0:00 Hey everyone, and thanks for dropping back into the cryptoverse. Today, we're going to talk about Bitcoin post FOMC. If you guys like the content, make sure you subscribe to the channel, give the video a thumbs up, and also check out the sale on ITC premium at intothecryptoverse.com. We also do have the upcoming ITC conference, the inaugural ITC conference. So, if you want to be there uh and listen to discussions, make sure you go ahead and get your ticket. Prices will be going up on November 1st. That's just a few days from now. So, if you are going to go, if you already know you're going to go, make sure you go ahead and get your ticket. That way it makes uh it makes it a little bit easier for us to plan on on how many people are going to be there, you know, how much food to order, all
0:46 that sort of stuff. So, I think it's going to be a great conference. We got a lot of people coming, and hopefully hopefully everyone enjoys it. Um with that said, I I do want to talk a little bit now about Bitcoin and uh FOMC. So, the Fed today did not raise rates, and so that was sort of the base case by the markets going into FOMC. There was like a 90%chance that the Fed would hold rates steady, and in fact, they did. And what's interesting though is if you just looked at like the inflation data, it is somewhat hard to justify like not raising rates because the labor market has been relatively fine, right? And and and
1:32 these are like the Fed's own words, right? They talk about how robust the labor market has been. But, we just had the producer price index PPI come in well above expectations, right? I mean, way above where you know, where the market was expecting. So, if we go take a look at that, um the producer price index PPI, that look at the year-over-year change, I mean, look at this thing. Right? I mean, this is you can look at a percentage, right? 6.35%. I mean, this thing has been moving up. And so, I I think one of the somewhat puzzling things, but not really, if we're being honest, one of
2:17 the puzzling things is if you see inflation kind of like running out of control again, and and it looks like, according to, you know, the SEP from last time and what Fed officials have said, they're expecting another rate hike, like, why not go ahead and do it in October? Why wait until December when who knows where inflation might be at that point? Now, obviously, the the the most likely answer, that they would, of course, never say, is because the midterms. And actually, the same thing happened in 2018. You know, I mean, I I I know some people think we don't live in a simulation, but in 2018, we had a rate hike in September,
3:02 a pause at the next meeting around the midterms, and then another rate hike in December. And it it seems like that's what we're going to get this time, too. So, you know, it's hard it it's hard to imagine like what is the justification really for not raising rates when you can see that inflation is starting to pick back up. Um and I I think that we have I believe we have PCE tomorrow. So, if we go over to the calendar and look at what's sort of up tomorrow, you can see we've got core PCE coming in and headline PCE. Now, the headline expectation is 3.6. Last month, it was 3.4. So, if we click on it
3:49 and just take a look at it, you can see that PCE had gone up into May and then it came back down, but I'm of the opinion that this stuff is going to start moving back up again. The rise in oil prices has significantly contributed to rising inflation in a lot of different areas, right? It it it it not it doesn't just affect um you know, energy markets, it affects many many things. And if you look at say WTI, you can see that it sort of found a high this final high was in the month of May and then it went down into July. So, if you go back to PCE, you can see
4:34 that this the high was in May and then it went down into July. And now it's starting to go back up. There's a lag, right? I mean, there's a lag on this thing and I think there's a good chance that PCE could come in somewhat hot just like PPI did. Just like the producer price index came in hot, I think there's a good chance that PCE could also come in hot. At least probably at 3.6%. I mean, I could be wrong about that. It's not like I have any you know, inside into it other than just, you know, what what would seemingly make sense and that would be to see a hot print. But, it kind of all falls in line with what we've been talking about, right? Cuz we've kind of laid out the framework for how this goes and the
5:20 first one was you get your second weekly close by Bitcoin below 83K, which happened. So, therefore, fake out confirmed. Arguably happened. The next thing is the Fed holds rates, which happened today. The next thing is PCE comes in hot. If it does, the long end likely spikes. Long end spikes. And one of the reasons why I think the long end will spike is because we are around the time where it should start going up if it's going to repeat like what it did in the last two midterm years. So, if you look at the
