In the previous issue, the focus was on geopolitics and its implications for the markets; this time, that particular aspect can stay in the background. Most of what I wrote previously on the impact of different scenarios—whether the ceasefire holds and, if not, when war will resume—still holds, and there’s not much worth adding. The situation is still just as uncertain as it was last month, with the only new piece of information being that the global economy has managed to survive fairly well with Hormuz being shut off, at least so far, that is. Supply chains and other macro-level factors are notoriously non-linear, such that what is hardly a nuisance today can easily become life-alteringly catastrophic in a matter of weeks.

Instead of speculating on the outcome of the current war, our attention is better spent on tangible developments that are taking place right now, especially regarding crypto regulation in the U.S. Last week, the Digital Asset Market Clarity Act was given the green light by the Senate Banking, Housing, and Urban Affairs Committee. You may remember this “CLARITY Act” from last year, when it first made headlines, but now it’s moving much closer to adoption. It still has a few steps to go (first needing to pass the full Senate), but it’s safe to say that the bill is in its final stages. If it is enacted, the impact for all sectors of the crypto market will be monumental—or simply huge, as the current administration would put it.

The CLARITY Act is essentially a comprehensive market-structure bill for crypto. Instead of relying on decades-old definitions of securities, commodities, brokers etc., which enabled Gensler’s crusade of litigation against crypto, the act finally defines digital commodities as a separate category and sets up clear, (mostly) objective guidelines on when a particular token is or isn’t a security. Jurisdiction will be split between the SEC and CFTC, with decentralized protocols (i.e. DeFi) being explicitly carved out from many intermediary obligations. In other words, the U.S. regulatory framework is finally catching up to the fact that a smart contract running on a blockchain isn’t the same thing as the New York Stock Exchange, for example.

This is one of the reasons why I think the current bearish consensus is exaggerated. Everyone seems to be convinced that crypto is over, but this happens regularly when the lows are in. In ‘21-’22, it tool about a year to go from the all-time high to the all-time low; if something similar plays out this time, then the low would be right around the U.S. midterms in November. This makes sense since the timing would be right for some volatility—given that Trump is so pro-crypto, there could be worries about the pendulum swinging violently to the other side if the Republicans are badly defeated—but I wouldn’t be surprised if things turn up even sooner.

Bitcoin

Looking at Bitcoin, things have been shaping up rather well since late April. The $73.5k level has finally been reclaimed, so the next resistance to watch is $86k, a zone that has proven pivotal twice so far.

As mentioned above, the short- to medium-term price action can be very volatile if anything new happens in the Middle East, so even going below $73.5k again would not be the end of the world. Instead—if summer proves seasonally bearish—another dip below that level could give us a great base leading up to the midterms and the next major uptrend.

SPX, Gold, Oil and DXY

Since the dip caused by the war in the Middle East was reversed, owing to the ceasefire that put an end to the escalatory military spiral, the S&P 500 has been on a very steep upward trajectory. Even the possibility of a hawkish turn at the Fed (see the Concluding notes below) wasn’t enough to dampen the bullish momentum.

As mentioned last time, gold is becoming more and more driven by export economies shifting away from USD-denominated assets. Hence, with Hormuz still very far from functional, gravity is once again making itself felt, bringing gold closer to the $4,360 level. If global trade stability doesn’t deteriorate any further, this could be a decent spot for bulls to load up, but as always, geopolitical risk is something to keep an eye on.

Oil is approaching the apex of a triangle on the daily, but whichever way it breaks out, patterns like this—where the breakout is this close to the apex—are notoriously unreliable. All in all, the line across the Strait of Hormuz matters way more for oil than any TA ever could. As for the Dollar index, it managed to get well below 98 before recovering somewhat due to the monetary policy outlook covered below.

Ethereum

Once again, the Ethereum chart doesn’t offer anything of interest; ETH has been somewhat weaker than BTC in April and May, but it is still stuck between $2k and $2.5k.

Concluding notes

War means debt, and so do supply chain disruptions, so the current U.S. administration will have to find a way to bring liquidity into the system. Now, however, it is becoming clear that this won’t happen via lower rates, as the new Fed chair, Kevin Warsh, begins his tenure. He’s just about the most “establishment” candidate imaginable, not someone who would want to cut rates just as inflation fears are once again making headlines. His first FOMC as chair will be June 17, with expectations almost unanimously pointing at another hold. Rate cuts are now a pipe dream; instead, a hike—or even two—is very much on the table by the end of the year.

It’s possible that we’ll end the year without a single change to the Fed funds rate. With that in mind, overanalyzing the Fed chair’s choice of words or facial expressions—to find the tiniest hint of a hawkish or dovish thought—isn’t what I plan on doing in the coming months. There are more important mechanisms driving overall dollar liquidity that I will cover, not to mention that crypto will become a crucial political topic leading up to the midterms.

Today we’ll be diving into what the war between US/Israel and Iran—which may or may not be over—means for the global economy, especially for commodities and the downstream effects of that, including what looks like a major paradigm shift in how gold has been trading lately. Before we get to all that, let’s cover the obligatory Fed developments first: the 18 March FOMC held rates steady, as expected, and the messaging was broadly of a “wait and see” kind as inflation worries became prominent again. Looking at implied probabilities of further rate changes, there’s now just over a 50% chance that we’ll end 2026 at the same rate level as now. That probability was over 70% days ago—before the ceasefire announcement—but only in the 10-15% range a month ago, before the conflict became that serious. Unsurprisingly, the prospect of further hostilities, along with the ensuing higher oil prices (and higher everything prices) was and might again become the main driver behind a hawkish turn at the Fed.

It’s far from certain that the current ceasefire will last, let alone deliver a permanent end to the conflict, as neither side has yet made any clear enough concessions for a proper deal. Iran wants to control the strait of Hormuz and charge tolls, and if the U.S. allows this, it will be a massive strategic victory for Iran, although Trump will spin it like a U.S. victory. If the negotiations break down and full-blown conflict resumes, the point I made last time about the U.S. needing a way to bring more liquidity into the system still stands; that will likely not come from any rate cuts, as that would be politically catastrophic in the face of inflation fears, but some other innovative mechanism will have to be worked out. Otherwise, if we do see peace in the Middle East, that will give markets a boost, but the damaged oil infrastructure in the gulf states will take some time to come back to full capacity. Hence, oil can stay elevated above the pre-war levels for quite some time.

Speaking of oil, it’s worth noting that there are different price benchmarks for this commodity. Unlike crypto, which can be instantly sent anywhere in the world, oil is tied to particular source locations, refining infrastructure and, as became obvious to everyone recently, shipping lanes and pipelines. The two most important benchmarks are WTI crude, which is delivered to Oklahoma and serves as the main U.S. benchmark (also the one that I use in newsletters by default) and Brent crude, a global benchmark based on the North Sea region and Northwest Europe. Normally, these two move in lockstep, but divergences can result from geopolitical instability or the prospect of a U.S. oil export ban. The market was bracing for such an export ban at the height of the conflict, which drove a sharp divergence, pushing WTI lower than Brent. There are also other benchmarks, such as Dubai and Oman, which primarily track oil exports to Asian markets and were, needless to say, much more affected by the war. Since much of U.S. monetary policy and the broader U.S. market—being the primary driver of crypto, among other things—is downstream of WTI, I will keep using this one as the default benchmark, but the divergences are important to keep in mind.

The main story for today, however, is gold. In order to mix things up slightly, I will get to what has changed with gold after looking at the chart. But first, Bitcoin.

Bitcoin

The $73.5k level is still the main resistance, with no major moves on BTC. The orange coin has been bouncing back and forth between $65k and $74k since the start of the war, but it has failed to break out.

SPX, Gold, Oil and DXY

Since the market for SPX hasn’t opened yet, we have to look at the at the S&P 500 futures to see this massive green candle after the ceasefire announcement. Nothing surprising there; equities generally don’t like downward spirals into escalation that could result in nuclear Armageddon.

Gold is the main story today, beyond doubt. Looking at the daily chart, the first thing that we see is that, since the start of the war, gold has tumbled quite a bit, but what happens after the ceasefire announcement? The immediate reaction is bullish.

Why is this surprising? Well, normally, gold is seen as a safe haven asset, one that correlates positively with geopolitical instability. Hence, many were expecting a sudden ceasefire announcement to send gold sharply down, with an immediate drop of 10% or so. But lately, over the past couple years, gold has been changing structurally. Ever since 2022, as it became evident that U.S. treasuries are not safe for countries that might do something against the will of the global hegemon (due to the precedent of freezing Russian assets), major export economies have begun to shift away from U.S. treasuries and towards gold. The result of this is twofold: first, gold mooned, obviously, and second, it became positively correlated with the stability of global trade. If gold is driven by export economies putting their profits into the credibly neutral, unseizable metal, then a disruption of global trade would send gold down (which it did), and any step towards the resumption of said trade would lift it up (which it did).

