Stocks and government bonds have fallen somewhat after November’s huge gains, while the price of Bitcoin shot above $41,000 and the price of gold (measured in dollars) briefly hit an all-time high. U.S. Treasury yields rose four basis points (0.04 percent) to 4.25 percent, while European stocks and U.S. futures posted slight losses. Gold prices rose above $2,130 an ounce before giving back gains.
From an economic perspective, the focus this week is on the US labor market, from which we receive new data that tells us more about the future policies of the US central bank.
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Is the Bitcoin rally over for now?
Due to the optimism surrounding the launch of the American Spot Bitcoin ETFs, Bitcoin appears to be unstoppable. But don’t forget that the rally was also the result of macroeconomic tailwinds, namely expectations that the Federal Reserve could introduce the first interest rate cuts in March.
The market currently estimates the probability of the first interest rate cut in March at 60 percent. The chance for January 2024 is 13.1 percent…
Now interest rates on US government bonds have risen again Light The market appears to have retreated somewhat.
In this respect, a crucial phase is beginning for the Bitcoin price, with the focus this week being on the American labor market from a macroeconomic perspective. The best scenario for the current rally/bull market would be if the data was positive.
This means that the American job market remains strong, we will not slip into a recession and, as the icing on the cake, inflation should fall back to 2.0 percent.
Is this a realistic scenario?
That’s the big question: Can we expect the U.S. economy to survive despite the most aggressive interest rate campaign in the history of the Federal Reserve?
Personally, I believe that the chance of a recession still exists. For this reason, I am cautious about declaring a new bull market, but Bitcoin’s strength is currently impressive.
In particular, the fact that the current rally is supported by a strong Relative Strength Index (RSI) on the weekly chart (70+) is a good sign. As you can see, breaking an RSI of 70 on the weekly chart has resulted in massive Bitcoin price explosions in the past.
In this respect, it could be that we are at the beginning of a new bull market, but unfortunately there is still a certain degree of uncertainty in the financial markets.
A recession can throw a spanner in the works and the euphoric mood also makes me a bit afraid of the near future…
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