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The main driver for all risk assets has shifted dramatically. Geopolitics in the Middle East has been replaced by a sharp pivot in the Federal Reserve's rhetoric. After new Fed Chair Kevin Warsh took a hawkish stance on June 17, the financial world reacted instantly. The market didn't just erase the chances of a rate cut from its pricing; it began actively pricing in a rate hike.

Analyst Coin22 notes a massive capital exodus from risk assets. The US dollar has already hit a new yearly high. The S&P 500 index is steadily heading towards its fourth consecutive red weekly candle. Gold and silver are undergoing a noticeable correction, and SpaceX shares have even plunged 30% from their peaks. According to the expert's observations, money is now being hidden in government bonds.

Why Capital is Fleeing to Bonds

The logic of this movement is built on a rapid reassessment of market risks. When the cost of money rises, future corporate cash flows are discounted at a higher rate. This primarily hits the valuations of growth stocks, especially in the technology sector, which was heavily inflated by cheap credit. Capital senses such changes about a quarter in advance.

The analyst interprets the drop in oil prices quite uniquely. For him, it's not a reason for joy, but a clear symptom of an economic slowdown. In his view, for the Fed, lower commodity prices no longer compensate for stubbornly rising service prices. Gasoline in the country is getting cheaper, but services, insurance, and rent continue to rise rapidly. Consequently, core inflation has become firmly entrenched, which is why the regulator is talking about hikes to suppress demand.

Factors of Asset Attractiveness

The main argument in favor of bonds is the positive real interest rate. The nominal yield on short and medium-term securities is at its highest in over a decade. Consequently, the real yield becomes anomalously attractive for large players. The analyst calls the reasoning that it's better to make money in stocks a common fatal mistake. Why take on the risk of a 20% correction in the S&P 500 if a risk-free instrument offers a guaranteed profit?

Gold clearly loses out in this scheme for the same reason. The asset does not generate a stable cash flow. Therefore, when real yields rise, the opportunity cost of holding it becomes prohibitively high. Additionally, Coin22 points to the traditional end-of-quarter effect. Large funds need to lock in profits in overheated assets and show clients a stable result. The safest way to do this is to shift into fixed-income instruments.

He links the rotation scenario to the actions of Goldman and JP Morgan. JP Morgan itself needs to rebalance a $165 billion portfolio by June 30. That's precisely why stocks, gold, and crypto are falling simultaneously right now. The first thing to do in such a situation is to actively hedge with shorts.

Scenarios for Gold and Bitcoin

Over the next few months, the analyst expects the Fed to remain on hold. The first rate hike, if it happens at all, will come no earlier than September. This means yields on short-term securities will remain high, and capital will continue to flow into bonds. Metals, according to his forecast, will trade in a range with downside risk. If the market believes in several rate hikes, gold could be pushed down to $3000. However, a crash is not expected due to ongoing purchases by global central banks.

Regarding gold, Coin22 is not opening a short from current levels for now. Instead, he is waiting for a local bounce to gradually build a position:

• first entry into the market around $4250 (25% of position size);
• second zone for adding around $4400 (another 35% of position);
• final addition near the $4500 mark with signs of buyer weakness.

The level for a complete cancellation of the entire bearish scenario would be a price close above $4600. The investor plans to take profits in stages.

For Bitcoin, the calculation relies entirely on the classic cyclical model. The key global cycle reversal typically occurs approximately 826 days after the halving. After that, it takes another 70 to 110 days to reach the main bottom. In relation to the current cycle, the 826-day zone falls at the end of July. Thus, the potential main bottom is expected in October–November in the approximate range of $50,000-55,000.

However, the analyst does not expect the price to fall in one sharp move. A "bull trap" in July with a bounce to the $70,000 area is quite likely. His current tactical goal is to catch a long position in the $58,000-58,500 zone. This would allow profiting from a move to $67,000-70,000, after which a new wave of decline would begin towards autumn.

My professional commentary: We are witnessing a classic "sell the news" scenario following the Fed's hawkish pivot, which coincided with the quarterly rebalancing by institutional players. For Bitcoin, the key signal will be the loss of the $58,000 level — this is where the boundary lies between a correction and the start of a full-fledged bear market. Gold, lacking yield, becomes the main victim of this rotation, and its decline could be more prolonged than expected.