The global economy has fallen into its weakest period in a decade, but Bitcoin is quietly brewing the next bull market?

At present, the global economy has fallen into a synchronized slowdown. In the latest World Economic Outlook report released on the 15th, the International Monetary Fund (IMF) lowered the world economic growth rate in 2019 again - to 3.0%, the lowest level since the 2008 global financial crisis.

Under such a dark cloud, the 2019 World Bank and International Monetary Fund (IMF) Autumn Annual Meetings almost came to an end in a chilly autumn. This global event, known as the "barometer of the world economic situation", really made the central bank governors, finance ministers, private sector executives and academic representatives of many countries around the world who attended the meeting feel the chill of the world economy.

Kristalina Georgieva, the new managing director of the IMF, said at a press conference, "Walking on the road and feeling the chilly autumn weather is very suitable to describe the current global economic outlook."

World Bank President David Malpass said in a speech at the annual meeting, "Growth has slowed, investment has stagnated, manufacturing has weakened, and trade has weakened. Extreme climate change and fragility have made poor countries more vulnerable."

Mervyn King, former governor of the Bank of England, issued a serious warning at the annual meeting. In his view, the world economy is "sleepwalking" towards a new economic and financial crisis, which is bound to have devastating consequences for the democratic market system.

Mervyn King, who ran the Bank of England a decade ago as the global banking system was on the brink of collapse and the economy was in deep recession, believes that 10 years later, people have not yet made fundamental questions about the thinking that led to that crisis. A refusal to think freshly means that the chaos of 2008-2009 will happen again.

Such economic "chill" has also forced global central banks to accelerate the pace of interest rate cuts. According to statistics, more than half of the world's major central banks implemented monetary easing in the third quarter of this year, which also set a 10-year high .

The report said that this wave of central bank easing is expected to continue until the fourth quarter. Last week, Australia, Iceland and India announced interest rate cuts. Australia has cut interest rates for the third time this year, and India has cut interest rates for the fifth time. The market expects that the probability of the Federal Reserve cutting interest rates at this month's meeting is close to 80%.

In addition, many central banks are planning to implement additional measures to stimulate economic growth, which has also caused the balance sheets of central banks to continue to expand, and there seems to be no end in sight.

The Fed has resumed its bond-buying program since mid-September, expanding its balance sheet by $210 billion , which now stands at about $4 trillion.

Although Federal Reserve Chairman Jerome Powell has repeatedly stressed that this is just a targeted technical operation and is not equivalent to QE (quantitative easing), the US financial website Zerohedge analysis believes that the market is convinced that this is a lie.

Zerohedge believes that the Federal Reserve's monthly purchase of $60 billion in short-term bonds and the total purchase of TSY Treasury futures (excluding maturing and extended ones) (maximum of no more than $110 billion) can already be regarded as QE4.

In addition, Zerohedge also expects the Fed to cut interest rates again in October, with a high probability of another rate cut sometime in November or December.

Even as Rabobank predicted as early as a year ago, the Fed has turned around from its tightening cycle at the time and is expected to continue easing until the end of 2020, when the Fed may start "0 interest rates".

It is worth noting that since August, the Fed has cut interest rates twice, totaling 50 basis points, and in late September, the Fed has opened the "tap" of the dollar printing press and "released" nearly $600 billion of liquidity (about 4.3 trillion yuan in total) to the U.S. market for 10 consecutive days to lower short-term market interest rates. These are considered to be the prelude to the Fed's re-launch of the QE "printing press" mode on a large scale .

As for the reason why the Federal Reserve has been vague about restarting the QE "printing press" for the US dollar recently, analysts believe that this may be to provide some people on Wall Street who are closest to the US dollar printing press with a time difference to obtain wealth differentials.

According to foreign media reports, the Federal Reserve and the Federal Open Market Committee (FOMC) held a secret video conference on October 4 to plan the launch of QE4, but this meeting was not announced to the outside world.

All signs indicate that the Federal Reserve may be pushing the inflated dollar and US debt to the brink of crisis .

On January 3, 2009, Satoshi Nakamoto left a message in the creation block of Bitcoin: "The Times 03/Jan/2009 Chancellor on brink of second bailout for banks (January 3, 2009, the Chancellor of the Exchequer is on the verge of implementing a second round of emergency assistance for banks)."

This was the headline of a front-page article in The Times that day, when British Chancellor of the Exchequer Darling was forced to consider a second shot at relieving the banking crisis.

While the supply of fiat currencies has been steadily increasing over the past decade, the supply rate of Bitcoin has been decreasing as Bitcoin’s block reward is cut in half every four years.

Next May, Bitcoin will be halved for the third time, when the inflation rate of Bitcoin will drop to 1.8%, roughly the same as gold . Over the past half century, the annual inflation rate of gold has remained between 1.1% and 2.4%.

More importantly, this inflation rate is much lower than the money supply of the US dollar and credit. According to statistics, in the 14 years before the 2008 financial crisis, the Federal Reserve's balance sheet (one of the means of measuring the amount of money in the financial system) grew at an annual rate of 5.6%. After 2008, this rate increased by nearly 20% per year.

As we all know, the first two halvings of Bitcoin have led to a surge in Bitcoin prices, so many people also expect that as the third halving of Bitcoin approaches, Bitcoin will soar again.

Finally, let's take a look at the current Bitcoin market to see if this wave of correction has reached the bottom and whether investors can consider entering the market.

On October 20, Bitcoin once again rebounded sharply from the key support level of $7,702.87. This is the fourth time in the past month that Bitcoin has successfully defended this level. However, Bitcoin subsequently encountered resistance at the 20-day EMA and has now begun to decline.

But I expect that Bitcoin should be able to break through this resistance level and surge to around $8777.89. The upper $8777.89-9080 is a strong resistance range.

However, if Bitcoin wants to completely reverse its downward trend, bulls need to push the price further above the downtrend line of the triangle.

On the other hand, if Bitcoin fails to break out of the 20-day EMA or even breaks below the critical support of $7,702.87, it is likely to fall further below $7,000.

At present, I suggest that everyone should wait and see. Of course, aggressive traders can buy now and set a stop loss at $7,700.