Journalist
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Market makers largely expect a bull rally once gold and silver peak.
From a technical point of view, this vision is not so far-fetched. For example, silver’s move to a record $79/oz has pushed the RSI deep into overbought territory, rising to the 90 level, as reflected by an extremely green delta.
Notably, similar structures are forming in other legacy assets, indicating broad overextension. As a result, the argument becomes that capital returns to Bitcoin [BTC] is compelling, further supported by the lateral heel.
Source: Elon Musk
That said, Elon Musk has already raised a valid counterpoint.
In his latest tweet, he delved into silver’s utility story, pointing out that it is not just a speculative trade, but an important industrial metal used across multiple industries. That dynamic makes silver’s record rally a real risk point.
All things considered, the outbreak of obsolete assets seems far from random. Instead, it points to increasing macro-stress. In this context, and given BTC’s sensitivity to macro shifts, is Bitcoin ready for another “flash crash”?
Macro stress points increase as Bitcoin approaches the FOMC
The current setup puts pressure on one of the most sensitive pressure points.
So far this year, the US macroeconomic situation has already pushed markets firmly into risk mode. In that environment, a rate hike would likely be the last thing Bitcoin investors want on the table.
Meanwhile, silver’s latest rally is hitting right where it hurts: inflation.
From an economic perspective, with silver prices now around $79 per ounce, input costs in key sectors will rise, raising the risk of broader inflation that will eventually trickle down to everyday consumer spending.
Source: Trade Economics
And the timing couldn’t be worse.
Technically, the fourth quarter has seen some easing of inflation. Still, inflation stood at 2.7% in November, well above the Fed’s 2% target. Now that the metals rally continues, another interest rate cut seems increasingly off the table.
For Bitcoin, that alone could trigger a new risk outbreak.
In this context, the current market divergence is not just a speculative move. Instead, it points to deeper macro stress, putting Bitcoin at a crossroads for another potential flash crash FOMC meeting approaches.
Final thoughts
- The over-expansion of existing assets indicates the increasing macro stress, which puts the markets in a risk-free mode.
- Bitcoin’s sideways movement, combined with the potential capital rotation of overextended assets, makes a bull setup plausible, but inflationary pressures keep downside risks high.