🚨WHY WE'RE WATCHING WRESBAL CLOSELY (exclusive analysis by @bullcase)
We're treating WRESBAL as an early top indicator for this cycle.
Assuming no change in rates, WRESBAL should stay flat until at least October (base case). If WRESBAL decisively dips under $3tn (with short term Bill auctions) then that would signal that stablecoin money has run out (highly unlikely scenario until at least October).
WRESBAL is the money commercial banks keep at the Fed. For short term bill purchases, banks shouldn't touch WRESBAL reserves as bills will be bought by stablecoin issuers with their reserves.
When commercial banks start decreasing WRESBAL to buy short term bills that would be a strong indicator of tight liquidity, recession and market top. [Our bull thesis is based on data, not hopium. BTFD!]
We're treating WRESBAL as an early top indicator for this cycle.
Assuming no change in rates, WRESBAL should stay flat until at least October (base case). If WRESBAL decisively dips under $3tn (with short term Bill auctions) then that would signal that stablecoin money has run out (highly unlikely scenario until at least October).
WRESBAL is the money commercial banks keep at the Fed. For short term bill purchases, banks shouldn't touch WRESBAL reserves as bills will be bought by stablecoin issuers with their reserves.
When commercial banks start decreasing WRESBAL to buy short term bills that would be a strong indicator of tight liquidity, recession and market top. [Our bull thesis is based on data, not hopium. BTFD!]
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Bull Case
Nomura's Charlie McElligott: Hedge if you can [confirms stocks near exhaustion as upside has been front run. Crypto melt up imminent, BTFD!] *McElligott: The realized Vol melt [down] is facilitating a substantial reallocation back into equities from the Vol…
🚨The sharp cooldown in 1M & 3M realized volatility continues as of July 11. Volatility control & CTAs (trend chasing funds) will keep increasing their stock exposure this week marking a local top for stocks (there is nobody else left to buy).
Rotation into crypto has only just began. Vol control buys support SP500 at these highs, when the top becomes obvious in the chart a mass rotation will start that will energize crypto's bull. [BTFD, ignore FUD]
Rotation into crypto has only just began. Vol control buys support SP500 at these highs, when the top becomes obvious in the chart a mass rotation will start that will energize crypto's bull. [BTFD, ignore FUD]
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🚨Mark Halperin: They're going to force Powell out [BTFD]
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🚨Tether just minted $205,329,320 USDT [To bid for Treasury's upcoming $70bn 6-week bill auction later today.]
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Bull Case
What is the stablecoin put? It refers to the idea that when yields on US Treasuries, like the 30-year, reach critical levels (eg 5%), stablecoin issuers such as Circle and Tether step in to buy Treasuries. As a result, going forward, each time yields get close…
CNBC's Kelly Evans: Can I just say I find it highly amusing that crypto stablecoins are now being cited as helpful source of demand of government debt? [article]
The stablecoin put narrative has now officially been picked up by the mainstream media. [BTFD! We're still early for this trade.]
The stablecoin put narrative has now officially been picked up by the mainstream media. [BTFD! We're still early for this trade.]
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Bull Case
🚨Important divergence between 1Y inflation swap and headline CPI YoY. If tomorrow's CPI print comes in soft, that's jet fuel for the bulls. [Crypto will pump regardless, BTFD!]
🚨Fed rate cut bets are now the lowest since February 2025. The consensus after today's CPI is that the boost on inflation from tariffs will start appearing in the data soon:
➡️Boston Fed Collins: tariffs will boost inflation over the second half of this year in the vicinity of 3% by year's end. Surveys show businesses intend to pass on some of the tariff costs to consumers
➡️Bank of America on CPI: Today's report provided ample evidence that tariffs are being passed onto consumers.
➡️Kay Haigh (Goldman Sachs AM): Price pressures are expected to strengthen over the summer; July and August CPI reports will be important hurdles to clear
➡️Seema Shah (Principal Asset Management): Tariffs take several months to feed through inflation data. With higher tariffs it would be wise for the Fed to remain on the sidelines
➡️Skyler Weinand (Regan Capital): We are now even further from the Fed's 2% target, which means the Fed is in no position to cut until at least September.
[Crypto is an inflation hedge, BTFD!]
➡️Boston Fed Collins: tariffs will boost inflation over the second half of this year in the vicinity of 3% by year's end. Surveys show businesses intend to pass on some of the tariff costs to consumers
➡️Bank of America on CPI: Today's report provided ample evidence that tariffs are being passed onto consumers.
➡️Kay Haigh (Goldman Sachs AM): Price pressures are expected to strengthen over the summer; July and August CPI reports will be important hurdles to clear
➡️Seema Shah (Principal Asset Management): Tariffs take several months to feed through inflation data. With higher tariffs it would be wise for the Fed to remain on the sidelines
➡️Skyler Weinand (Regan Capital): We are now even further from the Fed's 2% target, which means the Fed is in no position to cut until at least September.
