Bitcoin hits $17,000, is it too early for all clarity?

Bitcoin is recouping its recent week’s losses and is looking to regain lost support during the FTX debacle. , indicating short-term strength.

Other cryptocurrencies in the top 10 by market capitalization are profitable. Dogecoin (DOGE) and Ethereum (ETH) lead the gains with double-digit gains in the previous week. As of this writing, Bitcoin is traversing sideways between $16,900 and $17,000.

Bitcoin is on the rise, but is the market over?

Yesterday, US Federal Reserve (Fed) Chairman Jerome Powell hinted at easing monetary policy. The financial institution has increased interest rate hikes to ease inflation.

Markets are feeling the impact of Fed policy. Unemployment indicators are rising, the U.S. economy is slowing, commodities remain on a bearish trajectory, but most importantly, the real estate sector has been hit hard.

Recent data shows that U.S. home sales are at their worst in decades. The data suggests lower inflation, which could pose problems for the country’s economy. If the Federal Reserve does not act, the US could plunge into recession.

Rising interest rates and a new 30-year cost shock evaporate buyers and make monthly payments more than double what they were a year ago. It may or may not be listed by the owner. Other owners have mortgages as high as 2% or 3% and never walk away from it. Both supply and demand will decrease, who will win? https://t.co/pZN96vS27a

— Evan Kirkpatrick (@evankirkpatrick) December 1, 2022

The Federal Reserve may be willing to pivot to monetary policy in this context.This could allow bitcoin and risk-on assets to bounce back and build some bullish momentum. I believe It may be too early to call it a victory.

Experts argue that there are many other factors to consider before deciding on a bottom price. The next earnings season will be critical in equities, a sector Bitcoin is eyeing.

The company should show growth early next year. So far, Timmer considers the potential for significant growth to be “unlikely” as measured by the Purchasing Managers’ Index (PMI).

This index measures the state of the manufacturing and service industries. This metric shows the current and future health of your business. The graph below shows that the metric has room to keep crashing.

Based on the PMI cycle, the market may see effective relief in 2024 when it merges with Bitcoin’s halving. This event is a major bullish catalyst for Bitcoin. Timmer says:

(…) It seems premature to expect earnings to hit bottom any time soon. If earnings growth doesn’t bottom out for another year or more, an October trough seems pretty ambitious.

But Timmer also revealed that there is precedent for stocks to rise ahead of strong earnings seasons. The market experienced these rises in he 1970s and his 1990s, but as mentioned earlier this is unlikely in the current environment.

Of course, in the current cycle, earnings growth peaked at the same time as prices, so rather than repeating the hopeful outliers of the early 1970s, the market may follow more conventional strategies. /end

— Julian Timmer (@TimmerFidelity) December 1, 2022