So, here’s the deal with Bitcoin and the markets today:
Morning (8 AM – 1 PM, UTC+6):
Markets are expected to be green. Why? China’s central bank (PBOC) is back with another promise of stimulus. But honestly, I think they’re just testing the waters—giving out money in small doses to see where it leaks. As long as the U.S. keeps raising short-term borrowing rates (RRP), China will keep injecting more cash. Also, Japan’s central bank (BoJ) is releasing some reports soon, but no matter what they say, the Yen is probably heading to 160 per dollar. Why? Simple. If prices go up, people still have to buy essentials like rice, which pushes overall spending higher.
Afternoon (2 PM – 4 PM):
Markets could turn red again. Traders are waiting for some surprise announcement from China. Bitcoin might lag a bit here.
Evening (4 PM – 6 PM):
Back to green. China always finds a way—sometimes with tiny moves—to suck liquidity from the U.S. and boost its own market.
Night (7 PM – 10 PM):
This is when things get interesting. The PCE report is coming out. If it drops, that’s good news for Bitcoin. Why? Because the Federal Reserve (Fed) cares more about PCE than CPI when deciding on interest rates. A lower PCE means the Fed might go dovish (lower interest rates), which is bullish for Bitcoin.
Late Night (10 PM – Midnight):
Expect a red zone. A big market player (Wintermute) might start shorting Bitcoin.
Midnight – 8 AM:
This is where things get wicky (volatile). If short-term borrowing costs (RRP) rise, the market might erase earlier gains. But if RRP drops, we could see a strong Bitcoin close. History suggests RRP usually goes up toward the end of the month, so we might see a fakeout before Bitcoin rebounds next week.
Now, let’s talk about the big picture.
Unemployment is up.
Retail sales are weak.
Manufacturing is slowing down.
Consumer confidence is dropping.
Yet somehow, GDP is rising? Yeah, total magic trick. Turns out, the government is the one spending, not regular people.
In the U.S., people are just seen as taxpayers. The Fed doesn’t care about wages, it cares about how much people are spending. If spending stays strong, they’ll say:
“See? Americans are rich, they can afford rising prices!” and keep tightening policies.
If the economy enters a recession, rising PCE would crash the dollar (DXY). But since we’re not in a recession yet, higher PCE means DXY goes up.
The Fed’s Dilemma:
The Fed has two jobs: create jobs and keep the economy stable.
When there’s too much liquidity, jobs grow but so does inflation.
When they tighten policy, inflation slows but jobs disappear.
But here’s the problem: The Fed has already risked millions of jobs to fight inflation, yet the economy still isn’t stable. So what should they do now?
Bitcoin’s answer? Pump liquidity back in. More money = more jobs.
The downside? Double-digit inflation.
The Fed is already easing up on tightening (cutting QT from $25B to $5B), which means more money in circulation by April 2025. That will push PCE up, leading to another round of inflation risks.
What does this mean for Bitcoin?
Expect some fake-outs—a dump-and-pump after the PCE report, then volatile wicks when RRP numbers come in.
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