16d • General discussion
4/29 - Market Update: The Fed Is Stuck. And That's Good.
Bitcoin - $76,500
Ethereum - $2,289
Big headline news? - Jerome Powell's final press conference as Fed Chair. Rates held - no change!
Yup, we called the chop. Expect to go slightly lower over the summer. Now let me tell you why the "bad news" is actually the setup for this summer.
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💠#1 - Powell's last words.
Today was Jerome Powell's final press conference as Fed Chair. Rates held. No cuts. The vote wasn't even close to unanimous, it was 8-4, with 4 dissenters. Which to me is just additional writing on the wall that an interest rate cut is more likely to happen than not.
Powell seemed "hawkish" which is a fancy way of saying, he's willing to be aggressive and accept financial/economic pain to bring inflation down. He kept highlighting the sustained tariff inflation and Iran War oil price shock.
Basically, without saying it.. he signaled that the rates are going to stay higher for longer and won't change until the Iran War is basically over AND oil prices stabilize.
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💠#2 - The consumer is not fine + Iran War
Like we said last week...jobless claims are still holding around 214,000 .... technically "stable," according to the headlines but people are hurting. Credit Card Debt is exploding almost at 1.3 trillion and just from personal experience I'm hearing close friends talk about how financially tough its been.
Then add on the fact the Iran war isn't resolved, instead it's ramping up again. Trump rejected the Iran proposal and is looking to extend the blockade. Oil will stay above $100 for the summer keeping inflation sticky, which gives the Fed cover to hold rates unchanged, which keeps the squeeze on. We've known this. This is what leads to "the chop" where crypto ranges, doesn't go all the way down.. or all the way up, like a wave BUT that wave is telling.
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💠#3 - The Clarity Act + Institutional money.
While the consumer tightens, the smart money is loading up on Bitcoin/Ethereum ETFs.
US spot Bitcoin ETFs saw 8 consecutive days of net inflows totaling $2.1 billion through late April. BlackRock's IBIT alone captured roughly 75% of that capital.
Institutions are absorbing BTC supply at 9x the current mining rate. These investors aren't trading the chop. They're doing the same math we're doing. They expect rate cuts are coming eventually, scarce assets outperform when they do, and the time to accumulate is before the crowd figures it out.
Also, it seems like the pressure in Washington is finally heating up and the Clarity Act will get passed in May... IF IT DOES GET PASSED. The case for Bitcoin not going lower than 65k-60k gets even stronger. Not to mention the Spot Volume chart below tells me we're probably towards the end of the extreme selling pressure.
This is why we DCA through the chop. Not because it's comfortable. Because the people with the most information are already in. Look at the fear and greed index - 39. Last week it was greedy at 61. The market is itching for any reason to see BTC explode. My experience tells me the market believes BTC is above 90k than below 60k by year end.. every price from now until then is just a discount.
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🟢 KEY POINT ---------- The Fed being stuck is the signal, not the problem.
In plain English:
The Fed can't cut because inflation is sticky. Inflation is sticky because oil is high. Oil is high because Iran. The consumer is hurting because rates are high and prices aren't coming down. That pain shows up in jobs data by summer. Softening data gives the Fed the cover to cut. Rate cut expectations.... not even actual cuts, just the expectation.... move markets first.
September/October. Watch for it.
We're not chasing the rally. We're not waiting on the sidelines. We're already in, averaging down through the pressure, and positioned for the move before it happens.
The Fed is stuck. Bitcoin doesn't care why it gets unstuck. It just responds to what comes next.
DCA. Stay patient. Q4 is the signal.
PS - I updated the chart to reflect what we know now. For example, looks like BTC has found strong support around that 65k level. We know that it's likely to chop in this range between the RED bars. We have the high of the range and low of the range. The momentum is positive in the long run. It stops in July purposely because that's when we should get economic data that tells us where the direction will go from there.
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4/29 - Market Update: The Fed Is Stuck. And That's Good.
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