The Weekly Close

After the most volatile week since March of 2020, Bitcoin closed it’s weekly candle just above $78k. Bitcoin has been incredibly resilient given the price action we have seen in traditional markets, but we aren’t in the clear just yet. At the time of writing this report Bitcoin has bounced off the March high at $74k and is trying to hold above it’s 50-week moving average at $76.5k. The next 2 weeks will be crucial for Bitcoin as we wait to find out where the S&P 500 will bottom and whether Bitcoin will maintain structure or not.

Temperature Check

After a brief bounce the Crypto Fear and Greed Index is back in the Extreme Fear region. This isn’t surprising given what’s happened in macro over the past week or so. As a long-term investor, I try to be in an accumulation mindset during these time periods of Extreme Fear although it can be tempting to panic sell and exit the market altogether. My best buys historically have been the most painful to execute so we’ll see how buying Extreme Fear turns out this time.

Global Liquidity

Global liquidity continues to rise week after week. Short-term uncertainty and macro concerns have been in the driver’s seat over the past few weeks, but I believe Global Liquidity drives the macro trend. As long as Bitcoin maintain’s it’s weekly structure, I remain optimistic that Global Liquidity is revealing Bitcoin’s next move. I expect this recent price action in the S&P 500 to force the FED’s hand sooner than initially anticipated which should further increase Global Liquidity. For now, we’ll continue to monitor Global Liquidity and try to navigate this short-term volatility.

Macro

The S&P 500’s price action over the past few weeks has been staggering. We are seeing pure panic in traditional markets and although it is impossible to time the bottom on a falling knife, buying the S&P 500 at a -20% decline has been a great entry point historically if you can stomach the volatility. We have the macro support at the 200W moving average right below price, but I’m not convinced the market goes that low. It’s only a matter of time before Trump and the FED start to pivot their stances now that the market has shown it’s dissatisfaction with both monetary policy and trade policy. The next 2 weeks should be very telling.

Bigger Picture

In the grand scheme of things, Bitcoin is in the dead-center of our Fair Value range. Depending on one’s time horizon, this is a decent place to accumulate Bitcoin for the long-term. Of course it would be better to accumulate in the Cheap or Very Cheap regions, but those price ranges being visited any time soon isn’t promised so it’s important for one to plan with multiple outcomes in mind. We are still clearly holding above our March 2024 swing high and our 50-week moving average so it’s too early to assume the cycle is over in my opinion. I’m optimistic we’ll see Bitcoin in the Expensive and Very Expensive regions once again in 2025.

What I’m doing with my portfolio

My system called for some cash deployment for this week’s portfolio rebalancing. With my cash target of 30%, my cash position was getting too large so I deployed some cash across my positions. It was hard to do as I have no idea what will happen in the short-term, but every time I have followed my system and ignored my emotions in the past, I ended up being very happy that I did. Ethereum being heavily discounted and Solana sitting at it’s 200W moving average helped as well. I have no idea if this is the exact bottom, but I can’t help but feel optimistic buying Extreme Fear in this market.

P.S. If you made it to the end of this report thank you for reading and I hope you got some value from it. If you’d like to learn more, early bird pricing is still available on the Crypto and Macro Enjoyers program if you’d like to learn about my portfolio management system in a more structured way. You can learn more about it here:

I know there’s a ton of fear out there right now and many are fully capitulating because they are convinced the market has to go way lower, but Extreme Fear is the best time to buy assets I have conviction in so I feel quite comfortable being patient here. Feel free to reach out if you have any questions as sometimes it’s hard to know if anyone is on the other side reading these reports. 😂 As always, i don’t think this is the end for Bitcoin and The S&P 500 although the media and narratives make it feel that way and I still believe the future looks bright. 🤝