I’ve been talking about the shift from treasuries to gold for a long time, but the reason the current price action is so important is that we now have direct confirmation of this dynamic. Long-term, this bodes very well for gold and poorly for the USD.

Unlike the above on gold, Oil and DXY are fairly self-explanatory. Oil is dropping on the news, and so is DXY. The USD still has some residual safe-haven demand, which held it up during the conflict, but now the DXY is back below 99.

Ethereum

Nothing much to comment on here; like Bitcoin, Ethereum is rebounding slightly, but we need to see how it acts in the zone above $2.5k for any properly bullish momentum to be confirmed.

Concluding notes

Finally, it’s worth mentioning the CPI as well. Headline inflation for February was exactly in line with expectations at 2.4%, while the March data will be released in two days. Forecasts are once again around 2.4%, so any deviations will shape the public’s (and the Fed’s) views on how much to worry about inflation. If the current ceasefire lasts, however, these fears will largely dissipate, since they were driven primarily by the threat of persistently high oil prices.

We’ve had some time without a single overarching narrative in the broader macro space, but that is no more, as a new war in the Middle East becomes the main story. This isn’t the place to get into geopolitics, of course, so I will focus instead on what this could mean for the markets, both in crypto and more broadly.

As all but perhaps the youngest readers will know very well, war in the Middle East isn’t an unprecedented scenario. For decades and decades, Republicans and Democrats alike took turns at bringing freedom to countries that—coincidentally—happened to be important players in the oil market. The justifications given are numerous, often having to do with some form of weapons of mass destruction, but what interests us is the material, financial side of the equation. What kind of role does war play here?

The most important lesson we need to learn from history is that war is inflationary. Weapons cost money, whether it’s flintlock muskets or, especially, $5 million interceptors that have to be shot to stop $20k drones. Soldiers likewise have to be paid, but nowadays that also includes various forms of welfare that continue for years and decades after the last bullets have been fired. The price of money will thus have to go down one way or another; either through significant rate cuts or other forms of making the printer go brrr. The current outlook for the March 18 FOMC is that rates will be held steady, and that hasn’t changed yet. But in the face of war, it’s only a question of exactly when (and how), not if, more liquidity will flow into the system.

As for more short-term effects, the number one is oil. We’ve already seen a gap of more than 11% from Friday’s close to Monday’s open, and how this will continue will largely depend on Iran’s ability to keep tankers from crossing the strait of Hormuz. If you’re exposed to oil prices either directly or indirectly, that’s the most important development to keep an eye on.

Bitcoin

The $73.5k level has indeed been not only touched, but completely broken through, with multiple weekly closes below it. Now this has become the main resistance to watch, while $60k is a very old support level that has once again become relevant.

SPX, Gold, Oil and DXY

It’s easy to see what the main outcome of the war has been so far: oil gapping up while other markets are somewhat unfazed. The S&P 500 printed a worrying lower wick on the daily, but nothing much. Maybe one of Trump’s motives for his habit of starting wars on the weekend is to minimize the potential effect on the charts—if so, he has been somewhat successful, with the unavoidable exception of oil.

Ethereum

Just like Bitcoin, Ethereum also went through its major support level like a knife through butter. Not much relief can be expected here unless the broader market improves, starting with Bitcoin. If the orange coin successfully retakes $73.5k, then ETH will have another shot at $2.5k.

Concluding notes

As long as the current war remains confined to the Middle East, the effects on the markets should mostly be focused on the energy and defense sectors, but this is no time to get too confident in trade sizing. Broadly speaking, what you want to see in order to scale up would be a decisive signal that liquidity is flowing in, whether that’s from the Fed or an innovative Treasury move that would amount to the same thing. When that happens, it will be time for risk-on assets to shine.

It’s frustrating enough being exposed to crypto when the broader market is in the middle of a downturn and Bitcoin outperforms on the downside, but unless you have a significant chunk of your portfolio in metals and equities, you’re probably finding the current market extremely perplexing, and not in a good way. The dollar is poised to weaken further, indices are hitting ATHs, and gold and silver are ripping at an unprecedented rate, while crypto isn’t moving at all. Things look hopeless, but there’s a reason behind this divergence.

First, one key driver behind crypto—not the only one, for sure, but an important one—is money printing. While everything looks like the printers will go brrr in the relatively near future, there hasn’t been much of a significant increase in dollar liquidity so far. Given that jumps in dollar liquidity tend to precede BTC rallies, there’s nothing surprising in crypto’s underperformance. As for the Fed, this week’s meeting held rates steady, though it’s notable that there were two dissenters in favor of cutting by 25 bps. All in all, Trump isn’t getting the liquidity injection he wants just yet.

As for the question why gold and silver did pump—ridiculously so—the answer has to do with the different ways that monetary policy influences gold and crypto. Crypto is a very “grassroots” affair: much of it is driven by risk-loving institutions and good old individual traders with deep pockets buying and spreading the hype, which is why it often takes a significant shift in dollar liquidity for crypto to moon. Gold, on the other hand, is largely driven by governments and other large-scale players that tend to act more cautiously when it comes to various geopolitical and inflationary risks, and caution in this case means buying more gold before such risks can fully materialize and drive prices even higher. That being said, both gold and silver are in very dangerous “hype” territory right now, so major corrections wouldn’t be surprising.

Bitcoin

In a word: gravity.

The $86k level is once again in the process of being lost, after Bitcoin only barely managed a single weekly close above $92.8k (with a worryingly long-wicked candle at that), followed by the worst red candle since November. The odds of the old $73.5k level staying untouched are getting lower by the day.

SPX, Gold and DXY

Nothing new is happening with the S&P 500, apart from a minor retracement after hitting 7k for the first time in history. Gold has continued its rise, although a very nasty red candle is taking shape on the daily for both gold and silver (silver not being shown here since it just looks even more vertical than last time).

The notable thing here is DXY, which has reached lows that hadn’t been touched for four years. Trump wants a weaker dollar to bolster the competitiveness of U.S. industry, and he’s getting his way on that front even though Powell isn’t playing along. The next Fed meeting isn’t until March 18, so the key drivers for DXY in the meantime will be tariffs and any potential attempts at intervening in the dollar-yen exchange rate.

Ethereum

Ethereum is still following Bitcoin, so there’s absolutely nothing new here. The $2,500-2,600 zone is still of course the main support level to watch.

Concluding notes

There were many important earnings releases in late January, and most have beaten analyst forecasts, which helps explain why the S&P 500 is holding up so well. Still, most key tech players are in a very similar situation: earnings are somewhat better than expected, but ridiculously high projections for AI-focused capital expenditure are disconcerting. Valuations for the biggest companies are also on the upper end of the levels we’ve seen historically, so everyone is betting on AI to deliver an unprecedented productivity boost if those numbers are to be justified. Oh, and the threat of war between the U.S. and Iran is once again on everyone’s radar, which adds in a whole new layer of uncertainty.

Many headlines in the new year are far from unexpected in light of recent trends: Trump keeps introducing new forms of geopolitical risk, the concept of established alliances is shifting ever closer to meaninglessness, and the world is inching towards more conflict while AI is still the utopian light at the end of the tunnel for some—and a swiftly approaching train headed our way for others. Much of this is hard to relate to the markets in any concrete way; although trade wars dictated how stocks moved in the first half of last year, by now the bar for something to be market-moving has been raised much higher.

There are, however, two important developments that have significant implications for the markets. The first is the capture of Maduro; regardless of what one thinks of the moral justification behind the move, the message it sends to any countries that might get into any sort of clash of interests with the U.S.—a list of countries that now includes such formerly staunch allies as Denmark—is clear: not only is the U.S. willing to abrogate property rights (as they did with Russia under the Biden administration), but even scooping up a foreign head of state and bringing him to trial on U.S. territory is on the table. In such an environment, saving in U.S. treasuries is a hard sell to say the least. Instead, the far more reasonable option is gold, while Bitcoin is a natural alternative for less risk-averse governments.

The other key development also has to do with judiciary battles, but in this case ones that don’t require a special forces operation. We all know that Trump is keen to get rid of Powell, but this now escalated with a subpoena relating to Powell’s role in the Fed’s headquarters renovation project. Trump, who wants rates at “1% and maybe lower than that,” has begun taking things to a whole new level, but, ironically, the odds of Powell resigning from the board altogether—Powell’s term as chair expires in May 2026, but his governor term extends to January 2028—have dropped now that he has a reason to dig in and fight in the courts.

