Bitcoin has been ranging for a month now between $10,000 and $11,000 with the price seeing higher lows and lower highs.
That suggests some consolidation is ongoing on the daily with bitcoin unsure about where to go now.
On longer timeframes, there has arguably been a years long consolidation but with higher highs and higher lows.
One can see the above chart as a sideways in some way since early 2018, with it somewhat still continuing to today.
As shown in the featured image however, there’s a smaller triangle on the hourly or daily, with bitcoin either headed for an overtaking of $12,000, or for yet another re-test of $9,500.
As far as fundamentals are concerned arguably there’s a stronger case for seeing whether that $12,000 can fall due to western governments now being in debt, which suggests significant monetary devaluation is to be expected.
UK’s government for example is now deep in debt at nearly 100% of GDP. Long gone are the days when they were debating whether they could pass the self-imposed 40% of GDP threshold with the justification back then being the banking crisis was exceptional.
The deep cuts that then followed only slowed down debt growth, with any discipline thrown out completely this year.
With the economy struggling, tax rises or public spending cuts are probably not under consideration for now. Meaning only monetary devaluation is an option, and of that there is plenty.
ECB has ramped up its balance sheet expansion. Total assets rose by a whopping €170.3bn to a fresh all time high of €6,705.1bn as banks took €157bn in long-term loans, on QE (€20.5bn). End-of-quarter adjustments have slowed the rise somewhat. ECB’s Balance sheet now equals 66% of Eurozone’s GDP.
These are borrowing powers not spending powers, as Powell doesn’t tire from reminding us, so you can enjoy the monetary devaluation for now but a monetary contraction will probably follow.
Unless they just keep endlessly printing, with some $4 trillion added to US gov debt this year.
It’s not quite debt however. It’s banks printing this out of nothing, then giving it to the government, which really means to the people but through corrupt halls, and then they ask the people to pay back what they printed from nothing but now to pay it back to the banks with interest, or otherwise the banks won’t print from nothing anymore to give it to the people for them to pay it back through taxes, fines and licenses, but with interest.
It doesn’t make much sense, which is why they now suggesting the government prints it out of nothing and then decides when and how much of it to give to the people and when to take it off them through taxes, fines, and licenses.
Or we can all print it. Just like Nakamoto “printed” bitcoin, we can print any money we want and then the market can decide which one it prefers with that competitive choice exerting both discipline and fairness.
Europe in particular is moving to facilitate such free market money with a crypto legal framework, while UK seems to be in two minds with the deVer group criticizing the British FCA for banning bitcoin ETNs.