In the USA, a record increase in consumer prices has been recorded since 1990! None of the professional economists foresaw that things were so bad and that in annual terms its growth accelerated to 6.2%. The mantra about the temporary nature of the phenomenon also looks like a mockery – the price increase affected all categories of goods and services, minus volatile food and energy. So what? Bitcoin is a hedge against inflation, and a real alternative to fiat and the assets denominated in it, and on Wednesday he confirmed this. The decline in the following hours after the update of historical highs does not refute this point of view – after 40% in October in the first decade of November, the first cryptocurrency at a peak of $ 69,000 showed an increase of 10%. After all, upward movement does not happen exponentially. But all this is perceived as the bears’ last chance to stabilize the situation, but the chances that they will succeed are small.
There are signs of an impending sharp devaluation of the dollar.
Now, in the old–fashioned way, it reacts by strengthening against the background of such a sharp rise in inflation – everyone believes that the Fed will pull the stopcock sharply and start raising the key rate, abruptly curtailing the quantitative easing program. But you need to consider politics. Biden wants to fight inflation, but does not want the collapse of the markets due to falling ratings, while in a year the midterm elections to the US Congress will take place. At least he doesn’t want to collapse now. At least until the end of the year, before the Catholic Christmas. This is also what Powell wants, who is not averse to being reassigned to his post. Therefore, there will be no threats in the speeches. Therefore, inflation expectations will have no reason to decrease. The auction of 30-year US government bonds on Wednesday showed a decrease in the number of “fools” who are ready to buy instruments with a yield that only covers inflation by a third. Everyone will be looking for salvation. And judging by the dynamics of gold, which has marked a serious jump today, it will still be more likely to be found in its digital counterpart.
Indicators of the total volume of open interest in bitcoin and Ethereum futures have reached new historical highs. On the CME, the indicator fell, the hype around the launched ETFs in the USA decreased. But this data comes late, and may no longer be relevant. Yes, bitcoin is a rocket right now, and it’s scary to stay in long positions after 50% growth. But the initiative remains on the side of the bulls. If they push out and re–fix the BTC rate above $67,000 (maximum in October), the upward movement will continue along the rolled. FOMO is an effect with periodic liquidations of longs. It will be volatile. But November has always been like that in the cryptocurrency market.