The headlines over the past week have been mixed, so it should come as no surprise that the price action is about as uninteresting as possible. The YoY CPI came in 0.1% below expectations at 3.2%, while the annual PPI (Producer Price Index) was 0.1% above expectations at 0.8%. If that sounds boring, well, that’s because it is, but luckily we can always count on crypto to give us something more interesting to discuss.

On Friday, Sam Bankman-Fried’s bail was revoked and now he’ll be waiting for his trial (on October 2) behind bars. The reason for this is tampering with witnesses by sharing Caroline Ellison’s private writings with reporters in order to intimidate others who might want to testify against him. This certainly gave those who lost money on FTX a reason to celebrate this weekend, and it’s interesting to ponder how unthinkable it would have been less than a year ago to imagine SBF going to jail over sharing his ex-girlfriend’s diary.

As for the spot Bitcoin ETF deadline mentioned in the previous newsletter, the SEC unsurprisingly decided to delay their decision and requested comments on whether different aspects of the ETF would be appropriate within the US regulatory framework. Now, if they really do all they can to stall, the final decision could be delayed all the way to 2024.

Bitcoin

Bitcoin Monthly

Bitcoin Daily

Sideways price action continues as ARK’s ETF is delayed, as expected.

I’m updating the monthly this time: levels are clear as always, but the $29,000 mark is more important than many would think. This level was touched a few times, most importantly in the summer of 2021 after the Evergreen drama in China. It has proven itself as an interesting level as well in the summer of 2023 with the price ranging around it. Apart from that we have a massive range from $22,500 to $35,000 where I expect we will range for some time unless something changes with the ETF applications or the broader macro environment.

On the daily timeframe, Bitcoin tested the trendline for the second time and the bounce is getting weaker, which is a bearish sign. We have come to a decision point where we are either getting a breakdown and heading towards the $26,500 weekly level or we print a giga candle and break above $30k towards the CME gap and monthly resistance at $35k.

Sideways price action is also possible, however we have been ranging for some time and a move into either direction is imminent. 

SPX, Gold and DXY

S&P 500

Gold

U.S. Dollar Index

Stocks retrace further down.

Seems like the hawkish signaling from the Fed stopped the insane growth from stocks. At the time of writing SPX is trading right above the equal highs that were printed in June 2023 which is the last level before the breakout level at 4325. There is no FOMC meeting in August so let’s see where this takes us.

Gold’s moment of truth.

As predicted, gold has dropped to its 1916 level and is eyeing a breakdown. There is a big gap to the next support level at 1810. The structure remains bearish and a lower high was confirmed: basically a textbook downtrend. A new low is expected.

US. Dollar Index gains momentum

If stocks and gold are retracing, DXY must be going up – and indeed it is. It has poked above 103 level and continues to print green candles, but the real test comes at 103.66. Keep watching this chart, if a lower high is not printed here, then risk-on assets might be in trouble for the next few months.

Ethereum

Ethereum/USDT

Ethereum continues to do what it does best – be boring.

All jokes aside, if Bitcoin is not moving, we cannot expect Ethereum to do so either. Unlike BTC, Ethereum has already broken the trendline but without doing anything decisive. It continues to chop through levels, volume is dropping by the day and candle bodies are as small as they can get.

Levels remain the same and there’s nothing interesting here unless something happens in the broader crypto or macro context.

Blood’s content recap

HomeWork

“Bear Market Homework

It’s oke if you don’t want to risk capital in microcaps and find a 50x, but..

Create a Watchlist with potential 50x coins with low Market Cap.

Projects that survive bear market will perform well in Bull.

Be prepared to buy higher, but that’s the cost.”

Help me Help You.

“I am doing my best to share knowledge and my past experiences.

However, through DMs, I see that many are still rekt by the market over and over again.

Tell me what will work, and what you Need to learn faster, more efficient?

My DMs are always open, but cant reply to all.”

Concluding notes

One of the most talked-about events last week was the news on PayPal launching its own stablecoin, PYUSD, which will be issued by Paxos (the same firm that issues a few other stablecoins). Overall, it seems that a lot of people fall into one of two extreme camps when it comes to their reaction to this: either they think that PYUSD will automatically 100x the number of active users on Ethereum and make it completely mainstream or they think it’s the worst thing to happen to crypto because PYUSD will be highly centralized, making it nothing like other stablecoins that anyone can own and transfer at will.

The truth, in my view, is somewhere in the middle. On the one hand, it’s not like PYUSD will be PayPal’s only way of making USD transactions: in fact, it’s safe to say that most PayPal users won’t even know about it, let alone use it day to day. On the other hand, while PYUSD does have a very centralized structure, that’s not a bad thing for crypto as such. The whole point of smart contracts is for anyone to be able to make any kind of token they want; if that happens to be a strictly regulated type of token, then so be it. If anything, those PayPal users that do become interested in Ethereum and crypto as a whole after hearing about PYUSD will make their way to the properly decentralized parts of crypto on their own. And, finally, in a time when many US regulators and politicians are waging an all-out war against anything having to do with blockchains, some good PR from a well-known financial company won’t hurt.