Bitcoin's "Narratives" Impacting Prices & Ways to Push Bull Case Beyond $80K

SPEAKER_1 (0:00)

We welcome in crypto market analyst Ray Salmond.

Analyzing the recent Bitcoin performance that we've seen, we saw the 80,000, which got folks pretty excited that maybe the bottom was in, the broke out technically, but it has since pulled back a bit. What's the narrative at this moment?

Ray Salmond (0:19)

Hey, Nicole, great to see you. And you're right, narratives do define crypto price action. And once a storyline has anchored, stronger capital flows tend to follow. So previous narratives centered on Bitcoin as an inflation hedge, the US sovereign Bitcoin reserve, the whole Trump trade. And now we're back to square one where Bitcoin got started with its debasement trade. And that's through the Treasury yield curve control, a possibly cornered Fed where everyone expects a rate hike first and then cuts possibly throughout 2027

And the wider US economy is scratching its head on the future of inflation in the US. So the narrative component of all of this combined with a Bitcoin market, which was biased towards shorts, at the same time we saw a record low implied volatility in Bitcoin, and boom, it hits 82K. But the real test is, can it hold it?

SPEAKER_1 (1:21)

So when we think about the excitement in the narrative that happened, what you're saying now, the narrative seems to be more uncertainty. So what's the catalyst? Is the Clarity Act the catalyst?

Ray Salmond (1:33)

For Bitcoin, I actually don't think that the Clarity Act is the catalyst. I think the Clarity Act is more beneficial for stable coins, for DeFi, for crypto companies looking to onshore in America, for companies that are looking for clarity on what is the jurisdictional role that the CFTC or the SEC or Congress plays in the regulation of crypto. I think the narrative that's driving crypto right now, at least Bitcoin right now, is the upcoming two weeks. So we've got CPI on September 11th. We have FOMC on the 15th and the 16th. Through that, we either get a hold or a hike possibly.

Then of course, the Clarity Act procedural vote is on September 15th. So there's a lot of uncertainty surrounding the next two weeks. I think that the early price softness that you've seen in Bitcoin and Altcoin majors, is likely to persist over the next two weeks as traders decide what is their allocation, what is their appetite for risk, how did they want to position.

SPEAKER_1 (2:42)

I wanted to talk about some of the levels that we're seeing. The 80,000, you mentioned the break 82,000 in turn to support, which we've seen 100,000 by the end of the year.

What do you think gets us 200,000?

Ray Salmond (2:58)

Well, what Bitcoin needs is sustained ETF inflows and continuation of the bid and spot and futures markets.

The last three weeks, we saw $3.8 billion in net flows and daily volumes into iBit, which put it back into the top 10 ETFs by volume. This was something that we hadn't seen since January. In the weeks prior to these huge ETF inflows and net flows, there were multiple entities whose 13F filings showed that they had added to their iBit position. It's clear that a discount was there, just people weren't really biting into that discount until we crashed through 64K and rallied all the way up to 82K. Now, despite all this, liquidation heat map data shows short liquidity, basically capping Bitcoin price at 82,300. Pushing through that is likely to manifest through futures speculation. This speculation requires confidence. And the next two weeks present kind of a tense economic calendar. So I would say if the CPI comes in hot and we're able to identify that a lot of the increase is through the energy pass-through, and the Fed has already said, you know, the jobs market looks healthy.

There's no need for us to cut rates right now. Warsh has kind of signaled that. So if the CPI report looks hot and the increases can be attributed to the energy shock, then perhaps we get a hold and then you see the bullish momentum within equities and within the AI trade and with crypto extend.

SPEAKER_1 (4:44)

Can you also just mention about debasement and moving away from the dollar? And that seems to be a story or a narrative that we've covered a lot.

You know, a lot of the money flowed out of Bitcoin into some of the tech names, then it came back where there was anticipation for more IPOs, tech IPOs, sometimes you see the money move out of, you know, and there was some short covering happening in Bitcoin. But the debasement trade, why to hold Bitcoin seems to be a story that doesn't go away.