Current Market Analysis and what we should be looking at for the remainder of this Cycle

It’s been a while since my last detailed market update, so this one will dive a bit deeper than usual.

BTC Trend & Market Volatility:

Bitcoin is still showing signs of a bullish trend overall, maintaining a structure of higher highs and higher lows despite recent market dips. However, we may see increased volatility in the coming weeks due to upcoming U.S. elections. Political events often contribute to short-term fluctuations in markets, including crypto.

Liquidity Cycle and BTC’s Reaction:

The current liquidity cycle appears to be in an upward phase, which generally supports asset prices. Rising liquidity has historically benefited BTC and other risk assets, but it typically takes around 8-12 weeks for this increased liquidity to impact BTC prices directly. Therefore, if liquidity continues to rise, we could see positive effects on BTC.

Debt Cycle Implications:

Debt cycles often span 5-6 years, with significant debt maturities expected around 2025-2026. Major economies may need to address these maturing debts, which could lead to increased liquidity through measures like quantitative easing (QE) if countries aim to manage debt-to-GDP ratios. This increase in liquidity can affect broader markets, including BTC and other high-risk assets, as more capital becomes available.

Correlation Between Liquidity and BTC Growth:

Historically, Bitcoin’s price has shown a correlation with global liquidity levels. For instance, if global liquidity rises by 10%, BTC could potentially experience amplified gains. However, as with all projections, this is subject to market conditions, regulatory changes, and investor sentiment. On average global liquidity tends to double every 10 years, this is why you see historical investments data in an up only trend since inception if you just zoom out far enough.

Player vs player or player vs environment:

So this basically means, when liquidity is stagnant you are fighting against other investors for profits, if I invest in an emerging investment before the other person gets there, I will take the profits and dump on the other investors, this is player vs player. When liquidity is rising exponentially you are now in a player vs environment as it matters slightly less about when you get in as long as liquidity is still rising you will still make some gains...as long as you hit the sell button around the peak.

Rotation of investments:

As we go into the next phase, you will see the higher beta investments do 10x's to 100's of x's in gains, this is the flow of capital through the market, let's take crypto for instance. Someone buys BTC at $15,000 (price last year), they sell at $90,000 (potential gain of $75,000), they rotate this into memes like DOGE (not investment advice). You might think "well that's not that much of an increase", times that by hundreds of people and pick an asset that only has a market cap of $60 mill...crazy times ahead. But remember, this is the same capital moving through the market so as one jumps, one might dump so you need to be ahead of, or following the trend.

Market Leaders: Tech Stocks, Gold, and Crypto:

So far this year, top-performing assets have included tech stocks, gold, and cryptocurrencies. Investment choices depend heavily on individual risk tolerance. Those who favor traditional investments might focus on stocks, bonds and precious metals, while younger investors or those with a higher risk appetite are more inclined toward technology stocks and crypto. Property investment, while still viable, may no longer hold the appeal it once did compared to the liquidity and growth potential of digital assets like BTC.

Positioning in the Current Market Cycle:

We appear to be over halfway through this market cycle. Now is the time to position portfolios strategically to capture any remaining upside. As we approach potential peaks, it’s crucial to shift focus toward a strategy that can accommodate market corrections. This might include adjusting asset allocation to benefit from potential quantitative tightening (QT) phases that could follow an economic peak, so thinking about this now will set you up to continue making money in a more testing market environment.

Now the last thing I would say is about the new budget, new CGT rates WILL affect investors over the next 12 months so get to terms with the rates for your catagory and plan for this as they will come down hard on you if you don't pay your tax on crypto investments. The new Autumn Budget announced that Capital Gains Tax rates have been raised to 18% and 24% respectively from October 30, 2024.

Hopefully this helps a few of you reading this as I know this isn't a topic many people pay attention to, but if you want to make your life easier in the future then re-read this article, Google some of the terms and make the most of the times we are in.