Stormrake - Insights #Bitcoin

From Global War Tensions to Green in just 12 Days

Thu, 10 Jul 2025 16:20:07 +1000

What a wild couple of months we’ve had since our last article. There’s been no shortage of excitement in the market – to say the least! We’ve witnessed Bitcoin not only just break All Time High’s once again since the retail panic of April (well done Tarriff scalpers!) but we’ve now just speedrun a potentially devastating and prolonged conflict in the Middle-east. From Israel’s initial attack into Iranian territory, all coming to a conclusive yet miraculous ceasefire in a mere 12 days, now being coined the “12-Day-War” by the White House. Trump truly has quickly become one of the most influential and strongly mandated POTUS’ of our time. Not only is he leading America’s economic boom as we’re seeing asset prices resurge back to All Time High’s across the board despite some initial policy trepidation surrounding trade policy, but now we’ve got Donald “Daddy” Trump actually making serious inroads for the ever elusive notion for peace in the Middle-east, even if it comes at the price of “Kinetic Diplomacy” in the form of highly sophisticated Bunker Buster missiles and advanced stealth bomber capability on a strategically planned Sunday evening at midnight. Since then, we’ve seen nothing but green on the charts for Risk-on assets, signaling that despite the macro-uncertainty of the first half of 2025, we’re good to move forward now and finish off H2 with conviction and strength. Let’s take a look at how Bitcoin has not only survived but thrived throughout the last few months.

Bitcoin has kept maintaining momentum to the upside for the most part over the last few weeks since bouncing off our predicted major support zone around the mid-$70K range. Actually, as mentioned earlier, we saw Bitcoin briefly push to new All Time High’s once again for a few days, reaching a peak of exactly $112K before coming into the current sideways price action we’re currently in. Another stark reminder that it wasn’t even a month prior to the new highs that people were panicked about Trump’s Tarriff policies and many retail traders were in a perplexed state of “deep fear” as seen on the Fear & Greed Index. Not us however; we remained steadfast in our long positions and doubled down on telling our clients how this was a prime-time for loading up the truck and adding to position sizes. Those that took action have done exceptionally well in a short amount of time, as we knew back then that those exceptional market opportunities come seldom and remain few and far between. So why the sideways price action for the last two months then since the huge rally in May? To that, all I have to say is one word you’ve heard me repeat time and time again this cycle; Accumulation. This is nothing to fear, rather – again providing excellent opportunity for market participants to add to their positions, especially those that missed out on when we called bottoms back in April. Looking at the Price Action on the charts, we can in fact see we’re currently in the midst of another Bull Flag pattern and have been since late-May when we pushed the $112K high.

A clearer view of the chart can be found here: https://www.tradingview.com/x/CGhOb49p/

Not only is this a Bull Flag, but keen eyes and avid readers of my previous articles will notice a similar pattern of price progression; that being the ever-subtle yet exciting Inverse Head and Shoulders pattern. Two of these bullish patterns together provides excellent confluence and further signals the notion that the market lows are well and truly in, now with much more upside to come sooner rather than later. To further solidify the Inverse Head and Shoulders, we can see that it’s following a textbook “smaller right-shoulder” and has held steadfast when testing the strong support found at $98K.

A clearer view of the chart can be found here:https://www.tradingview.com/x/FRC6U6UI/

The strong bounce off this level happened exactly in the midst of Operation Hammer and the near-immediate ceasefire that followed shortly after. Just like I’ve outlined many times before, don’t follow the news narratives, rather look at the charts – they’ll tell you all you need to know. As a result we’ve seen a nice modest gain since then across risk-on markets, although we’re still within the broader accumulation range, therefore the opportunity for those still on the sidelines currently waiting to allocate further capital is still clear and present, however I doubt it will remain this lucrative for much longer now as the cascade of bullish price action and strong fundamentals narratives are ramping up to create the beginnings of a euphoric cacophony. Whilst Bitcoin remains on its historic tear despite all the macro headwinds, let’s take a look over and see how the altcoin market is doing.

The rest of the crypto market remains undervalued for the most part, yet all the top 10 majors appear to be in their own versions of an accumulation structure. Ultimately, market lows seem to be in across the board since the Trump Tarriff dip which was absolutely necessary and needs to be the case for the stronger Alt-assets to remain bullish for the remainder of the cycle, although we haven’t seen them break out of their aforementioned accumulation zones either quite yet. This means even for the major alts, the opportunity to buy low before moving higher also remains clear and present just like Bitcoin. Ethereum as the number #2 asset is still undervalued, yet holding its accumulation zone of support that we’ve outlined in previous articles. This is slowly but surely stacking the odds in its favor that there’s a lot more upside than downside risk from here on out. Holders almost always have their patience rewarded for holding in periods of “boring” accumulation periods such as this - just remember it’s not about timeframes; it’s about levels and trend. Trend is holding for ETH, so being bearish on it here in nominal terms is a massive counter-trade and usually these kinds of market participants that spread fear and “pile-on” an underperforming asset right at its market lows. Just like the Fear and Greed Index that we outlined in previous articles, if you counter-trade the sentiment of the masses, the odds are already in your favor. ETH/BTC is still above our projected must hold level, likely to keep increasing in the coming months. I believe this will align with when Bitcoin surges past the $112K high with momentous rise and slingshots to the next $150K target.

A clearer view of the chart can be found here:https://www.tradingview.com/x/cXFjh6Ni/

Historically, these big moves later in the cycle become the perfect catalyst for retail trades who missed the earlier cycle gains in Bitcoin, who’re looking for the “next-best-thing”, and just has its done the previous two cycles, I believe ETH will still retain the #2 podium place for a while longer and will fit that criteria as a moderately safe play for many newer investors looking for an excellent deal. In contrast, let’s take a look and see how XRP is performing relative to its counterparts as despite the macro-headwinds of late, it’s maintained the top 3 podium position (excluding Tether) and appears to be well poised for an exceptional late-cycle rally.

XRP pulled back with the rest of the market exactly where we predicted, in-line with BTC’s pullback at $109K back in December. Just as XRP pumped with Bitcoin in December, and has pulled back in price during bitcoin accumulation correction since then. I suspect it’s waiting for Bitcoin’s moment to resurge with conviction well past those December highs in order to keep up the pace once again. XRP during this accumulation period has held our previously predicted major support level perfectly at the lows of $1.60 since April and has bounced off with conviction and momentum since. Despite the recent 12-Day-War turbulence of late, we can see XRP is still making Higher Lows, again - retesting the top end of our support channel at $1.90 and continuing to push to higher local prices. Although we haven’t made a confirmed local Higher-High just yet, we can see that XRP over the last few months has solidified its price support and appears to be forming one of our favorite patterns this cycle; the Bull Flag.

A clearer view of the chart can be found here:https://www.tradingview.com/x/COZi7pG3/

So long as XRP holds the green zone of support above the 2021 highs, then I see XRP only gaining momentum from here once Bitcoin has given the green light to the Altcoin market that the final “melt-up” phase of the Bull run is ready for liftoff.

As for the discussion on Interest Rates and the narratives surrounding monetary policy coming out of the FED, as of July 1st, Chairman of the Federal Reserve – Jerome Powell was clear that Interest Rates remain in a sort of proverbial “holding-pattern” shifting the reasoning for this towards Trump’s ever evolving Tariff policies. It appears the FED want more certainty surrounding economic data before pulling their one-and-only lever to maintain fiscal stability; the lowering of interest rates. Trump being the everenigma tic and comedic leader of the free world, naturally sends a handwritten letter to Powell stating “You are as usual ‘too late’. You have cost the USA a FORTUNE and continue to do so – you should lower the rate by a lot!” making sure there are no misconceptions on his stance towards relatively hawkish monetary policy under his Presidency. The FED being a self-governed body however don’t answer to the whichever POTUS is currently in power, therefore we’ll need to see if there’s any further headbu􀆫ng from here between the two as Trump’s economic roadmap for America’s golden-age does actually hinge on easily accessible capital and free-flowing debt to keep the Fiat-driven equity markets propped up and drunk on cheap money for consistent long-term growth in post-GFC world.

What we’ve witnessed over the last few months is nothing short of a masterclass in how markets respond not just to macro events, but to the sentiment and positioning that follows them. From the chaos of global conflict to the calming green of market recovery, we’ve seen how quickly narratives can shift, however the charts always tell the truth. Bitcoin continues to lead with strength, supported by classic bullish patterns, while Ethereum and the altcoin majors remain quietly coiling in powerful accumulation zones. The 12-Day-War, Trump's kinetic diplomacy, and the ongoing tension between fiscal and monetary powers have only fueled the urgency for smart capital allocation in this cycle. As we move deeper into H2 2025, the window of opportunity narrows. The charts are aligned, sentiment is cautious, and the setups are clear; those who remain focused and positioned now may well be the ones leading the charge when the next leg of the bull run ignites. The message remains the same - stay informed, stay patient, and stay in position.

Written by James Ryan

Create a brokerage account today

Get Started

Reach out to us at Stormrake for further market insight and allow us to help you navigate the sea of mania and laser-eye memes, so that you can realise your goals in the market!

No Advice Warning

The information in this newsletter is general only. It should not be taken as constituting professional advice from the author - Stormrake PTY LTD.

