US M0 bottomed out and rose in June, BTC entered the main bull market in July
Conclusion first
1. After four months of decline, US M0 bottomed out and rebounded this month, and is expected to rise for 12 to 18 consecutive months.
2. BTC trend is highly correlated with US M0 and will continue to rise for 12 to 18 months
3. The interest rate cut is a foregone conclusion, and there will be no possibility of another interest rate hike before the cut.
In the past few months, there have been many discussions in the industry about the changes in US macro data and interest rates, and the trend has also been repeated many times. Here we analyze several important issues:
First, is US macro data important?
Answer: Important, but not credible.
The US macroeconomic data is indeed the basis for the Fed to formulate policies and is very important. However, these data are actually completely controlled by the US financial monopoly group, and whatever data is needed will be produced. A typical case is the initial cause of this round of BTC decline - the unexpected surge in US non-farm payrolls. The contradiction between the rising unemployment rate and the rising employment numbers coexists, and in the end even Fed Chairman Powell admitted in disguise that there is a problem with the data. Therefore, all macroeconomic data are tools and means to manage market expectations, and even means for large institutions to harvest the market.
Second, can the words of Federal Reserve Chairman Powell be trusted?
A: It can be completely ignored. The Fed often makes contradictory statements, which are nothing more than managing expectations and stabilizing the market. Data is unreliable, and statements that can change at any time are even less credible.
Third, when will the interest rate be cut?
Answer: It is expected that the United States will complete its harvest of other markets before August, and the strong dollar policy will basically have accomplished its mission and can be withdrawn.
Therefore, we judge that the probability of interest rate cuts in September and November is 50% each, but the expectation of interest rate cuts will be formed in July and August.
Fourth, why do we focus on M0?
A: It is credible and highly correlated. M0 is the result of the operation of various policies. Its figures are relatively accurate and difficult to falsify, so it is credible. At the same time, M0 is highly correlated with the price trend of BTC. However, the M0 value is released late, so we must predict the trend of M0 through other parameters. In fact, it is to replace the prediction of BTC trend with the prediction of M0.
At present, the actual economic data in the United States is not good, and the consumer confidence index has dropped sharply, indicating that inflation will fall in the near future. Although the Federal Reserve will not cut interest rates for the time being, it will reduce the balance sheet in June, and the secret release of funds has begun, because we predict that June will be the lowest point of M0 this year. Considering the subsequent actions such as interest rate hikes, the rising cycle of M0 is 12 to 18 months.
Fifth, how to judge the trend of BTC?
A: Bullish. The bottoming out of M0 blocks the space for BTC to fall sharply. The next two months will still be a period for large funds to build positions, and then the main upward trend of this bull market may begin. It is expected that the upward cycle of BTC will be synchronized with M0, that is, in the next 12 to 18 months, with a target of 200,000 to 300,000 US dollars.
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