Bitcoin Observations
This is NOT investment advice.
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Bitcoin Weekly
From Glassnode, approaching again levels where Long Term Holders tend to take a bit off the table at least:
We are right in the middle of a zone where a lot of coins currently held at a loss can calmly get out at 'break even' . . . . . . . . or panic sell:
Liquidation heat map, but note the Higher Time Frame of 3 Months:
Not only are people no longer afraid, they are getting giddy on the Fomo Finder:
More detail on the weekend post.
Bitcoin Bottom Line:
- FA/Macro signals and setup still off the charts bullish
- Reality is Bitcoin has run very fast and very far off of the 74Kish landing zone we anticipated and desired for weeks to come to fruition
- Now what?
- Still no Money Flow oozing green on Weekly Time Frame
- See below for Risk On/Off commentary, but suffice to say the market is shifting fast towards euphoria
Risk On/Off - Spoos and Daq Ask "Now What?"
Instincts tell me whole bunch of players continue to stare at this chart. So, where to from here? As stated before - we already got the counter-trend rally. It happened. Now we see if/what/when happens from here.
If it feels like it is calming down a bit . . . . . . . . . . that's because it has - for now.
For the below chart - allow me to emphasize that I am not predicting or projecting that the Yellow will happen inside the Blue circle. What I am saying is that personally, and for me and my decisions, that Yellow movement is absolutely and 1,000,000% possible, plausible, and would not be surprising to me.
Back in 2022 - the market worked through a process for several months, and there was no 'Trump Reset' or Bitcoin Lid. In fact - there was nonstop gaslighting about the amazing economy and both government spending and a slick Yellen at the ready to provide juice at any moment. Just something to consider when watching CNBC or engaging with one of those "now is the best time to buy a house!!!!!" types.
Over the last few months I've introduced a handful of ideas, thought projects, or perhaps 'themes' if you will. Those include the following:
Trump = Stagflation and No QE
Stagflationary Mehhhhh Quagmire
The Bitcoin Lid
I don't know if or how many of you may have considered those to be accurate or not. To the extent that any of you considered one or all to be accurate, don't assume this next one will be as accurate.
Presenting The Powell Shrug.
Next Fed meeting is May 6th and 7th. ADP private payrolls data was modest but not sharply negative. Weekly claims have not been suggestive of an imminent drop in jobs, though the one released Thursday suggests job deterioration may be forthcoming (a data point not included in the April jobs report). We'll see what Friday's jobs data says. Powell already told you he is winding down QT (which in and of itself is QEish in motion). Fed's favorite inflation indicator was benign but not indicative of a "deflationary scare event". JPow was clear about not bailing out equities. Unless the jobs created are say below 40K or so for April, from what does Powell draw the enthusiasm to issue surprisingly dovish guidance next week?
Is the market running into the part where Powell . . . . . . . . . just sits there and shrugs his shoulders and repeats how he needs to see more inflation and labor data to see the impact from tariffs before making any changes?
To complicate things even more, the BOJ just hinted it is about to fold yet again and gave some more kick the can guidance. Powell would prefer the BOJ to increase its level of hawkishness with so much liquidity gearing up globally (in other words, if BOJ further clamped down on the Yen Carry it would be 'easier' for Powell to cut and go dovey lovey).
Bessent's wallet is loaded back up for the most part. No noise with reserves. Basis trade fires subsided for now. Equities got crushed, but now they're up quite a bit from the lows. So what will make Powell rush out to be extra dovish next week aside from a very bad jobs report on Friday? Not sure where the next jolt of bullish energy comes from.
Not trying to be a doom and gloomer just simply trying to take a rational and honest assessment.
Risk On/Off - I'm in wait and see mode still. Equities are literally giddy right now just as we head into another Fed meeting.
TGA - Bessent's Wallet
Inflation, Tariffs, and Oil
Tariffs can open up a very long discussion with political views influencing the opinions and pronouncements made by most. Suffice to say from my personal point of view, for every method one uses to tell me tariffs will cause inflation I can likely find at least one to suggest the tariffs could be deflationary across all time frames. Demand destruction is most certainly not inflationary. So - I'm in the camp that prefers to deal with reality rather than sticking to a politically motivated and desired narrative about tariffs. I just want the real information that is useful and helpful.
Let's take a look at the Fed's favorite inflation indicator:
Let's look at oil:
Coinbase Suddenly . . . . . . . . . . . Brags About It's Lightning Network Prowess?
Ok, so now Coinbase is the king of the Lightning Network according to their own self reporting. End of the day I've always personally respected and appreciated Coinbase for standing tall and taking a lot of bullets on behalf of the industry. They also did lead the way with access to Bitcoin initially. Yes, a crap coin casino. But, as stated many times before the best route for me is to accept these types of announcements as more reinforcement of the expansion of the Bitcoin ecosystem.
Interesting how Coinbase bet the farm on Ether but recently has been emphasizing Bitcoin more along with the Lightning Network.
And Now Coinbase Rolls Out BTC Backed Loans to All (Except NY)
Now, this is very bullish:
Repeating my prior predictions/projections - the future of lending is letting users use BTC as the collateral for their own loans where they shop themselves for the best terms based entirely on their Bitcoin liquidity (and of course adhering to all laws, regulations, etc.).
Savvy players will strive to borrow USDC at leverage levels where the rates paid are as close as possible to whatever yield is generated by USDC.
Department of Justice Mulls Dropping Samurai Charges Like a Hot Rock
Coindesk.com reports that the DOJ might drop the charges against Samurai - a huge potential move. Part of the Revolution in Common Sense perhaps to at least take a step back and look at innovation versus the heavy hand of the federal government.
Mining Update
As stated many times previously, any trades/hedges from the context of the mining business are separate from my own personal views, hopes, projections long term, etc. Mining is a business that currently requires some level of fiat gymnastics to pay the costs. 88.5K-89.5K. 91k-91.5K. 96K-96.6K. 98.3K. Consequently - it is appropriate for me to both convert a bit more to cash to earn and take out a fiat based net short BTC trade/hedge which I have done in the range of $96.5-$97.4Kish. Also nibbling here and there on long USD positions. Viewed here as a trade and hedge against BTC downside. USD and BTC both extended . . . . . but in opposite ways. Long USD has some appeal but also indirectly hedges BTC downside in this context and setup in my humble view.
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Matthew Wong
Mirage
