15d (edited) • Bitcoin Talking Points
5/14 - Market Update: Something's Fishy. I Smell a Double Trap.
BTC - $81,250
ETH - $2,293
Big News this Week? - Trump visits China to Strike a Deal with over 17 US based CEOs. This includes the biggest news in tech like Tesla's Elon Musk and NVIDIA's Jensen Huang to make a deal that could lead to peace in Iran.
Overall picture - Fundamentally the market looks bad, but recent positive news like a potential US and China deal + Clarity Bill passing the Senate Banking Committee is pushing up the market to record highs.... but something feels off because the DXY (dollar index) - this shows how strong the USD is - well it's going up at the same time as ETH and BTC.
[---NEW CHART ADDED BELOW - DXY (DOLLAR INDEX)---]
Usually when the dollar gains strength it means that things that you buy with dollars become cheaper. That means stocks, crypto, houses etc etc etc... because technically you use less dollars to buy each thing - meaning each dollar is "worth more"... sounds complicated but hopefully that helps. Okay, but listen...this is not always the case and that is where I have mixed feelings.
Let me be clear ------- I DO NOT THINK THE PAIN IS OVER.
I think we're still due for a correction in the market, you can see how price is struggling to maintain above the red upper trendline we've been tracking over the last few weeks. Also, the consumer is still hurting and by in large, retail is completely out of crypto. I'm not hearing anyone talk about BTC and ETH out in public like before, everything has been AI and stocks related. So as we talked about in our previous market update we would need to see 3 things change before I change my mind about the crypto markets turning postive.
#1 Iran War Over/Solution/Deal (China might make this happen now)
#2 Clarity act Passed (halfway there now)
#3 DXY/Dollar Strength Index falling
But now I'm starting to see that DXY is actually trending up not just because of the negative economic situations we have but because we're starting to see US dominance in oil + bonds return. Previously many countries sold their US bonds off, including China which sold off close to 50% - approx. $650 Billion dollars worth. So this technically isn't a great sign in the short/medium term but I don't think it stays this way. I think if US and China strike a deal we're going to see bullish price action even if the DXY stays higher than we'd like.
Here's what I mean:
U.S. and China deal → lower tariffs/tension → stronger global growth expectations → lower oil/geopolitical stress → easier financial conditions → more risk appetite → crypto pumps.
So we might see a push of DXY go up and that would temporarily push BTC and crypto down momentarily. I'm thinking it leads to something like this.
A. Iran war de-escalates.
B. Hormuz shipping stabilizes.
C. Oil falls toward $80.
D. Gasoline cools.
E. Inflation expectations stay contained.
F. The Fed gets breathing room.
G. Rate cuts.
H. The economy keeps growing.
All of the above things would definitely bring crypto markets up.
⭐ So yes, in the short term I think the market is going to catch people/bulls off guard thinking its going higher - how could it not be right? Clarity Bill passing, Iran War ending, why wouldn't the market pump?
⭐⭐ Then, in the medium term its going to trap the bears who think it's going lower once a correction happens because of bad jobs numbers, bad/sticky higher than expected inflation data and potential rate hikes instead of cuts.
⭐⭐⭐ Higher probability we pull back, probably down to 73-75k BTC than up to 90k. We'll just have to wait and see.
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5/14 - Market Update: Something's Fishy. I Smell a Double Trap.
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