Yes, we're back on the "permabull" train. Here's why

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Note to paying subscribers: In the sections below we dive into the contrast between long-term holders and whales in terms of their accumulation patterns, an analysis on the market impact of Bitcoin spot ETFs so far, and hints from equities and funding rates on the directionality of Bitcoin this week.

Is Bitcoin Ready to Break (Upwards)?

• Last week, the S&P 500 had their best week of 2024. On Monday, it started this week in the green, with gains of nearly 1% above 5600 points, just shy of 1% from their all-time high. The S&P 500 has registered two consecutive weekly closes up over 4% since Black Monday, navigating days filled with data releases and market turmoil and recovering from previous losses.

• Nevertheless, Bitcoin has not mirrored this trend. It has remained stagnant, still struggling with the $60k threshold and navigating through this environment, not correlated with traditional markets and other risk assets.

• This week, the FOMC minutes are scheduled for release on Wednesday, August 21, followed by Chairman Jerome Powell's speech at the Jackson Hole conference on Friday 23. The critical question is whether we can expect a dovish or hawkish tone from Powell and whether there might be hints about the Fed's upcoming meeting in September.

• Two things are clear before these events occur:

  • The FOMC minutes may provide evidence of the stance of other Fed members, which could support the narrative of a rate cut in September. These minutes will be scrutinized for any indication that a consensus is forming among Fed officials regarding the direction of monetary policy.

  • The market is pricing in a rate cut and is anticipating a dovish tone from Powell's intervention on Friday. In Powell's speech, investors will be looking for confirmation of this expectation, which could significantly influence market movements.

• On the Bitcoin front, our risk indicator has decreased, while our momentum reading has slightly increased but remains bearish. On-chain fundamentals are still neutral. Are there signs that Bitcoin is about to break upwards? Let's dig deeper.

Speedometers indicating the current state of BTC. The full dot represents the current reading and the white dot represents one week ago.

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• The risk level has increased compared to how we started the past week due to FUD arising from the movements of U.S. government wallets to Coinbase and the Mt. Gox repayments, but above all, due to the CPI data release. Last week many traders preferred to remain sidelined while the market's direction was determined. It's ubiquitous to see