Stormrake is not a financial adviser and does not provide financial product advice. You should consider seeking independent legal, financial, taxation or other advice to check how the information relates to your unique circumstances. Stormrake is not liable for any loss caused, whether due to negligence or otherwise arising from the use of, or reliance on, the information provided directly or indirectly, by this newsletter.

Disclaimer

All statements made in this newsletter are made in good faith and we believe they are accurate and reliable. Stormrake does not give any warranty as to the accuracy, reliability or completeness of information that is contained here, except insofar as any liability under statute cannot be excluded. Stormrake, its directors, employees and their representatives do not accept any liability for any error or omission in this newsletter or for any resulting loss or damage suffered by the recipient or any other person. Unless otherwise specified, copyright of information provided in this newsletter is owned by Stormrake. You may not alter or modify this information in any way, including the removal of this copyright notice.

Copyright © 2024 Stormrake Pty Ltd, All rights reserved

Tax Time with Stormrake & Syla

Wed, 11 Jun 2025 15:20:48 +1000

As we approach the end of the financial year, here’s a quick way to stay prepared for tax time.

Stormrake has partnered with Syla to provide a complete crypto tax report, fully tailored to Australian tax requirements. Whether you're lodging yourself or working with an accountant, Syla makes it simple to import your Stormrake transactions and calculate your crypto tax.

Stormrake exclusive offer:

Get 30% off any Syla plan with the code STORMTAX at checkout. Register here.

How to register an account on Syla

1. Visit Syla and click the Try Free button.

2. Sign up using your Google account or email and a password.

Importing your Activity Statement CSV

3. After signing up, you’ll be prompted to add a Data Source. In the search bar, type Stormrake and select it from the list.

4. Choose File Import and upload your Stormrake Activity Statement CSV.

Don’t have one? Reach out to your Broker at Stormrake to request your Statement.

Review and download your Crypto Tax Report

5. After importing, you’ll land on your Dashboard, where you can view a summary of your portfolio.

6. Do you have other wallets or exchanges? Head to the Data Sources page and click Add Data Source to connect them.

7. Go to the Transactions page to view your transactions. You can make edits if needed.

8. When you’re ready, head to the Tax Reports page to download your Crypto Tax Report. You’ll need to choose a paid plan before downloading.

9. Share your reportwith your Tax Accountant when preparing your tax return, or follow Syla’s guide for self-lodging your own tax return.

Need Help

Get support directly via live chat at Syla.

Create a brokerage account today

Get Started

Reach out to us at Stormrake for further market insight and allow us to help you navigate the sea of mania and laser-eye memes, so that you can realise your goals in the market!

No Advice Warning

The information in this newsletter is general only. It should not be taken as constituting professional advice from the author - Stormrake PTY LTD.

Disclaimer

Welcome to Moon Season (We’re so back)

Tue, 20 May 2025 15:43:43 +1000

After all of the Fear, uncertainty and doubt since the beginning of the year, those who saw what we saw and took the necessary action to add to their positions during such a prime market opportunity are being rewarded in spades as we speak! With full market-wide reversals back to the upside, we’re very glad to see that since the last article I wrote back at the beginning of April before the final sell-off and capitulation leg took place, we’ve not only hit our targeted support zones across BTC and other Major-alt coins, but we’re back on track regaining the previously lost local trend with extreme bullish momentum that is likely to continue for the foreseeable future. Ultimately, this means that the broader market crash in response to global narratives we saw is now nothing but a blip on the radar as we continue the Bullrun. Trend wasn’t lost across any of the major assets, even looking over at US Indices; the S&P500 (yes – we keep a very close eye on this too) didn’t lose major trend support and completed a fairly textbook retest correction which is now being followed by a continuation to the upside, likely to All Time High prices again with feverous momentum – another great sign that the bottom is in. Even the Fear and Greed Index is pushing 70+ again, now in “Greed” territory, compared to when sentiment was down in the slumps in “Extreme Fear” around 15 just a mere 6 weeks ago. Make no mistake, that’s just how quickly things change in this space. Let’s take a look at where we think things are going from here, so we stay ahead of the curve once again as we melt-up into the retail euphoria phase that is to come.

Since our last article, we’ve seen the capitulation and market sell-off reaction that we predicted in response to Trump’s Tariffs. This has taken us to the zone of support which I outlined in the previous April article for a great deal of assets that we’ve been actively trading, the most notable one being Bitcoin of course. We got the final leg of the sell-off very quickly for BTC and for the broader market as a whole within days of publishing the article which gave the heads up to our clients that this was a high likelihood. As a result, it should’ve been no surprise too that we also landed into the strong support zone I outlined in that article, which consequently saw us bottom at precisely $74,434, of which we then started to move back up hard and fast with a “V-Shape” reversal pattern.

A clearer view of the chart can be found here:https://www.tradingview.com/x/EPRxOLse/

Not only did we start heading back up hard and fast, which is to be expected after a large emotional sell-off, but we also with haste started breaking through multiple local weekly resistance levels in order to solidify the notion that the bottom is well and truly in. These levels are derived from the previous trend resistance and landed us both $86,084 and $96,262, both of which price is holding well above now at a whopping $102,000 again (That didn’t take long!) All that’s left now is for BTC to keep up the momentum and crack the previous $109,356 High that we set in December, so that we can carry on melting up as we enter the later stages of this Crypto Bullrun.

With this being said, clearly Bitcoin has performed tremendously as the leading asset for the Crypto-space this cycle. Despite being in the later stages of the Bullrun, its strength this cycle cannot be underestimated; however, as we’ve detailed in previous articles, the dominance of Bitcoin has always reached a plateau each and every cycle where despite continuing to rise nominally in price, its strength relative to its altcoin counterparts starts to diminish as retail and now institutional investors will begin to hunt down those fundamentally sound and resilient projects that are somewhat undervalued in order to close out the maximum possible gains for their portfolios as prices start to get crazy from here.

Looking at BTC’s Dominance chart once again, we can see the channel of resistance we outlined earlier in the year to clients still holds true as the index appears to be topping precisely where we anticipated, and it couldn’t come at a more opportune time.

A clearer view of the chart can be found here:https://www.tradingview.com/x/BZ2q2inw/

At the start of May, once the recovery in nominal prices across the board started to pick up speed, we consequently saw BTC’s Dominance top-out around 65% which was the top of our predicted resistance zone. Since then, we’ve started to pullback and given that major altcoins individually remain bullish from here, this correction in BTC’s Dominance is likely to continue; therefore, meaning that Altcoins are gaining quicker in gains relative to Bitcoin. Again, this doesn’t mean that Bitcoin is going down in nominal prices, rather that altcoins are going up quicker and faster in % gains relative to BTC’s continued upwards growth. I suspect BTC Dominance will likely continue to fall from here for the remainder of this Crypto Bull run cycle, at least until shortly after the major altcoins top-out in their respective nominal dollar prices; of which then when the bear market eventually starts to set in, BTC will renormalize and re-absorb the majority of Cryptocurrency liquidity once again despite being in a bear market, just as it’s done historically in previous cycles. Let’s take a look at two of the Major altcoins now that we’ve been keeping a close eye on which we believe are likely to perform well from here on out over the coming months.

Ethereum took a beating with the rest of the market during the Trump Tariff scare which makes a lot of sense as FUD (Fear, Uncertainty & Doubt) doesn’t discriminate when it takes hold and isn’t rooted in much logical reasoning. As a result, we saw ETH lose its previous support and double-bottoming structure, falling into another major trend support level at $1554 where it has since held firmly.

A clearer view of the chart can be found here:https://www.tradingview.com/x/BiQ2pPUB/

The good news is that despite what might appear as ugly price action at first, this has positioned ETH to be extremely undervalued whilst still retaining the #2 place in the Crypto pecking-order in terms of Market Cap this entire time. These types of “good deals” amongst major tokens are EXTREMELY rare and should not be ignored. This is why since the bottom has come in across the entire market, we’ve seen ETH not only reverse back up too, but we’ve seen it in fact outperform significantly compared to not only other major altcoins, but the entire market as a whole, pumping near a whopping 100% in just the last 5 weeks. This because “The harder they fall, the harder they pump” and the ETH/BTC chart echoes this sentiment as well, showing that it’s currently holding the long-term Macro Bottom from pre-covid, therefore meaning we likely will bottom out here again creating a very strong “Double-Bottom” support, further giving credence to the notion that ETH will continue to outperform BTC from here despite falling out of favor in the eyes of retail earlier this cycle.

A clearer view of the chart can be found here:https://www.tradingview.com/x/BWQmuWqW/

The fundamental narrative that’s shifting for ETH now which is helping support this shift in Price Action is that the Pectra Upgrade has gone live; simply meaning that ETH is finally starting to correct its scalability issues that created high gas fees and network congestion which has been plaguing users of the network for a number of years.

While it’s nice to see ETH finally catching a break, there’s another major Altcoin asset that had once previously fallen out of favor too, but this cycle has seen it truly come back with a vengeance, and we don’t have to look far down the market capitalization list to find it…

XRP, the token of Ripple I remember wasn’t even on people’s radar last cycle due to the now determined unsubstantial lawsuit filed by the SEC and the delistings that followed the suit. Since then, Ripple have reclaimed their deserved place in the top 3 pecking order of assets (not including Tether), their token; XRP has truly held up well this cycle, undoing any of the previous cycles poor performance and is well poised to take advantage of this cycle’s continued growth. From a Price Action standpoint, XRP is holding up much better than ETH as it didn’t lose structural trend despite falling a sizeable 52% from peak to trough from when we were predicting an imminent market pullback in December of last year.

