Yields Soaring, Risk Testing Lows, Bitcoin Holding On: TBL Weekly #13
Our free weekly markets analysis, recapping the last week in bitcoin and macro.
Welcome to TBL Weekly #13—here are the week’s highlights!
Markets Analysis
Our monitor for the week ending Saturday, September 24th, 2022:
Risk sentiment worsened this week as the S&P 500 tests the year’s lows. This turmoil was spurred on by the strong dollar and rising US Treasury yields as expectations of higher Federal Reserve policy rates persist. Bitcoin did its best to hold its lows for the year—so far it has, but the margin is thin. The Fed is currently at max-hawkish rhetoric, and we continue to believe that a slowing economy and falling inflation will dominate the narrative soon enough. We cover these themes in depth within Thursday’s content.
We must mention the multi-decade highs for the dollar against the Euro, Yen, Pound, Canadian Dollar…you get the picture. The dollar is tearing through other government currencies, as other central banks hurry to catch up to the Fed’s hawkishness while capital flocks to the higher-yielding dollar money markets.
High-yield credit spreads are widening to their June highs but remain just shy:
Likewise, the S&P 500 is testing its June lows:
The last chart for today is our confluence price, a combination of three bitcoin valuation models to indicate fair value:
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Tuesday
Nik explains the important correlation between bitcoin and the S&P 500. Why does it exist, and what does it imply for bitcoin’s price action heading into a choppy Q4 for risk assets? Watch below:
Thursday
We had a double feature on Thursday!
Nik and Joe brought you live coverage of the FOMC rate decision on Twitter Spaces on Wednesday, and uploaded the full-length discussion to YouTube the following day.
If you’re looking for more markets catch-up, this excellent Twitter Space featuring macro heavyweights TXMC, Jeff Ross, Croesus, and Greg Foss is worth a listen:
Nik also discussed how despite the Fed’s apparent mission to cause a recession, the market only somewhat fears this outcome. Read this to understand why our outlook doesn’t entail much panic and worry:
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Friday
Nik & Joe discuss the similarities between today and the 2019 bear market, and explain why past precedent shows we’re likely in bitcoin’s bear market bottoming range. This doesn’t exempt bitcoin from a potential liquidity event, but it does indicate material support in the $17,000 - $20,000 range:
Have a great weekend everybody!
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