BTC whipsawed by the data

In this report:

• Today's Data.
• Treasury Secretary Bessent's Recent Comments.
• BTC & Total3.
• Cryptonary's Take & How We're Playing This Currently.

Disclaimer: This is not financial or investment advice. You are responsible for any capital-related decisions you make, and only you are accountable for the results.

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Today's Data

Today, the market was whip-sawed by two main data points. The first was the jobs data, which showed the unemployment rate coming down from 4.1% to 4.0%, but non-farms came in at 143k. This was somewhat of a confusing report to the market.

The unemployment rate is down, so that's good, but fewer jobs were added. Ultimately, it shows a still robust labour market; hence, the market took it positively, and we saw the market begin to move higher off the back.

However, just 90 minutes later, the Michigan Inflation Expectations came in at 4.3%, well above the 3.3% consensus. This shows a large increase in inflation expectations from consumers, which the FED won't like.

Maybe you could argue that this is somewhat transitory, given that it may be caused due to the expectations of tariffs. But either way, a sharp increase in inflation expectations isn't great.

This is how $BTC reacted to the string of data points today. Relatively big move up, followed by an immediate retracement back to where the move began, hence whip-sawing both Longs and Shorts.

BTC price reaction to today's data:

Treasury Secretary Bessent's recent comments

New Treasury Secretary Scott Bessent has spoken publicly a number of times recently, and the Bond market has reacted relatively well to when he's spoken. Bessent has successfully traded markets and run his own Fund for a long time, so the market knows he knows his stuff.

Bessent has said that he and Trump's focus is on reducing the US10Y Yield, but this won't be done through slashing short-term rates (the FED cutting). This would likely have the inverse effect as the Bond vigilantes would continue to demand a larger term premia to buy newly issued Coupons.

Bessent's focus will be on reducing the deficit and getting the fiscal situation more in hand - that's how he'll reduce the term premia and, therefore, reduce the US10Y Yield. This isn't something he can fix in a number of weeks; rather, it'll take a number of quarters.

But, the bond market rallied when Bessent spoke, indicating they're confident that Bessent will pull this off over the coming quarters and years. Whilst Yields might remain high, it's possible that they've begun a new long-term downtrend, although a gradual trend lower rather than an aggressive and sharp move lower. This is, and would be, positive for risk assets.

BTC and TOTAL3

We've seen how BTC has reacted above today's data, currently rejecting the horizontal level of $98,900, whilst the price is using the $95,700 horizontal level as support. In regards to mechanics, funding fluctuates between slightly positive and somewhat negative, and bears seem to have gotten confident over the last few days.

Perhaps this does open the door to a small weekend relief rally. Although it may not be huge, possibly $100k to $102k might be on the cards, but we don't expect more than that.

$BTC 1D timeframe:

If we now look at TOTAL3 (total crypto market cap excluding BTC and ETH's market caps), we can see that the price has broken below the horizontal support of 930b, but we have seen a good hammer candle form.

We're now looking for this 3D and Weekly candle closures to show a reclaim back above 930b. If not, the structure will have broken, and it might mean we will see more breakdowns for Alts or even just range-bounding at the lows in the coming weeks.

In our opinion, BTC, and TOTAL3 are the two key charts to be watching going into Sunday night's closes. We're looking (more hoping) for both to reclaim back above their horizontal resistances.

TOTAL3 3D timeframe:

Cryptonary's take and how we're playing this

This is a tricky market at the moment that is increasingly sensitive to the macro data, Trump and his potential policies. Markets naturally don't like uncertainty, and we have a lot of that currently. Pair this with the fact we don't have many positive catalysts in the short term; this does possibly set us up for another tricky few weeks.

But as the uncertainty is removed, and it will be once trade deals are done, and policies are implemented and cemented, then many coins will likely bottom, put in rounded bottoms, and may then be able to see a new leg up.

If we now zoom in on the immediate term, we're open to the idea that we see a relief rally this weekend. Although, we wouldn't expect it to be mega.

For BTC, potentially a retest of the $100k to $102k area at best. Alt's/memes look more than due for a relief rally. At the moment, though, it seems there isn't a narrative or catalyst that can spark this.

But we believe Alts/memes may participate in a small relief rally this weekend simply due to how oversold they are. However, this doesn't mean you have to play it, and our overall suggestion would still be to maintain a cautious approach until we have more clarity on the macro side and we see the emergence of new catalysts that can begin to take this market higher again.

What we will say is that many plays are very oversold, and so when this market does rebound, it'll likely set up for some great opportunities, be it in oversold coins rebounding or new setups/plays that can really run and produce big gains.

In the meantime, we maintain the cautious and conservative approach, but we're ready to pull the trigger again when we believe the time is right. We believe this will be more weeks (maybe 1-2 months) rather than months/quarters. We're very confident BTC ends the year substantially higher and that this isn't the start of a new bear market.

Have a good weekend all.