A clearer view of the chart can be found here:https://www.tradingview.com/x/1Umm4GiG/

XRP held its uptrend on the weekly timeframe, unlike ETH; therefore, despite XRP falling to a low of $1.61 where we correctly targeted our support zone months prior, it shouldn’t prove too difficult to keep creeping up higher from here as there’s far less headwind in ways of resistance to stop continued price appreciation. Conversely, XRP has also been setting up two different yet very bullish patterns over the last few months, both a Bull flag and an Inverse Head and Shoulders. Similar to what we predicted BTC would do around $50K pre-US Elections, I wouldn’t be surprised to see XRP do something similar from here. Given its strong narrative and ETF-hype as a well-positioned American-based Cryptocurrency project with close ties to the Trump Administration, this one is looking finally ready for incoming All Time Highs for the first time since January of 2018.

Finally, there’s a combination of Bullish narratives hitting the market all at once since the market’s price recovery; between the beginnings of a deal for the China & USA trade war negotiations, a potential ceasefire for the Ukraine and Russia war, US CPI Inflation data coming in lower than forecast once again last week and of course Trump’s 90 Day pause on Tariffs, there’s no wonder prices are reflecting the bullish sentiment that we’re going higher from here. Even the S&P500 has done a textbook V-shape reversal off its major support at 4825, now back at near 6000 again; a very similar recovery to how the index pumped coming out of the March 2020 covid crash. It’s clear that the market’s perception of all these cascading narratives has shifted radically from “It’s over” to “We’re so back.” All of this is great for Cryptocurrency, and with the first glimpses of a late-stage alt season truly beginning, make sure you’re ahead of the curve with us at Stormrake and ready to seize the opportunity like many of our clients did in the last 6 weeks – because believe it or not, you’re still early.

Written by James Ryan

Create a brokerage account today

Get Started

Reach out to us at Stormrake for further market insight and allow us to help you navigate the sea of mania and laser-eye memes, so that you can realise your goals in the market!

No Advice Warning

The information in this newsletter is general only. It should not be taken as constituting professional advice from the author - Stormrake PTY LTD.

Disclaimer

Buy when there’s Blood in the Streets

Wed, 02 Apr 2025 14:33:07 +1100

Between the deluge of sensational narratives, extreme retail sentiment swings, and the overall uncertainty of how Trump’s macro-economic policies will affect the US and global markets as a whole, it’s no surprise everyone has their own theories of where things are going from here. One thing is certain though, history may never repeat; but it sure does rhyme. The great and illustrious Warren Buffett once said: “Buy when there’s blood in the streets, even if the blood is your own.” The difference between those that survive multiple cycles and those that chop up their gains in this game are the ones who look at the bigger picture, seeing where we were before and where we’re going from here. As are many things in life, consistency is key, and if nothing’s changed – we keep stacking. Despite our BTC price pullback of 30% and our predicted mid-cycle highs at $102K, if we look back historically, we can see that we’re well within historical tolerances for a BTC retracement. Such optimal buying opportunities are generally rare in the later stages of a bull run and we don’t plan on letting it slip away from us! Let’s take a look at how this mid-cycle correction stacks up over Bitcoin’s 15-year history as an asset class.

We can see in the last two cycles where Bitcoin started to reach the mainstream, during the early stages of its maturity Bitcoin has always taken the opportunity in its later stages of a bull run to have a sizeable correction before creating what’s known as a “blow-off top,” going on to print eye-watering all-time high prices before eventually topping out. Back in 2017, this happened in September of that year giving us a whopping -40% correction before then going on to gain a blistering +560% gain in just the following three months.

A clearer view of the chart can be found here:https://www.tradingview.com/x/QtmXYQPP/

Being someone who was buying hand-over-fist as a bullish market participant back then too, watching this all unfold; those bears who sold their bags too early were absolutely livid to say the least. It was the “China-Ban” narrative back then which caused the sell-off, of which might’ve sounded daunting to newbies at the time, but it ultimately didn’t change anything in the long run for ever-growing demand to acquire BTC globally. Ironically, similar FUD (Fear, Uncertainty, and Doubt) surrounding China creeps into every market cycle. Historically, those who’ve bought these dips have always done well. I suspect the current rhetoric in relation to Trump’s Trade War with China will fare no differently as BTC demand is largely very correlated to the exponential expansion of currency circulation globally, in turn creating a perpetual risk-on environment where BTC thrives in the long run. Bitcoin was created as a remedy for reckless currency expansion and as much as the market is hanging out for further rate cuts from the US FED and here locally by our own RBA, the stark reality is that while this makes the cost-of-living more affordable in the short-to-medium term, lowering rates is a sure way to devalue your local currency further, and this devaluation is exactly what makes Bitcoin and other risk-on assets extremely bullish long term.

Going back to the bull cycle in 2021, during the month of April the markets were at a point where they had been climbing aggressively for 6 months straight, so much so that we got retail euphoria almost too quickly which led to an overabundance of retail leverage trading which in turn created an inevitable yet brutal correction seeing BTC declining a staggering -55% in just three months. When the market eventually recovered after this correction in the following months, although it printed a marginally higher-high and all-time high of $69,000, unfortunately the momentum had mostly already been lost as retail had less new capital to enter the markets after the huge liquidation surge and ultimately new capital was scared away as the macro-economic narrative also started to shift towards a rising interest rate environment in the later part of the year.

A clearer view of the chart can be found here: https://www.tradingview.com/x/Q2vPFVCC/

This was the nail in the coffin for risk-on and speculative assets such as cryptocurrency and is the primary reason why the 2022 bear market followed swiftly thereafter. With this being said however, it’s clear that in both the 2017 and 2021 cycles, when the inevitable mid-cycle correction came in, once averaged out, both had average corrections of approximately 47.5%, of which new all-time highs still were printed that cycle within the following months before the new top was in. This current cycle correction has seen us pull back so far only a mere 30% from $109,358 down to $76,555; therefore, we’re well within expected tolerances for a mid-cycle correction. It’s still possible with the uncertainty in the market currently that we might want to make another local lower-low. If this is the case, we’re looking at headhunting a retest from the breakout of the previous highs. This would land us around $72K, which also coincides with a very juicy 0.618% Fibonacci retracement.

A clearer view of the chart can be found here: https://www.tradingview.com/x/fQsoA5rf/

If prices go here however, we will need to see a significant bounce because any further short-term bearishness at this stage will make us lose trend on higher timeframes and consequently force us into a bear market cycle. In the end, these types of “must hold” supports end up serving as great opportunities to see some quick gains as a large bounce from here is likely, given its high importance to hold.

Ultimately, this means our projections for a continued bull run in the coming months remain unchanged and serve to prove the age-old adage that if history rhymes yet again, that any buying here would be highly opportunistic and may make for some excellent and potential fast gains for risk-tolerant traders given the advantage of prices having had come down to these levels across the board first before moving higher. Given that these sell-offs are generally emotional and sentiment-driven, funnily enough we can chart this too with something known as the “Fear & Greed Index” which is also publicly available and provided by coinmarketcap.com.

This is an excellent tool we can use in order to gauge retail sentiment for the crypto market as a whole, giving us a clear indication based on order book volumes and buying/selling metrics on-chain to determine if crypto may be either overbought or oversold at any point in time. This index gets updated daily and we’ve used it with a high degree of accuracy in conjunction with technical and macro-economic analysis to predict market tops, bottoms, and even mid-cycle corrections in between, the latter of which we’ve been experiencing post-Trump victory rally.

Inexperienced retail traders tend to buy into the hype narratives, usually when everyone has found out about "x" opportunity, at this stage everyone is convinced it’s a sure bet and everyone’s already bought. Therefore, all that’s left is for sellers to come in and take profits. This is how a market top forms; because at a certain point you reach peak-market saturation where the only people filling the order books are sellers, whereas the buyers that haven’t got much capital left to keep adding to their positions quickly get overwhelmed and price spills back over to the downside. The opposite can be said for bear markets and mid-cycle corrections. When all the "paper hands" in the market have been shaken out due to uncertainty surrounding macro-economic narratives, fear, and doubt, all that’s left is for buyers to swoop in, scoop up all the good deals, and very quickly the few sellers that remain are overwhelmed by the enormous buying power and prices reverse back to the upside.

This index is rated on a scale between 1-100; and as you can see the last time the index went well into the "Fear" territory, it was back in August of 2024 right at the bottom where I was also predicting our BTC bull flag where price eventually tagged $50K USD, and quickly got bought up and pumping massively thereafter in the lead up to Trump winning the US Elections. At the bottom in August, the index reached a low of 26. If we take a look over at the current mid-cycle correction that I predicted would happen eventually once BTC hit $102K, you can see the healthy correction that we’ve since had has led us to a low on the Fear & Greed index conversely at similar levels, in fact we reached a low of 15 on the index right on March 11th just a few weeks ago. If history is to repeat, once you reach these "Extreme Fear" levels where we are now, it’s not too far-fetched to think that the opportunity for many becomes too tempting, usually followed by prices quickly reversing back to the upside. I suspect this is what we’ll see again now, given that nothing has changed in terms of the fundamentals for BTC and the macro-economic landscape still remains bullish market-wide.

