Nasdaq and bitcoin more interesting than rates…
February 28, 2025
*******************
–So ends February. At yesterday’s close Bitcoin had fallen to its 200 day moving avg at 81963, this morning it has broken below, for now, with a low of 78225. Nasdaq-100 futures, NQH5, also just pierced the 200 DMA, 20644; traded slightly below this morning but is now slightly above. NDX and CCMP (Nasdaq 100 and Composite) are both above 200 DMA, 20186 and 18346, but the COMP is closer at 18544. The last time these two broke the 200 DMA was August 5 of last year, the culmination of the yen-carry scare. It was a one-day test, and then back to the races. I’m not really drawing any conclusions other than to think it’s reasonable to at least test long-term moving averages. However, I saw someone imply that Nasdaq is leading bitcoin. I would frame it the other way, that bitcoin is the canary. Friend Robert Luxem said on Jan 28: “Looks like my theory that Bitcoin/Crypto has become a 24/7 liquidity ATM for markets worldwide might carry some weight. The Chinese AI Deepseek story hit the tapes on Jan 26th, as well as the market. Bitcoin led the sell-off compared to the S&P Emini contract (blue) and also found the bottom first.” Luxem puts out first-rate analysis of crypto. Lmk if want contact info.
–I simply think that crypto ‘bros’ are likely, at the margin, to be capital constrained. A drawdown shakes them out first, and there’s a marginal (or margin call) spillover. Seeing this to a very small degree in betting stocks, for example Draft Kings has more than erased its mid-month earnings pop. BETZ is a gaming/betting ETF, and it too, appears to be under recent pressure (though well above 200 DMA). Just watching as a possible proxy for waning animal spirits… [disclosure I’m long DKNG puts]
–Ten-yr yield ended yesterday at 4.283%, up 3.4 bps, but looks to close out the month closer to 4.25%, the low for this calendar year. The most recent low was early December at 4.155%. Today we get the Fed’s preferred measure of inflation, the one that strips out any useful and necessary products whose prices have risen. Just kidding, it’s PCE prices, expected m/m 0.3 both headline and core. Yoy expected 2.5% from 2.6% last, with Core expected 2.6% from 2.8%. In this cycle, the lowest yoy Core was 2.63% for June ’24.
–All near SOFR calendars had made new lows Wednesday, but had small stabilizing rebounds yesterday. SFRH5/H6 still the most inverted at -59.25 (9569.75/9629)
