Last week we wrote that Bitcoin would break the floor Wall Street drew under it within four to twelve weeks.
It took one.
We had money on it. We’re short 929.2 Bitcoin, plus Ether and Solana, so we spent the week watching Wall Street try to prove us wrong.
Wall Street tried, with a billion dollars. For the first three sessions of the week, its spot Bitcoin exchange-traded funds (ETFs) poured $1.07 billion into Bitcoin. Old hands sold their coins to ETF tourists. On Glassnode’s data, wallets that have held Bitcoin for five months or more shrank their share for a fourth straight week. The tourists paid tourist prices.
Then they blinked. Over the next two sessions the funds sold $773.5 million, ending the week as net-buyers. The old hands didn’t blink. More than 54,000 coins landed on exchanges this week, 32,091 of them on Friday alone.
Sunday settled it. Bitcoin closed at $80,049, 2.20% under the $81,852 the average fund dollar paid. Wall Street’s floor is now its ceiling.
The latest Bitcoin investors are now taking on water. Barely half the coins bought in the last five months, 50.05%, still sat in profit on October 25, down from 68.65% a week earlier.
The world around crypto hardened after our last Macro Tape of October 20. U.S. crude closed at $102.19 on October 25, up 4.54% on the week. The MOVE index (the Merrill Lynch Option Volatility Estimate), the price of insurance against swings in U.S. Treasury bonds, closed a fifth straight week above its 200-week average. Our risk-off trigger stays on into the Fed on Wednesday.
We didn’t trade. We didn’t have to. Funding pays us 13.07% a year on our equity to hold our shorts, and none of the seven things that would change our mind we list below showed up this week.
The doubt lives in our own team. Priya Sandoval reads Wall Street’s billion as real demand, and sees a floor forming right under us. Charlotte Donovan reads a seller bigger than any buyer. They agree on the one test that settles it, below. One of our own measures leans Priya’s way: priced in gold, Bitcoin just climbed back above 20 ounces, where we read an early bull market, in a week it fell in dollars. But it was all gold’s doing.
Altcoin holders are selling too. A company that kept Solana in its treasury sold every coin it had. XRP got $150 million of good news from Franklin Templeton, and its holders sold into it. Most Ether now sits at a loss, DOGE holders sit deep underwater, yet its gamblers are still levered up. Saturday’s monthly close decides whether our signal for a altcoin rotation has life.
In dollars, Bitcoin now stands on a trapdoor. The line where the options dealers stop cushioning the fall and start selling into it sits 1.31% under Sunday’s close. If it breaks, we already know where we start cashing in. Read today’s Crypto Tape below.
On our use of AI:
We’re Hayloo Unchained by JFederer, a private crypto fund out of Switzerland. We built a Neurosymbolic Compound AI System for our own desk: it follows our strategies, it reads the news that affect our portfolio, it sits on a database going back decades, and brings math to our everyday emotions. We call it Hayloo. It’s our best hire. This Substack is published by Hayloo INC., our AI startup in Panama. It is compiled by Hayloo and approved by us.
Humans have written machine-assisted for centuries. What never changes is who decides.
Nothing at Hayloo INC. was ever decided by a machine. What we publish is what we defend as a team. When it’s wrong, it’s wrong because humans signed it.
Jordi Federer, Founder, Hayloo INC. hayloo.org
Our book is short Bitcoin, Ether, and Solana. People behind Hayloo may hold any coin discussed here, in either direction. Nothing here is advice to buy or sell.