In the last 24 hours, the market has experienced a lot of volatility. Bitcoin is currently trading just below $29,000, which is relatively stable compared to previous weeks. Stock markets, particularly the NASDAQ, have been performing well, driven by strong earnings reports. Yesterday, there was a lot of volatility in the crypto market, with Bitcoin experiencing large price swings due to liquidations of both long and short positions. The leverage ratio is currently low, but if greed and market volatility increase, there could be more liquidations. In economic news, the US House has passed a bill to increase the debt limit by $1.5 trillion, which could devalue the dollar. GDP data came in lower than expected, but it’s unclear how the market will react to this news as it’s in a transition period. PCE prices have increased, and tomorrow the PCE index, which the Fed closely monitors, will be released. Despite the uncertainty, it is advised to invest in companies with strong fundamentals and cryptocurrencies with good economics for long-term success.
Market Volatility and Bitcoin’s Price
How’s it going everyone? It’s Sam, and the market just got really crazy over the last 24 hours. I want to talk about that and discuss some of the news that just came out in the last 20 minutes. If you don’t mind, hit the Subscribe button underneath the video. Turn on that Bell Notification. There’s also that like button if you like this kind of content. Please let me know by dropping me a like.
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So, crypto’s down a little bit over the last 24 hours. There’s been a lot of volatility, which we’ll talk about. But right now, Bitcoin is staying right under $29,000, which honestly isn’t that bad. We’ve been pretty much sideways over the last week on Bitcoin. Now, dominance has gone up a bit, but we’re still below where we were previously about two weeks ago. So, 48.4 percent dominance is rising.
Performance of the Stock Market and Nasdaq
The stock market is also looking good. Nasdaq is up about 1.1 percent. A lot of this is due to some of the great earnings that have been coming in, which we’ll talk about more.
Crypto had a lot of volatility yesterday, as we can see from the Bitcoin chart. We had some massive wicks, which went all the way from $27,200 to $30,000. So, big wicks happened there, mostly due to the fact that we had a lot of liquidations. We had a lot of longs and shorts liquidated, which doesn’t happen too often. We had over $125 million of both longs and shorts liquidated. If you go into the past, it’s really hard to find a date where we had over $125 million of both liquidated. So, that doesn’t happen too often, but it does show that you can get wrecked on either side of a trade within a day.
The leverage ratio now is quite low. It’s the lowest since December 2021, so there might be a little bit of time before we see some more big liquidations or a short squeeze or long squeeze. But this can get higher much faster when there is greed in the market and when there’s not a lot of volatility. Sometimes people like to make their own volatility and make their own gains by going on leverage. So, if people get too bullish or sometimes if they get too bored, right, if we trend sideways too long, we can’t have those big moves.
US House Passes Bill and GDP Numbers
Moving on to some economic data, the US House passes a bill to increase the debt limit by $1.5 trillion, continuing to devalue the dollar. Bitcoin is a solution. Now, this will have to go through the Senate. We’ll have to see if they actually pass it. Some people don’t think that they’re going to be willing to pass a $1.5 trillion debt limit increase, but hopefully, we get more news on this later or in the very near future. I think it would make the market a little bit calm to know that the US is not going to default on their debt and just to see this pass through. But we’re basically just kicking the can down the road.
GDP just came in. The actual was 1.1 percent. The forecast was, depending on what bank you’re looking at, about 2-1.9 percent. The previous was 2.6 percent. This is one of those weird scenarios where it’s going to be really hard to see how the market reacts to this. Now, when this GDP number came in, Bitcoin fell, and stocks actually went up. The hard thing about this is we’re in a weird time where some economic news that comes in bad is actually pushing up the markets, and then some economic news that comes in good is actually pushing up the markets and vice versa.
This is worse than expected, but some people might say, “Hey, this means that there’s less chance of inflation in the coming quarters or in the coming year. So now, the Fed won’t have to raise as much. There’s less chance of a recession if the Fed doesn’t have to keep on raising, and they can start actually lowering rates, start stoking demand.” So, I don’t know how the market is going to react to this yet. It doesn’t seem like it really scared off the stock market too much, but the other side of it could be, “Hey, people aren’t spending. GDP is decreasing. We’re getting closer to a recession.” If this goes negative for two quarters, that would be considered a recession typically in the old sense of how they defined a recession. Maybe the market’s scared by that. It’s hard to tell because, again, we don’t know exactly how the market’s going to react when there’s good news or bad news these days because we’re in this weird transition time. Not all bad news is actually good news anymore. It will all depend on how this affects recession fears and how it affects the Fed’s chance of raising rates.
Economic Data and Market News
PCE comes in tomorrow. We actually got PCE prices today, which is kind of a weird thing. PCE measures consumer spending on goods and services while PCEPI or the price index measures the prices of those goods and services. So, it’s kind of weird that these come in at different times, but the PCE price index rose 4.2 percent. The estimate was 0.5 percent, and the previous was 3.7 percent. So, this is kind of re-accelerating a bit when we thought that it was going to actually fall down. But this is not the big PCE that the Fed likes to look at. The PCE that the Fed likes to look at is coming in tomorrow, so hopefully, that comes in lower than expected or at least at expectations. We had good CPI, good PPI, so hopefully, we’ll get good news there tomorrow.
Another piece of good news for the market is MetaStock had really good earnings, at least compared to what people were expecting. Google had good earnings compared to what people were expecting. Microsoft had good earnings. A lot of the big tech players had good earnings versus expectations. So, another scenario though where it’s hard to know how the market’s going to react to all this.
We had good earnings, but next week, are people going to say, “Hey, that was great, but this leads us to think that their pricing power is too strong. This could cause more inflation, then we will have to continue to raise that terminal rate.” So, it’s really hard to see how the market’s going to react to anything these days. I know I keep on saying that, but I think the key is you buy good companies that you think have a deep moat. They’re going to continue to reward shareholders. You buy cryptos that are going to become more and more scarce, have good economics, and are going to continue to be used more and more in the future. And then, you don’t have to worry about the daily fluctuations of however the market feels, right? If good news is good news or good news is bad news, right? In the long term, good news will be good news, but short term, it’s hard to tell those weekly fluctuations in the market.
So, I think buying companies again that have those strong fundamentals, so they’re not diluting shareholders to a large extent. They’re not having out-of-control stock-based compensation. They’re not spending billions and billions and billions on worthless bets. They’re buying back shares, they’re paying dividends, they’re storing up cash balance if they’re trying to pay down debt or maybe they’re storing up cash balance to make an acquisition or just to be in a stronger financial position. They’re growing their dominance in their moat. They’re coming out with good products. Those are the companies I want to buy…