Transcription
Welcome back to my 10 favorite people. Hope you're doing well.
I'm incredibly excited for today's video because Bitcoin continues to hold support and this price action is starting to look very similar to what we saw in late September, early October of 2024 and late September, early October of 2023. We also have sentiment back in the fear region. And although everybody loves to say that we should be greedy when others are fearful and fearful when others are greedy, investors continue to do the exact opposite. And we have watched the same pattern play out over and over again this cycle.
You have major fear alongside a bearish narrative at a major low like the FTX collapse or the SEC going after Coinbase and Binance or the Japanese yen carry trade implosion or the tariff drama we saw in April of this year. And all of the higher highs are combined with a bullish narrative that makes investors way too greedy like Black Rock first filing for the ETF or the ETF seeing major inflows convincing everybody bare markets are cancelled or a pro-Bitcoin US president winning the election causing everybody to FOMO into the market or most recently we had the corporate treasury narrative that made everybody pile in and say we're going to have a super cycle and now we're just waiting for the next bearish narrative to convince everybody that it's all over while Bitcoin puts in another macro higher low.
And this is exactly why Monday's free weekly report was called the trend is your friend because it's a lot easier to zoom out and look at the macro picture instead of getting caught up in every single short-term price swing. And speaking of short-term price swings, on Monday we saw the biggest long liquidation event of the year, liquidating $1.8 billion of positions in a single day. And I believe Bitcoin only moved two or three%. You can see how that day completely dwarfed everything that came before it, including the 30% correction Bitcoin saw back in March and April during the tariff drama.
And usually these type of major liquidation events tend to mark major bottoms because so many investors get liquidated and lose their position because it completely resets the market. And we know these market makers are not going to give these traders a free ride going into what is historically the most bullish month for Bitcoin, October. It's really sad to see so many losses as we prepare to enter what is one of the best periods for Bitcoin seasonalitywise and these investors might end up being completely right on their thesis that Bitcoin is headed higher because the Fed is getting ready to ease and things are looking quite bullish. But because of trying to catch that trade with leverage, they ended up losing their entire position, which is why I never have and never will recommend leverage trading on this channel.
So, for me, the remainder of this year is pretty straightforward. I expect Bitcoin to rally into Q4 for one major final push. Could there be a headline that takes us lower in the short term and wrecks more leverage positions? Of course, especially if it comes from macro or a bigger correction in the S&P 500. But because I'm not trading with leverage, my main concern is being on the lookout for when the cycle is over and when we might be in store for some major downside. And that is not what we're seeing at all whatsoever.
I know it may not feel like it, but so far this has been a very slow and steady cycle where Bitcoin puts in a big rally. Investors start to take profits and as that Bitcoin changes hands, price starts to cool off. Then we repeat the same playbook once again. Then we cool off and then we had another rally with large profit taking and now price is resetting and cooling off before the next move higher. And we see the same thing in the spot ETF inflows for Bitcoin. Look at the three biggest spikes in the past year. We had one in July of 2025, one in November of 2024, and one in March of 2024 because that profit taking by long-term holders was getting absorbed by these ETF buyers. So price just changes hands and Bitcoin is able to consolidate and reset as new buyers absorb that supply and then once the profit taking is complete, Bitcoin can head higher once again. And I believe that's the same cycle we're seeing here.
So how am I positioning for this? I didn't make any changes to my portfolio this week because I'm not doing any leverage trading and I don't see why you'd need to make any changes in your portfolio because Bitcoin had a 2 to 3% move. I have plenty of upside exposure for the remainder of the cycle, but I've still taken small profits along the way. In case we end up getting caught off guard by some type of black swan or major event, I really want to at least lock in some profits on the way up and not wait too long to try to sell everything at the exact top.
And as always, if you'd like to learn more about my portfolio automation system or mental models I use to navigate this market or common mistakes I see so many investors making, you can check out the Crypto Enjoyers program and community in the video description. But in my opinion, the future looks quite bright. Bitcoin is still maintaining its false breakdown that we've seen over and over and over. And every single time we've had one of these false breakdowns, sentiment has always been terrible. And there have always been people calling for way lower prices.