Regardless of the outcome, it’s clear that Trump wants lower rates and a hot economy. If he gets his way, whether by removing Powell or through novel money-printing mechanisms that the electorate won’t immediately associate with inflation, overall liquidity will go up and, with it, so will crypto.

Bitcoin

So far so good.

The technically not too strong $86k level has held out, and we might just see the first weekly close above $92.8k since November. If $92.8k is successfully reclaimed, 2026 will be off to a good start.

SPX, Gold and Silver

Both the S&P 500 and gold have done a lot of price discovery over the past months, but both charts have started to show some horizontal levels that seem to be playing a role here. In both cases, an important high from 2025 set a new horizontal level on the daily; nothing much—as is the case with charts that have so little price history at current levels—but at least it gives us some orientation for TA.

Silver, on the other hand… well, the monthly chart, going back all the way to 2010, is pretty self-explanatory.

Ethereum

Unsurprisingly, the story with ETH is identical to that of Bitcoin. A weekly candle that has peeked above a significant level, but it’s still unclear whether we’ll see a close above and a successful reclaim of that level.

Concluding notes

While the media is focused on Greenland, the main story with Trump so far seems to be economic: he wants to run the economy hot and he’s determined to do that by any means necessary. If anyone needs a reminder on why central bank independence is widely regarded as a very important thing, the basic idea is simple: if the current administration controls the cost and supply of money, they will simply pump every market imaginable and let whoever is in charge next worry about the inevitable consequences.

The long-term picture isn’t pretty for the U.S. dollar or even for the stability of various long-standing U.S. institutions, but for now, Trump only cares about making the number go up. For crypto holders, that’s what matters most.

We’re wrapping up quite the year, one that was definitely far from uneventful, but not in the way many were expecting. All the stars seemed to be aligned for hard assets to outperform in 2025, and while this did play out, it mostly led to gold and especially silver leaving crypto in the dust.

The Fed ended the year in a somewhat less dovish mood: while the December 10 FOMC did see another 25 bps cut, this was only passed in a 9-3 vote. Three dissenting votes are a very rare occurrence, one that hasn’t happened since 2019, and what’s more interesting is that the dissenting voices went in both directions, with one member favoring 50 bps and two voting to keep rates steady.

As for inflation data, the delayed November CPI came in at only 2.7% YoY, which is quite a bit less than the 3.1% forecast. If you’re wondering why this didn’t lead to a sharp rally across the board, the explanation is simple: since certain datapoints were simply unavailable because of the shutdown, the Bureau of Labor Statistics had to fill them in by, well, guessing (or, to put it less charitably, by making them up). One of those guesses in particular, namely the one relating to rent prices, was surprisingly low, which is why the market didn’t take this particular release very seriously.

Bitcoin

Not much has changed.

The $92.8k level is still the crucial resistance to watch. The one silver lining to the current situation (which looks frighteningly like a bear flag on the daily) is that $86k seems to be forming as a new horizontal level, one that puts a technical obstacle between here and $73.5k.

SPX, Gold and Silver

These three charts are all showing this year’s price action, and together they paint a decent picture of the main trends of 2025. SPX, which still hasn’t managed to close above the previous ATH, is up almost 17% year-to-date (YTD), with a largely stable upwards trajectory since the Q1/Q2 volatility. Gold, meanwhile, is outperforming notably with 70% since the start of the year, but the real star of the show is silver with twice that: 140% YTD. The dynamic between gold and silver tends to be similar to that of Bitcoin and Ethereum, with silver being the higher beta version, but this level of outperformance is still remarkable. This doesn’t mean that 2026 will continue to be spectacular for silver—a year as incredible as this one is rarely followed up by anything remotely approaching these numbers—but it does show the kind of attention that hard assets can get.

Ethereum

Just like with Bitcoin, there’s nothing going on with ETH either. it’s still between the same support and resistance as last time, likewise with a pattern that looks worryingly like a bear flag on the daily. The way things look, both BTC and ETH are likely to close the year in the red—not by much, to be sure, but it’s hard to be enthusiastic about the performance of either asset.

Concluding notes

To conclude on a positive note, it’s important to keep in mind that monetary policy shows zero signs of changing long-term. As much as Trump wants to be perceived as tough on inflation, there’s absolutely no politically acceptable way to deal with debt other than eventually inflating it away. The DOGE era is far behind us, and regardless of what obscure name the Fed and Treasury find for the latest flavor of quantitative easing (QE, or, in layman’s terms, printing boatloads of ever more worthless fiat), the one thing we can be certain of is that this will continue. Gold and silver are showing as much, and I still expect this to spill over into crypto.

Finally, I hope you enjoy this Holiday season and I wish you all the best in the new year, both on and (more importantly) off the charts! Regardless of what Q1 brings in the market, the coming year will be incredibly exciting for Bitlock, and I look forward to sharing some major updates in future newsletters.

All eyes are on the upcoming Fed meeting next week, December 10, with a 25 bps cut now almost 90% likely. If you’ve noticed that the markets are starting to look better over the past two weeks or so, this is largely due to dovish policy becoming more and more likely; a couple weeks ago the probability of a cut was under 40%, so it’s easy to guess what happens to risk-on markets when that number more than doubles.

That said, the December Fed meeting will be out of the ordinary due to the recent government shutdown. Although federal services have been back up and running for a while, the shutdown made it impossible to retroactively collect key inflation data, so the October CPI has been cancelled. The next data release, which is the November CPI, will only be out on December 18, well after the meeting. The Fed will therefore be flying at least partly blind.

While a cut is almost guaranteed, what matters more will be Powell’s language: will he still pretend to care about fighting inflation or will he capitulate to Trump’s ultra-dovish camp? Out of key market-moving headlines that we can expect in the coming couple of weeks, this is the one to look out for.

Bitcoin

Still not great.

Even though equities recovered somewhat and the broader market isn’t looking too bearish, Bitcoin still lost the $92.8k level, which has now become the crucial resistance to watch. On the downside there’s nothing much in terms of support until $73.5k.

SPX and VIX

The S&P 500 was looking not too good on the daily since losing the diagonal covered in previous issues, but this time we’re zooming out to the weekly for the bigger picture: panic about the AI bubble has subsided and the index is now tantalizingly close to a new ATH. Closing a weekly candle above the previous ATH would be the outcome bulls want to see, while a swing failure type pattern (see how Bitcoin failed to close above the ATH three times before plummeting) would be the bearish scenario.

There’s absolutely nothing new with gold or the DXY, so this time I opted to revisit the VIX: after a couple of worrying spikes, volatility is back down, which increases the likelihood that the bullish scenario on SPX will be in play.

Ethereum

BTC did continue to dump after the previous update and, unsurprisingly, ETH followed suit. The major $2.5k-2.6k zone was tapped briefly, but the $3.1k level is now a key resistance. Since there are no major narratives that would cause a volatile divergence between ETH and BTC, the two charts are fairly similar, with the one key difference being that ETH, unlike BTC, has a support zone very close on the downside.

Concluding notes

The AI situation mentioned in the previous issue hasn’t improved to any meaningful extent, although the media have gotten tired of reporting on it; in fact, credit-default swaps (CDS) on major AI players are still dangerously high (even if they’re no longer mooning), which reflects persistent scepticism about whether the massive debt-fueled boom is sustainable. The market can stay proverbially irrational for surprisingly long, but AI companies will still need to actually start making money at some point if they’re to thrive in the long run.

On Wednesday, the U.S. government shutdown finally ended after 43 days, making it the longest shutdown in history. From economic data releases to welfare payments, many federal services were halted and employees were either furloughed or worked without pay, including in some lesser-known sectors such as air traffic control, leading to thousands of flight cancellations. Whether you’re a trader that wanted clarity on jobs data or a regular Joe that wanted to visit family in a different part of the country, there were many ways to be inconvenienced in the U.S. over the past month and a half.

While the federal government is back up, the same can’t be said for equities or especially crypto. The poor performance recently is largely due to two factors: Fed uncertainty and fears that the AI bubble is bursting. The first one is straightforward: at the October 29 FOMC, the Fed cut rates by 25 bps, as expected, but Powell suggested that this could be the final cut for 2025, partly due to the lack of economic data. As the odds of an additional cut at the December 10 meeting plummeted from about 95% to 50%, where they are right now, risk-on assets reacted exactly how you’d expect.

The issue of the AI bubble is much more complicated and speculative, but in brief, the market seems to have run out of the optimism and FOMO that came as a result of ever more extravagant expectations for how AI will revolutionize the economy and society as a whole. Cracks are starting to appear in the optimistic narrative: companies that are important players in AI are beating earnings but their stocks are dumping right after the announcements. Good news followed by bad price action is just about the biggest warning sign that things could get very messy. If you’ve been in crypto for at least a couple market cycles, you’ll know how that dynamic tends to play out, and it’s not pretty. When everyone is convinced that something is the future, but extremely positive headlines fail to move the price any higher (or even move it in the opposite direction), that means that the market has run out of buyers.