[Crypto is an inflation hedge, BTFD!]
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🚨ICYMI:
*Genius Act re-vote today. Trump says he has secured the necessary votes after yesterday's halt [expect to see more stablecoin put narrative in a MSM outlet near you soon]
*More rumours of Powell getting fired for cause or resigning are circulating [Trump needs to get this done before tariff inflation bubbles up in the data or it will be too late]
*Genius Act re-vote today. Trump says he has secured the necessary votes after yesterday's halt [expect to see more stablecoin put narrative in a MSM outlet near you soon]
*More rumours of Powell getting fired for cause or resigning are circulating [Trump needs to get this done before tariff inflation bubbles up in the data or it will be too late]
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Bull Case
The next leg up of this market will not be BTC led: Ethereum compressing under resistance. The longer it coils, the bigger the breakout. BTFD!
🚨ETH/BTC technical break out confirmed after coiling under resistance for 8 weeks. The next leg up is indeed ETH led, just like the chart seemed to anticipate in May!
➡️ ETH/BTC up +6% this week
➡️ break above 200DMA for the first time in 1 year
BTC.D has topped, this is where battered down alts start outperforming BTC and smart crypto money starts rotating slowly into alts while Big Money rotates from stocks into BTC & Eth.
[Stocks 🔄 BTC & Eth 🔄 alts]
➡️ ETH/BTC up +6% this week
➡️ break above 200DMA for the first time in 1 year
BTC.D has topped, this is where battered down alts start outperforming BTC and smart crypto money starts rotating slowly into alts while Big Money rotates from stocks into BTC & Eth.
[Stocks 🔄 BTC & Eth 🔄 alts]
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Bull Case
Stablecoin single vault APYs are hovering around 30-day averages indicating most liquidity is still sidelined. Still no hot money in sight, still very early in the move. [Ignore FUD, BTFD every time!]
🚨Stablecoin single vault APYs are starting to pop. Top movers in the top 5 by volume (prev = 6 days ago):
SUSDE 5.01%; prev 4.05%; 30DM 4.19%
USD0++ 9.1%; prev 6.8%; 30DM 6.82%
USDS 6.3%; prev 5.85%; 30DM 5.4%
USDC (fluid) 7.22%; prev 5.89%; 30DM 6.32%
Liquidity seems to support this rally, which is a strong sign of strength. [BTFD, we're just getting started!]
SUSDE 5.01%; prev 4.05%; 30DM 4.19%
USD0++ 9.1%; prev 6.8%; 30DM 6.82%
USDS 6.3%; prev 5.85%; 30DM 5.4%
USDC (fluid) 7.22%; prev 5.89%; 30DM 6.32%
Liquidity seems to support this rally, which is a strong sign of strength. [BTFD, we're just getting started!]
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Bitcoin/Ethereum Spot ETF flows 16 July 2025:
🟢 Bitcoin ETFs: $799.5M net inflows
🟢 Ethereum ETFs: $716.63M net inflows
🟢 Bitcoin ETFs: $799.5M net inflows
🟢 Ethereum ETFs: $716.63M net inflows
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🚨WHY PCE WILL COME IN HOT AND CRYPTO WILL PUMP (exclusive analysis by @bullcase)
June's core PCE will be reported on July 31.
➡️ BoA just revised its core PCE estimate upward yesterday: we are tracking core PCE to rise by 0.3% m/m (0.31% unrounded) in June. If our forecast proves correct, then the y/y rate should still increase from 2.7% to 2.8%, and it could be on track to hit 3.0% as soon as July. [Fed's target is 2%]
➡️ In response to PPI, Goldman revised its core PCE estimate slightly lower from 2.77% to 2.74%, but still higher than May's 2.7%. [PPI excludes imports and inflation this time is driven by tariffs]
➡️ Core CPI YoY came in warm this week, 2.7 vs 2.6 forecast. [CPI includes imports]
➡️ Cleveland Fed's model didn't react to PPI and still projects 2.66% for June and 2.71% for July
Many hints that PCE is going to come in higher, but the Fed is still in dovish patience mode.
Trump's bullying on Powell has put hawks on the backfoot. A Fed that hesitates to hike rates as tariff inflation bubbles to the surface is another form of jet fuel for the bulls, because it's effectively a cut (negative real interest rates!).
An actual cut would be even better, but that can only happen in summer while the data are mixed. Also, Trump would need to fire Powell quickly.
A September cut is looking less and less likely. But nobody is talking of a September hike, which is bullish!
