Today's point of view
Long-term rating: Overweight
Short Cycle Rating:
Bitcoin accumulation
Lighten up in small-cap cryptocurrencies
Today's point of view
Inflation is not a bad thing, investors should not make a mistake!
Yesterday, two pieces of news pushed Bitcoin to fall rapidly, and Bitcoin fell by 21.55% within two days. One piece of news is that Tesla CEO Elon Musk announced that he will suspend accepting bitcoin payments due to concerns about bitcoin’s use of unclean energy, but he will not sell the bitcoins he already holds; the second news is that the U.S. April currency The inflation rate rose 4.2 percent year-on-year, the fastest pace since September 2008.
It is said that "inflation is the biggest enemy of a bull market", and the news of inflation scares investors. The U.S. stock market accelerated its decline, with the three major U.S. stock indexes closing down nearly 2%. The Dow and the S&P 500 recorded their largest one-day losses since January and February, respectively, and the Nasdaq fell below the 120-day line.
Economists at JPMorgan Chase, Moody's Chief Economist and the Vice Chairman of the Federal Reserve all happened yesterday, saying that inflation is temporary and one-off.
For investors in the currency circle, we would like to say, please don't make a mistake.
Inflation is not the killer of the Bitcoin bull market.
We divide inflation into three levels, low inflation, moderate inflation and excessive inflation. The low inflation environment is good for the price growth of Bitcoin, because the Federal Reserve has more room for monetary easing, and printing money pushes up all risk markets. This core logic has been fully learned in the bull market of the new crown crisis in the past year.
Moderate inflation is the enemy of Bitcoin. When the economic development is stable and inflation is around 2%, the Federal Reserve may tighten monetary policy due to economic recovery and concerns about excessive inflation. The reduction of money will directly and negatively affect all venture capital markets. price.
Excessive inflation, or an inflation rate that far exceeds the Fed's 2% inflation expectations, has greatly benefited the price of Bitcoin. The central bank's monetary policy has a certain delay, that is, when the Federal Reserve introduces a certain policy, its impact will take about 12 months to fully affect the economy. The current loose monetary policy of the Federal Reserve will continue to affect the US economy in the next 12 months.
Assuming that inflation in the United States has entered the overheating zone and is not temporary, then even if the Fed starts to tighten quantitative easing rapidly today and raise nominal interest rates, in the next 12 months, the previous loose monetary policy will still affect the economy . This means that inflation will continue to rise, taking 4% as a base point, and may rise to a historically high position.
Excessive inflation will destroy the value storage function of the US dollar. Bitcoin is the world's only store of value in a deflationary economy. If there is overheating of global inflation, money will flood into Bitcoin quickly and massively, which may lead to an unprecedented Bitcoin bull market.
Therefore, we do not need to judge the future trend of inflation. Investors only need to be clear that only moderate inflation is the killer of the Bitcoin bull market.
Let's go directly to the weekly chart of Bitcoin. In the bull market of Bitcoin, every time the price of Bitcoin will be strongly supported by the 21-week EMA moving average, this is a historical rule. With the long-term sideways trading of Bitcoin, this is the first time that Bitcoin has touched the 21-week EMA moving average after Bitcoin left $10,000. This is our team's ultimate goal expectation for Bitcoin adjustment. At this point, we give A Strong Buy rating on Bitcoin.
The same 21-week EMA moving average support, we can see that in every bull market of Bitcoin in history, it is an important lifeline to support the continuation of the bull market.
Bitcoin does not need KOL, whether Musk supports Bitcoin or not, Bitcoin will continue to complete its historical mission. As V God transfers his SHIB coins to charity, the zoo cryptocurrency will also start a battle royale. We will wait and see whether Leek, who has lost a lot of money under the leadership of Musk, is still his loyal fan.
Investors, today is the best time to buy Bitcoin in a year, did you buy it today! ?
