Beginning of Freedom – Issue #97

We had a less-than-ideal CPI print last week, with both headline inflation and the MoM core CPI coming in at 0.1% above estimates. All in all, it’s safe to say that inflation is still too sticky for the Fed, but even though the next FOMC meeting is this Wednesday, you can breathe a sigh of relief because the Fed has made it fairly clear that they plan on pausing for now. While another hike is definitely on the table, it will most likely be in November or December, largely depending on economic data that we get in the meantime.

On the other hand, Bitcoin is looking a bit more lively with yet another prominent spot ETF application, this time by Franklin Templeton, an asset manager with $1.5 trillion of AUM. Gensler can try to delay the SEC’s decisions as much as he wants, but it’s clear that the regulatory tides are turning, especially given the recent Grayscale ruling. Sooner or later the flood of ETFs will be approved, and pretty much all the top asset managers in the world will be incentivized to get people to put some of their retirement savings into Bitcoin.

Bitcoin

Bitcoin Weekly

Bitcoin Daily

Bitcoin showing some life after weeks of indecisiveness.

During the week it dropped slightly below the support area, but traders defended the swing low from June and managed to push Bitcoin above $26,500 again. We are still far from saying this is a clear reversal, but it’s good to know that there is strength on the market when a breakdown is about to occur. Weeks of slow bleed towards support with volume decreasing is not a good sign, so the bounce was desperately needed.

The daily chart paints a better picture. At the time of writing, BTC is (successfully) battling the $26,500 level and trying to break above the Bloodswing indicator which is usually bullish. A few weeks back (After Grayscale won the case against SEC), Bitcoin pumped and couldn’t break above the indicator, so let’s see if this time is different.

This is shaping up to be an interesting week in terms of TA, so stay glued to the charts.

SPX, Gold and DXY

S&P 500

Gold

U.S. Dollar Index

Stocks printed a lower high.

SPX is not printing a nice picture, showing a reversal once again prior to the FOMC event. Although a pause is forecasted, which could give some room for stocks to reclaim previous highs, given the fact that inflation came higher than expected it is no wonder that it’s not performing well. Levels remain the same, 4325 is the support that must hold for continuation.

Gold traders are fighting over the $1916 level

Well if there is something that hasn’t changed for a few months now it’s the battle for the $1916 level. The bigger picture is still bearish considering we have a series of lower highs and lower lows, although gold was quickly scooped up after breaking below $1916 last week. Is a change in structure ahead of us?

U.S. Dollar Index is not stopping

You thought we’ve seen everything and then the 9th consecutive weekly green candle was printed. It looks like it’s popping above the 105 level this week unless something major happens at the FOMC on Wednesday.

Ethereum

Ethereum Weekly

Ethereum teased with a breakdown again.

ETH has been underperforming Bitcoin for some time now and it has been quite boring for traders lately, but with October coming we could see traders shift focus from BTC to ETH. Last week it printed a lower low and teased with a breakdown towards $1400, however, since Bitcoin was pushed back above its level, so was Ether. For starters, ETH has to reclaim $1768 to become appealing again which in my opinion will happen by the start of October.

Overall, Ethereum will probably keep underperforming as long as we are in a bear market, but as soon as that changes I expect it to heavily outperform Bitcoin. That’s why I’m sticking to sharing Ether charts and bidding interesting levels.

Blood’s content recap

ETF Approval = Alt Bull Run?

“ Buying altcoins now feels similar to 2019; Scary.

Trust me, experienced traders do not buy a lowcap expecting it will 10x from their first entry, they accumulate when others are scared.

Proper research will help you pick Gems from the Dirt.

I am accumulating some lowcaps already.”

Reminder

“ETH spot ETF will be a huge deal

Apart from people putting their savings into ETH, it has staking as a Risk-Free way of earning Yield.

An ETF that stakes its #ETH could generate rewards higher than management fees, making it more profitable than just holding spot.

Gamechanger”

Concluding notes

One headline that’s been making the rounds lately—and with good reason—is the fact that FTX seems to be considering retail clawbacks. If you had any money on FTX and you managed to withdraw it while that was still possible, then you should probably pay attention: if they go forward with a clawback, that would mean you’d be forced to pay back the money you withdrew (and get sued if you don’t). 

Let’s break this down from two perspectives, starting with the more negative one: clawbacks are a thing, they’re nothing unusual for bankruptcies and the fact that they filed a preliminary analysis of different ways of doing it means they’re serious. In the worst-case scenario (for people that managed to withdraw), they could demand the return of all withdrawals up to 90 days before SBF’s mother-of-all-ponzis went bust.

But on the other hand, there’s good reason to think they probably won’t just go around suing everyone across the globe who managed to get the last $100 they had in crypto out of FTX. For one thing, the legal fees involved would be astronomical, and likely wouldn’t come close to being worth it when it comes to those with smaller accounts.

Apart from the insane fees, there’s another reason why going after all of retail would be a dumb move. FTX is also talking to bidders and considering the much-discussed idea of FTX 2.0 becoming a reality. Now, given that one of the most important assets of the FTX brand is the huge user base, making all of them hate the new leadership (and not just the old one) would instantly nuke the potential value of FTX 2.0.

All in all, it seems very unlikely that there will be clawbacks for small retail accounts, while for those with larger withdrawals (roughly 6 figures and more), the situation is less clear. In any case, this whole fiasco should serve as a reminder of why people don’t like KYC in crypto, and it has nothing to do with money laundering. Simply put, if you have your money on a KYC exchange, then your funds can be clawed back if the exchange goes under even if you withdraw a couple of months beforehand. That kind of risk is, to put it mildly, far from reasonable.