Some AI companies themselves are only making matters worse by phenomenally bad PR, right at the moment when doubt is starting to creep into the market. Most notably, OpenAI’s CFO Sarah Friar made a statement that could hardly have been more miscalculated: as the public was becoming sceptical about the gargantuan sums that will be required to keep scaling computing power, she mentioned that the company hopes the U.S. government would guarantee the financing of its data center investments. In other words, a government bailout. Of course, OpenAI backtracked and went into full PR crisis mode, but the damage from statements like that is hard to undo.

Bitcoin

One word: ugly.

If my tone was a bit on the pessimistic side in the previous issue, now it’s clear why—losing $110k did indeed lead to five-figure BTC, and now the key level to watch is $92.8k. It’s hard to overstate how important this level is: it’s proven important a number of times (especially on the daily), and there’s a whole lot of empty space below it all the way down to $73.5k.

SPX, Gold, and DXY

The S&P 500 managed to peek above the diagonal, even making a fresh ATH, but the optimism was short-lived: the high happened right on October 29, and Powell’s comments took it back below the diagonal within a few days.

Gold, meanwhile, is performing relatively well; the retracement discussed in the previous issue didn’t turn out to be all that deep. As for DXY, no prizes for guessing what it’s doing given the price action on risk-on assets: it’s back above 99.1 and looking strong.

Ethereum

After losing $4k, the next major support, $3,150, was indeed hit, so the question now becomes whether it will hold or if sub-3k ETH is coming. As always, ETH tends to be higher beta BTC when the market is rough, so everything depends on the orange coin. If BTC does end up losing $92.8k, things could get ugly here, and $2.5k would be very much within the realm of possibility.

Concluding notes

Although caution is absolutely warranted with regard to the AI sector in particular (and consequently risk-on assets in general), I’d urge everyone against overreacting and trying to time any potential crash. There’s a lot of wisdom in the adage that far more money has been lost in trying to predict corrections than in corrections themselves. In most cases, if you’re convinced a crash is coming, the best course of action is simply to trim potential portfolio exposure to AI rather than trying to short aggressively. Nothing worse than getting blown up in the volatility, only to later realize that your thesis was directionally correct.

The U.S. government shutdown continues: as of today, it’s the second longest shutdown in history, behind the 2018-2019 shutdown that lasted 35 days, and there’s still no end in sight. Prediction markets are giving odds of almost 75% that this shutdown will beat the previous record in duration, so the situation is very close to becoming completely unprecedented.

Key economic data releases are still paused, and will likely remain so when the upcoming Fed meeting takes place next week, on October 29. Regardless, the odds of another 25 bps cut are now about 99%, so monetary policy is as good as guaranteed to stay on its dovish trajectory, especially since there almost certainly won’t be any surprising data releases—or any data releases at all—to change the Fed’s mind in the meantime.

Bitcoin

In simple terms: not great.

Bitcoin has been bouncing between the $110k level and the low to mid $120k region for over three months now, but the price action has started to push more forcefully in the downward direction. If we see another weekly close below $110k, then five-digit Bitcoin becomes a very likely scenario.

SPX, Gold, and VIX

Sometimes, simple TA is all you need.

In the previous issue we looked at the TA on the S&P 500, which didn’t offer much by way of clear levels except for a diagonal support that was in the process of breaking down. As it turns out, that single diagonal line was perfectly sufficient, and we can see that the price respected it so far, failing to break above a couple of times and forming what is potentially a bearish flag pattern.

Gold looks toppy on the weekly; however I don’t think this is so much a major shift we’re witnessing as simply a consequence of the extreme hype we’ve seen lately getting somewhat worn out. If the weekly closes here or lower, a deeper correction seems probable, but in the current macro environment it’s hard to see it lasting very long or going that far. As for DXY, there’s nothing interesting happening, so I thought I’d share a VIX chart instead, since volatility is something that’s worth keeping an eye on right now. Of course, volatility isn’t even close to spiking as high as it did in the transition from Q1 to Q2, but if it’s persistently higher it can put downward pressure on equities.

Ethereum

Unsurprisingly, Ethereum is following Bitcoin.

At this point, Ethereum’s chart looks worse than Bitcoin’s, since we’re in danger of seeing a clear loss of the $4k level if the current candle closes somewhere around current levels. There are no very clear supports on the weekly until $3,150, so ETH’s increased volatility in times of panic could play out.

Concluding notes

At a time like this, there’s little to do other than keep an eye on the macro and watch where equities will take the rest of the market. The recent slump has obviously also led to some net outflows from both Bitcoin and Ethereum ETFs, but these are fairly insignificant as both groups of ETFs are still very close to their ATHs in terms of flows.

It’s not a good idea to speculate too much, but if the “AI bubble” does end up bursting, I’d recommend keeping one thing in mind: that would be extremely messy for equities, consequently also for crypto, but it doesn’t change the longer-term outlook for crypto one bit. In fact, if the AI hype fizzles out in a somewhat orderly fashion, rather than tanking everything overnight, that would leave more room in the narrative matrix that might just be recaptured by digital assets.

We’re entering Q4, a quarter that typically brings volatility—mostly the good, upward kind—for both stocks and crypto, but this time the optimism is somewhat overshadowed by the ongoing U.S. government shutdown. In brief, Republicans and Democrats couldn’t agree on federal spending, especially healthcare, in time to pass a spending bill. As a result, many government services were put on hold, with 900,000 federal employees temporarily out of work.

The good news is that this kind of thing doesn’t have a direct impact on the markets, since shutdowns are far from unheard of. The bad news is that the shutdown does have significant indirect effects on just about everything: for example, key economic data releases, including the September jobs report, have been halted, leaving the Fed “flying blind” ahead of their October 29 meeting. Prediction markets give about 40% odds of the shutdown extending into November, in which case the suspended data releases would come only after the Fed announces its policy decision (most likely another 25 bps cut).

Bitcoin

Indecision.

The menacing weekly candle discussed in the previous issue did manage to close back above $112k, followed by yet another ATH that was only barely an ATH. The region between $110k and $124k is now an area of indecision, one that is hard to trade directionally until the weekly resolves one way or the other.

That said, it’s worth noting that Bitcoin ETFs saw a total net inflow of $5 billion since the start of the month, so appetite for the orange coin is very much present.

SPX, Gold, and DXY

Trouble in TradFi land?

The S&P 500 is showing some unusual signs of weakness. The TA here isn’t very clear, but the one line that kind of fits is a diagonal support that was just broken (barring a miraculous turnaround by the end of the trading day), driven by renewed intensification of the U.S.-China trade war. In terms of seasonality, Q4 is definitely bullish for equities, but it does tend to bring a lot of volatility as well, so being prepared for a deeper correction is a very good idea.

As for gold and DXY, not much has changed: gold is taking a breather while DXY is still stuck in the 97-99 zone.

Ethereum

The $4k level is tested once again.

Previously, $4k held quite convincingly, with only a brief wick below on the weekly. Now, with the broader market looking shaky, this level is getting tested again. Needless to say, what happens here will largely depend on how Bitcoin handles the broader volatility, as Ethereum rarely outperforms in a moment like this.

Concluding notes

Along with mistrust in the U.S. government, the changing macroeconomic landscape is pointing to “hard” market sectors—energy, commodities etc.—reclaiming an important role in the global economy. All the hype is still on AI, but data centers require lots of electricity in order to train and run the latest models, and this demand is rapidly outpacing both supply and the growth in compute efficiency.

Headlines about Nvidia’s ever-growing market cap are everywhere, but there’s much less attention paid to the fact that silver hit a new ATH and broke $50 an ounce for the first time ever, while energy stocks are pulling 2-3x moves. I’m not saying the AI hype is over, but simply that, if you want to make the most of it, you might want to think outside the box and consider other options than the same few stocks that everyone is talking about.

The FOMC last week brought a 25 basis point rate cut, in line with most expectations, as the weaker job market (namely the almost unprecedented downward revisions of jobs data that I covered in the previous issue) caught up with the Fed. The overall tone of the meeting was fairly dovish, with two additional cuts expected by the end of the year. Trump, however, wants rates to go down more sharply than that, and if he succeeds in getting a majority in the Federal Board of Governors, we can expect policy to shift into hyper money-printing mode.

