TBL Weekly #12
Our weekly markets analysis, and recap of The Bitcoin Layer posts and videos.
Welcome to TBL Weekly #12, grab a coffee and dive into this week’s highlights.
Here is our market analysis for the week ending Saturday, September 17th, 2022 - let’s break down the notable events in our Markets Monitor.
Bitcoin had a huge down day on Tuesday but remains resilient around the $19k-$20k area despite all the Fed hawkishness, higher rates, and equity market jitters. Expectations for the policy rate over the next few Fed meetings increased—the terminal Fed Funds rate for this cycle moved from 4% to nearly 4.5% this week after CPI showed very few signs of the inflationary trend swiftly reversing. Instead, a slow decline in inflation is viewed by market participants as still warranting hikes beyond 4%. We continue to find it interesting that equities, volatility, high-yield credit spreads, and bitcoin all failed to match their worst levels of the year despite two-year Treasury yields a full 50 basis points higher than in mid June, when bitcoin wicked below $18,000. Despite a brief flirtation with the idea of a 100 basis point hike next week, the market is settling on the third consecutive 75 basis point interest rate hike. Do you think the Fed knows it is murdering the economy? Based on Jerome Powell’s recent comments, yes, it probably does, and it doesn’t care (for now). Lastly, bitcoin has spent 62 days this year below our TBL Confluence Price. Despite the shaky macro backdrop, we still believe ratios below one on the TBL Fair Value Ratio are deep value territory.
We should mention this week’s price action on the ETH/BTC cross, considering Ethereum’s recent shift away from mining. This chart shows three failed attempts at a breakout this year above 0.09, as well as a large red candle this week as the market seemed unenthused about what the switch means for the altcoin market:
Next week, our eyes are fixated on Wednesday’s FOMC meeting. We will be doing a live Twitter spaces starting about 15 minutes before the Fed decision. Make sure you are following us @TheBitcoinLayer on Twitter and Instagram!
Introducing an all-new segment we call Ride With Nik. Our best thoughts come to us while we’re driving and chatting, right?
Nik takes you on a ride around Los Angeles to discuss how the Fed would react to the CPI inflation print moving into last Tuesday’s meeting.
Check out Ride With Nik: CPI Inflation & Fed Hikes:
Are you following us on social media to catch Joe Consorti’s Daily Cup of Joe every weekday morning?
Nik & Joe cover it all in this Wednesday’s chart pack/macro orientation: the recent Fidelity/bitcoin news, a regime shift in correlation between stocks and Treasuries, and a full update to our Fed and rates outlook post-September CPI.
Nik breaks down the latest dramatic price action in rates and risk markets after recent economic data. Can the markets survive a 4.5% Fed Funds rate, or is the Fed diving headfirst into committing more policy error?
Nik & Joe explore correlations between bitcoin, stocks, rates, and commodities, and how they shift through time. Correlation study is an integral part of our macro framework. Understanding these relationships in the present and past allows us to extrapolate how they will behave in the future.
Now that you’re all caught up, consider sharing this post, or checking out some of our recommended bitcoin and macro newsletters.
Have a great weekend everybody!
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