Today, we’re looking at capital flow back in risk assets. A concern plaguing investor’s minds these days has been the US debt ceiling. At this point, it might feel like an ethereal concept but basically, in order to avoid government shut-downs and a flurry of economic consequences, the Fed would have to -and probably will- raise the current debt ceiling. 

Investors are feeling reassured by the hints dropped and bought the tech dip we saw earlier this week, along with most other equities. Just not cash basically. 

While gold is stagnating, we also saw a massive move up in crypto markets. BTC was leading the charge. Apparently, someone bought the equivalent of $1.6 billion worth of BTC… in just 6 minutes, basically a market order that rippled through markets. 

Prices that until then stagnated at around $51,300 rose over the next hour to $55,500. That’s over 8% higher. We’re currently managed to stay there, hovering around $55,500 still.

Could the transaction have been a smart way to kill a lot of leveraged shorts and any stop-loss in the lower 50Ks, now swept away? It’s possible. More often than not, whales playing games and liquidations are the answer to any question you’d have with regards to crypto trading.

I also think the move happening in the wake of the US essentially giving itself yet another blank check (or the ability to indulge in the current cash binge it’s been on) is telling. I want to believe that one or several large players felt their capital was safer in a scarce, verifiable, decentralised, tamper-proof asset: Bitcoin.

We’re now tantalisingly close to the all-time high, believe it or not, essentially 15% away. It’ll be interesting to see whether FOMO ensues or if we need to go and revisit lower levels first.

The CME futures basis is incidentally also the highest since mid-April. We can also see the CME share of BTC volume hit an all-time high yesterday. hinting not so subtly at massive institutional engagement. 

It’s also interesting that, with that idea in mind and for large transactions, BTC is and remains the place to trade. Alts, on the session, are really just tagging along but underperforming.

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