On this unique analysis, I am cross-examining the behavioral pattern of Bitcoin ( BTCUSD / candles) as compared to the stock market ( S&P500 / blue trend-line) during the last time that the Fed starting raising the interest rates (green trend-line).

** Late 2015 pattern. The start of the previous rate hike phase **
The pattern from this sample is quite clear. Last time the rate hike started (December 2015), the stock market was already on a strong correction that bottomed 1 month later. At the same time, Bitcoin was volatile but didn’t correct that much and instead started a new Bull Cycle. Notice that the stock market peaked and started its correction 5-6 months before the first rate hike. Obviously the bearish news that dominated the market at the time was China’s slowdown (August 2015) and before that a potential Grexit but keep in mind that a potential rate hike was already being discussed before implemented and the markets tend to price in the news long before the event takes place.

** 2022 pattern. The start of a new rate hike phase **
Similarly coming to today, this week’s aggressive 0.50% rate hike, the strongest since 2000, catches the stock market already in an ongoing correction. Notice that as in 2015, the stock market peaked and started to fall 5-6 months before this week’s aggressive hike. As in 2015, this could have very much been related to the stocks pricing the rate hike months ahead of the actual event. At the same time, Bitcoin has had a low point in January 2022 (and an even lower (bottom) in July 2021), being volatile these past 5 months but with the strong correction already behind it from November 2021 to January 2022.

Can all these be a coincidence? Or do all three form again the same pattern as in late 2015/ early 2016? As we mentioned numerous times from our channel here, Bitcoin’s price action since the April 2021 High can be seen as a new form of Bear Cycle, much like the one in 2014/15 that preceded the rate hike. The current volatile range (circle on the chart) looks a lot like the one in November 2015 – January 2016, which kick-started the parabolic rally of 2016/17.

Does all this mean that the stock market is about to price a bottom on this 5 month correction and Bitcoin to start a new Bull Cycle as the Fed moves into aggressive rate hiking (as per their announced plan) in an attempt to win the battle against a raging inflation? Feel free to share your work and let me know in the comments section below!

——————————————————————————————————–

Please like, subscribe and share your ideas and charts with the community!

——————————————————————————————————–