Crypto is an inflation hedge and the inflation hedge trade, which started with Powell's press conference on May 7 that defined dovish patience, is about to get a boost. A core PCE that starts to warm up while the Fed is scared to mention hikes is even more bullish than a rate cut. That would pave the way to a bullish August.
June's core PCE will be reported on July 31.
➡️ BoA just revised its core PCE estimate upward yesterday: we are tracking core PCE to rise by 0.3% m/m (0.31% unrounded) in June. If our forecast proves correct, then the y/y rate should still increase from 2.7% to 2.8%, and it could be on track to hit 3.0% as soon as July. [Fed's target is 2%]
➡️ In response to PPI, Goldman revised its core PCE estimate slightly lower from 2.77% to 2.74%, but still higher than May's 2.7%. [PPI excludes imports and inflation this time is driven by tariffs]
➡️ Core CPI YoY came in warm this week, 2.7 vs 2.6 forecast. [CPI includes imports]
➡️ Cleveland Fed's model didn't react to PPI and still projects 2.66% for June and 2.71% for July
Many hints that PCE is going to come in higher, but the Fed is still in dovish patience mode.
Trump's bullying on Powell has put hawks on the backfoot. A Fed that hesitates to hike rates as tariff inflation bubbles to the surface is another form of jet fuel for the bulls, because it's effectively a cut (negative real interest rates!).
An actual cut would be even better, but that can only happen in summer while the data are mixed. Also, Trump would need to fire Powell quickly.
A September cut is looking less and less likely. But nobody is talking of a September hike, which is bullish!
Crypto is an inflation hedge and the inflation hedge trade, which started with Powell's press conference on May 7 that defined dovish patience, is about to get a boost. A core PCE that starts to warm up while the Fed is scared to mention hikes is even more bullish than a rate cut. That would pave the way to a bullish August.
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🚨We're moving past Bitcoin season based on the following parameters:
Alt season = 75% or more of the top 50 coins outperform Bitcoin over the last 90 days.
Bitcoin season = 25% or fewer of the top 50 coins outperform Bitcoin over the last 90 days.
CURRENT LEVEL: 39
We're still far from alt season mania (level 75), but the rotation out of BTC has started. [Slowly first, then all at once]
Alt season = 75% or more of the top 50 coins outperform Bitcoin over the last 90 days.
Bitcoin season = 25% or fewer of the top 50 coins outperform Bitcoin over the last 90 days.
CURRENT LEVEL: 39
We're still far from alt season mania (level 75), but the rotation out of BTC has started. [Slowly first, then all at once]
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Bull Case
Gold used to move in lockstep with real yields (TIPS), reflecting inflation and rate expectations. That relationship has broken down. With gold ripping and real yields flat, is the market pricing in inflation too early or is it overreacting and miscalculating…
🚨Jim Bianco (starting to notice something's wrong with inflation): The 10-year TIPS Inflation breakeven rate has continued its uptrend over the last year. Not what you want to see if your demand is a 300 bps Fed rate cut. Or is this the fear of what a 300 bps cut will do to the economy? [Look away Jim, nothing to see here]
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🚨WHAT IF WALLER JUST GAVE US THE INFLATION DENIAL NARRATIVE THAT WILL PUMP EVERYTHING FOR LONGER? (exclusive analysis by @bullcase)
Fed's Christopher Waller's remarks yesterday suggest this bull market may last even longer than we all thought.
This not so much for his support of a 25 bp cut at July’s FOMC, that was already known.
It's his statement on inflation being near target excluding tariffs that opens the doors of Valhalla for bulls. Excluding tariffs sounds like a great inflation denial narrative that may prevail at the Fed, especially if Waller replaces Powell.
In 2021 the inflation denial narrative was that inflation is transitory.
In 2025-26 the denial narrative will likely be that inflation is near target excluding tariffs. For this narrative to expire we need confirmation that inflation is sticky.
Each inflation print takes 1 month and tariff inflation is just now starting to show in the data (weakly). With so many prints still needed for confirmation, the bulls have plenty of runway left to charge ahead.
BTFD!
Fed's Christopher Waller's remarks yesterday suggest this bull market may last even longer than we all thought.
This not so much for his support of a 25 bp cut at July’s FOMC, that was already known.
It's his statement on inflation being near target excluding tariffs that opens the doors of Valhalla for bulls. Excluding tariffs sounds like a great inflation denial narrative that may prevail at the Fed, especially if Waller replaces Powell.
In 2021 the inflation denial narrative was that inflation is transitory.
In 2025-26 the denial narrative will likely be that inflation is near target excluding tariffs. For this narrative to expire we need confirmation that inflation is sticky.
Each inflation print takes 1 month and tariff inflation is just now starting to show in the data (weakly). With so many prints still needed for confirmation, the bulls have plenty of runway left to charge ahead.
BTFD!
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