JakeO

Most traders naturally become trend followers-especially at the mercenary end of the spectrum.
The fact that all three majors (BTC, ETH, SOL) are trading below their moving averages is enough for tourists to write them off. That said, the same logic applies in reverse: once these levels are regained, capital flows back systematically and momentum will return.

This is a direct reflection of the juice coming out of the basis trade.
Long ETF vs short CME futures annualised >10% at the beginning of the year vs ~5% today. This is close enough to risk free rates that the carry trader will throw in the towel….

This is a direct reflection of the juice coming out of the basis trade.
Long ETF vs short CME futures annualised >10% at the beginning of the year vs ~5% today. This is close to risk free rate and therefore the carry trader will leave….

2025 debasement trade scorecard:
Gold +67%
Silver +131%
DXY -10%
BTC -5%
Central banks have been the marginal buyers - Poland, China, India, and other EMs have led gold inflows as they diversify away from the dollar. Tether has also driven significant demand, matching sovereign-level buying.
This flow is currently absent from BTC, explaining the divergence and historically weak relationship between the two assets. Correlations are notoriously fragile, but 2025 has undeniably stress-tested the "digital gold" narrative and until 10/10, we traded more in line with risk assets.

Crypto stabilised last week but the vol surface tells a different story vs equities. BTC/ETH put skew is still near 1-year highs with 30-day in 86th/91st percentiles even as spot consolidates.
This is even more evident in risk-reversals which show hedging demand hasn't come off the way it has in stocks. The breakdown in correlation continues to be notable, and any year-end bid will come with a flattening of this extreme skew; driven by put sales and call buying.

Despite Powell pushing back on December rate cut expectations, more tape action is flagged following Trump/Xi trade comments.
As we tick into '26, can assume markets pay less attention to short-dated forward guidance given Powell's term ends in May. Focus will turn to the incoming chair & traders will focus on just how dovish is the dove...

Your daily reminder that markets can stay irrational longer than you can stay solvent.... After Greenspan's infamous 'irrational exuberance' speech in Dec'96, the S&P kept grinding higher over the next three years later to the tune of >100%.
Back then, the FED was openly worried about excessive valuations, yet policy remained supportive enough to allow the bubble to inflate for another three years. Valuation ceases to matter when capital is cheap.

Let thy VIX be the guide...