Tesla Model D
3 min read

Tesla Model D

Cryptic ball: D for dump.

This Wednesday crypto found its highest level in a month, with bitcoin hitting $24.3k and ether testing $1.6k again. Both then fell, even if stocks kept rallying. While some are blaming Tesla for this, I argue there's something else at play.

  • Firstly, crypto has been leading macro moves for a while now. While relief rallies often need a pause, this is the time of the month when volatility increases as uncertainty surrounding the Fed's FOMC meeting increases.
  • That means I'm expecting stonks to dip a bit during the rest of the week, with crypto's upcoming direction potentially dictating what can happen next week in global markets. Overall, I'm still expecting that direction will be up. Why?
  • Well, the news that Tesla sold 65% of its original bitcoin holdings in Q2, around $30k, having already sold 10% one year ago, is "a nothingburger" - especially as Elon Musk clarified they are "open to increasing its crypto holdings" again.
  • Then, what matters is still the wider macro picture. For now, I'm confident the next announcement on July 27th will confirm a 75bps hike, which is fully priced in. And that will allow the rest of summer to play out nicely.
  • After that, I'm a bit concerned with how instability in Europe over an uncertain, but likely colder winter, can impact the rest of the world. But as the Fed is likely forced to pivot in Q3 then I reckon the US effect will be larger anyway.

All-in-all, it's clear all markets are rallying as they anticipate the worse is behind us. If circumstances, e.g. war, winter, or inflation, change that and bind the Fed to continue raising rates, then I may be wrong. Until then, time to research alts.

Chart art: P for pivot.

Implied interest rates peak this year and then abruptly fall. Let's hope that plays out.

Three things: R for rekt.

Tweet tip: B for bottom.

I agree. And LOL at those crying that the 3AC contagion hasn't ended yet.

Meme moment: T for trade.

Ah, you must be thinking you're late and that if you buy now the market will dump on you! That's very possible, but one needs to risk it for the biscuit! Consider scaling in instead of jumping all-in into a position.

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Our newsletter offers opinions and insights from analysts in the cryptoasset space. It is not intended to be investment advice, and should not be treated as such. You must not rely on its information as an alternative to financial advice from a qualified professional. Without prejudice, we do not undertake or guarantee that its information is correct, complete or non-misleading; or that the use of the guidance in the report will lead to any particular outcome or result.