The news from Planet Ruby—Friday, June 14, 2024
- Signal: Macro trend
- Noise: FOMC
Last week, the dollar rose significantly following unexpectedly strong labor market figures, heading back over 105. While that was an unwelcome headwind, the S&P still made a new high early this week, though other risk assets struggled. Gold took a downturn, and may be painting a bearish head-and-shoulders pattern.
But the big news came on Wednesday, which saw both the US CPI print and FOMC decision on interest rates. These are almost always occasions for volatility as the market receives and then digests new information.
Interesting view of #BTC going into FOMC and CPI tomorrow.
— Benjamin Cowen (@intocryptoverse) June 12, 2024
The last 2 FOMCs marked local bottoms on that day.
2 of the last 3 CPIs were near local tops.
The other CPI was in the middle of the trend.
Tomorrow should be fun! pic.twitter.com/zmsb09eGLO
In the event, CPI came in slightly below expectations, sending the DXY down by almost a full point and giving risk assets a boost.
Although still well above the target rate, CPI this morning came in slightly soft vs consensus expectations. pic.twitter.com/uSUFzyChAF
— Lyn Alden (@LynAldenContact) June 12, 2024
A few hours later, Jay Powell announced a hold in interest rates. This was expected with almost 100% confidence. However, he also dampened expectations by explaining that there would likely only be one cut this year, vs forecasts of 2 or 3. The DXY promptly recovered and is now back over 105.5.
In the UK, the odds of an interest rate cut before the General Election on July 4 have also been reduced by official figures showing that wage growth remains uncomfortably high. Pay is rising at an annual rate of 6%. Meanwhile, the economy remains flat.
Bitcoin Punished
Bitcoin broke lower in the early hours of Tuesday, rejecting firmly from $70k once again.
After putting in a low of $66k, BTC recovered somewhat. The soft CPI print and then almost immediately less positive Fed speech sent it on a $2,000 round trip to $70k and back. It's now trading back below $67,000.
To the upside, $70k represents resistance, and of course the old ATH of $69k. To the downside, support lies at $65k, which is the 50% level from the latest ATH to the pullback to $56,500.
The Bitcoin ETFs broke a 19-day streak of inflows with a $200 million outflow on Tuesday (and another $200m on Thursday). GBTC is down to 281,000 BTC, from 620,000 before converting to an ETF. Blackrock has almost 306,000.
One of the reasons for the falling price, aside from the stronger dollar, is likely to be unprofitable miners capitulating and going offline after the Halving reduced their revenues. Estimates vary, but hashrate dropped between 15 and 30% from the peak in May, though is now recovering.
#Bitcoin undergoing a rare miner capitulation. This one is from the halvening event, culling weak miners. As they die, they dump BTC, price rebounds afterwards.
— Willy Woo (@woonomic) June 10, 2024
But first we need to purge the degen open interest in futures bets. Liquidations need to happen before a pump. pic.twitter.com/xsSdg5QMsP
Overall, this cycle has seen very uneven returns, with bitcoin and memecoins showing strong gains, but many alts (including ETH) underperforming.
In other news, Donald Trump continues to position as the pro-Bitcoin option, seeking to win over the large bloc of crypto-holding voters. Following a meeting with major players in the mining industry at Mar-A-Lago, Trump promised to support miners if he became President.
BREAKING‼️- FORMER PRESIDENT DONALD TRUMP:
— Swan (@Swan) June 12, 2024
“#Bitcoin mining may be our last line of defense against a CBDC…
We want all the remaining Bitcoin to be MADE IN THE USA!!!
It will help us be ENERGY DOMINANT!!!” pic.twitter.com/3TdutGX8uV
On the back foot, Biden has made a concession and is discussing accepting crypto donations for his campaign via Coinbase Commerce.
What's New In The SKALEVERSE?
The SKALE ecosystem continues to grow at a dizzying rate! Make sure you follow the latest news at @SkaleNetwork, and remember that you can stake your SKL easily via the Staking Portal.
Did you know that you can easily stake your SKL via the SKALE Portal? 🔒
— SKALE (@SkaleNetwork) June 11, 2024
1️⃣ Simply connect your wallet
2️⃣ Select a validator
3️⃣ And stake your SKL
See it in action below and stake your SKL via the SKALE Portal here: https://t.co/MhmgIO2Jhf pic.twitter.com/3NrRRH4MTO
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