In the words of the great Warren Buffett “Be fearful when others are greedy and be greedy only when others are fearful.” This couldn’t ring truer with where the market is at right now. Currently at these Extreme Fear levels, we’re at a pivotal point in the market where if the macro-economic conditions remain in favor of risk-on assets just as we’ve seen them be after every uncertain market correction, well; these entries here will be talked about with a lot of reverence one day. If nothing’s changed, our strategy remains so too. Keep stacking, keep learning and growing, because if history taught us anything, it’s that a lowering of interest rates and global currency debasement doesn’t solve itself overnight with a few tariffs. The long-term direction of the economy and broader markets are crystal clear, just like how we believe Bitcoin and other fundamentally sound cryptocurrency projects will have clear skies ahead, along with new all-time high prices to come with.

Written by James Ryan

Create a brokerage account today

Get Started

Reach out to us at Stormrake for further market insight and allow us to help you navigate the sea of mania and laser-eye memes, so that you can realise your goals in the market!

No Advice Warning

The information in this newsletter is general only. It should not be taken as constituting professional advice from the author - Stormrake PTY LTD.

Disclaimer

Trump’s Tariffs + Trend Chop=Trading Opportunity

Sat, 15 Feb 2025 14:06:14 +1100

Since my last analysis on Christmas Eve 2024, after the massive wave of volatility post-US elections, the markets have since made the well-adjusted decision to take the needed time to cool off and enjoy some breathing room as we outlined then would be a likely possibility. This has allowed the market participants that have been Bullishly long since early in this cycle to not only take advantage of all the mounting positive narratives for Cryptocurrency, such as the deluge of Institutional Investment and unprecedented ETF inflows that have been building up over the last few years, but also seizing this current mid-cycle correction phase to provide ample opportunity in reallocating capital to undervalued positions and ensuring our strategies remain well-poised in maximizing gains ahead of the upcoming Altcoin Season.

With recent volatility pertaining to a few curveballs such as; the surprise announcement of China’s DeepSeek AI, rocking the foundations of US-based AI companies and NASDAQ heavy-hitters such as Open AI and Nvidia who’ve built businesses around limitless spending budgets and boundless excess of capital derived from the notion that “more spent = better results,” now with China swooping in and undercutting their competitors with a viable Open Source solution that’s up-to-speed meeting market demands at a fraction of the cost, it’s no surprise that the recent manic over-valuations of some of these US companies led investors into a selling frenzy realizing that these once “safe-bets” a mere twelve months ago are now being threatened simply by the free-market finding opportunity via inefficiency, thus creating viable competition. Ultimately this is all very good for the technology ecosphere in the long run, however; yes – the market needed its medicine when Nvidia’s overblown P/E Valuations were sustaining a figure above 40.0, which for the Stock Trading enthusiasts know this is deep in the over-valued territory where a sudden steep and sharp correction becomes an inevitability sooner rather than later, which we’ve now got.

This of course, spilled over into the Cryptocurrency sector and solidified our prediction that a mid-cycle correction of sorts would likely commence here started to ring true. Combined with Trump’s inevitable Tariff Shock to the broader markets, it’s clear that we’re in a deluge of uncertainty right now, however nothing fundamental has changed for the markets; mainly newer retail participants just don’t like uncertainty and tend to overreact in the short-term. Based on all the positive political shifts and executive orders Trump’s signed in the wake his inauguration combined with his feverishly bullish plan to make the United States of America the world leader for all things Crypto, there’s no doubt where this industry is heading in the future in my eyes. Let’s take a look at the charts and see what price levels we’ve needed to respect in the meantime, and where we will be going thereafter once out of the storm.

In our previous article in December, after hitting our $102K target for Bitcoin, we called for a well-deserved retracement as we stated “nothing goes up in a straight line forever.” This couldn’t have been more fortuitous, as since then Bitcoin hasn’t been able to trade consistently above that Fibonacci extension target without being sold-off consecutively each week. We noted that there were two primary entry points we were looking for when coming back down on the weekly time-frame that were also ascertained using Fibonacci’s sequence, again looking at likely psychological price levels that we could retrace back down to. Our first level at 0.236% tagged around the $96,500 mark early on, however, it was our predicted optimal level of 0.382% level sitting at a price of $89,400 where our ideal retracement level was that price ultimately came to test and hold and has been holding ever since.

A clearer view of the chart can be found here:https://www.tradingview.com/x/B9CMVoUb/

While price chopped along sideways in a channel for some time, we blocked out the noise and remained steadfast that this level would tag in some way, shape, or form, and that day came on Jan 13th in the lead-up to a forecasted “hotter-than-expected” CPI print of 2.9% Year-on-Year, +0.2% greater than previously anticipated. This gave the market the extra little bit of uncertain push back to the downside that we were hoping for, albeit still holding trend, therefore giving us a nice setup and bounce higher that came in the following days before the announcement of DeepSeek AI.

Since the eventual panic sell-off from not only DeepSeek AI challenging the overblown valuations of the US AI Sector, but also now with Trump’s 25% Tariff shock to Canada, Mexico and now being discussed which other non-US nations will need to be subject to these extra economic buffers, it was only natural that the market has priced this in and remains somewhat “choppy” and stagnant with prices mostly sideways across the board until we clear these high seas of uncertainty into clearer waters. With that being said though, in terms of Price Action, we have held what we’ve needed to, and maintained the overall uptrend that has gotten us to these eye-watering prices in the first place.

A clearer view of the chart can be found here: https://www.tradingview.com/x/l86DJqrX/

As you can see, despite the narratives that seem to just keep on coming, despite the relentless nature and wild swings of the market, Bitcoin is determined to hold the $90K line in the sand and Local Uptrend on higher-timeframes; a good sign that this is all just noise and won’t permeate into a larger and broader sell-off. The Local Trend needs to hold here (green box) to keep momentum relatively high in the medium term so that we push into fresh All Time Highs later this cycle, however, if we do end up getting a Weekly or a Monthly close below the green box zone, then we will be looking at yet another broader re-accumulation phase (similar to what happened between March – September 2024), in order to re-gain buying momentum before attempting to head higher.

Whilst we expect to see Bitcoin trailing higher once it’s ready to sustain consistent buying volume and reduced selling beyond the current $102K Resistance zone, given that historically in the first half of a Bulllrun we usually see Bitcoin lead the charge, it’s the second half of a Bullrun where BTC dominance starts to fall off, giving way to the meteoric rise of Altcoins, like we saw in cycles past. As is true for all trading opportunities, this can even be charted and critiqued using Trend Analysis and our understanding of Price Action to determine where a likely trend reversal will come in, paving the way for Alts to reign supreme again. Currently, BTC dominance has remained consistently in an uptrend since the beginning of 2023, in-line with the beginnings of a bottom forming from the FTX crash in Q4 2022.

A clearer view of the chart can be found here: https://www.tradingview.com/x/1HSdsNJi/

As Bitcoin is the grandfather of all Crypto currencies, the relationship it has relative to how the entire Crypto industry will perform as a whole later on in the cycle cannot be underestimated. However, at a certain point during a Bullrun, usually happening once Bitcoin has breached into fresh new All Time High territory in USD, often when that first major mid-cycle correction kicks in (like what we’re experiencing now!) that’s typically when BTC whales and eagle eyed market participants look at reallocating their holdings into undervalued and underperforming Altcoins in order to make the remainder of their gains seeing that Bitcoin has already done most of its rally up until this point thanks to the law of diminishing returns. Upon closer inspection, we can see BTC dominance last Bull cycle during 2021, Bitcoin reached a market saturation peak at 73.63% in December 2020, again aligning with when it started breaking above $20K USD for the first time since the 2017 Bullrun, beginning the printing of fresh highs that would last all the way until November of 2021. The question then remains – where do we see BTC Dominance topping this current cycle? Well again, thanks to the law of diminishing returns as the overall plethora of Cryptocurrencies, memecoins and broader umbrella of Web 3.0 assets available to market participants each and every cycle keeps growing, it’s unlikely we’d see the peak at those levels again, in-fact if we trade the trend on the basis that BTC.D will keep making lower macro highs on higher timeframes as a result like it’s always done given the above, I’d expect to see this cycles resistance coming in around the 60-65% zone, of which we’ve tagged twice now in the recent months and rejected off of both times. This further gives credence to the idea that whilst BTC will continue trailing higher from here nominally in USD prices, it’s performance compared relatively to its Altcoin counter-parts will start to dwindle until this cycle has reached its peak.

Speaking of undervalued and underappreciated heavy hitters in the space currently, Ethereum has remained stable yet consistently low on buying volume for the entire duration of this current Bullrun for the time being. This meant that while the sell-offs that came for the entire broader market also came of ETH naturally, as its not vastly overvalued yet like it has been in cycles prior, it meant that the sell-off didn’t send prices below support and reversing trend into becoming Bearish – in-fact we held nicely at the structural accumulation zone and proceeded to double bottom during Trumps Tariff shock cleanly at $2,100, with a sharp rebound within 24 hours straight back to the $2,600 - $2,700 range.

