Markets are cyclical, and so is the sun, moon, and the rest of the solar system. But could solar cycles specifically be what controls the ebb and flow of financial markets like Bitcoin and stocks?
A study of the VIX, the S&P 500 and cryptocurrency concludes that there may be something more to the relationship. And with the sun waking up from a decade long slumber and beginning to grow in activity, a longer-term top in markets could be near.
How Does Astrology Fit Into Financial Analysis?
Whether you personally believe it or not, evidence suggests that there’s a connection between the position of outer-worldly entities and the impact on financial markets.
Related Reading | Four Frightening FUD Filled Factors Bitcoin Investors Should Beware Of
The moon is known to control the tides, and any Bitcoin chart with the moon cycle enabled shows an almost immediate correlation. The reason for all of this, is due to people’s moods.
Certain astrological events, such as Mercury in Retrograde, are notorious for causing complications in relationships and with technology.
Could the sun be the force controlling financial markets? | Source: Sunspot Index Data Center
But could the sun and its 10.3 years solar cycles act as a top or bottom signal in the stock market? And if so, how might this impact Bitcoin which has only one solar cycle since its inception?
How Will Bitcoin React To The Solar-Stock Market Connection?
Socioeconomic data suggests that the sun, moon, and stars all can impact human behavior. Human mood, or emotion and sentiment, is a primary driver in markets alongside supply and demand.
If the above is true, and the solar cycle can predict bull or bear markets with some degree of accuracy, then the timeline suggests a major crash is coming.
The VIX follows the solar cycle patterns from above | Source: BTCUSD on TradingView.com
The chart at the top of the article ends with the dot com bubble. The prediction using nothing more than the increase in sun spot activity was valid again and again, up until the bear market following the dot com era. The same activity can be seen above, with the VIX mimicking the pulses of the solar cycle.
As the next cycle came around, the housing market collapsed and the Great Recession began. But at this time, two distinct things happened that changed markets forever: Bitcoin was created, and quantitative easing began.
Related Reading | Deutsche Bank Warns Of Disaster Worse Than Pandemic That Could Completely Kill Bitcoin
Quantitative easing saved the stock market from a massive double-top formation and instead pushed asset prices higher. Bitcoin price has only known upside in this environment.
But the next sun spot increase is here, and the sun is already back to experiencing massive solar flares that could be a signal that the near term top in markets is nigh.
“An important stock market peak has been witnessed or directly anticipated when, in the course of each new sunspot cycle, the yearly mean of observed sunspot numbers has climbed above 50.” Once the annual mean climbs over 50 the largest % decline of the stock market cycle follows
— Tony "The Bull" Severino, CMT (@tonythebullBTC) July 7, 2021
Even more frightening for Bitcoin, is the fact that large enough solar flares can knock out communication systems, which Deutsche Bank has warned is a very real possibility that would be far more devastating to the economy than even the pandemic.
Follow @TonySpilotro on Twitter or via the TonyTrades Telegram. Content is educational and should not be considered investment advice.
Featured image from iStockPhotos, Charts from TradingView.com