Bitcoin Observations
This is NOT investment advice.
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Bitcoin Weekly - Is Wave 2 Done Yet?
What is Wave 2? Are we in Wave 2? I do not know. Nobody does. I absolutely postulated that a) we were way overdue for a real correction based on multiple factors I assess, and b) my instincts overall are sensing a much bigger move at play here OR yet another retreat below key levels/MAs/fibs/EMAs/ichi clouds/bands/etc/etc/etc for a frustrating consolidation period . . . . . . . a move that appears to possibly be the second wave (modest pause essentially) of a very bullish 5 wave move. You can see my prior projection/speculation/reaction here from 12/20 where I surmised a 2-6 week correction at a minimum was due.
This does not mean that is the case. Nonetheless - where are we now. The weekly:
Call me crazy, but as of now I see one weekly candle that shows distribution and several other rather benign weeks:
Weekly close above or below 94.5Kish and 98.5Kish is notable and perhaps even significant. If this current weekly candle closes on higher volume in the upper half of the range, that MIGHT be a signal of more bullish action forthcoming soon.
Is the below at play? I do not know.
RRP Drawdown Does Not Equal QE
RRP Drawdown = RRP Drawdown. Maybe they want both life preservers (BTFP and RRP) to run dry and see what happens. Or maybe they want something to happen. I do not know.
Here is what I would look at for signs of potential intervention:
Bank Equities - focus on the ones with the most relative exposure to LT government debt (all geos), U.S. CRE, ugliest overall balance sheets, and the ugliest charts, look for signs of substantial distribution (big selling on high volume), if something is cooking many, many more players will know before you and I will
Discount Window - if banks start hitting this pay attention
3YR Notes Sizzle
Bessent's new crew pulled off a sizzling hot $58B auction for 3yr Notes this week, and it was strong across the board. It has become more and more apparent with Bessent jawboning or lack of jawboning that the emphasis on the short end will continue so perhaps a bit of "hell, if they are gonna make others buy this shorter stuff then we're buying it now ahead of that" going on here.
So if all is well in debt land, then we should see yields on the flagship 10yr Note fall, right?
And the second auction of the week:
Japan
Japan appears to be embracing Bitcoin with friendly regulations, a tax cut, and potential ETF approvals. Interesting timing.
Trolling Inflation Statistics
We all know ZH uses clickbait titles (in all honesty, they are excellent writers and craft clever titles consistently) and there will always be some level of trolling and "I told you so". I've opined in various places that we would see a resumption of inflation and I'll add today mostly outside of food and energy (going forward on a long enough timeline to satisfy the gotcha people).
My reaction to the above is as follows:
A. The Fed wants inflation
B. The "2% inflation target rate" is not in the Federal Reserve Act and numerically is literally a self-imposed guidepost/restriction. They can change it and I believe they will.
If "inflation is red hot" and "we got a super hot CPI" then my response is the following: raise the Fed Funds Rate and do it now as in via an emergency meeting. If the entire world revolves around one CPI print then deploy the sledgehammer now and go out and raise rates until you hammer out all growth prospects and subsequent inflationary pressures.
Just do it . . . . . . . . if that is truly what you are trying to achieve currently.
Got Some Tips on Gold and Copper
Presenting weekly charts for three of the most inflation sensitive instruments in the market:
Market discounting only inflation or a presumption of more legitimate and sustainable economic growth + inflation? Time will tell. Find it interesting we have these charts (these are weekly mind you, not 15 minute charts on a Fed or CPI day) and yet the Fed and Treasury are NOT pounding the table on using the sheer force of rate hikes to "hit the mandate" and smash down inflation with the sledgehammer. I wonder why.
Musk Selling Option B Pitched Here
"we can get the economic growth to match that 1 trillion growth in the money supply . . . . . . . . "
That is a quote attributed to Musk when talking about reducing the annual deficit by 1 Trillion (and the implication that IF that were even achieved you are still selling another 1T in new debt). Who cares about the exact numbers look at what he is trying to sell. As discussed multiple times previously, the formula is to grow the nominal level of GDP at a faster rate than the UPB is growing. This presents the political opportunity to brag about the optics of the "debt getting under control" with NOMINAL GDP growing at a faster rate than the giant pile of debt. That sounds a lot like the Option B we presented here.
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Alex Grey
Mystic Eye