6:05 year-to-date ROI of something like the 10-year yield, for instance, right? Just look at the 10-year yield. Uh and if you look at it in 2026 and compare it to say 2018, you can see how the 10-year yield find it found a top in October. And then it fell, it even bounced around the same time, and then it fell. And And back then, you can see that it bottomed, it found a low around October 26th to the 28th, and then it rallied back up sort of into the midterms. And maybe even a little after the midterms. And then it fell. And then if you look at 2022, you can see the same thing happened, right? It topped in October, a little later in October, it dropped, found a low around
6:52 October 27th, which is basically right around where we were where we are now, and then it had one final rally into about November 7th before then dropping into the end of the year. Now, we know the long end back then still went up in 2023 somewhat, not a lot. And by the end of the year, I guess it was mostly flat. And then of course it continued to go up in 2024 and and and um if you look at like 2025, I guess it dropped in 2025. But we know the long end's, you know, much higher now than it was back in 2022. And so, or at least for a lot of it. So, when you look at it like this, I I I think there's a good chance the long end will rally. So, then I have to ask myself, well, what is the catalyst, if you need one? What is the catalyst for a
7:40 potential rally? The catalyst is basically, you know, what war said today. And that is him kind of bragging about how the long end has come down recently. Would that not be the perfect time for the long end to go back up? Right? Like right after the Fed official is bragging about it coming back down. And what's remarkable to me is kind of like the audacity to even say that it's coming back down when it it's still higher than where it was at the September meeting. Like if you look at the 10-year yield, the September meeting, the 10-year yield was at um you know, right around where it is now. Maybe a little bit lower than where it is now. So, it it's kind of or maybe right around the same cuz it it
8:26 dropped today right after the Fed meeting. But, it's basically the same level. So, to to say that it's come down is basically just getting lost in this right here. But, then zooming out, it just seems a little silly to be bragging about the 10-year coming down. And with oil prices rising, like what if What if the reason the long end rallies back up to 5-3 is because the Fed is unwilling to raise rates when they should? Right? That doesn't mean the long end has to go up for the rest of the year. What I've said, the most likely outcome if we continue along this idea, is that the long end spikes and then after the midterms, then So, but before before the
9:13 we we should also see oil spike to 120 due to the Iran war. And then after that, stocks finally drop. And then after that, or probably before that, Bitcoin drops in Q4. I mean, I'm just thinking like what is What is the catalyst if you need one to get the long end back up. It's probably great to see it go right back up after the Fed chair brags about it coming back down. And also, potentially they raise they they they don't raise rates today, they didn't. What if you get a hot inflation report tomorrow and then everyone's left wondering, "Why didn't they raise rates?" Right? I mean, why not? Is it just because of the midterms?
9:59 Because if everyone's already penciling in a rate hike and inflation's picking back up, do you not run the risk of falling behind? Now, what I think's going to happen is I think the long end rallies and then comes back down before the next FOMC, they raise rates, and then and then and it probably continues to come down after that. That's what I think's going to happen. But, we'll we'll see. So, what about Bitcoin? Well, Bitcoin, you know, had an initial rally, but you can see that it's running up against this 50-day moving average. And this is a this is an area that's run up to a lot after breaking down below it. And and so, I think this is going to be kind of a critical level here for for Bitcoin. And I know there's a lot of, you know, I see the comments, right? I mean, I obviously I've I've sort of
10:44 tilted with a bearish bias uh throughout all of 2026, you know, and and for the most part that bearish that that bearish bias was correct. Obviously, with this move back up to 87k, you could argue perhaps it wasn't. Um but, at the same time, you know, the longer we just continue to spend below the May high, it just seems like it's more accepting of being back below it. Now, I know everyone's kind of just waiting for the the day we wake up and Bitcoin goes up to 90k or something. And I'm not going to say that it can't happen. Um you know, I I wasn't expecting the move to 87k. But, what I am saying is that there is just simply the the risk that that Bitcoin fades back down. And and
11:31 there's a lot of markets that are already doing that. And I think that's what really like gets me to not like completely throw in the towel on the Q4 drop idea, is if you go through a lot of the markets, they tend to have three separate lows in 2026. If you look at gold, you have your Q1 low, your summer low, and now it's trying to form the Q4 low. So, there you have gold. Now, look at South Korea. This index, you have your Q1 low, you had a massive rally, you still had your summer low, and now it's trying to form the Q4 low, right? Three separate lows. Completely different index, but you see it in gold, you see it in South Korea.
