Bitcoin: Post-FOMC

Hey everyone, and thanks for jumping back into the cryptoverse. Today, we're going to talk about Bitcoin post-FOMC. If you guys like the content, make sure you subscribe to the channel, give the video a thumbs up, and check out Into the Cryptoverse Premium at into the cryptoverse.com.

The first order of business is to fill out your bracket if you want to participate in the annual ITC March Madness bracket challenge. Winner gets a one-year subscription to ITC Premium. Uh, it's fun. And if you want to go sign up, links in the description below or in the pinned comment. You have to sign up before tip-off of the first game. Uh, which is only going to be like less than 12 hours, probably by the time I post this video. Around 12 hours from the time I post this video. So, make sure you get your bracket in if you want to join the challenge.

So, let's go ahead and jump in. We had FOMC today, and the Fed is in a difficult spot. Powell even said this, basically. You know, the problem that the Fed has is that we've seen energy spike, energy prices really start to spike. Now, remember, we know that business cycles, the beginning of the end of the business cycle historically is when energy spikes in a late business cycle environment. So, I want to be clear. Oil spiking by itself isn't necessarily bearish. In an early business cycle environment, oil going up could just mean that demand for oil is going up, which is a bullish thing. But in a late business cycle environment, oil spiking is a very, very, very bad thing. And it's not just that. There's other things, too.

We'll talk a little bit more about oil. If you look at the recent uh producer price index release year-over-year, it came in kind of high. And what you'll notice is that the, the consensus was like 2.93%, 2.9%. It came in at 3.4%. Now, the Fed's hands are kind of tied. Maybe they want to cut, right? Powell even kind of let a slip today. I think he accidentally said like the weak labor market or something like that, and he kind of corrected himself. But there's no denying that there is some weakness in the labor market, right? There's no denying it. You could look at at all sorts of metrics and see that it's there. It doesn't mean that you have layoffs immediately because in order to have layoffs, you have to have lower asset prices first. But you can see if you look at things like hires, it's been trending down. If you look at job openings, right, it's generally been trending down. Even though this month when it went up, it still has generally been trending down. So, you can see there's weakness in the labor market. We even had, I believe, what was it? Um, employment level came in at 92,000. Year-over-year, it's almost going negative, right? It's, it's, it's very close to being negative. It's only 156,000 over the last year. And you can see that recessions occur when this metric goes negative, and it's very close to going negative.

So why do I say we're in a late business cycle environment? Is it because I just want to throw it out there and see if it sticks? The reason I say it is for several reasons, right? One is we have the ITC business cycle chart. You can recreate this on TradingView if you want, or you can view it on under the um, Into the Cryptoverse platform. S&P 500 divided by the unemployment rate squared times US interest rates times US inflation rate year-over-year normalized by the money supply. You do that, you get this. It clearly shows you each and every business cycle. And furthermore, you can see that we have been trending down. Historically, the way we get back down to the lows is through a contraction. And note that if instead of overlaying the S&P 500, we overlay oil. What do you notice? It's oil starting to spike in these late business cycle environments that then leads to the end of the business cycle. And you can see exactly why, right? The labor market is already weak. And by most standards, the Fed should be cutting, but they can't cut because energy is going up. And energy is going up not because of demand, but because of a supply issue caused by the third major thing we talk about that influences business cycles, and that's geopolitical. We don't really talk about geopolitical risk that much because it's very hard to predict. But what we could predict was that the end of the business cycle would likely start with a spike in oil, and it just takes a while to play out.

So the Fed's hands are tied, you know, and and there's a lot of pressure on them to cut. But the problem is, yes, there's a lot of pressure on them to cut, but actions that are being taken that have led to the increase in the price of oil and energy prices are directly making it so it's pretty hard for the Fed to want to cut. In fact, despite the fact that Jerome Powell will likely be replaced soon, uh, potentially as early as May, um, despite that, guess what? Look at the expectations for the next rate cut. The market is now, look at this. The market, let me, is this right? Let me reload this. Right now, the market's not pricing in a rate cut for a while, right? I mean, you'd have to look at the combined probabilities here, but not until 2027 at this point. And who can blame them, you know? Who knows? And and and they asked Powell this too, like, you know, how long do you think this conflict's going to last? Nobody knows. And when he was, when they were talking about the SCP, the Summary of Economic Projections, um, one of the things that that they said, here we go, the Summary of Economic Projections. One of the things that Powell said, and let me see if I can quote this. "If there was ever going to be a time to skip producing an SCP, this would be it." Why? Because they're making a decision based on things they have no idea how long it's going to take to play out. If the, if, if the war in Iran were to end immediately, then perhaps oil prices could come down and it wouldn't be as detrimental. But if this just keeps going and keeps going and keeps going, it's just a matter of time, right? It's just a matter of time before the stock market continue, you know, sort of realizes this big risk in a late business cycle environment because it influences consumption. If people are paying more at the gas to get to get more to to pay for gas, that means they're not going out and buying other things as much. They're not going out and buying, unfortunately, your altcoin. How could they buy your altcoin if they're spending all their money at the gas station?

