The News From Planet Ruby—Friday, December 8, 2023
- Signal: $42k, retail (AWOL)
- Noise: Max, Peter
The Stage Is Set
The US dollar has bounced from its recent lows, with the DXY jumping from 102.5 to 104.2 over the last week. That appears to have been a lower high, following the script for renewed weakness now that interest rates have almost certainly topped.
Central banks are under renewed scrutiny as inflation falls, the risk being their aggressive approach to monetary policy could overshoot the target and push their economies into deflation. Eurozone inflation is now just 2.4%, close to its 2% target.
Meanwhile, major stock indices have continued to climb as the expectation of further interest rate rises evaporates. Gold has fallen more than $100 from its new all-time high, but remains above $2,000.
After a turbulent couple of weeks at OpenAI, there's better news for the sector as AMD seeks to challenge Nvidia's dominance in the AI chip market and Google's Gemini takes on ChatGPT. OpenAI won't be falling behind, though. An interview with Sam Altman confirmed that the mysterious Q* project is real.
Bitcoin Breaks Key Resistance
Bitcoin bears can barely catch a break. BTC tore higher, punching through $42k resistance. This is a critical level, since it's the 50% line from the all-time high to the bear market low. It's yet to be seen whether this level has been flipped to support, which would be very bullish.
So far, BTC has pushed as high as $44,500. Evidence suggests that this isn't retail traders (who currently have other priorities). They likely won't come back in any great number until the all-time high is breached, and mainstream news outlets are still fairly quiet about crypto. Instead, institutions are the ones doing the buying.
Bitcoin is currently trading just over $43,000. It's overdue a larger pullback, but we know from experience that bitcoin can stay overbought far longer than seems rational. As Peter Brandt notes, volumes are actually falling, helping to drive the price higher more easily. A local top would typically be accompanied by a volume spike...
Bulls Get (Too?) Bullish
The price action for bitcoin has been staggering this week, and we're now starting to see the kind of outlandish predictions that would normally mark at least a local top. Bloomberg has stated that this is the start of a fresh crypto supercycle that will push BTC above $500,000. Max Keiser says that Qatar is thinking of buying half a trillion dollars of BTC.
There's some interesting information that might weigh against the idea of an imminent correction. $42k represented the most overbought level on the weekly RSI in the last bull market, and peak on-chain activity. In terms of momentum, it was actually downhill from there. Today? Holders are barely lifting a finger.
Goldbug Peter Schiff is not happy about bitcoin's rise. He is predicting catastrophic falls, as he has done most weeks since first learning about Bitcoin many years ago.
Meanwhile, the ETF train chugs on. More amendments to applications have been published, clarifying various details and adding language apparently requested by the SEC. The regulator has postponed its decision on Grayscale conversion of GBTC to an ETF, which was expected. The countdown to approval (or just possibly denial) now stands at less than five weeks.
What's New In The SKALEVERSE?
That's all for this week!