Amid Macro Uncertainty, Bitcoin Stabilizes. Incredible October Stats Inside

The world has turned upside down. Can bitcoin be stable right now? Is everything suddenly extremely volatile? As the planet descends into chaos, bitcoin remains in a weird limbo that’s uncharacteristic of the asset and doesn’t seem to end. That’s both what it feels like and what the stats say. This is how it feels. the latest ARK Invest’s The Bitcoin Monthly report, they put it like this, “bitcoin finds itself in a tug of war between oversold on-chain conditions and a chaotic macro environment.”

Let’s look at the numbers. The stats support the thesis, “for the third month in a row, bitcoin continues to trade between support at its investor cost basis ($18,814) and resistance at its 200- week moving average ($23,460).” Three months in that range seems like too much. Something’s got to give. However, that’s what everyone’s been thinking for the last few months and we’re still here. 

The Dollar Milkshake Theory

Bitcoin is less volatile than normal, yes, but this is not the only reason. Every company is in the red, especially techy ones, and all of the world’s currencies except the dollar fell off a cliff. Are we seeing “the dollar milkshake theory” playing out in front of our own eyes? That sure does feel that way. Global central banks have been printing bills like there’s no tomorrow, and that extra liquidity is there for the stronger currency to take.

According to Darren Winter is a professional investor, the “dollar milkshake theory views central bank liquidity as the milkshake and when Fed’s policy transitions from easing to tightening they are exchanging a metaphoric syringe for a big straw sucking liquidity from global markets.” If that’s what we’re seeing, what happens next? ARK, 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”

BTCUSD price chart for 11/07/2022 - TradingView

 Source: BTC/USD on| Source: BTC/USD on

Bitcoin vs. other assets in October

The 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.”

However, let’s not kid ourselves, bitcoin has not been doing good. There is little to no success out there. Particularly in the tech industry. “The price drawdowns from alltime high in Meta (-75.87%) and Netflix (-76.38) have exceeded that of bitcoin’s (-74.46%). To a lesser extent, Amazon also suggests a correction proportional to that of BTC’s “usual” volatility (-48.05%).”

According to The Bitcoin Monthly, the situation “suggests the severity of the macroeconomic environment and bitcoin’s resilience against it.”

Change is the only constant, 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. However, there will be some movement. It will probably happen when we least expect.

Featured Image: Bitcoin 3D symbol from The Bitcoin Monthly | Charts by TradingView

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