And look, there's a lot out there saying that anyone who talks about any of this stuff is a doomer, okay? But business cycles are a normal thing. Like they are, they are perfectly normal and they've been going on for centuries and they will continue to go on. So we're just looking at the data. That's what I mean. We're just looking at the data. I mean, maybe my interpretation of how it affects Bitcoin's price is wrong, but hasn't been wrong so far. Bitcoin still generally trending down. I mean, look, the problem with Bitcoin is that this is a pattern we see in all bare markets, right? Where we just generally trend up for a little while and then it eventually breaks down. And we saw the same thing in the last bare market, too, right? All these little bare flags that that kind of pop up along the way. And what have I told you guys? I've told you guys a couple of things related to these these these flags. What happens in bare markets? We spend more time going up than we go than we spend going down, right? That doesn't mean I'm not saying like red days and green days. I'm just saying in general, Bitcoin spends more time trending up than trending down. Just like in the bull market, it was reversed, right? In the bull market, what do you notice? We trended down. You see that? You see how in the bull market we generally would trend down? In the bear, we generally trend up. It's just that when the break occurs to the next low, it occurs so quickly that people don't have time to respond. Right before they know it, we're at a lower price. Think back to November when Bitcoin went to 80K and then it trended back up to 98K. I released the first macro memo on the website benjaminc.com on that day, January 15th, and I said this is a counter-trend rally and it's likely about to top out and we should go to new lows. I think the same thing's happening, right? I mean, I think this is just a counter-trend rally for a little bit, and you don't need a narrative. There's all sorts of narratives. There's Jane Street, there's the ISM, there's the money supply, there's whatever, whatever what going on with MicroStrategy, whatever narrative you need, ETFs, doesn't really matter. Point is is Bitcoin normally trends up in March of midterm years. And guess what? After trending up into March, it then tends to break down as we get further into the year. It happened in 2022. It happened in 2018, and it happened in 2014. Every single low that was set in February of the midterm years was not the market cycle bottom.

What I have a hard time wrapping my head around is why the permabulls give the people that are just saying, "Hey, look, it's a four-year cycle." Why do they give them such a hard time? I mean, why is it so crazy to just say like, Bitcoin tops when it always tops, and it just goes into a bare market when it always goes into a bare market? I don't understand why it's seen like such a bad thing to call out, especially when you look, you know, at the year-to-date ROI of Bitcoin in midterm years, and see 2026, that it is still generally tracking the average of prior midterm years with to within one standard deviation, right? Like it's still generally tracking it. So that is what I think. I don't know how high Bitcoin's going to go before it drops. Maybe the high is already in. I mean, in 2022, we basically just swept the prior high right there. You can see that. Maybe that's what happens, you know. And and here's the thing. You can draw any sorts of trend lines that you want to. You could argue that maybe it it goes all the way back up to 80K, hits the bull market support band. Or what if, what if we already had a fake out and instead we're connecting these dots and it's already put in its local high. Another pattern that might get pointed out in a few weeks by the uh by the guys that never turn bearish is 2021. If if Bitcoin follows this pattern, look what it did. It it rallied up. It even had a long wick up, and then it had a green candle body close higher, and then it wicked up into the following week. Came short of the bull market, and then came down and swept the low. Imagine if Bitcoin does that. If it comes down and sweeps the low in April and then goes right back up to the bull market in like May, gets rejected, and then goes down into the summer. Could totally happen, right? I mean, it could absolutely happen.

Um, so, you know, with the SCP, if you look at at what they're projecting, they're basically not really projecting many more rate cuts this year. One, one rate cut, I think, on median expectation is one rate cut for the rest of the year. Guess what? Markets don't even think that's true. The markets right now think we aren't getting rate cuts this year. And there's some traders saying, "Hey, you know what? Why don't we think about a rate hike instead?" And I know Powell has said many times they're not going to hike or that he doesn't think their next move is a rate hike. And hopefully it's not. But the problem is that the, if oil stays high and and things don't calm down immediately, if the price of oil stays high, it will have adverse effects on inflation. It absolutely will. It's only a matter of time before it starts showing up. And that is how the Federal Reserve gets checkmated. They have two weaknesses. They have the unemployment rate going higher. They have inflation going higher. You can't solve both. Checkmate into the business cycle. And then we start a new one. It's a long process. I'm not saying it has to all play out this month, next month. It might even take place over the next couple of years. But that is the business cycle. And you can see it, right? That you can clearly see the business cycle when you look at the business cycle chart. You could look at another chart built on completely different things, completely different things. Maybe a couple of them are similar, but there's a lot of other things involved in it, and that's liquidity. And you can see here that we are in a late business cycle environment.

So, those are my views and, you know, post-FOMC, Bitcoin had has had a little bit of a sell-off here. Um, I don't know what to say. I mean, I, I, I think this will end up being a lower high, and we're going to be looking at this later this year. I mean, like, why did we, you know, why didn't anyone expect? Guys, those are my views. Remember to get your brackets in if you want to spice up March a little bit here. Let's look at the bracket challenge. I'm going to be watching March Madness. That's usually how how I get through these uh the midterm years is is to to watch college basketball. And and uh no, there'll be better times in the future. But for now, why fade the four-year cycle? Are you fading it because someone told you? I mean, the reality is most of the guys telling you to fade it and calling for new highs were also the same ones that told you there was never a bare market in the first place. So, you know, if you don't call for a bare market, you're obviously going to want it to be over sooner. But I would say this, the four-year cycle will eventually end, and something else will happen. The problem is is we could, the four-year cycle as it stands could still play out for a long time before it actually breaks. And I don't know when it's going to break. I think it's better to defer to the four-year cycle until proven otherwise rather than trying to constantly predict when it's going to end and getting wrecked every single time. Just defer to it in my opinion. That's at least what I do.

If you guys like the content, make sure you subscribe to the channel, give the video a thumbs up, and again, check out Into the Cryptoverse Premium at into the cryptoverse.com. I'll see you guys next time. Bye.