On-Chain Signals Weaken as Risk Rout Hits Bitcoin
- By Bilal Hafeez and Dalvir Mandara
- 12 min read
Summary
Trading View (next 2-4 weeks): We like to be marginally bearish bitcoin.
Investment View (next 1-3 years): We like to be long bitcoin.
Macro
- Central bank hawkishness is growing. A 75bp hike is expected at the September FOMC meeting, while the ECB is likely to hike by at least 50bp next week.
- The recent generic risk-off move has seen correlation rise again between bitcoin and US equities.
- The probability of recession within the next year is now at 75%.
- Overall, the macro backdrop remains bearish.
On-Chain/Flow Signals
- Our metrics have slipped back towards neutral. Currently, only one measure is bullish, and one is neutral/bullish. Meanwhile, one is bearish, and the rest are neutral.
Overall View
- With the macro backdrop still bearish and our on-chain/flow signals neutral to bullish, our overall view has pared back to slightly bearish bitcoin (Chart 1).
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