Remember to do your research first kids.

And don't trust information without double checking. Even my information.

The OP of the post below forgot to do that.

https://np.reddit.com/r/CryptoCurrency/comments/vc1z3j/why_are_so_many_of_you_people_hodling_nomatter/

Giving some inaccurate information, and some bad advice on timing the market.

Nobody knows what's going to happen, so don't try to time the market, unless you're ready to gamble.

It's a much more complex picture than OP was trying to paint.

So don't pull out everything, or go all in on shorts. Pull out only what you're not comfortable having out there.

But don't try to bet on the direction of the market. Instead strategize for multiple potential scenarios.

1- OP is inaccurately describing how the Fed reduces its balance sheet.

"The Fed is going to sell another $45 billion in assets in July, and another $45B in August. Then, they will increase the rate to $95 BILLION EVERY MONTH starting in September.

That's simply not true. The Fed isn't doing a selloff, it's doing a runoff. It's simply gonna let part of its balance sheet runoff and let bonds reach maturity.

They are doing that by simply not re-investing some of the bonds that come to maturity.

Evidence: https://www.federalreserve.gov/newsevents/pressreleases/monetary20220504b.htm

https://www.stlouisfed.org/open-vault/2022/may/how-will-fed-reduce-balance-sheet

2- "The fed meeting is tomorrow and its going to be a .75 basis point hike".

OP didn't provide any evidence on how he already knows this. The Fed haven't announced anything yet.

Just because everyone expects it to be .75, doesn't mean it will be.

In fact, since everyone seems to expect a .75, that would increase the likelihood that the selloff for the last few days, might be already pricing this in.

3- Last time we starting having QT was in October 2017.

This is back when Janet Yellen started to reduce the balance sheet by $650 Billion.

Remember what happened to Crypto in October 2017, and the following couple months?

I'm definitely not saying the same will happen. Conditions were different. And QT went on for several months, where Bitcoin started to dive again. I'm just saying QT alone isn't an automatic guarantee of anything for crypto.

Things have to be put into context.

But more importantly, policies on QT have changed since then.

2017 didn't have the result expected, and they eventually had to pull to plug on their QT.

This time around there's a couple of policies to safeguard from that happening, with some safety switches. Banks will be able to have liquidity when needed, and the New York Fed can setup unscheduled domestic repurchase agreements.

4- OP claims that there is "An almost perfect correlation between crypto and the Nasdaq".

That's not entirely accurate.

While there has been a recent increase in correlation, it has never been a 1:1, nor near perfect, nor above 0.9 in statistical correlation to stocks.

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In 2022 Nasdaq 100 correlation peaked at 0.7

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0.75 correlation peak with the S&P 500

0.8 and above is generally considered "strong correlation". But we've only reached around 0.7 with stocks. At 0.5 you have a moderate correlation.

A short term spike from around 0.5 to 0.7 isn't exactly an "almost perfect correlation".

That's a little bit of an exaggeration.

5-"And when both the stock market and the housing market get tumultuous, risk assest get sold first. That is what you are starting to see."

A tumultuous housing market?

It's been a fairly hot housing market, and the only thing still holding up. Or at least not at a 2008 or a housing market crisis level yet.

It's been red hot for the last 2 years.

Average house prices have vastly increased during that time, although slowed in the last quarter, reaching a historic high: https://fred.stlouisfed.org/series/MSPUS

There are recent signs of sales slipping, and with the supply chain unclogging, inventories started to increase. So a correction could already be in the works.

It might crash. Maybe next month. Maybe next decade. But we don't know that yet.

Also, Bitcoin has been selling off since November of last year. When the stock market was still reaching new highs month after month. We already entered a bear market before stocks started to tank.

We've seen mixed information about this.

Earlier this year, on the day stocks dropped into correction, Bitcoin went up.

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Bitcoin vs S&P 500 on the day stocks officially entered \"correction\"

Then it went on to go in a mini bull run from $35K to $47K when the war broke out in Ukraine, while stocks were tanking.

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https://preview.redd.it/fvgi7g4k4n591.jpg?1330&format=pjpg&auto=webp&s=494db109a610bcbbe44abbbde21a5d0ce48e796b

When Chinese markets tanked between the end of 2015 and the beginning of 2016, and the stock market in the US went into a little panic and dipped into correction, Bitcoin went from around $200 to around $400.

On the other side of that, Bitcoin crashed with the rest of the world during the covid crash.

So the correlation isn't always consistent or guaranteed.

It's not a sure fire thing you can rely on.

6- At the end of the day, the picture is more complicated than that. Never trust anyone who tells you things will definitely go worse, or definitely go better.

No one really knows.

Keep in mind, markets are based on emotions more than fundamentals. So they can always do something irrational.

But the fundamentals aren't even that crystal clear.

We are in a bear market, and stocks are heading into recession.

But at the same time, we have conflicting data.

We had negative GDP in the US, in big part because of the big jump in trade deficit. Which came from the after effects of covid restrictions, and supply chain clogs.

But now the bottlenecks in the main US ports have dropped by nearly 40%. So it's not guaranteed that GDP will be negative again next quarter.

Also, unemployment is at a historic low. And at the same time, 2022 had some of the highest wage increases in over 10 years.

Consumer spending has been up 2.7% despite inflation. And even inflation adjusted, it's still up 0.7%.

OPEC has started to increase its output, and is set to increase its output in July by another 400K barrels a day. Possibly more if they reach an agreement with the G7.

That could help quell both inflation and supply chain problems.

So the outlook is a little more complex.

If it was a sure thing, we'd all be millionaires.