Another week has passed, and guess what, bitcoin didn't die!

Many people out there started panicking when bitcoin broke below $10k.

There were comments of bitcoin filling the CME gap (including some from me) as well as comments that bitcoin would eventually fall all the way back to the $7k range.

There were even some crazy people out there saying this was the last hurrah for bitcoin and it was going sub $3k in the coming months.

Hopefully you didn't believe any one of those, well except for my possible CME gap fill. :)

However, if we look at the chart now, it looks very much like the rumors of bitcoin's demise were greatly exaggerated:

(Source: https://twitter.com/Hushhhbruh/status/1307298892015448065/photo/1)

We had a very clean break of the downtrend created from the $20k peak back in late 2017, and then a subsequent retest of that trend line.

The price held up on that retest and has bounced significantly, likely indicating that the retest has held and the move from here is higher.

Stock market looking like it might be ready to roll over...

Part of the reason some were fearful about where bitcoin might go had to do with the stock market.

Bitcoin and stocks have been incredible correlated over the last 6 months and the stock market is showing signs that it might be trying to roll over...

Check it out:

(Source: https://stockcharts.com/h-sc/ui)

However, I think the current correction in the stock market looks very much like what we saw back in June of this year.

Back in June there was about a 3 week stretch where we pulled back about 25 points on the SPY which was about an 8% correction.

Currently we have pulled back about 30 points on SPY which is also around 8% in roughly a 3 week stretch as well.

Which means I think the current correction is likely close to being over, which will be good news for bitcoin.

We haven't even talked about the elephant in the room...

Much of where both of these assets go in the near term may depend on what happens in Congress.

As it stands right now, many of the economic benefits seen from the roughly $6 trillion injected into the economy are starting to wear off.

Without a fresh round of stimulus, the economy and risky assets are likely in trouble.

However, I think both sides know this and will eventually come to an agreement on some sort of stimulus, probably sooner rather than later.

After all, the president knows his re-election hopes may depend on whether he can get another check out to the American people again or not...

I suspect it won't take stocks dipping much further before Congress gets off their butt and decides to get something done and that will be exactly what bitcoin needs to ignite the next phase of this bull market rally.

Stay informed my friends.

-Doc

Posted Using LeoFinance