This is NOT investment advice.
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Tug of War Intensifies . . . . . . Straddling a Lava Lake
S&P 500 closed the week at 6,000.36. ES dipped below 5900 this week and spent time above 6000. BTC is hovering currently above the 103Kish critical level. It dipped below it this week and recovered for now. In my view it is prudent to simply accept this type of correlation exists and deal with it. Bitcoin had a chance to really run and break free. For now - it did not do so. In fact - after not running with nothing above it blocking it, BTC has since been rejected firmly for now running up to the $105.8Kish we tabbed.
Interesting action in the UST 10YR this week. BOMO bumps bonds up, econ data reminds the market of the 'Melt Up'.
After word spread on BOMO, Bessent announced he was also prepping the longer range guns - i.e. longer duration debt. Bonds liked that initially (and some tepid hiring data) but looks like the 'Melt Up' started landing more punches as the week wore on.
In my humble view - this week bonds saw the labor data on Friday and concluded it was "good enough" for now to maintain the global growth narrative being just one component pushing yields higher. What happens when the economy produces 200K+ jobs/month consistently?
The Tug of War continues as the sheer force of the 'Melt Up' - this giant fiat fueled monster that is gathering steam - battles the multitude of reasons why Risk Off makes just as much sense if not more than Risk On at this precise time/location/position. Even if you want to be bearish, the 'Melt Up' just persists in the opposite direction.
All that said - let's see what happens. Is ES leading the way or is it BTC? Might be whomever gets past $105.8Kish/6000 for real . . . . . . . . or whomever heads the opposite direction with Volume and Money Flow in hand.
Bitcoin Weekly
Bitcoin Daily
Liquidation Heat Map - 1 Week Time Frame
Glassnode brings the Cumulative Volume Delta Heatmap - a valuable tool in my view:
Glassnode Spent Supply Distribution Quantiles . . . . . . . above each level the action historically has gotten "more toppy" i.e. the higher BTC is above these levels the more euphoric market participants are. Very interesting how Volume Profiles prior to this move above that $95-98Kish range suggested that there wasn't much stopping BTC after 103Kish. That was before this recent price action started carving out more volume history.
Glassnode shows how topping activity does generally align with bigger chunks of the selling coming from older coins:
Glassnode wraps it up:
Bitcoin Bottom Line:
- Is ES leading BTC or is BTC leading ES? I think right now both of them are trying to figure that out just like we are
- Note continued resistance at $105.8Kish
- Glassnode makes some good points and observations and I generally agree, most important one might be "demand that must prove itself resilient"
- Either this coiled spring activity continues with an eventual explosion higher OR we get a correction that aggressively tests the key levels noted repeatedly . . . . . . . at least that's what are the most likely options in my humble opinion
Risk On/Off
Let's start with the Spyder:
SPY 4HR
TiNA Weekly
If a clear and convincing break were to occur, it appears as though TiNA is in a good mood and willing to give us a shot again (and yes, the groveling and asking for forgiveness). That bearish and ugly big Green Weekly candle that put the current bottom in defines this rally. Huge volume . . . . . . . . but closing in the bottom half of the weekly range. This rally . . . . . . . . prices inch higher Volume and Money Flow lag in most cases. Lotta longs long because they have to be.
From The Market Ear at ZeroHedge.com which does great work:
UST 10YR Weekly
Japanese banks running out of steam?
Risk On/Off Bottom Line:
- Risk On/Equities need to work through the process of rates being pushed/pulled up along with a stronger global economy being ok or even good . . . . . . do we need an actual correction first to go through this adjustment . . . . . on the one hand rates are telling you the global economy might be entering a boom time (which stocks should love), but what 'breaks' equities on the 10YR UST???? Is it 500 BPS? I do not know the answers to these questions just sensing the market is asking and trying to decipher them
- Tug of War intensifies a setup is there and has been brewing (break 6000 legit, smallies play catch up, hard assets great wing men and off we go), but very few would be surprised with a rug pull either (Japan, yields, econ takes more time to percolate and grow, trade war intensity, Fed drama, a new Black Swan, who knows) . . . . . . . your call . . . . I'm ready either way
- I've added to some core here and there on pullbacks to include CCJ and ZAP, if we get a true new bull I want on the Top Groups (which we don't know yet) not the most talked about on CNBC
Near Term Forward Spread
Reminder and for anyone new - this is a tell/metric closely monitored by Powell (he has stated this publicly many times). This represents the market's opinion about where it sees the 3-Month T-Bill rate 18 months from now relative to today's 3-Month T-Bill rate. In other words, if this is declining the market is telling Powell to cut.
For the last several months market has been in limbo either flat here (blue on left) or in a state of confusion (green and blue).
Amboss Rails Nails It
As reported by BitcoinMagazine.com - Amboss launches a new product called Rails. Is Rails a tool, or the tool, that helps get corporate clients connected to Lightning and earning from Lightning?
Mining Update
Short Nikkei (up slightly now, sticking). Long Dollar (down slightly now believe it or not, sticking and might add). Long UVIX (beaten up a bit currently, smaller than prior which was quite juicy, might add). Long fiat based Long and Short levered BTC, more weight on the Short. Will act accordingly based on if/when/how we move off the current pivot in BTC and ES. Remember, objective here is to hedge/protect mining business and trade when appropriate for me to do so. A hedge for mining may or may not align with a straight trade but rather be more suited (in my view) to countering BTC dropping. Yes, can straight short BTC but when above certain Volume Profile points the risk of a runaway train crushing my short is very real, perhaps before I can even act to respond. Stops too tight eaten up before I may have a chance to be accurate in terms of direction.
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