LIVE#BTC is trading at 51.7k USD. This week was rather volatile for stocks and commodities. I stayed away from Crypto to see where the markets are moving. SP500 broke the 5000 mark and is holding strong above 5000. Gold showed a little weakness but is holding near to 2010$ for an ounce level.
What caused the movements for this week? On Tuesday core CPI and month over month CPI numbers got published. They were good for US economy and showed that there is high likelihood that he Fed Will not cut rates in March. On Thursday US jobless claims were published which strenghtened the economical outlook. US economy is resilient and is doing really well.
So, what is the outlook for Crypto? BTC will halve this year, probably in April. What does it mean? With BTC halving the mining difficulty doubles and the miners will get less rewards. Mining BTC is worth when the electricity price is near zero or even free. Miners, who have high electricity bills might not survive. There are two options. BTC network will collapse or BTC price will readjust.
It has happened before that BTC falls 70% and then it recovers and makes all time highs. Right now, where SP500 is trading in all time high and BTC is holding strong the likelihood for huge retracements is there. Of course it's the same for an upside and then a fall and a recovery.
I would be really cautious. The economy is holding strong, but I think it's holding strong on a verge of a cliff. When there is an event which triggers the fall then the markets will bleed in red.
There are some money outflows in BTC, but probably it's now consolidating. What is worth to observe is whether the altcoins follow the BTC rise. If they don't follow we might see lower lows.
This is not a financial and every trade decision should be well calculated.
