A Spot Bitcoin ETF Is Coming. Wall Street's Aristocracy Demands It.

Jul 03, 2023

IN TODAY’S REPORT

What we cover: A spot BTC ETF is coming. ETH’s 50-day high looks promising. BTC Dominance poised to stall.

TODAY’S STATS

Spot Bitcoin ETF Developments and ETH 50-Day High.

After ghosting the crypto industry’s requests for clarity in favor sending Wells notices to Coinbase and various other U.S.-based innovators endeavoring to run legitimate businesses at the vanguard of tech, the SEC’s surprisingly sudden statement that the recent flood of spot Bitcoin ETF applications are “inadequate” strikes us as decidedly bullish.

Under the towering shadow of BlackRock’s influential spot Bitcoin ETF application, the pressure is now squarely on the SEC, and not from crypto-native “degenerates” but rather Wall Street’s aristocracy. The Commission’s rapid response is noteworthy and arguably obsequious, demonstrating the need for the SEC to eventually approve a spot Bitcoin ETF for the benefit of the establishment’s coffers, if for no one else.

It may take several months to over a year, but it’s clear. A spot BTC ETF is coming.

Turning our attention to the second largest crypto by market cap, Ether just closed at a 50-day high as it plays catch-up to Bitcoin. Today we’ll take our usual evidence-based look at what’s happened in the past when ETH closes at a 50-day high while above its 200ma. We’ll also factor in the fact that Ether’s one year moving average is rising, indicating slightly positive upward momentum over the last 365 days.

`ETHEREUM (ETH/USD). Daily Chart with 200ma and 365ma.`

QUERY SETUP CONDITIONS:

CONDITION 1: Ether closes at a 50-day high
CONDITION 2: Ether is above its 200-day moving average (200ma)
CONDITION 3: Ether's 365-day moving average is rising

ENTRY AND EXIT CONDITIONS:

1. ENTRY CONDITION: Enter long ("buy") at the open of the next daily candle
2. EXIT CONDITION: Exit ("sell") 365-days later

Here are the results using a 365-day hold:

`ETHER (ETH/USD). Query Results for ETH with a 365-day Hold. Inception to Now.`

Since the start of our data for Ethereum, there have only been five instances of this setup when using a 365-day hold, with a minimally respectable 60% win rate.

While the worst trade of -49.3% deserves concern, it occurred during 2018’s bear market after entering the trade in the final phase of the euphoric 2017 bull.

Not shown in the above image, the second worst trade of -48.5% similarly entered just before the successive implosions of Terra Luna, 3AC, and of course FTX. It’s arguably relatively safe to assume that the probability of a loss of this magnitude at this juncture in the macro cycle is lower.

Share REKTelligence Report

What stands out in today’s results is the stunning average trade of +514.7%. A similar result from recent levels would put ETH at 9954.6, blowing past its prior all time high in the 5000 area. Equally impressive is the profit factor of over 27, indicating that total hypothetical gains are over 27 times the size of total hypothetical losses. While instances are obviously few here, that’s still an impressive profit factor.

THE TECHNICAL VIEW

Bitcoin’s Surging Dominance Set To Stall

Bitcoin’s surging dominance may ascend even higher in the next several days to weeks, but a continued rise will likely see the king crypto’s market dominance stall in the 55% to 60% range, giving altcoins a chance to find their footing and potentially garner some much-needed rotation.

Excluding Ethereum, even the highest-ranking altcoins require investors to venture dramatically farther out on the risk curve, something few are willing to do in any broad-based manner at the moment.

That said, there are an increasing number of altcoin surges occurring off of multi-month lows. For now, however, these pumps remain the exception not the rule, and we’ll need to see a brighter macro liquidity picture before Alt Season arrives.

`BITCOIN DOMINANCE (BTC.D). Monthly Chart with Trendlines.`

SOURCE: TradingView

THE TLDR

A Few Key Takeaways

Text within this block will maintain its original spacing when published

✔ It may take several months to over a year, but it’s clear. A spot BTC ETF is coming. 
✔A similar average trade of +514.7% would put ETH at 9954, blowing past its prior all time high
✔ A continued rise will likely see the king crypto’s market dominance stall in the 55% to 60% range
✔ We’ll need to see a brighter macro liquidity picture before Alt Season arrives.

peace_love_crypto

-DB

IMPORTANT DISCLAIMER

The information presented and made available in this newsletter is intended for educational purposes only. THE INFORMATION IS NOT AND SHOULD NOT BE CONFUSED WITH INVESTMENT ADVICE AND DOES NOT ATTEMPT OR CLAIM TO BE A COMPLETE DESCRIPTION OF ANY SPECIFIC COINS, TOKENS OR MARKETS OF ANY KIND, BUT RATHER EDUCATIONAL EXAMPLES OF THE APPLICATION OF TECHNICAL ANALYSIS AND QUANTITATIVE ANALYSIS TO THE MARKET. This information has been presented and prepared without regard to any particular person's investment objectives, financial situation and particular needs because as individuals come from diverse backgrounds, with diverse objectives and financial situations. This information is of a general nature only so you should seek advice from your investment advisor or other financial professional as appropriate before taking any action. The opinions and analyses included herein are based on sources and data believed to be reliable and are presented in good faith, however no representation or warranty, expressed or implied is made as to their completeness or accuracy. It is imperative to understand your investment risks since all stock investments involve significant risk. The user of REKTelligence’s newsletters, podcasts, courses, coaching and other educational services agrees to indemnify and hold harmless REKTelligence LLC from and against any and all liabilities, expenses (including attorney's fees), and damages arising out of claims resulting from the use of this educational content. REKTelligence LLC is not a licensed investment advisor.