Sep 13, 2023

Bitcoin (BTC)'s price remains little-changed at around $26,000 as new inflation data is released.

Video transcript

New inflation data is out. The consumer price index was up 3.7% in August on a year over year basis. That's 0.1% higher than expected. So, what does that mean? Interest rates are going to stay higher for longer? Well, let's, and what does it mean for crypto? More importantly, that's, that's why you're here. Right? Well, joining us now with some answers to that and the entire meaning of life, all of life answers. Nonetheless, it's the crypto trader. He's the author of that book, Glenn Goodman. Welcome back. Welcome back, Glenn. It's great to be here and I've brought the meaning of life with me. It's, it's just here in my pocket. So uh I'll get to that shortly, but I had, I had the meaning of uh of life in my, in my jacket pocket as well. And then uh went to dry cleaners and it's gone. So, yeah, that happens all the time to me. Uh So, all right, we have the, the CP I data uh a little bit higher than expected, it was a little bit higher than expected. Um But, but the interesting thing when I look at the markets right now is that they've been going basically initially when the data came out because naught 0.6% month on month uh for inflation was, I mean, that was actually expected, but the year on year figure ended up being slightly higher than expected. And so uh the market, the stock market fell quite, you know, quite quickly initially. But then everybody looked, you know, after the initial snap, everyone looked at the actual data where, oh, actually it's not that bad. Is it? Is it? So then prices rushed back up again. Those, that, those probably the robots doing all that, right? So it's probably no human intervention at this point. It's like that's what happens when you set your algorithms too. Precisely. Yes, and not using any kind of thought involved. So, I, I mean, this question of hire for longer, uh or at least, you know, where we are and that it will last well into 2024. Uh It, it seemed like a lot of people were hoping and praying that there would be some sort of rate cut at the end of the year. Doesn't look like that's gonna happen. I don't think, uh, we're already in September, you know, December, I last, I checked that's four months away. I, I, you know, I'm using a calendar. Um, it doesn't seem like the, the fed will, will get around to cutting. Um So does that mean that the, the risk appetite and the willingness to get into crypto will remain sort of the things stand right now. Yeah. I mean, you know, every new piece of data that comes in, particularly from, for the American economy, obviously, you know, there's always the potential for things to change as things stand. I, I think it's highly unlikely that we'll get a rate cut before the end of the year. Um, I think in the next meeting, the fed will not do anything. And November is a question mark and you know, as we can see inflation, all right, it's, it's come down a fair amount, but it's, it's not going anywhere fast at the moment. And actually, if you look at core inflation, so, you know, the the the headline inflation figure obviously was pushed up uh quite heavily by the price of gas or petrol as we call it here in the UK. So, so, you know, that went up pretty heavily and that was the main thing that was bearing down on the figure. But the core inflation figure, which obviously professionals look at um pretty closely which excludes food and it excludes energy because they're considered volatile components. Uh what you actually end up with is a figure that was a little bit worrying. And I mean, basically what, what you had was core inflation 0.3% month on month, slightly faster than expected. Uh worked out at 3.4% annualized drug prices were quite a significant factor here, actually higher drug prices. Uh Also what else? Uh, rent is still running very hot. But, um, the, the auto market continues to do quite badly and that, that helped to sort of pull prices down again. So a bit of a mixed picture, but all in all, still slightly worrying, I'd be, I'd be very surprised if we saw, um, a rate cut before the end of this year. But as I say, every new piece of data can change my outlook as well as everybody else's. Would you be surprised? No. Ok. So you're leading more, more likely a rate hike than a rate cut uh Before the end of the year, I think that the Federal Reserve are still very determined to make sure that inflation gets dead and buried. They don't want to see it come back in a big way because uh for Jerome Powell, that would be very embarrassing. And there's nothing worse for somebody, for anybody for going to dinner parties to see their friends and their friends going. You really messed up your life, didn't you? You, you, you're embarrassed to say, you know, I know from experience. That is correct. So, yeah, I mean, I think from a psychological perspective, he's, he's gonna be inclined to stay higher for longer. Glenn. Let's, let's turn to Bitcoin now and take a look at this chart that you created, that illustrated your analysis of Bitcoin's price price. We have um, April there and now September, of course, we are in September, talk to us about what we're seeing. Right. Well, what I did there, I mean, this is basically just taken from my own Twitter feed in April. I tweeted out for the first time that those particular support and resistance lines after that top line, as you can see, there have been hit by the price and then started bouncing back down. So I was like, OK, that matches up with that earlier um resistance that we saw back in the uh when was it, it was back in the previous year. So um I sort of define those resistance and support lines right there. And then as as you can see here, we are in September and the same resistance and support lines still hold, the price has just been pogo between the two of them ever since for, you know, getting on for six months now. And II I included this not to go. Oh, look at how clever I am that I, that I saw this coming in April. It wasn't that I saw it coming. Exactly. It was just that it's that I wanted to emphasize the power of technical analysis or simple technical analysis. Forget all your complicated indicators when push comes to shove what's important is to look at where the main resistance and support are. And then you can really define um where a bull market would take off for me. That would be if the price pushed up hard above that resistance line and a bear market arguably would begin if we pushed way down below that support line in between those two lines. It's short term trader territory. As you can see, they push the price up whenever it hits support, they push the price down whenever it hits resistance. It's their little game in between those two lines, longer term investors. Um really only need to take things seriously when they go outside those two lines whenever that may be. Well, does your, does your arm hurt from patting yourself on the back? I was gonna say, I thought for sure there's a little bit of a humble brag in there. No, no, no, I didn't invent technical analysis, did I, I didn't invent support lines. I'm just, I'm just following the way that, you know, the, the the greats of 100 years ago laid it down and uh I say great, I mean, you know, they were just looking at what everybody else was looking at too. They just put a name on it. Support resistance. But from time immemorial, certainly sent, people have been looking at exactly these kinds of levels. I'm just a, a humble trader in a long line of traders. All right, Glenn, I think that's the perfect note to wrap the segment up on. Thanks. Thank you for joining us and taking a look at the markets this morning. See you soon. That was the crypto trader author Glenn Goodman.

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