A clearer view of the chart can be found here: https://www.tradingview.com/x/jxkD2fXH/

This is a great indication that despite being dragged down with the rest of the market which is to be expected in times of market-wide volatility, ETH was able to respect it’s broader macro uptrend since 2023, consequently not losing trend and having buyers stepping in quickly to seize the immense “Double Bottom” opportunity. Given all this, I’d say that ETH likely is here to stay defending its #2 place in the pecking order for all Cryptocurrencies for the foreseeable future.

In the December article we also looked at how once ETH broke out of this accumulation phase, we’d likely see the completion of an Inverse Head & Shoulders Pattern, careening price up to a first Fibonacci Extension target of $7,400. While it might seem at first glance with all the recent volatility and market shocks that this may no longer be valid, if we block out all the noise of the sharp candle wick sell-offs that were bought up same-day in recent weeks, we can see the overall structural trend of ETH when changing from a Candlestick graph to a more simplistic Line graph, that nothing has changed.

A clearer view of the chart can be found here: https://www.tradingview.com/x/9FiUA51b/

Actually, if we end the month of February back at around $3,000 or higher, we could easily see the aforementioned “smaller Right Shoulder” easily form here, therefore keeping the original analysis unchanged from December. Sometimes in the market, discerning trend can be difficult when the charts are full of long wicks to the downside where buyers have longed with capital hard and fast to “Buy The Dip”, however that noise can sometimes get in the way of seeing the bigger picture, hence the Line chart in this instance removes that singular day’s extra volatility to the down-side, seeing it got bought up virtually instantly anyway, demonstrating that essentoally nothing has changed in the grand scheme of weekly or monthly timeframe trading. This is exactly what you want to see during a mid-cycle corrective phase, as newer retail participants sometimes trade solely off the noise, hype and mania, where-as veteran traders tend to look at the overall trend structure and bigger picture to make their analysis for the Long term.

Now taking a look over at the current Macro-Economic landscape, ultimately the trend is still the same there too. The US FED are still being extra cautious to make sure they don’t cut rates too quickly and send us straight into a heated-up second wave of consumer inflation. As a result, despite Trump’s vocal conviction that the FED must start cuƫng rates ASAP, for the month of January, the FED decided to keep rates on hold at a forecasted 4.50%.

Source: https://www.investing.com/

Whilst Trump would have preferred they started cuttng right off the bat once coming into office, when asked, he commented that the decision rather to hold rates steady here for the time being was “probably the right move”. The market was happy with this response as it didn’t sell-off again due to any further uncertainty surrounding this, likely in-part to Trump’s tepid and understanding tone.

Coming into 2025 with moderate enthusiasm, a bit of uncertainty yet overall unchanged macro trajectory I think was the best possible outcome for the longevity and remainder of this Bullrun. Remembering the last cycle, we came into 2021 as hot and ever, hittng the ground running with memecoins galore making insane gains, which sounded nice at first, however I very quickly remember by late Feb, early March we started losing steam quickly, which ultimately led to an entire market top in just mid-April, which saw us sharply over-correct to the downside minimum 50% in some cases. The market then struggled for the months following creating uncertainty for far too long, meaning that BTC was never able to regain the $60K peak again with any form of consistency there-afer, eventually bleeding out and spilling all of its gains quickly once 2022 rolled around. This left many feeling like it was an underperforming cycle upon looking back, of which I’m glad we’re not repeating again. Moderate, yet extensively quick market-wide liquidations like we’ve seen in the last few weeks which we forecasted in our December article, the fact that we’re experiencing those now and they’re well within expected correction drawdown tolerances, means that we’re settng up to have a healthy and fruitful 2025 ahead. With a Crypto-pro Trump at the helm of the largest and arguably most impactful economy in the world – I’m confident we’ll see clearer skies ahead in the near future, with fresh narrative and retail euphoria quickly washing away the much needed tepidness of January. Allow us at Stormrake to show you the way through the noise so that you and your portfolio can prosper in a world where the pendulum is swinging back the other way, making not just America great again, but making the whole world have something to look forward to in a new Tech-driven Golden Age where future possibilities of innovation and growth are boundless and exciting once again.

Written by James Ryan

Create a brokerage account today

Get Started

Reach out to us at Stormrake for further market insight and allow us to help you navigate the sea of mania and laser-eye memes, so that you can realise your goals in the market!

No Advice Warning

The information in this newsletter is general only. It should not be taken as constituting professional advice from the author - Stormrake PTY LTD.

Disclaimer

The Six Figure Dream becomes Reality – Where to from here?

Tue, 24 Dec 2024 14:51:59 +1100

What an amazing month we’ve had since the US Elections! Not only was our prediction on the money with how a Trump victory would positively affect the markets, but in just a very short amount of time we both sustained the breakout momentum of the Bull Flag pattern we’d been following and careened straight into our first price target at $102,000 USD using our Fibonacci extension strategy outlined last month. While retail mania has started to seep in again naturally with many meme coins pumping and speculation running rampant given the substantial gains across the board, the question many are asking is – where to from here? Let’s take a look into some possible scenarios for Bitcoin and what might be next after the Godfather of Cryptocurrency taps out and hands over the reins to its younger brother later this cycle…

After hitting $102,000, Bitcoin naturally sustained some trading momentum over the subsequent days and weeks allowing us to actually overshoot our target by a small margin and tag a local high as of three days at $108,364. This is to be expected in Bull runs as some overperformance almost always takes place in a volatile market as retail participants somewhat late to the game in this cycle will naturally chase a sea of green for a quick buck. However, as the saying goes; nothing goes up in a straight line forever. Price corrections are a healthy part of any market cycle with Bitcoin being no different. I suspect we’ve reached somewhat of a plateau for now and could be seeing the beginning of a healthy correction. Currently the daily trend is still holding, although a short sharp liquidation of the over-leveraged longs here is starting to take place now as expected. Bitcoin has a history of the very hard and fast price spills in order to weed out some of the bad money in the system, usually finishing of the larger timeframe candles such as the weekly or monthly with a large bottoming-wick, solidifying a base of support before continuing to print higher. Using Fibonacci’s sequence for a retracement here would make sense given it’s a psychologically bearing indicator being used on an emotionally fuelled pump, post-election mania. Right now, we are getting a nice sell-off, which hopefully could allow us to do a retracement into the 0.382% Fib level, getting us to $89,430.

A clearer view of the above chart can be found here: https://www.tradingview.com/x/cICk8mHy/

If this was the case (which is a pretty optimistic one, we might not go that low), it likely means we close out of the month of December with a red month, although as mentioned above if we can get a nice long bottoming wick due to buyers swooping in and buying the dip, we could start moving back upwards rather quickly at these levels which are perceived as a relative “good deal”; this would consequently set us up very bullishly leading into the New Year for 2025 and beyond.

The Alternative scenario (and more likely one) would be that these last few weeks of exhaustive and slowly diminishing gains are leading to an eventual Distribution pattern in the short term. This essentially means that as retail buying momentum starts to slow once we reach a temporary point of market saturation, eventually profit taking comes in and overpowers the few diminishing buyers that are left. Once you start getting more sell orders than buy orders in a market, an inevitable price correction happens, and we start to turn back down such as is currently taking place. Again, all of this is healthy for the markets – so long as we hold and maintain the critical levels of support, of which at this point in the cycle would be rather easy to do, especially given the macro bullishness across all sectors of the market right now. The first level of daily support I also believe to be here at $96,490 as mentioned above in order to maintain the daily uptrend we’re in

A clearer view of the above chart can be found here: https://www.tradingview.com/x/01wuTYO6/

In this liquidation slide-styled correction, even if we wick through the $96,490 level pretty hard, as long as we close daily trend around or above this price, it makes for a fantastic opportunity to add to our holdings so that we can get the last few entries in before the real mania begins. At that point, because we have closed the daily candles and weekly candles holding trend despite the hard sell-off, a strong reversal will likely come in eventually spurring on substantial buying volume followed by even more green on the charts until we fully melt up and blow out ultimately closing out this approximate four-year market cycle. In either scenario, as long as we’re holding the broader structural trend we’ve made up – we’re clear to keep printing higher from here in the coming weeks and months ahead.

In our previous articles we’ve also given credence to how an “Alt Season” may play out, meaning when Bitcoin starts to become the less dominant coin in the market and the alternative Cryptocurrencies that aren’t bitcoin start to gain significant momentum and, in some cases, even outperform BTC by the end of the Bull run. Let’s take a look at what Bitcoin’s younger brother and second largest Cryptocurrency is doing.

Ethereum is well positioned to take advantage of this upcoming “Alt season” and has shown all the technical signs it’s needed to in order to demonstrate it’s not only undervalued currently, but soon to play catch-up with the rest of the market. Historically, Bitcoin is the first major Cryptocurrency to breach new All Time High’s when a Bull run kicks off, becoming the leader that points the way for all other Cryptocurrencies to follow suit once deeper into the Bullish cycle. This is usually true up until the point of a significant “Mid-Cycle Correction” of which I believe we’re potentially in the midst of as writing this. Right now, we’re also getting a sell-off in ETH as its value is closely correlated to BTC at this stage of the cycle, however once we recover out of this, I suspect that the retail mania will ramp up to higher levels of speculation, therefore paving the way for the broader Alt Coin market to melt up even further which will position ETH as an attractive yet currently undervalued-conservative way to gain exposure to this upcoming Alt Season.