Another important piece of news comes from the SEC—and it’s worth taking a moment to appreciate the fact that, nowadays, it’s mostly good news for crypto coming out of the SEC, instead of an endless array of pointless lawsuits—with new generic listing standards for crypto ETFs. In a nutshell, this means that new ETFs for crypto assets that are already traded on a regulated futures exchange will be eligible for an expedited listing process that will take only 75 days, replacing the previous timelines which were closer to a year (along with nonsensical rejections, requests for clarification and anything else that Gensler was able to come up with to damage the industry).

We can thus expect plenty of new ETFs to enter the space, with both single- and multi-asset exposure to crypto. The first multi-crypto ETF, Grayscale’s Digital Large Cap Fund (GLDC) containing Bitcoin, Ethereum, XRP, Solana, and Cardano, was already approved. Overall, this is a total paradigm shift in the regulatory environment in the U.S., one that will bring a ton of institutional capital into the space.

Bitcoin

Support getting tested once again.

The zone between $110k and $112k is dangerously close to becoming a resistance level again. The weekly close will be telling—anything below $110k would not be a great scenario for bulls. With that said, the most bearish month of the year for BTC is almost over, so a dip further below $110k to shake out overconfident longs before reclaiming the level wouldn’t be too surprising.

SPX, Gold, and DXY

Everything except for the dollar is unstoppable.

The S&P 500 looks essentially the same as in the previous issue on the weekly chart—a steady push into new ATHs—so I decided to share the monthly chart this time, to put things into perspective. The U.S. being involved in both a trade war and an actual war didn’t change the overall trajectory of equities, and all the doom and gloom at the end of Q1 this year is nothing but a single nasty wick.

Meanwhile, gold is showing some serious follow-through on its breakout from the range that it had been stuck in until early this month, with no signs of slowing down. Adding the weakness of the Dollar index into the picture, it becomes easy to see that the reason behind both charts is the hum of the money printers, slowly but steadily getting louder in the distance.

Ethereum

It was bound to happen—all eyes on the weekly close now.

The retest of $4k wasn’t exactly unexpected given how important a level it is, but so far it seems to be going great. Bulls will want to see a weekly close above the level and—provided the broader market doesn’t do anything crazy—continuation is likely for ETH in Q4.

Concluding notes

The bearish seasonality did play out, as we can see in the charts, but it is now almost behind us, with only a few days left in September. There’s still no reason to be pessimistic about Q4, especially with the institutional and macro environment that we’re in right now. The money printers will go brrr at an ever-accelerating pace, and the post-Gensler SEC means that projects in the U.S. can try to raise money for actually legit things for a change (with the previous SEC, the only way to avoid lawsuits was to launch a purely zero-utility memecoin with no value capture whatsoever). All in all, exciting times are ahead.

In the previous issue I mentioned that the macro outlook was decent, which was definitely the case given the U.S. economic data at the time, but the cautionary note on seasonality and other upcoming datapoints turned out to be really necessary. The big surprise was the jobs data revision this week, which erased a total of 911,000 jobs from earlier nonfarm payroll numbers (specifically those for the 12 month period ending in March 2025). If you’re wondering how this is possible, it’s because the monthly figures are only estimates based on surveys, which are then anchored to more reliable data annually. Sometimes, it turns out that the monthly estimates were off by a lot, which can send shockwaves through the markets.

Normally in this kind of an environment, bad news would be good news, because the odds of a rate cut would go up quite a bit. This did in fact play out to an extent—there’s now even a chance of a 50 basis point cut next week—especially as the PPI came in well below expectations at 2.6%, compared to the expected 3.3%. This is a good combination, but the problem is that the labor market being this weak is still worrying. There’s a fine line between data that’s just bad enough to push rates lower and data that’s so bad that the worries of AI taking everyone’s jobs away amid runaway stagflation become much more impactful than anything the Fed can do.

All that said, the crucial release to look out for is the CPI, which will be out within hours after this newsletter is published. If the CPI is also cooler than expected, the party’s on for risk-on assets, but if it comes in hot, the word stagflation will start trending once again. As we’ll see below, the charts largely look undecided, so the CPI will be the missing piece that will show where markets are likely to go.

Bitcoin

So far so good.

Looking at the weekly chart, we can see that the previous candle managed to close above $110k, but it failed to clear $112k. If this week’s candle closes somewhere around here or higher, things will be looking good once again, and another ATH will be very close. Much will depend on the macro picture, so keep your eyes on the CPI ahead of next week’s FOMC.

SPX, Gold, and DXY

TradFi is waiting eagerly for data releases.

Absolutely nothing has changed; the S&P 500 and DXY look very similar, while gold is confidently pushing into price discovery. All three of these charts are essentially waiting for the CPI and the FOMC; directionality should be much clearer to gauge after we see how the macro looks.

Ethereum

Ethereum still holding up well.

Ethereum has managed to stay above $4,200, not even getting close to the pivotal $4k support. Not much to say here either except that it’s holding up well amidst the uncertainty; in any case it’s hard to overstate how important the U.S. economic outlook is right now, as pretty much everything looks undecided from a purely technical perspective.

Concluding notes

One final reminder is that we’re still in September; whatever happens with the CPI and the immediate market reaction to the release, don’t forget that we still have some time to go before seasonality starts being a tailwind again. September is typically bad for both equities and crypto; this fact on its own doesn’t mean much, but it should make you a bit more cautious, especially if the macro starts moving in a bearish direction. If that does happen, don’t get too caught up in the bearish hype either, since the outlook for Q4 hasn’t changed at all.

The macro environment is giving mixed signals right now, but the overall picture definitely leans in a bullish direction. The Fed is about to cut rates while the U.S. economy is growing faster than expected, and the market looks ready for a Q4 rally. That said, seasonality will only start to be a tailwind when Q4 actually starts. Right now, we’re still in the early days of September, the single worst month not just for Bitcoin, but also for major equity indices.

With this seasonal cautionary note in mind, it would be a good idea to keep an eye on the major data releases in the coming days, namely NFP (tomorrow), PPI (Wednesday) and CPI (Thursday). If we see any unexpected weakness in those numbers, the narrative could quickly shift to runaway inflation, which would put downward pressure on the markets. At this point it’s almost impossible for the Fed to keep rates steady, unless we get some really major surprises, so a cut is still basically guaranteed (currently at a probability of almost 98%), even if things look inflationary.

Bitcoin

Not looking great right now.

The weekly did close below $110k, which isn’t a great sign for bulls unless this week’s candle closes back above that level and, ideally, $112k. The reason $112k is important is that it’s the May high, which also coincides with the low in early August—a low that forms a menacing double top that is particularly obvious on the daily. If the double top does play out, the target would be right around the $98.5k level.

SPX, Gold, and DXY

Gold follows through, SPX looks less than fantastic.

The past couple of weekly candles on SPX look a bit toppy—not much to get worried about on its own, but in the context of bearish seasonality for September, it would be a good idea to keep an eye on the support levels if we do see a retracement here. Gold on the other hand is following through on the breakout into price discovery; in case it shows any weakness here, then the previous resistance at $3,433 would be the level to watch. As for DXY, there’s nothing new whatsoever.

Ethereum

Ethereum is still holding up well.

Ethereum’s weekly chart does look somewhat worrying, but the daily, shown here, paints a much brighter picture than Bitcoin’s chart. The $4k level is still untouched, unlike Bitcoin’s $110k level, and we’re yet to see how it reacts if the level is tested. It’s hard to gauge directionality in this kind of an environment, since ETH will end up following the broader market if things go south, but it still means that ETH could continue performing well in a potential Q4 rally.

Concluding notes

Last week I mentioned that gold’s breakout, if confirmed, could be a sign of a shift to expectations of higher inflation and instability in the current financial status quo. So far, this seems to be playing out: the breakout has been confirmed, and the Dollar index is still weak in spite of the good outlook for the U.S. economy.

What I said about Bitcoin also still stands: in this environment, it is likely to catch up to gold as expectations of continued inflation ramp up. This will take some time, however, since the technicals aren’t exactly ideal. So, if the potential for a red September across the board does play out, that will provide valuable buying opportunities.

We’re less than three weeks away from the September FOMC that will most likely bring a rate cut, but the drama between Trump and the Fed is only heating up. In the latest unprecedented development, Trump signed an Executive Order firing Fed governor Lisa Cook due to alleged false statements on her mortgage documents. In response, Cook sued Trump and set off a legal battle that will probably go all the way up to the Supreme Court.

The reason this is important for Trump is that Cook is one of the four governors that vote on Fed policy that were not appointed by Trump, out of a total of seven. If he can get her removed and install someone more inclined to do as he says, Trump would effectively gain control over the majority of Fed governors. Since the Fed is supposed to be fully independent, it’s easy to see why this is making a lot of people upset.

