Is Bitcoin Stable? It's Hard to Say Amidst Global Uncertainty
Given the current state of affairs, it's hard to say whether bitcoin is stable or not. Everything else seems to be in a state of flux, so it's hard to make a definitive judgement.
It is hard to predict what will happen to the world economy in the near future. However, one thing is certain – bitcoin remains a stable asset in the midst of chaos. This is evident from the latest ARK Invest report, which states that bitcoin is caught in a tug of war between oversold on-chain conditions and a chaotic macro environment.
It does seem like something has to give soon in the case of bitcoin trading between support at its investor cost basis and resistance at its 200- week moving average. Three months is a long time to be stuck in that range, and many people have been thinking that for the last few months. However, so far nothing has changed and bitcoin is still trading in that same range.
The Dollar Milkshake Theory: How to Get More Out of Your Money
It is hard to say what the future holds for Bitcoin, but it is clear that the current situation is not sustainable. Every company is in the red, especially techy ones, and all of the world's currencies except the dollar fell off a cliff. Global central banks have been printing bills like there's no tomorrow, and that extra liquidity is there for the stronger currency to take. The dollar milkshake theory may be playing out in front of our own eyes. Only time will tell what the future holds for Bitcoin and the global economy.
If the "dollar milkshake theory" is true and the Fed is sucking liquidity out of global markets, what happens next? ARK says that we could see a return to The Bitcoin Monthly.
“As macro uncertainty and USD strength have increased, foreign currency pairs have been impacted negatively while bitcoin has been relatively stable. Bitcoin’s 30-day realized volatility is nearly equivalent to that of the GBP and EUR for the first time since October 2016”
Bitcoin outperforms other assets in October
The current macro-environment has been so bad lately, that there's the perception that bitcoin has been doing better than stocks. The facts are that, for the first time since 2020, "bitcoin's 30-day volatility is on par with the Nasdaq's and the S&P 500's." And, we know past performance doesn't guarantee future results, but "the last time bitcoin's volatility declined and equaled the rising volatility of equitiy indices was in late 2018 and early 2019, preceding bullish moves in the BTC price." Looking at these facts, it's possible that we may see a bullish move in the BTC price in the near future. However, we can't be certain and only time will tell.
It's no secret that the tech sector has been struggling lately. Stocks like Meta and Netflix have seen massive price drops, and even Amazon has taken a hit. But compared to other industries, the tech sector is still faring relatively well. After all, bitcoin is still down by nearly 75%. So while the tech sector may not be booming right now, it's still in better shape than many other industries.
The Bitcoin Monthly's analysis of the current situation suggests that the macroeconomic environment is quite severe, but Bitcoin appears to be holding its own against it. This resilience is encouraging and suggests that Bitcoin may be a good investment even in tough economic times.
The only constant is change, however. Bitcoin's stability suggests a violent breakout, either up or down. The entire world can't remain the red forever, something or someone has got to rise above the crowd and show everyone how it's done. We've been waiting for a resolution for what feels like ages, and we'll probably have to wait some more. There will be a movement, though. When we least expect it, probably.
