NVIDIA Buoys Bitcoin

Good morning. NVIDIA is carrying Bitcoin right now. We’ll explain why in our first news piece. Then, we’ve got a sneaky long for your Trade on the Day that everyone else is sleeping on. And finally, our chances for a December Fed rate cut dropped to 33% yesterday.  

All of that, plus . . . 

• Your Chart of the Day says a Bitcoin relief bounce is coming. 
• Exercise your flexible thinking (go short, anon) with our DEGEN Trade of the Day. 
• And your Alpha Leaks. 

Chart of the Day

This is Bitcoin on the daily, since mid-2021, tracked with the RSI. So pretty much every time Bitcoin gets into oversold territory on the daily RSI, it either bounces, ranges sideways and bounces, or drops a bit more and bounces.

Stated differently, whenever Bitcoin drops into oversold territory, it almost never continues to dump hard. Therefore, from this data, we should expect a relief rally to come soon. Now, worst case scenario is we might drop a bit more (i.e. $80K to $85K); but again, we should expect a relief rally to come after that. 

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Trade of the Day

Your Trade of the Day is Old Man Ethereum. Now before you fall back asleep, read this first, because we think there’s a green light for risk-adjusted spot purchases or longs at $3,000. 

First, you’ve got the psychological support level at $3,000. Second, bullish RSI divergence on the daily. And third, a MACD that’s looking to have a bullish crossover soon. Now, the volumes do suck, so for a safer trade, wait for higher volumes to arrive first at the $3K level. 

If you’re using leverage, we highly recommend a stop loss between $2.8K to $2.85K, because this market is still very shaky. And we don’t recommend dumping your entire bankroll into a spot purchase here either. But, a risk-adjusted spot buy does make sense. 

Concerning fundamentals, Tom Lee’s Bitmine [BMNR] is still aggressively accumulating ETH, and Blackrock just filed paperwork to launch a new staked ETH ETF. 

Alpha Leaks

• Applied Materials [AMAT, Stock] should get a boost from NVIDIA’s earnings call last night. That’s because NVIDIA CEO Jensen Huang basically said that the company will spend a lot of money next year building newer and better chips. And Applied Materials is the company that builds and sells the machines to NVIDIA that help build their chips. 
• Avalanche’s [AVAX, Crypto] Granite upgrade went live yesterday. Developers say Granite improves cross-chain messaging, lowers gas fees, and makes cross-chain messaging development simpler.  
• Build on Bitcoin’s [BOB, Crypto] token generation event happens today. Build on Bitcoin is an L2 network that brings ETH-style DeFi to Bitcoin. 
• Filecoin [FIL, Crypto] launched “Onchain Cloud” on Tuesday. Developers say this service offers “an open, verifiable cloud built on content-addressed data, transparent service delivery, and programmable payments.” 
• Hyperliquid [HYPE, Crypto] should launch a native borrowing and lending market soon. That’s the rumor anyways. Not to mention, HYPE’s price action has been an absolute rock in this most recent sell-off. 
• Kraken [Ticker TBD, Stock] raised $800M this week from Jane Street, DRW Venture Capital, and others, as the company prepares for their IPO. Kraken right now is valued at $20B. 
• NVIDIA [NVDA, Stock] smashed their Q3 earnings yesterday. The expectation was between $54.8B to $55.2B. But the number came in at $57B. More analysis on this in our news section. 

News Roundup

NVIDIA Buoys Bitcoin 

NVIDIA dropped a very solid earnings beat after the stock bell yesterday, and the markets are breathing a much needed sigh of relief.

The tech giant posted Q3 revenue at $57.01B (up 62% YoY), which was well beyond the $54.8B to $55.2B expectation. The company’s bread and butter right now are their “Blackwell” data-center AI GPUs, and CEO Jensen Huang said yesterday that “Blackwell sales are off the charts”. Additionally, the company’s Q4 earnings guidance came in yesterday between $63.7B to $66.3B, which was comfortably above the market’s expectation of $62B. NVDA ripped 5% in overnight trading after the earnings were released.

Now, why does any of this matter for Bitcoin and our crypto markets? Simple. NVIDIA’s earnings beat signals that we’re not in a massive AI stock bubble, because the earnings justify the company’s current valuation. And since a lot of the recent stock market sell-off has been over AI tech bubble fears, then these earnings tamp-down on all of that.

And because Bitcoin often trades like a risky tech stock, then NVIDIA’s earnings give room for Bitcoin to go higher, because tech stocks now have room to go higher. So that’s why Bitcoin ripped back up over $90K late yesterday, immediately after the earnings were released. 

So long story short, the markets were on edge yesterday, but Nvidia’s Q3 numbers provide some confidence that valuations can go higher from here. 

Fed. Rate Cut Odds Now 33%. Here’s Why. 

The odds for a Fed rate cut next month are now at 33%, according to the CME’s FedWatch tracker. The odds were 50% only two days ago and almost 100% a few weeks ago.

The reason for the drop is because of the US Bureau of Labor and Statistics’ announcement yesterday that no October employment report will be coming at all, and the November employment report won’t come until after the Fed’s December 10th meeting. The reporting issues are consequences of the government shutdown.  

So, no October or November employment numbers leaves Powell and the central bankers blind with concerns to half the data they need for their dual mandate. And therefore, the market is now betting that Powell will take the safe path and not cut, given he won’t have any evidence showing labor-market weakness. Makes sense. 

Now just for clarity, we are getting September employment numbers today, but this data is seven weeks old already, so it probably won’t have much impact on anything. And of course, Bitcoin didn’t like any of this, and this is probably why we hit $88K yesterday, before NVIDIA’s earnings release pumped us back up. 

Has the Spot BTC ETF Bleeding Stopped? Maybe. 

US spot Bitcoin ETFs flipped back to net inflows yesterday, recording $75.4M. That’s after five straight days of heavy outflows, totaling $2.2B. BlackRock’s IBIT led the upwards reversal with $60M coming in, which is a huge contrast to its $523M in outflows on Tuesday. 

The shift from outflows to inflows coincided with Bitcoin’s stabilization above $90K. Now it’s too early to tell, but maybe this shift indicates that IBIT participants see a sub-$90K Bitcoin as a good value purchase. 

Having said that, what’s also interesting about yesterday’s shift, in relation to the $90K level, is the fact that the average purchase price for Bitcoin across all US spot ETFs is $90.1K. Meaning, if Bitcoin is trading above or below this price, then the ETF holders on average are in profits or at a loss, respectively. 

So therefore, another hypothesis is that yesterday’s shift is the ETF buyers trying to average down their cost-basis.

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Degen Play of the Day

We crypto bros need to get better at shorting our PRECIOUS internet money tokens. So consider this an exercise in flexible thinking. 

We like shorts on ZEC here. Why? Well, ZEC is near all time highs at $675. It’s printing some fat bearish RSI divergence on the daily. And the MACD looks like it wants to puke. Need I say more? Yes . . . yes I do. Use a stop loss on this at $750. 

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