It's also great that we're still seeing plenty of ETF inflows with 1.9 billion in inflows. Just last week, Bitcoin brought in about 1 billion, Ethereum brought in about 800 million, and Salana brought in about 127 million. So, there is still plenty of demand for these assets. E Trade also announced they're going to be listing those three main assets, Bitcoin, Ethereum, and Salana in Morgan Stanley's crypto expansion because they're tired of letting Black Rock make all the money. Black Rock is bringing in $260 million in annual revenue just off the Bitcoin and Ethereum ETFs, and they've only been live for a few years. As a matter of fact, IBIT is already the 22nd largest ETF in the world, and it's among some of the most popular ETFs already with things like the Vanguard Total International Stock ETF. That's only ahead by about $16 billion in AUM. And the most popular gold ETF in the world is only ahead of IBIT by about 26 billion. And I wouldn't be surprised if we saw IBIT in the top 10 over the next few years, which is crazy for such a new product on such a new asset.
And we're still seeing Michael Strategy making some small buys, acquiring $100 million of Bitcoin. We know this shrinking premium is making it harder and harder for Sailor to raise capital to buy more Bitcoin. And Strategy's chart continues to look pretty weak. It lost the 50week moving average and is now getting rejected on the underside of that major moving average. And we really want to see MSTR reclaim that 50week moving average quite soon. And a rally from Bitcoin will allow it to do just that. But if we zoom out and take a look at the bigger picture, this seems to have been a really clean, slow, and steady uptrend for Bitcoin where it cools off every time it's about to get overheated. I'll be a lot more concerned about a cycle top if we get very far extended from the 200week moving average. But for now, I think Bitcoin is in a good spot. I believe we still have higher to go. Not an amazing buying opportunity here if you're thinking about the short term, but also not incredibly overheated to where I'd be very concerned about a major correction. But I'm hoping we can see Bitcoin enter that very expensive region very soon. And it's always great seeing onchain data agreeing with that thesis. So, we have the short-term holder cost basis model sitting right at the short-term holder cost basis, not overheated at the yellow region, and definitely not very overheated at the red region, which makes me think we still have higher to go. We topped at the yellow in our most recent rally, but I would expect this cycle top to coincide with Bitcoin being very overheated, which would result in huge profit taking and eventually break price structure, but that is not something we have seen yet.
And speaking of not breaking price structure, Ethereum continues to consolidate here between our $4,000 range high and our all-time high at 4,800. $4,000 Ethereum continues to be the line in the sand. Even though a lot of people are fearful and panicking right now, I'm really not that concerned. as long as 4K holds. And although I don't put too much weight on basic TA patterns like head and shoulders and cup and handles, WOFF accumulation tends to be very accurate, especially when an asset follows it this closely. And as you can see, this has been perfect WOFF accumulation for Ethereum as well as a breakout. And right now, we are at the last point of support, which is that $4,000 level that Ethereum is retesting. As long as we're above that level, I expect expansion into price discovery within the next few weeks. We've seen ETF inflows slow down, but they'll come back as soon as price starts rallying again. Same thing with corporate treasuries still accumulating slowly, but have definitely slowed down compared to before because Ethereum is just resetting here and cooling off a little bit after the incredible rally we saw since the April low, almost doing a 3x off the bottom, which is an incredible rally for an asset of Ethereum size. and I still expect it to head higher once this consolidation is over.
As for the rest of the altcoin market, I hope you all made life-changing gains in that 2-day alt season we just experienced. I can't wait for the next one in 4 years. But in all seriousness, this looks like a very mini alt season like what we saw in November of 2024 and in March of 2024, which gives me even more conviction the top isn't in. And I expect us to see a bit more greed and euphoria that really results in major risk-taking and actually creates the cycle top. And because we haven't seen that yet, I'm a lot less concerned about major downside because we haven't seen the market get incredibly overheated yet. And I would be very surprised if we saw this cycle top before these US retirement funds having access to crypto went live. It feels like the perfect sell the news event that you would have near a major blowoff top as investors pile into the market during the final phase once they get exposure via these US retirement funds and 401ks as well as the altcoin ETFs we're expecting to launch around October.
