December Rate Cut Odds Zoom Back Up

Good morning. You think your dog coins are volatile? Wait until you see December’s rate cut odds. That’s our first story. Then, before you cut your SOL bags, check out what’s happening with the SOL ETF inflows.  

All of that, plus . . . 

• Your Chart of the Day shows a possible falling wedge (bullish) on the S&P 500. 
• Bitcoin is your Trade of the Day, and ZEC shorts continue to be your DEGEN trade. 
• And your Alpha Leaks. 

Chart of the Day

The S&P 500 is your Chart of the Day. Let’s be real, Bitcoin is still in a somewhat fragile state, and given it acts like a high-beta tech stock, then we need the tech sector to hold up here, if we want Bitcoin to continue to rally.  

And the good news is the S&P chart actually doesn’t look too bad here. The markets clearly liked Fed President John Williams’ comments on Friday (i.e. see our first news story), so yesterday’s price action was green, with the index getting back above 6,700 on high volumes. 

Moreover, the RSI both on the four hour and daily is attempting to get back into bull territory now, and the price action in general might be forming a bullish falling wedge pattern. Keep your eyes on the stock indices. 

Time to Double Down

The past few weeks have been brutal. Volatility spiked, prices dropped hard, and the market shook a lot of traders out.

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Trade of the Day

Bitcoin spot purchases and / or longs is your Trade of the Day. Here’s why. 

First, it appears that Bitcoin has bottomed out at $80K, and importantly, the price held above the tariff lows from this past April. Second, the candle at $80K was a hammer on very high volumes. This indicates that buyers stepped in hard and pushed prices back up. And third, the RSI is coming out of oversold territory now, and the MACD appears to be making a bullish crossover. 

Now we don’t know if this current relief rally will ultimately be the start of a new major leg higher or just a dead cat bounce. But even if it’s the latter, our thinking is that Bitcoin probably goes back to $100K, because that’s where the 50W SMA currently sits, and Bitcoin often likes to retest this line after losing it. 

Alpha Leaks

• Alphabet’s [GOOGL, Stock] AI chips (i.e. tensor processing units, “TPUs”) are being considered for use by Meta within their data centers by 2027. If this happens, it’s good for Google and bad for Nvidia. 
• Broadcom Inc. [AVGO, Stock] will be a big beneficiary if Alphabet’s TPUs take off. That’s because Broadcom is a key design partner with Alphabet for the production of the TPUs. 
• Chainlink’s [LINK, Crypto] first ever spot ETF launches in seven days (i.e. Dec. 2nd). It’s called the Grayscale GLNK ETF, and it will launch on the New York Stock Exchange. 
• Hyperliquid’s [HYPE, Crypto] first team token unlock happens this Saturday. Approximately 9.92M HYPE will be released to core contributors, which represents 2.66% of HYPE’s circulating supply. Also understand that this is the start of a 24 month tranche unlock for HYPE, where 23.8% of HYPE’s total supply will be released to core contributors. 
• Monad’s [MON, Crypto] mainnet launched yesterday. Monad is a high-performance EVM-compatible L1 blockchain. 
• Solv Protocol [SOLV, Crypto] went live on Solana yesterday. Solv Protocol is a DeFi platform that serves as an “operating layer” for Bitcoin. 
• Tesla’s [TSLA, Stock] AI5 chip should be released soon. That’s according to Elon Musk on X. These are AI chips that operate in Tesla’s vehicles and Optimus robots. Musk insinuated that these chips will be major players in the AI hardware sector. 

News Roundup

December Rate Cut Odds Zoom Back Up

Just one week ago, the odds for a December rate cut sat at just 33%. But as of this morning, the CME FedWatch shows an 80.7% probability of a 25 bps cut on December 10th. These are the highest odds we’ve seen since mid-October.

The reversal came swiftly after New York Fed President John Williams’ remarks on Friday. He stated that “further adjustment in the near term” is still appropriate, which is fairly direct language for a Fed official. Williams also highlighted cooling job growth and moderating wages as further support for another cut. 

Other Fed governors remain split, but the market is listening to the doves right now. And of course, the absence of October labor or CPI data only complicates things for both the Fed and the markets that are trying to predict the outcome. 

However, Bitcoin and risk assets have taken notice. Bitcoin likely bottomed this past Friday at $80K, and it’s now making an attempt towards $90K, no doubt in part due to this shift in rate cut odds.

Spot SOL ETFs Have 20 Consecutive Days of Inflows 

The US spot SOL ETFs marked their 20th straight day of net inflows on Monday, pulling in $58M across the six funds.

Since launching on October 28th, the funds have accumulated a total of $568M in net inflows, which brings the total assets under management (AUM) to $843M. This AUM represents 1% of Solana’s circulating market cap. Bitwise’s BSOL ETF is the big winner thus far, as it’s basically the IBIT for SOL ETFs. BSOL holds 67% of all the AUM across the six US funds. 

Analysts think that the 20 days of inflows is evidence that institutional investors are seeking out a third alternative to Bitcoin and Ethereum. They further state that the funds have outperformed pre-launch expectations, despite the larger market pullback, and that this all signals Solana’s evolution as a core asset for DeFi, tokenized stocks, and other RWAs.

Now despite these steady inflows, SOL’s price has trended down over these last several weeks, finding support around $125. However, the inflows do suggest that smart money is accumulating; and therefore, SOL might be poised for a strong rebound if this market flips back into bull mode. 

Bitcoiners Fire Back Over MSCI Controversy 

The MSCI is considering a rule change that would exclude any public company holding more than 50% of its balance sheet in crypto from major equity indices, effective February 2026 if approved. We first discussed this in Saturday’s newsletter. 

The MSCI proposal surfaced on October 10th, but it blew up last week when JPMorgan estimated in a research note that there could be up to $2.8B in forced selling for Strategy alone, if the rule passes. And that note turned this issue into open warfare on X.

Michael Saylor responded Friday, stating that Strategy is a “publicly traded operating company with a $500M software business,” and not a passive fund. Over the weekend, Bitcoiner Grant Cardone pulled his $20M from Chase and announced that he’s suing the bank. And yesterday, Max Keiser tweeted “CRASH JP MORGAN, BUY MSTR (& BITCOIN)”. 

This remains a live risk event. If the rule gets rejected (consultation closes Dec 31st, decision due Jan 15th), the treasury companies will keep their passive inflows. But if it passes, then the relevant equities will take a hit, which will in turn hurt crypto valuations. 

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Degen Play of the Day

We called for shorts last week on your PRECIOUS internet ZEC tokens, and we’re reiterating this call today, depending on what happens over the short term. 

So here’s the story now. Price is resting just above some ascending support at $478. If ZEC loses that, then it’s go time for your shorts time. Also note the RSI falling into bear territory, the MACD is looking horrid, and the CMF just crossed below zero for the first time since September. 

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