12:18 Now, go look at the HSI, go look at at China. It's it's like the same thing, right? You have your Q1 low, you have your summer low, and now it's trying to form the Q4 low. So, I just I see this pattern across so many different markets, and I struggle to to sort of say that oh, no, it won't happen with Bitcoin, right? Because Bitcoin has done the same thing. The Q1 low, the summer low, we just need the Q4 low, right? And and and then it all matches everything else that we just looked at. So, I'm not saying that view has to pan out, but like it it's not like it's completely out of the question. Um and one of the things that I I've sort of noted a couple of times is how back
13:05 in May, Bitcoin sold off, started selling off about a month before the SpaceX IPO, right? In fact, we just added the chart, I believe, uh to show that. Let's see if I can Yeah, so if you look at at Bitcoin, the blue line, so the dash line is when the SpaceX IPO was, and this just shows you 30 days before the IPO and 30 days after. This is Bitcoin sort of normalized from 30 days before to 30 days after, and you can see that Bitcoin's actually following what it did prior to the SpaceX IPO. I mean, the argument is that what if people just simply pull money out of the crypto markets to save up to go put it in in one of these IPOs. Now, that might not
13:51 make sense to you, but there are a lot of people that do that type of stuff, right? There's a lot of people that will do that, especially if they bought Bitcoin in the summer and they're up 30% or something, 40%, and if they want to go get the Anthropic IPO, that's the reason, right? And then it just kind of fades back down and, you know, bottoms sometime around the IPO and then probably goes back up after that. Right? So, this is just, you know, it's playing out so far, and if it continues to play out, you know, you'll you'll see it drop, maybe bounce one more time, and then drop into, you know, into the Q4 low, and then you have basically the the midterm year has played out, would have played out like it always does, right? So um
14:37 we'll [snorts] see what happens, right? But I mean, you know, it it it almost be like if it if it mimic that, where it, you know, you drop, you rally, you drop again, maybe a rally one more time, and then you get a larger drop. I know it's a lot, you know, to take in, but if you look at the Fed and what they what they said, I mean, again, they just kept rates constant, and you know, I mean, if you look at if you look at expectations, let me reload this cuz I do believe it is it's been updated. I don't think there's as high of a probability. Yeah, I mean, you have like an 80%nearly an 80%chance that the Fed raises rates in December, right? And if you look at it aggregated over the next several months, you can see the market is pricing in two rate
15:23 hikes in 2027. I don't even know if you're going to have those rate hikes in 2027. You might not need them. You know, if the stock market were to get a correction at the end of the year before the end of the year, perhaps those rate hikes get priced out. At the end of 2018, we had the the SEP that was released in December 2018, the summary of the economic projections, thought we they they it said that we likely would have two rate hikes in 2019. And then we got zero rate hikes in 2019. So, we ended up getting three rate cuts. So, I I think this is important to, you know, to sort of to understand, but also be like, look, these things don't always have to play out like the market thinks, right? So, it's a complicated market, for sure.
16:09 There's a lot of moving parts. The next thing to watch is where does PCE come in tomorrow? And I could be wrong. Like, maybe it comes in cold, right? There's a chance of that. I'd say there's probably at least a 30-40%chance that it comes in softer than expectations. But, if it comes in hot, then the most likely outcome would be that crypto would probably sell off. The long end would start to rally, right? Crypto might then bounce one more time into the midterms, and then drop after the midterms. You know, all of Bitcoin's prior major drops that marked market cycle bottoms have always occurred after the midterms. Every single one of them.
16:55 You look at 2022, right? The last drop was after the midterms. Same thing was true in 2018. The final drop was after the midterms. And then even in 2014, uh you rallied right after the midterms, but we ended up dropping after the midterms as well. So, it kind of all just lines up. Uh and I think it's important for people to realize that yeah, this has been a great rally up to 87k and you know, maybe maybe the bulls are right and we don't go and go back down, but we're seeing a lot of other markets put in the Q1 low, the summer low, and the Q4 low. And I I just think that if if PCE comes in hot, the long end rallies, we get the uncertainty of the midterms
17:40 and what that could bring, you could easily see that Q4 low. And I mean, look at what happened with Brazil after their midterms. You had a very unexpected result and then Brazil like dropped 20%overnight. Like the index, which seems a bit of an extreme overreaction. Um I I don't I you know, I don't fully I it's not like I'm that in tune as what's going on over there, but it seems like an overreaction. And then today, you had we're not going to get into all of it, but you had other elections, right? And when you have elections where there's a lot of uncertainty, it often it often leads to markets dropping. And with the launch of the SpaceX IPO preceding the SpaceX IPO, the stock
18:26 market dropped, the S&P dropped about 5%. And that was that was like the week or two leading into the SpaceX IPO. The Anthropic IPO is going to probably be like the week of November 16th to the 20th. So, we could start to see a drop in the stock market shortly after the midterms. It could continue drop. It's already been dropping, but a continued drop after the midterms that then takes Bitcoin down into the Q4 low. I know it's not a popular view at this point, right? I get that, but it is still a complete and total possibility that isn't just backed up by you know, a a sort of this bearish bias, but I mean, I feel like it is somewhat backed up by
19:12 some of the data, right? Not all of the data. You can go find some data that looks pretty bullish if you want to go look at like TA and the RSI and the MACD and that sort of stuff. That all looks bullish. But, if you want to look at like what Bitcoin normally does after a rate hike in September of a midterm year, on average, it doesn't do anything. And then about 50 days after the rate hike, Bitcoin then starts to drop. And we're currently on day 43. And you can see we had two midterm years previously where we had a rate hike, Bitcoin just kind of popped up for a little bit, didn't do anything, and then we got the final drop uh right after, you know, somewhere somewhere around the midterms, right? So, those
19:57 That's my view. And um we'll see where it we'll see where PCE comes in tomorrow. And if it comes in hot, look for the long into rally. Look for Bitcoin to drop, then probably one more bounce by Bitcoin uh you know, at some point before the midterms. And then at that point, if if it goes down to the Q4 low, then it would be just doing what would have been the base case all along. If you guys like the content, make sure you subscribe to the channel, give the video thumbs up, and also make sure you check out the upcoming investing through the cycles conference. Ticket prices are going up in just about three or four days from now. So, make sure you go ahead and get your ticket before the prices increase. Thank you guys for being here, and I'll see you next time. Bye.