And I still believe that Salana is the best positioned asset for those ETF launches coming in October. We saw that breakout and now we're seeing a violent back test as well as some major liquidations on leverage positions, which is the exact type of wash out you'd expect before continuation and price discovery. Salana is still the fastest growing blockchain. It's had the best user experience among the major chains that I have used for transactions, and I believe it's perfectly positioned for a lot of inflows once its major ETFs go live. And I still expect to see more corporate treasury buying for Salana as well as we approach those ETFs going live and as it approaches price discovery. We really want to see the Bitcoin pair bounce here off of that 50WE moving average and close above our range low. We don't want to see a false breakout here into that previous range just to fall back below it. But as long as it's above the 50we and 200E moving averages, this could just be a pullback into a higher low before Salana Bitcoin heads higher. So we'll see what happens.
For now, Bitcoin is up about 80% over the past 12 months. Ethereum is up about 60% and Salana up about 48%. And I expect all three of those numbers to be quite a bit higher by year end. So we'll continue to take it week by week and see what happens. The global liquidity index is also telling us that Bitcoin still has higher to go into about the end of November of this year. Again, I don't expect this to play out perfectly, but it has been great for general trend and I will continue to keep using it until it gets invalidated or the market tells me otherwise.
We are seeing some strength from the dollar here with a false breakdown. And if the dollar does end up putting in a major bounce, that would cause a downtrend in the global liquidity index, which would still point to a major top for Bitcoin in around the late November time frame. Again, I don't expect it to follow perfectly, but I will be more cautious if a major downtrend for the global liquidity index starts to form going into year end because of strength from the US dollar. And the reason why we're starting to see this dollar strength is because as of right now, the market is only pricing in 4.25 basis point rate cuts over the next 12 months. And if you're wondering why the market is doing that, it's because that's exactly what the Fed told us they were going to do in the September 17th economic projections for the remainder of 2025 as well as 2026 and 2027. Of course, this is a moving target because we're going to get a lot of data over time, but that's what the market currently expects because that's what the Fed is currently projecting based on current data.
And this is what those current rate cut projections would look like. I think it's a bit optimistic. We haven't really seen that from the Fed before. Usually, once they start cutting rates, it tends to be aggressive and quick down to zero, but as of right now, they're saying they're going to cut rates down to 3% and then keep them there. But they're already starting to hint at even lower rates than that because of a recent weakness in the labor market. We know that the unemployment rate, which is the Fed's preferred measure of employment, is slowly heading higher. And we know initial jobless claims, our proxy for the number of layoffs in the economy, is slowly heading higher as well. Same thing with continuing jobless claims. This is a good proxy for the number of unemployed people in the economy. That's slowly been rising also. And because the Fed's preferred measure of inflation, PCE, is sitting at 2.6% which is kind of close to their target compared to being at four, five, 6, or 7%. I think it's going to get harder and harder for them to justify breaking the economy by keeping rates elevated to fight inflation. But we are getting an update to PCE and core PCE on Friday. And I expect markets to react to whatever that print ends up being.
But the good news is that we still don't see any major warning signs of recession quite yet. Q2 was positive in terms of real GDP. And the forecast for Q3 is positive as well. No wonder risk assets like the S&P 500 have been doing well. And I believe it's only a matter of time before that carries over to Bitcoin because investors know that it's only a matter of time before the Fed starts expanding their balance sheet once again with QE and that this global liquidity index macro breakout is going to continue on the larger time frames. We just have to survive the volatility in between and the shakeouts along the way.
And as we look forward, the federal government is still running huge deficits. That trend seems to be worsening year after year. Exponential debt growth means exponential money supply growth and currency debasement, which is bullish for our risk assets that we price in the fiat currency like the S&P 500 and fixed supply risk assets like Bitcoin. But as always, let me know what you expect. Thank you so much for the support on the recent videos. Thank you so much for watching and I'll talk to you.