Trump’s overarching goal is to finance the ballooning U.S. debt without the interest payments getting unmanageable. One option is to get the Fed to bring rates much lower, but even if that takes too long—if he doesn’t gain control over the Fed for some time—he can still rely on Treasury Secretary Bessent to find other ways of encouraging market participants to buy up government debt. As mentioned a few previous issues, Bessent is already working on this, with stablecoins being the most obvious play (and it’s easy to see what that means for crypto).

Long story short: the crypto market may have cooled down a bit, but this is nothing out of the ordinary if we consider seasonality. It’s almost September, historically the single worst month for Bitcoin, and with the current U.S. administration’s approach to fiscal and monetary policy, there’s no reason to worry about any kind of significant tightening that would impact risk-on assets negatively in the mid to long term.

Bitcoin

All eyes on the weekly close.

The test of the $110k support level, mentioned in the previous issue, is happening right now. So far there hasn’t even been a daily close below the level, which is encouraging for bulls, but if the weekly closes here or lower, five-figure Bitcoin seems likely. Keeping in mind that September is historically awful for BTC, I wouldn’t be surprised if we see some more downside, but once again, it all depends on the structure.

SPX, Gold, and DXY

There’s still nothing new in TradFi… or is there?

The three charts above tell us nothing much, as hardly anything has changed since the previous issue. There is one thing to look out for, however, namely the fact that gold is trying to finally break out of the range it’s been in for over 100 days now. This is another close worth watching: if it succeeds, the next leg up on gold could be explosive. As for why this might happen and what it means, more on that in the concluding section below.

Ethereum

In spite of volatility, Ethereum holds up well.

The cautionary note in the previous issue was very warranted; we saw a dip in which BTC took everything down with it, but the interesting thing is how well Ethereum is holding up. On the daily, its structure looks much better than Bitcoin’s, and there’s still the all-important $4k level where bulls might step up to the plate if we see it tested. If Ethereum keeps this up, there’s every reason to believe it will outperform again once the broader market regains strength.

Concluding notes

Overall, the market doesn’t look too exciting, and it’s hard to say anything much based on the charts above considered individually. If we zoom out to the bigger picture and look at all the charts together, though, then there’s something notable that might be happening. If gold succeeds in breaking out—remember that it’s still an if—while DXY is this weak and U.S. tech stocks are taking a breather as the AI rally slows down, then this could be telling us something. Headlines are dominated by unprecedented levels of conflict between the current administration and the Fed, by the exponentially growing deficit and, of course, tariff news. In this environment, gold’s outperformance is a clear message that we will see another wave of mistrust in the current global financial system.

This is all still dependent on the breakout actually being confirmed, so take it with a grain of salt. But if it does play out, we will probably see another violent move up in gold, and in that case it’s only a matter of time before Bitcoin catches up. Maybe not yet—don’t forget the horrible seasonality this coming month—but the rest of 2025 could be quite the ride.

The July CPI report was a mixed bag, with headline inflation at 2.7%, just below the expected 2.8%, while Core CPI was 3.1%, above expectations of 3.0%. Nothing too surprising, but this was enough to make a rate cut at the September 17 FOMC extremely likely. Trump has also been very vocal on social media, saying that “Jerome ‘Too Late’ Powell must NOW lower the rate,” and even threatening a lawsuit that could remove Powell before his term ends in May of next year.

All this would have been very unusual in any other administration, but it has very much become the new normal. Even if the lawsuit threat doesn’t play out, Trump still has a much simpler way of greatly diminishing Powell’s influence on the markets, namely by announcing who he plans to appoint as the next Fed Chair in May 2026. Much of the impact that any Fed Chair has is due to what the market expects him or her to do in the future, more so than what the Fed Chair actually does at any single meeting or press conference. Any changes the Fed Chair can make are incremental, so what really matters is the direction in which those changes will add up over months and years. By announcing who will be the next Fed Chair, that person—most likely someone very loyal to Trump—will automatically gain a lot of power over the markets, power that will quickly eclipse that of the current chair.

Long story short, traders will soon have to keep an eye on both Powell’s statements and those of his likely successor, a situation that will be made all the more entertaining (or confusing, depending on how you look at it) by the fact that they will probably be at odds with each other. If you’re used to the old way of keeping track of the Fed—just reading the main points of a press conference or looking at a dot plot every once in a while—that will soon become woefully inadequate.

Bitcoin

Volatility is back.

After a very uneventful second half of July, BTC seems to have remembered that it can move along the y axis as well. Not decisively, though, at least not for now: we’ve seen a dip that didn’t quite manage to test $110k and then a very ugly-looking failure to close above the most recent ATH. If the daily candle closes like this, it won’t be the prettiest picture for bulls, and the $110k support might just get tested properly.

SPX, Gold, and DXY

Not much has changed in TradFi land.

The S&P 500 is back to its orderly march upwards and gold is still a range trader’s paradise. As for the U.S. Dollar Index, the 101.6 level, which seemed tantalisingly close in the previous issue, is back to being a pipe dream for now, but given how risk-on assets have been performing over the past weeks, it should come as no surprise that DXY has failed to show any strength.

Ethereum

Ethereum is where all the action is.

The breakout above $4k was strong, putting ETH within a stone’s throw of its $4,868 ATH from 2021. Right now, the daily candle doesn’t look great, much like Bitcoin’s, but the crucial thing is how much strength it showed at the breakout. $4k is a level that ETH failed to close above on the weekly chart twice in 2021 and three times in 2024, only ever holding it for a couple of months in late 2021, so a decisive breakout like this is just about the best thing you can expect. If we do see a dip, perhaps driven by BTC, it goes without saying that $4k is the support to watch, especially on higher time frames.

Concluding notes

I mentioned the spot Ethereum ETFs in the previous issue, but this week kicked off with a record that absolutely must be given the attention it deserves: on Monday, the spot ETH ETFs had over one billion dollars of net inflows. For context, the record for Bitcoin ETF inflows is only about 30% higher than that, at $1.37 billion. What’s more, the incredible performance of Ethereum ETFs isn’t just due to a one-day outlier: if we add the two preceding and the two following trading days, then we can see that the ETFs had almost three billion dollars of inflows in the span of one week.

All this was unimaginable back when the prevailing sentiment was that Ethereum is “dead”, just months ago, but what was even more unimaginable is the fact that this is being driven largely by regulatory developments in the U.S. Paul Atkins, the new SEC chair, recently made some very strong statements about moving financial markets onchain and simplifying the process of issuing tokens and raising capital in the U.S. This will of course benefit crypto in its entirety, but while Atkins didn’t single out any one chain for these purposes, it’s safe to conclude from what we’ve seen with BlackRock, Coinbase and others that the bulk of the activity will be on Eth and its L2s. In any case, Gensler’s anti-crypto crusade now sounds like a half-forgotten bad dream.

Finally, if all this has made you excited to trade altcoins in this environment, then I’d recommend you check out the trading competition over at Bitlock, with a $10k prize pool for traders with the highest volume and referrals. I never do any sort of promotions here, but as you probably already know, Bitlock is a project that I’m deeply involved with, one that follows the core ethos of self-custody and security. Besides, the trading competition doesn’t require any risk on your part—just trade as you would anywhere else, fully on-chain of course, and you can earn a pretty good prize for making it onto the leaderboard.

It’s hard to go a day—and impossible to go a week—without U.S. trade policy headlines taking up all the media attention. But more often than not, the news are mostly a distraction; it’s good to have an idea of the general direction in which things are developing, but obsessing over them any more than that does much more harm than good. For example, the U.S.-China tariff pause was supposed to expire on August 12, causing untold headaches in the financial markets, but then, just a couple days ago, it came out that the pause will most likely be extended by another 90 days, to November 10. Trading headlines is always a risky approach, but when it’s something that whipsaws as much as U.S. trade policy, it’s especially precarious.

In what seems to be a more important development, Trump’s threats of blanket 30% tariffs on the EU were enough to get EU negotiators to agree to a deal with 15% tariffs on most EU goods entering the U.S., with the EU pledging to purchase $750 billion worth of U.S. energy and invest $600 billion in the U.S. by 2028 in return. There are more details to the deal, but if it sounds like a very bad deal for the European side, well, that’s because it is. It’s safe to say that, regardless of how unsustainable some aspects of U.S. fiscal and monetary policy are in the long run, the EU is in no position to stand up to it. For those of us primarily interested in crypto, not much has changed: in the areas of TradFi that are important to keep track of, the U.S. is still calling the shots.

Looking at the most recent GDP release, the U.S. is holding strong on that front as well: Q2 annualized GDP growth, released yesterday, came in at 3%, significantly higher than the expected 2.4%. This is quite the positive surprise, but it should be noted that it’s partly driven by a reduction of the U.S. trade deficit, while real final sales to private domestic purchasers—a less volatile figure often called "core GDP"—grew at just 1.2%, down from 1.9% in Q1. This, along with the fact that GDP growth dramatically reduced the odds of a Fed rate cut in September (while yesterday’s Fed meeting held rates constant, but this was pretty much universally expected), explains why the impact on the markets was mixed.

