Massive intraday swing, new TBL 'Guest Lecture' series, podcast now available
Discussing the wild swing in stocks and bitcoin on Thursday. Some important price study. We bring you takeaways from The Bitcoin Layer's first interview from our new 'Guest Lecture' series.
Dear readers,
What a difference a couple hours can make. Within minutes of another scorching inflation print, stocks and bitcoin went into crater mode. But only a couple hours later, risk bounced dramatically, and there weren’t a whole lot of satisfactory explanations for why.
We take a step back, reset the markets post-CPI, and bring you some excellent analysis from hedge fund advisor Andy Constan, who I interviewed as part of our new The Bitcoin Layer ‘Guest Lecture’ series. Exciting news for the audio-inclined—within hours, all of our video content will be available via your favorite podcast platform! Now, let’s talk markets.
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Today’s topics
Stocks bounced violently, but we are always cautious to draw conclusions on a half day’s price action.
Bitcoin had a spectacular ricochet, once again, off of $18,000. Why won’t you die, bitcoin? (Please don’t!)
Did the ECB flip flop and cause the risk-on move?
Treasury yields continue their bear market. No buyer will emerge until the Fed is able to show that a “digestion” period is underway.
We interview Andy Constan and learn a lot about inflation, QT, and how he is preparing clients for the next six months.
Short covering in equities
Stocks had their largest intraday swing in over two years, and one of the largest of all time:
But why? The inflation numbers this morning came in fairly hot, cementing another 75 basis point interest rate hike from the Fed on November 2nd. Typically, we’ve seen poor risk market performance as the threat of higher yields becomes realized. And this type of price action has been with us all year. The immediate reaction was on par, but before 9am PST, the S&P 500 was already 4% off its lows. Nobody really knows why, although there was some speculation that a European Central Bank dovish leak was the cause. More on that later.
Bitcoin jokes and charts
My Twitter followers had a ton of fun with this one today:
But the question remains, who was that large buyer? It probably was simply the correlation with risk assets that pumped bitcoin’s price, but the $18,000 area has been defended several times since June, making us wonder just who refuses to let it fall below this range. Speculation on the who and why of buy-volume is just that: speculation. Doesn’t mean we can’t crack some Peter Schiff and Vitalik Buterin jokes!
To the realized price action, look at yet another huge rejection of the 18-handle, and a possible peak above resistance that stretches back months. This picture was taken late Thursday night as bitcoin tries for $20,000 yet again: