Markets Wanted More—Sacks’ Speech Sends Bitcoin Lower

Thu, 06 Feb 2025 12:38:20 +1100

To receive the Morning Note in your inbox, subscribe here: https://stormrake.substack.com/

David Sacks' speech this morning was far from bearish—yet it wasn't the announcement investors were hoping for. It seems that unless the market hears the exact words "The Bitcoin Reserve is here," it reacts negatively.

The Bitcoin Czar declared that the Golden Age for digital assets is upon us. Sacks revealed that his primary focus is evaluating the feasibility of a Bitcoin Reserve, while also reinforcing the crucial role of stablecoins in maintaining US dollar dominance on the global stage.

In the lead-up to the speech, crypto markets were rallying, with Bitcoin briefly touching $101K. However, as soon as Sacks began speaking, the market took a dive. Since 6:30 AM, Bitcoin is down over 3%, with most altcoins seeing double-digit losses—turning the charts into a sea of red.

As always, when Bitcoin sneezes, altcoins collapse. This highlights Bitcoin’s strength relative to the rest of the market. Bitcoin dominance currently sits at 61.41% and remains bullish, reinforcing the importance of prioritising Bitcoin exposure in uncertain times.

Stormrake Spotlight: Ethereum (ETH) ($2,865)

Source:https://www.tradingview.com/x/eAbbb86V/

Despite being the second-largest cryptocurrency, Ethereum is still an altcoin—and as mentioned above, altcoins fall when Bitcoin stumbles. However, ETH’s major support at $2,770 has held up well, despite repeated tests over the past few days.

During last night's bearish price action, reports surfaced that Fidelity had just purchased another $49.75 million of Ethereum. This marks the second consecutive day that a major player has accumulated ETH. If institutions continue buying at these levels, it signals that they see ETH as undervalued—a strong indicator that retail investors may want to follow suit.

BTC/USD Key Levels and Price Action:

Source:https://www.tradingview.com/x/kK8Bd6XL/

Bitcoin failed to hold above the key $100K level and has since bounced off support at $95.7K. Currently, momentum remains neutral, with moving averages trending sideways. Structurally, Bitcoin has confirmed a higher low but is still following a lower high, suggesting a consolidation phase between these two key levels.

BTC Total ETF Flows for 4 Feb: $ + 35.6 million

(ETF flow data is sourced from https://farside.co.uk/btc/ and reflects figures at the time of writing.)

ETH/USD Key Levels and Price Action:

Source:https://www.tradingview.com/x/18tHiBpZ/

Ethereum remains range-bound between $2,556 (support) and $2,865 (resistance). The structure remains bearish, with multiple lower highs forming. A move towards the lower end of the range is likely unless ETH can break above the 21 & 55 EMAs, which would open the door for a challenge of range resistance.

ETH Total ETF Flows for 4 Feb: $ + 4.1 million

(ETF flow data is sourced from https://farside.co.uk/eth/ and reflects figures at the time of writing.)

To receive the Morning Note in your inbox, subscribe here: https://stormrake.substack.com/

*All prices are denominated in USD unless stated otherwise*

Written by Alexandar Artis

Create a brokerage account today

Get Started

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