DXY trending upwards

٢٥ نوفمبر ٢٠٢١

• It appears that DXY will continue trending upwards for the next few weeks, thus adding weight to the BTC lengthening cycle thesis.
• The probability of any parabolic move from BTCUSD correspondingly drops.

٣ ديسمبر ٢٠٢١

ملاحظة

I suppose I'm writing this update from the fundamental perspective and from the perspective of someone working in healthcare R&D.

When COVID-19 first emerged, various markets got a huge hit. That was expected. The Fed aggressively engaged in QE to prop up the market; DXY trended downwards, and economic growth accelerated. However, there is a price to this, and the Fed will eventually taper their QE programme depending on their estimations of how much the market needs propping up.

I personally don't think the pandemic is over, but it is politically suicidal in many countries to suggest that the pandemic is not, at the very least, starting to wind down. This is why the Fed had a meeting with the CEOs of various big tech companies. This was followed by Microsoft CEO Satya Nadella selling off 50% of his Microsoft shares (remember what he did similarly back in 2018?), and the Fed announcing tapering in Nov.

I personally don't think the bullrun, at least the crypto bullrun, is over yet. Omicron may help matters (maybe), and persuade the Fed to turn dovish again (maybe).

As always, life is uncertain, the financial markets even more so. The logical approach is to avoid determinism, and focus on risk management and positioning over price prediction.

٤ ديسمبر ٢٠٢١

ملاحظة

As I have run out of money to buy the dip (set order at BTCUSD 20W SMA instead of the 0.382 level, silly me), we now have time to indulge in some dubious speculation on fundamentals.

First thing first, let's point out that the reactions of various governments towards Omicron are not commensurate with the evidence that we have. Yes, it is approximately twice as transmissible as Delta, with a potential R0 of up to 16. However, there is very limited evidence with regard to severity, with whatever evidence we have suggesting that full vaccination (ie 3 shots) greatly reduces its severity.

Why have governments across the world reacted with such alacrity then?

My suspicion is that they know that the current policies of reopening borders are not working. Borders have reopened, but insurance companies are refusing to insure air travel (insurance companies are good at risk assessment (survivor bias haha)). However, political sentiments do not allow not reopening borders.

Omicron is just a convenient way to reverse policies without losing too much face.

This is just dubious speculation, but we may see the Fed starting printing money like mad again in 1HCY22. Give them some time to work out the paperwork as many are clearing leave carried over from 2020.

١ يناير ٢٠٢٢

ملاحظة

I'm glad that there is increasing probability that this thesis is wrong. In all probability, DXY will close below the 8W SMA. Historically, such failures have led to retests of the the 21W EMA. Currently, the 21W EMA is at $94.6.