The Price Action leading up to this correction has been trending really nicely, in fact ETH has done a similar “Bull Flag” Pattern, of which we successfully predicted on BTC earlier this year. ETH broke out of its Bull Flag post-Trump Election win, pumping from it’s major support which held since early August between the 0.618% and 0.702% Fib levels, equating to lowest point held at $2,131.22 in this zone of psychological support.

A clearer view of the above chart can be found here: https://www.tradingview.com/x/FiWocl2S/

As of early December, we finally reached structural resistance for this bull flag at $4,093.57, meeting the resistance point again from which we fell from initially back in early 2024. Now that we’re correcting from there, we have come back to retest the weekly breakout level that confirmed the uptrend had resumed when we gained the $3,561.89 weekly high. This was a Lower High within the Bull flag itself that we needed to gain in order to reverse trend. Now that this has happened and we have retested this level, it’s an excellent sign that we’re likely to keep trending healthily back upwards by tagging all the needed support along the way now so that we can cleanly break the All-Time High’s and beyond, I suspect most likely by Late January – early February. Until then, this entire trading range on ETH between $4,000 and $3,000 will become an accumulation range likely for the next 30 days or so, providing ample opportunity for market participants to add to their positions before a “sea of green” really takes hold and it’s off to the races!

This deluge of bullish momentum will likely come in when Ethereum completes another more advanced yet bullish pattern which I believe to be currently forming in its final stages known as an “Inverse Head & Shoulders”. Essentially this is another bullish accumulation pattern layered over the Bull flag, indicating further confirmation that we’re likely to head higher after this correction. For the pattern to finalise, we need to form the right shoulder of the pattern, which we are currently doing by having a correction here. Then finally we need to get a breakout of the “Neckline” of the pattern which is around our same resistance at approximately $4,000 in order to cleanly break higher and soar past the All-Time Highs and into virgin territory thereafter.

A clearer view of the above chart can be found here: https://www.tradingview.com/x/dpR7OCrb/

As you can see, also using Fibonacci extensions in order to ascertain where the first target might be once above the All-Time High, it’d likely land us at $7,475.60 where the 1.618% psychological level resides, similarly to how we predicted the $102,000 first target on bitcoin with a high degree accuracy, of which it just reached and pulled back from this month.

As we correct in price here, it’s an excellent opportunity to take a look back at the absolutely stellar year we’ve already had, allowing us to achieve what was once considered impossible; a Six Figure dollar value on merely a single Bitcoin – but it’s not over yet! The most ludicrous part of this market cycle is still to come, although to maximise opportunity, we need to stay vigilant with how this correction plays out over the course of January into early 2025, because if we hold these levels here, despite the bottoming wick volatility and some daily timeframe selling and follow-through to the downside – once we zoom out in larger timeframes it’s clear to see that this is a healthy correction in the grand scheme of things, rather, I’d say it’s a blessing in disguise to veteran market participants. In further articles that are to come over the following months, we will also look at how to chart ETH relative to BTC price, as opposed to USD in order to get an even more in-depth look in how we can capitalise off this incoming Alt Season accurately using historical data and manage risk while we’re melting up in a deluge of retail (and possibly institutional this time around too!) mania. Allow us here at Stormrake to guide you through the noise and catch the hidden gems of the market in order to achieve your bounty this cycle and beyond!

Written by James Ryan

Create a brokerage account today

Get Started

Reach out to us at Stormrake for further market insight and allow us to help you navigate the sea of mania and laser-eye memes, so that you can realise your goals in the market!

No Advice Warning

The information in this newsletter is general only. It should not be taken as constituting professional advice from the author - Stormrake PTY LTD.

Disclaimer

Make Bitcoin Great Again! (It already is.)

Tue, 05 Nov 2024 18:03:47 +1100

Policy, Polls and Politics...this week is sure to be a BIG one! Between the upcoming US Elections and the Federal Reserve monetary policy meeting soon after, it’s going to be an action-packed week to say the least. Whether you’re rooting for the Democrats, Republicans or just spectating with a bucket of popcorn in-hand for sheer entertainment purposes observing the spectacle that is sure to play out over the next few days, it’s undeniable to underestimate the impact this election will have on the broader traditional markets and Cryptocurrency alike. Compounding another potential FED rate cut on top of all this by the later part of the week means there will surely be a lot of volatility in the markets. Let’s take a look at how we can navigate these enigmatic waters, primarily starting with Bitcoin as it’s done some interesting price action since our last analysis.

I’m pleased to announce that the wait is over – the BTC Bull Flag is finally complete! Through the last nine months we’ve managed to birth quite the technical play. Coming out of this prolonged accumulation phase, we’ve seen Bitcoin quickly soar back up to a whopping $73,600 USD, giving us a monster rally equating to a near $7,000 gain for the month of October. This has consequently popped us out of the top of the Bull Flag accumulation pattern we’ve been eyeing and writing about since earlier this year – to the Bulls; congratulations, your patience has been rewarded.

A clearer view of the above chart can be found here: https://www.tradingview.com/x/Up4AwQhW/

As you can also see, the current price after breaking out and since retraced on the daily

timeframe back down the $67,000 - $68,000 range. This is actually a positive and healthy sign as it allows for stable growth later by ensuring that price currently retests the breakout here; meaning that price by progressing slowly and ensuring all price supports are being tested along the way up now, this will in-fact help mitigate the risks of wild and spontaneous volatile swings back down to these current levels once continue to keep climbing higher in subsequent months. Whilst Cryptocurrency will always be volatile compared to traditional asset classes, the healthier price growth you have, the more stable the gains will be later on down the road in any bull market cycle. Now with fresh new All Time High horizons in sight, the next more immediate potential take profit target I’m personally eyeing would be an eye-watering $102,147 USD. We can determine this number using Fibonacci extensions and applying it to the previous market cycle in order to ascertain future levels for this current cycle. This first stop along the way at approximately $100K makes sense from a psychological perspective given that it’s a strong take profit target that many would’ve had in their minds for those who’ve been long standing market participants well before this current cycle.

A clearer view of the above chart can be found here: https://www.tradingview.com/x/jDhO4ypm/

This would make for nice headlines, further lending credibility to bystanders that Bitcoin and the broader Cryptocurrency industry is here to stay, and that those without allocation already probably shouldn’t wait any longer to diversify into a tokenized digital asset based long-term strategy.

Historically, while October has always been a volatile month for Cryptocurrency with this year being no exception and now with the US Elections around the corner over the next few days, we’d likely expect to see significantly more volatility coming into the markets and bolster liquidity so that the momentum can remain in the following months hereafter. With that being said, all of the focus now will be on who actually wins the Election – because that will make or break the market right? What if I told you that in the end it doesn’t even matter?

Most market participants who were around at the time will remember that in the wake of the 2016 US Elections, the surprising Trump win did in-fact help pave the way for a strong focus on market growth as it gave optimism and hope to that market that the economy would once again become “great”. This led to historic growth in traditional assets and Cryptocurrency alike during the vast majority of 2017, where for our industry the notion of an ICO was birthed and Bitcoin from January of that year climbed all the way from a mere $966 - all the way to a staggering $20,000 All Time High price by December that very same year. This equated to a mind-blowing 1,928% increase in valuation for Bitcoin and saw the first significant rise and true creation of the “Altcoin” market as those who felt like they already missed the boat with Bitcoin also felt they could proverbially “get a second chance” for the elusive moonshot opportunity. Given the last few years of disastrous economic policy under the Biden Administration for US residents, it’s not far-fetched to think that many will vote for Trump again regardless of individual political beliefs as people tend to vote with their wallet; and if that wallet’s hurting, they’re likely to accept something they previously thought as less-than-ideal in order to circumvent and appease the issue. This sort of capitulatory thinking is why I believe people will be driven to the polls like never seen before in this Election cycle and with Trump currently being the favorite for obvious reasons, I wouldn’t be surprised to see that aforementioned market optimism come back with a fiery appetite for more growth once again.

Interestingly enough however, if we look at previous cycles we will see that in the long-run, the current day politics don’t ultimately dictate the overall direction and outcome that our industry is heading in. Whether it’s a Democrat or Republican who takes the White House and whomever is sitting in that chair in the Oval office is subject to much other much larger governing agencies, interests and policy-making institutions that the US finds itself beholden too. All the while, Bitcoin with its inherit diminishing supply pool via Halving cycles every four years baked into its code demonstrates that scarcity of any asset class will “trump” all in the long run when you have perpetual inflation and prolonged currency expansion programs such as “Quantitative Easing” being propagated by Central Banks globally. By overlaying previous US Election cycles over a long-term Bitcoin Chart; it’s clear to see there’s only one direction we’ve been heading overall – and that’s up.

Whilst history may not always repeat, it sure does rhyme. Just like how when Bitcoin in the previous 2020-2021 market cycle was ready to break the $20,000 All Time High barrier, we also had further monetary policy easing from the FED, just like we currently have now, therefore likely aiding continued growth in assets and price appreciation. As we come to the later part of the week, by early Friday morning AEST we will have confirmation from the FED on the next round of Monetary Policy, deciding whether they cut rates by a further 25 basis points or leave them on hold. Currently the market is pricing in a forecasted 0.25% reduction off the Federal Funds Rate, coming off the back of the 50 basis-point cut in September this year.

