Fast & Slow Money

Key Takeaways

Family offices, sovereign wealth funds, and pensions are buying the BTC ETFs
BTC price continues to show a strong potential for bearish momentum
Legacy markets remain in a strong risk-on posture with indices at ATHs

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Digital Asset Commentary

A batch of 13F filings for the Bitcoin ETFs from the prior quarter began to trickle in last week and included the Abu Dhabi sovereign wealth fund, a Hong Kong family office and a Wisconsin state pension adding to their Bitcoin position. Price momentum following the election outcome, as well as the election result itself, likely played a significant role in influencing these investment decisions.

BTC ETF flows in recent weeks have been underwhelming, and BTC is now hovering near a crucial multi-month diagonal support. While less likely, a bounce here could trigger the early stages of an ascending triangle, a bullish continuation pattern. However, given the lack of positive momentum in the price action, a downward move seems more probable, with a potential target around the 20-week moving average at $88k and a further stretch bear target at the yearly pivot support around $80k.

Outside of digital assets, the US Dollar, US 10-year yield, & oil are showing signs of weakness, while risk-on sentiment, as indicated by the S&P 500 and Nasdaq 100, remains strong at all-time highs. Although fundamentals suggest an overvalued & over-concentrated market, technicals of these indices strongly point to bullish continuation. Bitcoin has diverged significantly from this strength and is potentially competing with the current gold rally. Strong equity index momentum, and/or a gold momentum slowdown, may help kick start positive momentum back to Bitcoin and digital assets. Additionally, the wealth effect of major indices rising often extends to assets down the risk curve.

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