Bitcoin

Nothing ever happens—at least for now.

The only way you can tell that I didn’t accidentally post last week’s BTC chart is by the number of the recent daily candles in the 2-3% range. No change whatsoever—$110k is still the support to watch if things get shaky.

SPX, Gold, and DXY

The S&P 500 Index isn’t showing any change for now; the mixed reaction to yesterday’s GDP figures and the Fed meeting has managed to make this a red weekly candle for a change, but there’s still time for things to turn around.

Gold is still stuck in its range; if you’ve been range trading it, then it must have felt like free money. It’s not often that we see technical levels so clean in gold.

The U.S. Dollar Index is the odd one out—the only one with a significant shift. As it became clear that the U.S. is calling the shots globally, in spite of its fiscal irresponsibility, the dollar performed splendidly. The only question now is whether this move will have enough momentum to challenge the 101.6 level.

Ethereum

Ethereum taking a breather.

Not much has changed since last week—ETH made another attempt to creep up to the $4k level, but it hasn’t quite managed to do so yet. At a time like this, macro headlines tend to dominate, which is why ETH often waits for Bitcoin’s lead when things look indecisive. That said, it’s still showing relative strength that we haven’t seen since 2022.

Concluding notes

As mentioned in previous issues, a crucial reason behind Ether’s relative outperformance was the extremely bearish sentiment that preceded it. It’s worth noting, though, that this outperformance manifested not just in the price, but also, just as significantly, in the ETF flows. To get an idea of what I mean, here’s a chart of cumulative ETF flows since launch:

As you can see, it became parabolic early this month, right at the same time as the ETH/USD and ETH/BTC charts. This is not surprising, of course, but it does show the breadth of the recent demand for ETH. Given how things look, ETH could keep outperforming for a while, but I’d be cautious if we have either a macro shakeup that would cause BTC to dump or something that would lead to another parabolic move up for BTC. When a major BTC move happens, in either direction, all eyes are on the orange coin and pretty much everything else underperforms.

The macro outlook remains similar, as last week’s CPI release was largely in line with expectations, with a 2.7% headline CPI and only the core CPI, at 2.9%, slightly below the 3% forecast. Inflation is still stubborn, and at least a portion of these figures reflects the impact of new tariffs and import costs, with some analysts predicting that these could continue to push inflation higher in the coming months.

What this means is that the Fed won’t be able to cut rates just yet, even though that would be one way to decrease the U.S. deficit. Luckily for the crypto market, though, it looks like stablecoins are becoming more and more important as a way for the current administration to create demand for government debt. Briefly put, stablecoin issuers make money by investing the dollars backing their stablecoins into treasury bills, which helps keep rates under control. By driving more dollars into stablecoins—and pumping crypto prices is an excellent way of doing that—the government has a lever for controlling debt financing costs that is completely independent of the Fed. It doesn’t solve the long-term problems that I keep talking about in these newsletters, but it does have the potential to inject unprecedented amounts of liquidity into the broader crypto market, and we all know what that means.

Bitcoin

Resistance becomes support.

Bitcoin finally managed to break out of the range that it had been stuck in for two months. The breakout had enough momentum to push it to a new ATH just above $123k, and now the old resistance at $110k becomes the crucial support level to watch. Given how Bitcoin tends to perform after putting in a new ATH, it’s likely that the new support level won’t give any kind of an easy entry on retest—at least not any time soon.

SPX, Gold, and DXY

The S&P 500 Index resumed its orderly path upward, dipping slightly towards the previous ATH last week, but not actually testing it. Given that any form of conservative fiscal policy, which would avoid inflation in the long run while risking damage to the markets, is well and truly out the window, there’s no surprise that stocks are doing great.

Gold, on the other hand, is still stuck in its range. The $3,433 resistance that I mentioned last time was tested almost perfectly, with the high just a few dollars above it, but so far it has given a textbook rejection. The question now is whether gold will follow Bitcoin’s lead.

The U.S. Dollar Index tried and failed to reclaim the 97.67 level. Nothing new or surprising here—the DXY and risk-on assets are still going in opposite directions, as usual.

Ethereum

Ethereum breaks out, big time.

The resistance that Ethereum was facing in the $2,550-2,620 zone was formidable, but it broke through and grabbed the attention that it had beed waiting for all this time. I kept mentioning the fact that sentiment on ETH was ridiculously bearish for much of the first half of this year—if you thought I was overdoing it, now you see why that was an important factor to consider. ETH/BTC is up almost 70% since then, and ETH/USD is now eyeing the infamous $4k level.

Concluding notes

In macro terms, everything looks like we’re in for a very exciting time for the broader market. Those of you that have been keeping an eye on my Telegram channel will know that I’ve also been personally involved in building a project that will help you make the most of the action that is ahead of us: Bitlock, a wallet that gives you complete control, privacy, security and convenience on any chain. This is a project that is only just getting started, but it’s already fully functional for you to try out, along with a vibrant Telegram group where you can learn more about it. There will be much more about this to come, but for now, suffice it to say that early users will be rewarded for being ahead of the pack.

As you might know if you’ve kept track of my Twitter, I’ve been very busy working on something lately, something that I’ll be able to share with you very soon. In order to focus on that one hundred percent, this newsletter had something of a summer break, but we’re now back to the regular macro and market updates hitting your inbox.

A lot has happened globally during the last month, and yet—although the world was even closer to all-out global conflict than it has been in a long time—not much has changed when it comes to the markets. The 12-day war between Israel and Iran made headlines globally, but it barely made a splash on the charts, except of course for oil. If you’re mostly focused on crypto, occasionally dabbling in tech stocks, you might’ve heard that oil prices were causing major headaches for pretty much every key player in the global economy, because oil is, after all, a key driver of inflation—especially the kind of inflation that gets regular people to vote, driving incumbent parties out of office. Still, all this talk of impending doom turned out to be overblown. In concrete terms, it was barely a blip on the weekly chart:

Things could have gone in a different direction; Iran could have closed the Strait of Hormuz, through which 20% of global oil passes, and that would have caused much more disruption. As things stand, all that happened was a ~15% pump and dump—the kind of thing crypto traders barely even notice.

Speaking of conflict, the Elon vs. Trump battle continues, now with Musk starting a new political party after failing to change the course of the Trump administration. It remains to be seen whether this will have any kind of sustained impact; given the history of U.S. politics, anything outside the two main parties tends to be less sustainable than a Solana memecoin where the dev wallet holds 98% of the supply. If we add to that the fact that Elon’s main proposal is to balance the budget—in other words, giving less free stuff to voters—it’s hard to see how he can succeed. Even if the current monetary and fiscal landscape is obviously unsustainable in the long term, it’s not easy to imagine this being solved by voters willingly paying more in taxes to get less in return.

Bitcoin

Bitcoin remains range-bound.

Since the previous issue, Bitcoin made two attempts at the ATH, but in both cases it failed to break above $110k. As we can see on the daily chart, it’s been trapped in a ~10% range for two months now, with support around $99k-100k and resistance at $110k.

SPX, Gold, and DXY

The S&P 500 Index took off right as the Iran-Israel war ended, smashing through its ATH before a slight pullback yesterday. The level to watch is the previous ATH at 6,147; if it is tested, bulls will want to see the price bounce right off to prevent a deeper retrace.

Gold prices have been in a 5% range for over a month now. There’s nothing much to do with the chart except to find fresh daily levels—the only one of interest being the new resistance at $3,433.

The U.S. Dollar Index plunged lower, now struggling to reclaim the 97.67 level. Looking at its performance since Trump’s inauguration in January, it’s hardly necessary to comment what the market thinks about protectionism in international trade.

Ethereum

Ethereum recovers after a plunge towards previous support, but still unable to break resistance.

Ethereum dumped all the way to $2,111 in mid-June, stopping short of the major support at $2,033. It did manage to recover fairly quickly, but the formidable resistance in the $2,550-2,620 zone is still too hard to crack.

Concluding notes

The Fed held rates steady for the fourth consecutive time at the June 18 meeting. If you’re wondering why I’m only mentioning this now, rather than at the start, the answer isn’t just the fact that it’s been almost three weeks since the meeting. There’s a more substantial reason why this isn’t the most impactful piece of news: given renewed worries about inflation, the Fed must still put on a hawkish display, even if Trump would much rather that they bring rates down to decrease debt refinancing expenses for the government. Hence, Powell still needs to act tough, and given his opposition to Trump, it was expected of him to keep rates where they are. If Trump wants to fund his policies, he’ll have to find other ways of injecting fresh USD liquidity into the system, relying more on Treasury Secretary Bessent—a loyal ally—rather than Powell.