Not only will we have the US making an interest rate decision, but today we also had our very own RBA make an interest rate decision deciding to leave the Cash Rate unchanged at 4.35% for the time being. This indicates that while the US economy has been somewhat more successful in reducing CPI inflation in the short term, the Australian economy still has some in-roads to make before it can start cutting rates safely without inducing a premature 2nd wave of the cost-of-living crisis currently weighing on our fellow Aussies.

While everyone is waiting with bated breath on how the US Election will turn out; whether Kamala Harris manages to claw back her way from the brink of some unfortunate recent PR disasters or if Donald Trump once again seizes the day in triumph, it will surely be a spectacle – not only to see how the US responds to their newly elect, but how the market will respond as well. Volatility is sure to be rife, plaguing both Bulls and Bears whom are intra-day trading until we have the final results. Alas, it’s prudent to remind ourselves that a charismatic politician won’t make or break the Cryptocurrency industry, that instead always comes back to the recklessness of Government fiscal and monetary Policy; being the very reason Bitcoin was created in the first place. Therefore, while I’d like to emphatically profess “Make Bitcoin Great Again!” The reality is that it always has been. It’s provided an unparalleled store of wealth for market participants for well over a decade. If you see that the Government aren’t going to save you, then you’ll likely also see that you need to do that yourself through achieving financial freedom. That’s when real greatness ensues. Here at Stormrake, we’ll help you navigate this Election cycle, and help you keep making your portfolio great (again!) as we’ve already done so for many!

Written by James Ryan

Create a brokerage account today

Get Started

Reach out to us at Stormrake for further market insight and allow us to help you navigate the sea of mania and laser-eye memes, so that you can realise your goals in the market!

No Advice Warning

The information in this newsletter is general only. It should not be taken as constituting professional advice from the author - Stormrake PTY LTD.

Disclaimer

The Upcoming FED Pivot – It’s Time to Decide

Thu, 19 Sep 2024 15:04:49 +1000

After many months of speculation, market game theory and heated discourse online – we’re now at decision time. The US FED are scheduled to meet early tomorrow morning and by the time you wake up and make that fresh coffee, looking at the daily market news we’ll have definitive action being taken on monetary policy. This will shape the coming years not only the broader traditional markets globally, but largely impact the foreseeable future in this current Cryptocurrency Bull run we’re currently in and leading into 2025 and beyond. The US FED have been waiting for the right macro-economic conditions to present themselves before pivoting on their hawkish and aggressive interest rate stance, consequently giving us the rate rises we’ve been subjected to for over the last 2 years. All of this is about to change in the next 24 hours. As we’ve mentioned in previous articles discussing the impact of a return of Doveish monetary policy, there’s only one way this goes in the long term. Wealth inequality unfortunately seems like it’s here to stay and it’s up to us individually to understand how to navigate an economic climate of perpetual inflation and price appreciation so we can get ahead of the curve and capitalize off this. Let’s take a deep dive into what the future might look like.

One key element, if not the most important that the FED has taken into consideration in recent years and months is the on-going inflation crisis seen in not just the US but globally as a result of monetary policy that was at or near zero for far too long prior and in response to the pandemic. With this being said, since the aggressive rate hike cycle since 2022, the FED has observed that inflation metrics have since significantly cooled off, predominantly in this year. Chairman Powell and the Board’s message in recent years was to target a 3% inflation year-on-year (YoY) on the higher end of tolerance with 2.5% YoY being on the lower. This lower end of the tolerance band is exactly where the data suggests we sit currently with the recent September 11th CPI release coming in as expected at forecasted levels.

This has allowed the FED to seed a narrative that the projected recovery of the macro-economic landscape is taking place, paving way for the FED to loosen their grip on rates and allow them to re- commence yet another easing cycle of lower rates for the foreseeable future. While lower rates is generally aimed at creating a bullish signal to the markets – a sign of things getting better; it’s also prudent to ask why rates are being lowered in the first place - is it truly because of a recovery and a sign of beating the aforementioned inflation once and for all, or is it instead because of other factors where perhaps the FED see an impending economic slowdown, therefore a rate cut here may save the markets some price shock later on down the road. Let’s explore some possible scenarios.

Historically, the FED has almost always cut rates in the lead up to a recession, which in fact is a sign of weakness in the real economy in the short-medium term. One important indicator that the FED use to determine the likelihood of an impending recession is by looking at the Yield Spread between the 2 year and 10 year US treasury yields, also commonly referred to as the “Yield Curve.” This Yield Curve allows the FED to see if there’s an unnatural rate of return where a 2 year Treasury Bond actually nets a higher return than a longer, more risky 10 year Bond. This in-turn forces the market to instead of looking into the distant future for safer more profitable returns, it inversely enables and reinforces more near-sighted speculative and risky investing for a higher return, creating a compounding bubble that eventually leads to a watershed moment and bust cycle. Hence, this flipping of sentiment is called a “Yield Curve Inversion” and can be used ahead of time to predict said recessions. As you can see below, each time an inversion took place between the Yield spread of 2/10 Yr US treasuries in the grey columns (timeframe) a recession took place shortly after.

Whilst this is an indication of potential weakness in the real economy, this doesn’t necessarily apply to the price economy of the markets immediately. Essentially, the macro-economic reality of the world and price may impact one another eventually and there is correlation, however said correlation doesn’t equate to immediate causational outcomes on each other. Have you ever wondered why when there is bad news the markets still manage to find a way in the short term to print new All Time High’s? This is why. The same can be said for negative prices to the downside without any significant shift in the macro. Price is irrespective of the realities of the world, until it no longer isn’t. This is because it takes time for the consequences of actions to be seen and the delay between the two is where uninformed market participants may get caught out. Does this mean that I’m perma-bearish until we inevitably take the medicine for yet another round of monetary easing that’ll surely create another inflationary cycle in the long term? Absolutely not and I’ll show you why with the last two most recent recession examples.

The last two times the Yield curve inverted and then reversed their inversions back to a positive spread where the longer bonds yield more again as they normally should, according to the FED’s own chart above were in September 2019 (prior to the initial pandemic recession) and in April 2006 (prior to the Global Financial Crisis). In both cases once the reversion took place, US indices kept climbing and made new All Time Highs in subsequent months. When the Inversion took place in August 2019, just a mere month later it reversed back to normal, albeit being shortly lived we saw prices keep making new highs until February of 2020 where it then stalled out on the fears of the pandemic spreading globally and talks of impending lockdowns. The S&P500 was able to gain an additional 15% at All Time High prices near $4000 per contract before the crash began.

A clearer view of the above chart can be found here: https://www.tradingview.com/x/pCbfIZmj/

The biggest crash of all was in-fact the Global Financial Crisis, caused by the imploding of the Sub-Prime mortgage market and bad debt rife throughout the US banking sector during the late 2000’s that led to a 58% correction over two years in the S&P500 and trillions of dollars in losses worldwide. The initial inversion took place in February 2006, although the reversion back up started in April 2006 just two months later, before re-inverting again. Once the initial normalization reversion took place in April ’06 however, the market made sure to keep printing All Time High’s until it topped-out in October 2007 @ $1578.5 per contract. Inevitably it took some time to determine that a recession had begun but after the lagging GDP and employment metrics came through by late 2008, it was determined that the US had already been in a recession since December 2007.

A clearer view of the above chart can be found here: https://www.tradingview.com/x/cBDunOLi/

In both instances, once a recession was all but officially confirmed on paper, the FED intervened with rate cuts in order to prop the market back up, re-inflating the inflationary bubble once more without taking the necessary medicine needed, being; sustained high interest rates in order to correct the damage done by reckless monetary and fiscal policy of which got the markets into trouble in the first place. As the FED in both instances also Doveish-ly pivoted on rates well into the sell off’s, already being deep in a sea of red, it’s a wonder how things might play out this time around as the pivot is coming well before prices have been overly bearish, in-fact in the broader traditional markets everything is at, if not near All Time High’s again due to the bullishness of the aforementioned easing inflation throughout the year.

Currently, as you might’ve already seen – yes, we are in an inverted yield curve, and yes we are now as of this month starting to cross the threshold again where a re-normalizing of spreads and a reversion seems to be taking place. For these reasons, ultimately, I’m bullish in the near term on prices, especially with a looming US Election which could very well help in rallying market sentiment if we see a Trump win, much like it did last time in November 2016. Bitcoin in the midst of all the above is still holding our Bull Flag pattern along with key support levels, bouncing off from the sell off and lows of our previous months analysis as predicted and comfortably still rangebound in our accumulation pattern, meaning it’s well poised to benefit off the doveish monetary policy and FED Pivot we’re about to undergo.

A clearer view of the above chart can be found here: https://www.tradingview.com/x/KH0mcPjm/

It seems likely that the US FED are pricing in a 25 basis-points cut, of which is being forecasted so I’d expect to see the announcement early tomorrow morning echo the same market expectations, knowing that Chairman Powell and the board want to avoid any surprises given how the market may not know how to react to an overly doveish 50 basis point cut so quickly, possibly spooking the markets into thinking there may be an immediate issue at hand. What we will need to see happen after this is a monitoring closely of any red flags in the macro-economic landscape that could hinder any rally coming out of this, perhaps taking an eagle-eyed approach to spottng any cracks or leaks in the robustness of the banking sector, Bond market or geopolitical tensions. Or perhaps the catalyst could simply be yet another inevitable inflation cycle down the road, deriving as a consequence to FED’s eagerness to carry on printing the market back up just that little bit further.... Time will tell, but we aren’t going anywhere. Strap in and buckle up, because this is where the fun begins!

