bottom and that the former rally into Sept. 2022-high will continue. This will not be the case.
We expect DXY to reach 105.8 or perhaps 107.2 - before rolling strongly over. A convincing decline below 100 would seriously question this setup.
Outlook for SP500 is just bullish-bullish! Doubts about the current rally still exist in the market as equities climb the “Wall of Fear”. This is classic bull market behavior. RSI is in bullish territory and moving higher. MACD is the same. Price bottomed at the point when fear was the highest and took off in a strong manner.
We think we are currently in wave 3 of the last rally into a blow-off top and all-time highs. Wave 3 will likely take us to ~$4750 before Summer. A pause during Summer as wave 4 develops around ATHs and then the final thrust is likely to set in into early Autumn. Investors will be convinced of the market strength and will flock into Long-positions just as the stock market tops in a major top before the recession. Again… classic!
US10Y seems to have put on top in October 2022. We observed the bounce into February 2023 and the subsequent decline down to the current support area. All this is part of a classic topping pattern, which is a natural development and structural reversal pattern following a strong rally.
For now, the price may bounce in and around the current area (blue box) for some weeks before 3.2%-area is broken with force and the price continues lower towards 2.5%. In the longer perspective, we expect yields, in general, to crash hard into the coming recession and put in new all-time lows by late 2024.
Do you expect new ATHs this year before the recession's bear market? Or do you think that even with the recession BTC can make new ATHs in 2024-2025 since the FED will have to cut rates and print? So basically just curious if you think we will have 2 legs like in 2019 and then late 2020-2021 or just 1 leg this year and then bear market again because of the recession. Maybe you could talk about your long-term scenario in one post. Many people are expecting ATHs by late 2024-2025 but I have a weird feeling that the top will be this year.