FX Evolution: How Much Higher Can We Go?
The market rally since late October has been strong. Some analysts even view it as too strong. Fear of missing out (FOMO) seems to have afflicted markets. That’s caused assets such as bitcoin and gold to hit new all-time highs.
It’s also showing up in many stocks, notably tech stocks with a strong correlation to AI. There is both a bull and bear case for markets right now. The current uptrend suggests some further upside, but not much.
For some assets such as bitcoin, the cycle remains bullish. The asset will have its halving event in mid-April. That will cut the reward for mining bitcoin in half.
Meanwhile, bitcoin demand has risen in the past two months since the approval of bitcoin ETFs for trading. That’s allowed bitcoin to touch on the $69,000 peak price it last saw in 2021.
When bitcoin hits new highs, it typically doubles in 20-90 days. With this new high occurring right before a halving, bitcoin could be on track to clear six figures by the end of the year.
Meanwhile, inflation has declined. But wringing out the last of it from the system is proving much tougher. That may help gold prices trend higher. Gold previously hit a high of $2,130 in mid-December, but hit $2,150 this week.
As these assets head higher, it may be time for the stock market to take a belated seasonal breather.