If you want to find out just how long this bear market is going to last and the market forces driving it, click here to read the report I provided to First Stage Investor members.
What I want to focus on now is the rare market opportunity we have today.
I’ve written and said that “timing the market is a fool’s errand™” so often that I might as well trademark it. But for the first time that I can remember, the events driving the crypto markets are predictable (gasp).
Every time inflation data is released or interest rate hikes are announced, it causes huge spikes (usually downward) in the crypto markets. The short version of the story is that investors are worried about inflation AND what interest rate hikes designed to get inflation under control will do to the economy. That’s depressing the stock markets. The depressed stock markets are tanking the crypto markets. And this vicious cycle will keep repeating until inflation is under control and investors believe the economy is in a good spot.
Fortunately for us, we know with 100% certainty when inflation data and interest rate hikes are announced. Consumer Price Index (CPI) data is released every month around the same time. Here’s the schedule. Interest rate hikes are announced at Fed meetings. Here’s the schedule for those.
For the foreseeable future, these are the only two macroeconomic data points that matter. There will be plenty of crypto specific events — like this week’s Ethereum Merge, technology developments, partnerships etc. — that affect individual coins. But from a big picture standpoint, the CPI reports and interest rate hikes are the only things that matter. And we know when they happen!
That means we can plan out when we buy into or exit positions. If you’re looking to acquire crypto (as you should when prices are this cheap), the first few hours after a bad inflation report or an interest rate hike could be a good spot to make that move. Or if you want to pocket some profits, selling before bad news hits is a good plan. Either way, you can set yourself up for success because these are planned events. And you know about them in advance.
Part of the information advantage that professional traders have is they know when big events are going to occur before everyone else, and they act accordingly. In terms of inflation data and interest rate hikes, you have the same information they do. Make sure you take advantage of it.