Is Bitcoin in a Bear Market

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BraVoCycles Newsletter
July 07, 2024

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News Buzz

  • The government said the U.S. economy added a solid 206,000 jobs in June in its nonfarm payrolls report early on Friday. That was more than analysts expected but below May's downwardly revised tally of 218,000. 

  • The unemployment rate slightly increased to 4.1%, a significant rise from the 3.6% recorded a year ago. This shift will likely fuel the anticipation that the Federal Reserve might soon consider a rate cut. The market is currently pricing in a more than 75% chance of the Fed reducing its benchmark lending rate by a quarter point at its September meeting, as per the CME FedWatch Tool. 

  • Biden dismisses questions about his age and health in ABC interview, says he is staying in 2024 race.

  • Equities in China and India are being touted as potential Asian outperformers in the year's second half as investors flock to emerging-market themes. . .

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Market Sentiment Analysis

  • Magnificent 7s are pushing SPX and NDX to new highs while most of the market is not following.

  • Most market sectors topped in March or May.

  • The sentiment in multiple sentiment indicators is extremely bullish, typical of previous significant market tops. But note that the sentiment indicators are not short-term (ST) timing signals. They are more of an MT or LT warning signal.

  • The Investors Intelligence Advisors’ Survey has risen to 63.1, on par with 63.7 in April 2021, characterized by speculation in several sectors.

  • Market Vane’s Bullish Consensus of 72 is the 2nd highest in 10 years; it was 73 in Jan’2018.

  • Investment managers are leveraged long, i.e., over 100% invested; see the NAAIM chart below.

  • The second chart below shows a 5-year picture of the NAAIM index. The index's level is like that at previous significant stock market peaks.

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Bitcoin Update

  • Bitcoin had a mini crash last week.

  • It is now below it 50D, 100D and 200D MAs, a sign of a bearish downtrend.

  • Bitcoin and other cryptos are bouncing from the last week's low.

  • Could the drop below the 200D MA be a fake out? Or could the bounce be a “dead cat” bounce? I suspect it is the latter.

  • See my X posts below for more details.

  • The newsletter and BraVoCycles on X (former Twitter) go together like a “hand in glove.”

  • For your full benefit, please follow me on X. Many premium subscribers do.

  • Below are some of my Bitcoin real-time posts on Twitter in the last couple of days.

Market Summary

Market Data

As of close on 6 July 2024.

What Has Been

  • The 4th of July week was nicely green for SPX and NDX, as expected and as it is traditionally. Other sectors/indexes did not do as well.

  • On Friday, The SPX rose 30.17 points (0.54%) to 5,567.19; the $DJI rose 67.87 points (0.17%) to 39,375.87; the Nasdaq Composite® ($COMP) climbed 164.46 points (0.9%) to 18,352.76. Russell 200 was down more than 0.5%.

  • However, the breadth was negative on both the NYSE and NASDAQ.

  • Longer-term treasuries recovered this week from the weakness on Friday the previous week and Monday. The 10Y Treasury note yield dropped 7 basis points from the previous Friday to 4.28%.2Y Treasury note yield traded on Friday afternoon at 4.61%, the lowest level since March 27.

  • Gold and silver were green, while crude oil and natural gas were red.

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What is Next

  • NDX and SPX keep pushing higher, defying gravity, though it was not unexpected due to the positive seasonality in the first week of July.

  • Will they . . .

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