Written by James Ryan

Create a brokerage account today

Get Started

Reach out to us at Stormrake for further market insight and allow us to help you navigate the sea of mania and laser-eye memes, so that you can realise your goals in the market!

No Advice Warning

The information in this newsletter is general only. It should not be taken as constituting professional advice from the author - Stormrake PTY LTD.

Disclaimer

We got the inevitable; what’s next for a Doveish FED and Bitcoin in 2025?

Tue, 06 Aug 2024 11:07:31 +1000

In last month’s article we wrote about Bitcoin being in a prolonged accumulation pattern, in which we expected to see more touches on both the bottom and top of its respective “Bull Flag” channels. Like clockwork, it turned out that our prudent approach of identifying opportunity in a “sea of red” and our pragmatic-patience aligned with the technical understanding of Trend and Price action-based charting was prosperous once again. Shortly after posting our accumulation prediction for Bitcoin in late June, we saw a sell-off which took us to the bottom of our aforementioned Bull Flag’s channel. As mentioned last month too stating that “Bull Flag setups have been an opportune time to buy Bitcoin” combined with short-term irrationality to the downside, keen-eyed traders and I decided to add to our positions. The first week of July saw us “wick” through the bottom of the channel, although there were no definitive closes below the channel – a good sign, ultimately holding the line at $55,800. One textbook rule of trading is that “not everything goes up OR down in a straight line.”; this would and continues to be a key part to our strategy in the coming weeks.

After we held the bottom of the channel, it was only natural we would get some form of a relief rally in the markets. This happened to coincide not only with a technical level of support, but also the shocking events that took place in Bulter Pennsylvania on July 13th where President Trump dodged a bullet in a spectacular display of courage and resilience from an assassination attempt on his life. Such fervor quickly disseminated into the markets over that weekend and sustained momentum over the coming weeks on the bullish prospects that a Trump victory in the upcoming November US Elections could now be a very real possibility. With a strong campaign promoting economic growth and a return-to-form for the States, it’s no wonder that we saw a sea-of-green shortly thereafter, carrying a rally that went from traditional assets such as US Indices like the S&P500, all the way into Cryptocurrency and Bitcoin alike. The aforementioned rally sent BTC price in recent days into a summit, pushing the $70,000 threshold again.

A clearer view of the chart above can be found here: https://www.tradingview.com/x/qld6roEP/

As you can see, this took us right into the resistance at the top of our Bull Flag channel, marking a more than 30% bounce from the very bottom to top of our recent July volatility, a tremendous rally in which we outlined late June that could likely play out as we trade within this accumulation range. Fueled by optimism, patriotism and the ever-improving macro economical climate, such as the US FED’s recent pricing-in of a 25-basis points rate cut coming in September this year, marking the first cut to the Federal Funds rate in approximately 4 years, it’s little wonder that we’re seeing volatility start to creep back into the markets and Cryptocurrency industry as a whole.

In recent developments, like clockwork after hittng the top of the channel, we have now initiated an inevitable pullback, as outlined by our Bull Flag accumulation prediction, it appears this could be the final wave of opportunity on Bitcoin before we start to first locally reverse trend, and finally put an end to the accumulation we’ve seen since March of this year and instead resume a bullish trajectory leading us healthily into the 2025 Bull run. Currently we’re hovering around $51,500 for Bitcoin, with the lowest point coming in today at $51,331.

A clearer view of the chart above can be found here: https://www.tradingview.com/x/Nv7zUYZZ/

Whilst it might look scary now, remember as mentioned above last time we saw a capitulation down to this price range, we quickly reversed trend as seller exhaustion set in and buying resumed rather quickly, sending us on a two-week tear back regaining 30% back in the green.

Given that fundamentally we’re not seeing any major shifts in macro-economic sentiment, and that the US FED feel re-assured enough that a soft-landing is still close to being achieved based on unemployment and inflation data, it seems that this sell-off may simply be a pricing in for the September rate cuts across all markets broad and wide, not just in Cryptocurrency; a good sign that our specific industry remains largely unimpacted by any significant headwinds at this point in time. Perhaps the impact of FED on the market is troublesome and maybe even worry some for some I will say this; for all the faults of monetary and economic policy, if there’s one thing I’ve learnt about the puppet masters pulling the puppet strings in the market is this; Don’t fight the FED. Their uncanny ability to sway market sentiment on a dime is unparalleled and personally I don’t plan on them radically shifting their policies to accommodate prolonged deflation so that the common man can work a 9-5, 5 days a week and pay off their mortgage in 5 years like it’s the 1970’s all over again. The expansion of fiat currency has backed them into a corner between a rock and a hard place, full well knowing that an implosion of the markets, just like the banks during the GFC would be too big to fail; intervention through Keynesian economic trickery may just be inevitable again, much like that we’re seeing with the pricing-in of September rate cuts, ergo; an easing cycle all over again and we all know what inflationary euphoria that caused in the markets post-Covid era.

Of course, we will need to keep an eye on interest rates and how they continue to impact the market, and in future articles we may even look at the Yield Curve and how the timing of recessions are predicted using such contrasting charts in more detail, although for now we see an industry that has managed to survive much stronger headwinds than this, and shake them off each and every single time. If I had a dollar for every time I heard “Bitcoin is dead” I’d have a whole Bitcoin, and probably then-some given I’ve been hearing it since Bitcoin was at ultra-low prices back then, of which people can only dream of today. A sea of red is scary to some, an opportunity to others, and a potential learning lesson for everyone and here at Stormrake we’re here to help you navigate through the noise to the other side. The journey and how we choose to deal with the curveballs along the way is what defines us, relish it and enjoy the ride!

Written by James Ryan

Create a brokerage account today

Get Started

Reach out to us at Stormrake for further market insight and allow us to help you navigate the sea of mania and laser-eye memes, so that you can realise your goals in the market!

No Advice Warning

The information in this newsletter is general only. It should not be taken as constituting professional advice from the author - Stormrake PTY LTD.

Disclaimer

The Spot Ethereum ETF is Here as is Mt Gox’s Repayments

Wed, 24 Jul 2024 19:09:21 +1000

Spot Ethereum ETFs Begin Trading:

Another big day for cryptocurrency as the Ethereum Spot ETF was launched and eclipsed $1 billion of volume in its first day of trading. However, the net inflows of the ETF was just over $100 million. Meaning the outflows from Grayscale totalled almost half a billion dollars.

Source: https://farside.co.uk/?p=1518

Similarly to the Spot Bitcoin ETFs first day of trading, it was highly volatile and turned out to be a sell the news event. The day saw a net inflow of $203 million, this was greatly hindered by the mass outflows by Grayscale of almost $500 million.

There are parallels between Bitcoin and Ethereum price action at the first day of their respective ETFs trading.

Both BTC and ETH were approximately 40% away from their previous all time highs.

The launch days were ‘sell the news’ events with the majority of the gains and price increase being made in the lead up to the event.
Grayscale BTC and ETH ETFs were finally allowed to trade again, which lead to major outflows.

If Ethereum is to follow Bitcoin’s post ETF price action, we may see a retracement in Ethereum’s price due to the mass selling by Grayscale. The first fortnight of BTC ETFs trading saw a 20% retracement in BTC due to Grayscale outflows. A similar trend may occur with ETH as Grayscale outflows should sustain selling pressure on ETH until they exhaust their outflows (a 20% pullback would see Ethereum at ~$2,800).

The ETF hype drove BTC to new ATHs prior to the BTC Halving event, this occurred 2 months after BTC ETF was launched. Aforementioned, ETH is ~40% from its ATH, will we see a new ATH set by ETH in the coming months as a result of the ETFs?

Mt Gox. Continues to Make Repayments:

This positive news has been overshadowed by Mt Gox. moving almost $3 Billion dollars worth of BTC onto exchanges to continue repayments. What was one of the major catalysts of driving BTC down to 54k has reared its ugly head again. If Mt Gox is to sell all of this BTC, then it will outweigh all of the BTC ETF inflows over the last couple weeks which helped BTC recover from $53.5k to the current price. Whilst it is unlikely to see these repayments negate all of the gains BTC saw as a result of the inflows, it would be wise to expect a slight pullback.

If a pullback is to occur, this should be seen as a time to 'buy the dip' before BTC continues on higher.

While the immediate impacts of the Ethereum Spot ETF launch have mirrored the volatility seen with Bitcoin's ETF debut, the long-term outlook remains highly favorable. The initial sell-the-news reaction and significant outflows from Grayscale have temporarily pressured Ethereum's price. However, if Ethereum follows Bitcoin's post-ETF trajectory, any short-term retracements could pave the way for substantial gains and potentially a new all time high in the months ahead. We remain bullish on Ethereum, confident that the long-term effects of an Ethereum ETF will further solidify its position as a leading asset in the cryptocurrency space. The introduction of the ETF is expected to drive increased institutional interest and broader adoption.

Written by Alexandar Artis

Create a brokerage account today

Get Started

Reach out to us at Stormrake for further market insight and allow us to help you navigate the sea of mania and laser-eye memes, so that you can realise your goals in the market!

No Advice Warning

The information in this newsletter is general only. It should not be taken as constituting professional advice from the author - Stormrake PTY LTD.