Bitcoin Observations
This is NOT investment advice.
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Top Signal
The most important thing I am seeing, in my opinion, at this precise moment is the following: A) Fed already active via SOMA but no front-running bid under UST, and B) BOJ wishy washy flippy floppy and JGBs still getting smoked.
The second most important signal is how Bitcoin is seemingly rallying with this huge threat to Risk On.
Bitcoin Weekly
The weekly chart is very bullish at this point, tough to dispute that in my view. The Green MF is showing you in real time how a Higher Time Frame provides an overall lift (or lid when in the reverse trend) and tends to scoop up dips. Let's see what happens.
Bitcoin Daily
Glassnode presents some more interesting and compelling data here. Look at the difference between ST Holder Realized Profits in the post-election run versus now. The way I see this we have more of a foundation now, a healthier structure more conducive to a longer run upwards. Maybe I'm crazy.
Updated Compendium and Enumeration of Recent FA/Macro Bitcoin Flex
This output is not exhaustive nor is it inclusive of everything. Given the volatility and turbulence of the last few months, perhaps a refresher on some FA and Macro "stuff" with recency that is favorable to Bitcoin:
- Powell Shrugs and punts on cuts, Bitcoin rallies anyways
- Fed tapers QT and sets the stage for balance sheet expansion
- Bessent tells the market Option B is a go, i.e. "catch us if you can" global growth race starts (more spending and debt globally)
- SOMA smiles, bonds crumble
- Fed publishes research proving that making banks gobble up UST will help market liquidity
- Fed taper and SOMA starts to inject liquidity back in (not a new QE at this point yet)
- Treasury Secretary tells the Globalist powers that be that America is going its own way (top holder of BTC as Nation State, politically accepted by both sides now)
- China starts to seek final agreements with America on trade, increases stimulus, still facing inevitable Yuan deval
- High emphasis placed on SLR reform, necessary for BanQE
- Stablecoin momentum increases, high political pressure to make the ecosystem more supportive, push for Stablecoins is push for USDT is push for Lightning Network is push for Bitcoin
Bitcoin Bottom Line:
- Let the market tell/show us what is next
- Already cleared a very major Volume Point of Control and otherwise very key zone in the 95K-98Kish area, will we need this as support in the future or are we gone?
- For the first time in its history perhaps, Bitcoin is starting to act as the "everything hedge" that it is based on FA. Will the TA ultimately prove this to be the case? (i.e. it 'makes sense' that Bitcoin rallies as LT bonds collapse, but the market has not held that relationship firm historically . . . . . yet)
- Appears to be working its way above the 103Kish area that obviously is very important based on volume and recent price action, so far reacting in a very bullish manner to pullbacks on Lower Time Frames
- As with One from Mr. Grey, at the end of the day maybe Bitcoin just ends up staring . . . . . . . . . . at itself?
SOMA Settles In, BOJ Hawks Grounded - Long Term Bonds Sell Off
Maybe this is 'the switch'. SOMA appeared in Bessent's recent auctions. Fed is tossing the spare change from the mismatch of total funds with different maturities hitting each month into the auctions - i.e. technically they are active in the market. This is not a new QE program. Nonetheless - the market can see the information easily and is aware of it. The entire curve has been gradually rising the entire time.
The BOJ is giving mixed signals and appears wobbly and more than capable of flip flopping back to Dove. JGBs are getting crushed again.
The typical pavlovian response would be a rally in UST and JGBs. Why are rates not really responding all that much to confirmation of Fed action via SOMA and a BOJ that is getting very flip floppy again? Interesting question in my opinion. It may very well be that the 'Melt Up' is in fact kicked into gear (past a new pivot point if you will) and Long Term Rates globally are now in price discovery based on the Bessent Option B and the sovereign risk each nation faces.
If you're long Bitcoin you're long a Global CDS, in my opinion. There are much worse positions to have, in my opinion.
Baffled BOJ Bemoans Checkmate
ZeroHedge.com does an excellent job capturing what we have been saying for years now. With JGB auctions starting to get real, real shaky and the market NOT responding obediently to buying JGBs with a Dovish pivot . . . . . . . what we have here folks is the Japanese bond market unraveling:
High Yield Waves Goodbye to Equities
High yield bonds aren't as enthusiastic here with Spooz between 5900-6000. Sniffing out some chinks in the corporate earnings armor?
Risk On/Off
Here is a zoomed in look at a 4HR chart for the S&P 500. Spooz is floating around between that 5900 and 6000 level seemingly oblivious to everything.
So, equities will forever ignore that yields globally and domestically are surging? I'm still watching and waiting for some action that tells us where this is most likely headed. We're all the way back up from tariff mania? Now what? HY and LT rates ain't buying the last legs of this equity rally. Note hedges below.
Assessing 'Alt Season' Anarchy - More on L2s
Fully realizing any mention of an 'Alt Season' can send people in a zillion different directions, please allow me to clarify.
BTC = TCP/IP
Lightning Network = Email
The above is not etched in stone nor is it a finite or complete analogy sealed off from any other interaction. It's a frame of reference and a very good one in my humble opinion.
TCP/IP was the start. The foundation. The backbone. The core infrastructure. So what? Well, let's look at what was ultimately built on top of TCP/IP in addition to email. We have things like social media, video like YT, cloud computing, SaaS, and a whole bunch of other stuff.
My thesis is not to per se select a specific winner but to rather open up my mind as to where the most fertile ground is. My contention is that "a bunch of stuff will be built on Bitcoin". I have no idea what most of it will be!!!!
So, if there is capital that flows to something that resembles an 'Alt Season' . . . . . . . . then what I am really saying is that it may very well flow to "the stuff being built on Bitcoin".
Bitcoin L2s.
Mining Transaction Fees
Luxor data:
Bitcoin in America - Gold and Strategic Reserves
Another great report was published by River, and it provided a nice comparison of BTC and Gold looking at America and China:
Mining Update
Continued nibbling/adding to UVIX. Maintained long USD hedges. Nibbling long EWV. What are the main threats to the BTC exchange rate in the short and intermediate term regarding Macro, Black Swans, etc.? Japan blows up. QQQ fizzles and tanks. Long VOL and Short Nikkei (as hedges).
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Alex Grey
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