8d • General discussion
5/7 - Market Update: A Summer Rally. Should You Trust It?
Bitcoin - $81,160
ETH rose to around $23,430
Markets rallying. Month-to-date, BTC is up around 2.6%, following a strong April (+11.87%) that helped lift overall sentiment in the market. The Fear & Greed Index has recovered from a low of 12 last months to around 47 so closer to neutral.
Big Headline News? - Iran War Deal Imminent
Overall picture market picture though? It's looking like a good start to May with lots of positive news but it feels... temporary. Plus we're hitting the upper trendline of the channel I showcased in the previous market update. It feels like we'll head down from here but if not, what would cause a reversal and a breakout? I'm looking for these 3 things:
- Iran War Deal Completed
- Clarity Act Passed
- Dollar Strength Index (DXY) down. (weaker dollar -> higher BTC price and vice versa)
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Big Institutional Moves backing the rally:
- Goldman Sachs disclosed a nearly $108M position in spot SOL ETFs, and total AUM across Bitwise, Fidelity, and Morgan Stanley for Solana products has surpassed $1 billion. Crypto.com
- a16z Crypto raised $2.2B for its fifth fund, down from its record $4.5B fourth fund, promoting CTO Eddy Lazzarin to general partner. Cryptointegrat
- Strategy (formerly MicroStrategy) reported a $12.54B net loss in Q1 driven by a $14.46B unrealized markdown on its Bitcoin holdings, while holding 818,334 BTC. Cryptointegrat
- Coinbase is cutting ~14% of its workforce, citing crypto market volatility and a shift to AI-native operations. Cryptointegrat
CLARITY Act Progress:
This is the big story right now. Over the weekend, lawmakers struck a compromise on the CLARITY Act, with Circle shares surging nearly 20% on the news. The key update: language was added restricting crypto companies from paying savings account-style yield on passive stablecoin deposits, preserving that function for traditional banks but stablecoin reward programs were preserved under certain conditions. CNBC
Bank of America called it a net positive, saying it "should alleviate concerns tied to deposit flight, reduce regulatory uncertainty, and allow banks to engage with digital-asset infrastructure on more controlled terms." Coinbase CEO Brian Armstrong posted "Mark it up" on X in support. CNBC
So basically I hate to say it but the banks won this fight. Crypto really needed to win this fight to help adoption explode. Imagine earning passive income and accruing interest by just sitting there? Yeah, that is what crypto can allow to happen, but the banks simply could not have that. Temporary. The market will find a way.
The rally might continue to push somewhat higher but I don't think we have the liquidity to go much higher than where we are now. I'm being conservative here and waiting. Short term bearish it feels like.
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5/7 - Market Update: A Summer Rally. Should You Trust It?
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