Is This the Local Bottom? Or Is There More Pain Ahead?
Bitcoin is holding up relatively well, but the same can’t be said for altcoins. People still believe this is a full bull market because Bitcoin is performing, but here’s an interesting thought: What if everyone’s looking at this the wrong way? What if Bitcoin can no longer really be considered “crypto” but instead “digital gold,” as many are now calling it, especially since it’s been included in the U.S. strategic reserve—and potentially other countries’ reserves too—as a new hedge against inflation to replace gold? Deutsche Bank recently said Bitcoin is “like gold,” and the U.S. strategic Bitcoin reserve “could set international standards.” If so, we’d need to look at how gold has performed in bad economic situations and what the cause was. Here’s some brief data we pulled on that: 1929 Great Depression (Stocks -89%, 1929–1932): Gold didn’t trade freely (fixed at $20.67/oz until 1933), but after FDR’s revaluation to $35/oz in 1934, it effectively “gained” 69% in nominal terms. 1973–1974 Bear Market (Stocks -48%): Gold +72% (inflation-driven). 1987 Black Monday (Stocks -23% in one day, -34% peak-to-trough): Gold +5% over the year. 2000–2002 Dot-Com Crash (Stocks -49%): Gold +12%. 2008 Financial Crisis (Stocks -57%, 2007–2009): Gold +25%. 2020 COVID Crash (Stocks -34% in March): Gold +13% (Feb–Aug 2020 peak). So, if Bitcoin is “gold”, and the altcoins are “stocks”, one could say the data tells a similar story as right now, with many altcoins and stocks down bad, but Bitcoin holding relatively well. Then again, that’s just a thought. As it stands, Bitcoin has formed a bullish divergence on its RSI on the daily chart, which technical analysts will tell you is a positive sign. Things started looking up yesterday after U.S. inflation numbers beat expectations—another extremely bullish signal. But it wasn’t long before Trump started talking about tariffs again, sending the market back down. It’s almost like he’s trying to squash every little piece of hopium the markets get to push his long-term plan. President Trump declared, “Financially, we will be stronger than ever before; I think the markets are going to soar.”