Short Term Holder Realized Price (STH--RP)
The price of Bitcoin for short-term holders usually acts as support during bull markets, and its historical accuracy is amazingly high (during bull markets, they like to buy when the price of Bitcoin reaches their cost basis because this is a good time to add to their position).
Judging from the historical chart data, STH--RP is almost a successful support level for every price drop in every bull market cycle from 16 to 24 years.
US April CPI Index
The biggest macroeconomic development this week was the release of US Consumer Price Index (CPI) data for April - the month-over-month change in CPI was 0.3%, below the expected 0.4%. The core CPI was 0.3%, in line with expectations. The annual rates of change for both headline and core CPI were flat or down slightly, at 3.4% and 3.6%, respectively. The biggest development was the decline in the annual core CPI, which hit its lowest level since April 2021.
All in all, this inflation report was in line with expectations, but there were also some signs of being below expectations, which is a sharp departure from the norm in the past few quarters. It inadvertently reminds people that interest rate cuts may come earlier than the market expects!
Bitcoin Spot ETF
In the days following the release of the US CPI index on May 14, Bitcoin ETFs received inflows of more than $100 million, and even $300 million on May 16, becoming the main driver of Bitcoin prices. Eight of the 11 US ETFs reported positive inflows.
"BlackRock’s IBIT spot ETF saw its largest single-day inflow of $93.7 million, the largest inflow since April 12. This brought IBIT’s total inflows to an impressive $15.6 billion. Fidelity’s FBTC spot ETF also continued its strong performance, adding $67.1 million, bringing total net inflows to $8.4 billion."
BlackRock’s IBIT cash ETF reached $10 billion in AUM in just 49 days, a record that is so impressive compared to other ETFs of similar size.
The US 10-year yield minus the 2-year Treasury yield inverted
The 10-year and 2-year Treasury yield curve is already inverted and has been so for nearly two years. Historically, a recalibration of the yield curve is often seen as a harbinger of a recession. The curve is not showing any signs of recalibrating yet. As long as the Treasury continues to issue a large amount of Treasury bonds at the short end of the curve, the curve may not adjust.
Global M2 assets increase
The current global liquidity has risen sharply, driving the market, and the M2 money supply of the four major fiat currencies (US dollar, euro, renminbi and yen) has increased year-on-year, even though interest rates have reached the highest level since 2007. In this high inflation, high deficit environment, risk assets such as Bitcoin will perform well in nominal terms because new liquidity will eventually flow to assets.
We have been on an upward trend; we continue to be on an upward trend.
History tells us that we are likely to continue on an upward trend.
My belief is that it is still appropriate to stay with the uptrend and focus on objectively bullish data and signals, while also recognizing the importance of managing risk!
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Note: All content represents only the author’s personal views, is not investment advice, and should not be construed in any way as tax, accounting, legal, business, financial or regulatory advice. Before making any investment decision, you should seek independent legal and financial advice, including advice on tax consequences.
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