Another week with another set of flashy headlines, mostly about Elon’s falling out with the Trump administration after leaving DOGE. The main point of contention is Elon’s opposition to Trump’s “Big Beautiful Bill,” which would further increase the U.S. deficit—something that Elon, who had been trying to decrease spending, isn’t a fan of. In simple terms, Elon had hoped that the new administration would move towards a balanced budget, but it turns out that the can will simply be kicked down the road once again. Instead of fiscally conservative policies, which would require extremely unpopular measures such as raising taxes and decreasing defence and welfare spending, the U.S. will keep going down the path of increasing its debt indefinitely and hoping that some miracle in the form of AI-enabled hyperproductivity will save it from the inevitable long-term consequences of that choice. In the bigger picture, this is nothing new, of course. Modern economies have long since abandoned the notion that budgets need to be balanced, something that bodes extremely well for hard assets like gold and Bitcoin.

A headline from this week that’s more important in the short term is the Circle IPO. The company behind the USDC stablecoin went public on the New York Stock Exchange (with the ticker CRCL), raising $1.05 billion at a fully diluted valuation of approximately $8 billion, before reaching an impressive $18 billion after the first day of trading. How the stock continues to perform will be important for some sectors of crypto—primarily Ethereum and DeFi protocols that are heavily involved with stablecoins, given that Ethereum has about half of the total supply of stablecoins.

Bitcoin

Bitcoin continues to drop after rejecting range high breakout.

Bitcoin experienced a modest pullback this week, declining by approximately 1.2% to close at $103k. The price action indicates consolidation below the recent high of $105k. Key support levels to watch are at $100,000 and $98,000, while resistance is expected near $105,000 and the psychological barrier at $110,000.

SPX, Gold, and DXY

The S&P 500 Index has shown resilience this week, trading around 5,940. The index is approaching the resistance zone between 5,940 and 5,960. Support levels to monitor are at 5,900 and 5,850.

Gold prices have experienced a slight increase this week, trading around $3,360 per ounce. The price is consolidating within a narrow range, with key support at $3,320 and resistance near $3,380.

The U.S. Dollar Index has edged higher this week, trading around 98.89. The index is attempting to establish a higher low, with support at 98.70 and resistance near 99.00.

Ethereum

Ethereum fights to stay below the major weekly resistance, yet unable to break through.

Ethereum has declined by approximately 5% this week, trading around $2,460. The price is consolidating below the recent high of $2,800, with key weekly support levels at $2,000. Resistance is anticipated near $2,550.

Concluding notes

It’s been almost a month since we looked at the ETF flows, but now would be a good time to revisit them briefly. Last time the Bitcoin ETFs were showing some impressive performance, with over $5 billion in net inflows from April 21 to May 9. Since then, they’ve continued to attract capital, namely close to $4 billion from May 9 to now—the pace is steadier, but the money keeps flowing in. It’s the Ethereum ETFs, however, that are putting in some very unexpected numbers this time. Normally, watching Ethereum ETF flows is just about the least exciting thing you could possibly do, but since the May 9 issue, the ETFs have managed to get about $850 million of net inflows, with only one red day. Of course, all those cumulative inflows are something that the BTC ETFs can do in just one good day if the market is particularly bullish, but it’s still a very welcome change compared to the stagnation that we’ve seen from January to early May.

Looking at where most market-moving headlines came from over the past week, it won’t be surprising that it’s from Trump and his administration once again. Apart from Elon announcing that he will be leaving DOGE (the Department of Government Efficiency, not the memecoin—he might well go back to tweeting about that one), the biggest bombshell was a court ruling: the U.S. Court of International Trade ruled that Trump's tariffs under the International Emergency Economic Powers Act were illegal, alleging that he overstepped his authority in imposing them. As usual with that kind of news, the markets quickly (over)reacted, hoping that unrestricted free trade is back on the menu, but it soon became clear that this is only a temporary setback to Trump’s overall agenda. There will be appeals and, even taking the worst case for Trump into consideration, tariffs might only need to be somewhat reduced, not eliminated.

Most pieces of news seem more impactful than they really are, just like some negotiation tactics tend to involve taking extreme positions, which is famously what Trump does. When a reporter asked him about it, however—specifically asking about the “TACO” (Trump Always Chickens Out) trade—he wasn’t too happy that he was talked about in that way. Because of this, I wouldn’t be too surprised if he decides to make some (at least apparently) extreme moves that he will try—again, at least apparently—to stick to. Maybe it won’t go further than some more posturing, like revoking visas for Chinese students, but at the end of the day, it’s impossible to know for sure with someone like him. What is interesting is that, if he ends up going completely extreme on trade policy, causing a global recession in the process, that whole chain of events will have been set in motion by just one question from one reporter. There are many things one can say about the times we’re living in, but the word “boring” isn’t one of them.

In any case, Trump does seem to be following through on his crypto agenda, as the Trump Media & Technology Group (ticker DJT, because of course it is) announced plans to raise $2.5B to establish a Bitcoin reserve, involving $1.5B in stock sales and $1B in convertible notes. Remember when even the president of a country as small as El Salvador talking about Bitcoin was absolutely mind-blowing? Who would’ve guessed that we’d see the U.S. President doing something like this so soon.

Bitcoin

Bitcoin continues to respect the bullish structure, but this week showed signs of cooling off. After tapping $108,910 mid-week, the price retraced slightly and is now consolidating around the $105k level.

The $108,000–$110,000 zone remains critical resistance from a price discovery perspective. Bulls will need a clean weekly close above that area to trigger the next leg higher. On the downside, $103,000 and $100,000 are key levels to watch. A break below $100,000 would shift the short-term bias toward corrective, but for now, structure remains intact with higher highs and higher lows.

This week’s rejection near the highs could indicate profit-taking or the start of a deeper consolidation phase. For now, it's a "wait and see" environment around the all-time high region.

SPX, Gold, and DXY

SPX printed another green weekly candle, extending its rally after reclaiming all losses from the April dip. Price is now less than 100 points away from the 6,000 round number—a major psychological and structural resistance zone.

The index remains in a clear uptrend with higher highs and higher lows. Immediate support sits around 5,850 and then 5,740. Until we see a weekly close below that, there’s no technical reason to be bearish.

That said, the push is starting to look extended, and a period of consolidation under the 6k mark would be healthy.

Gold traded sideways this week with a tight range, holding its ground after last week’s dip. The $3,280 level continues to act as strong support, with $3,320 capping upside movement.

This pause comes after a multi-week rally, and right now gold looks like it's digesting gains before making its next move. If $3,280 gives way, the next key level is $3,150.

On the upside, bulls will need a clean weekly close above $3,320 to attempt a retest of the ATH near $3,500. Overall, the bias remains bullish as long as price holds above $3,150.

DXY remains in a weak state, grinding just above the psychological 99 level. This week’s candle was a small-bodied doji, signaling indecision after last week's decline.

Structurally, the dollar has broken below its multi-month range and is struggling to find strong demand. The 99.00–99.30 zone is key support. A decisive breakdown there could accelerate the downtrend toward 98.00 or even 96.80.

For any bullish case to emerge, DXY would need to reclaim 100.50 and then 101. Until then, dollar weakness continues to support risk assets like BTC, SPX, and Gold.

Ethereum

Ethereum printed a lower high this week, compared to a February high, suggesting temporary exhaustion after late April’s sharp rally. Price is attempting to stay above $2,600 but so far the two prior weekly candles couldn’t achieve that.

Structure-wise, ETH remains bullish on the weekly, but it is clearly lagging Bitcoin. If BTC consolidates in the weekly range, ETH could get some spotlight and secure the $2,800 level. Key downside levels sit at $2,500 and $2,000. A breakdown there opens the door for a sweep toward $1,700.

Bulls need to reclaim and hold above $2,750–2,800 for ETH to challenge the psychological $3,000 level. Until then, expect chop and relative underperformance.

Concluding notes

Remember the Yen Carry Trade collapse last year? Well, it seems like there’s more trouble ahead for Japan, this time with long-dated government bond yields going through the roof and GDP growth in negative territory. U.S. bond yields are also getting harder and harder to push down—all in all, some key pillars in the current global economic order are getting shaky. These are very complex and long-term processes, which are hard to predict and don’t really factor into shorter time horizon trades—which is why I don’t cover them too often—but it’s a good idea to keep in mind the bigger picture. Again, this isn’t the sort of thing that will offer actionable trade ideas within days, weeks or even months, but it does remind us of one thing: why hard assets—gold and, most importantly, Bitcoin—are set to play an even bigger role in the future.