Markets Bet on Peace but the Risk Is Real

Chart of the Day — Has BTC in loss hit the cycle low?
Trade of the Day — ETH in the channel
Alpha Leaks — A huge new BTC ETF launches
News Roundup — The AI too powerful for public use
Degen Play — CRDO setting up for entry at support

BTC Profit and Loss at Bear Market Lows

Looking back over the last couple of cycles, the amount of the Bitcoin supply in profit and loss indicates how deeply into the bear market we have been.

In 2019 and 2022 this measure went down as low as 42% and 48%, respectively, at around the rock bottoms. By comparison, it’s at 49% now, having dipped as low as 43% in February.

This puts us in true bear market territory, but such a high ratio of holders underwater also suggests that selling pressure may have already hit a peak. That doesn’t mean instant recovery or no further dips, but it lines up with consolidation at the lows.

ETH Rejects the Channel Top

Price movements are currently closely tied to war-related headline news, so make sure you size accordingly and set stop losses. Don’t go overboard when the market can flip quickly.

ETH is still trading inside its rising channel, got rejected near the top, and is pulling back into a decision zone around the

50-day EMA. The EMA itself lines up with the middle of the range, so if buyers defend this area then ETH may set up for another move higher, but if that level gives way, then it likely heads back to channel support.

So, if ETH drops below the EMA at $2,150, you can take a short down to channel support at around $2,000, or wait for it to reach support and open a long, targeting the top of the channel at $2,280. Invalidation comes from a channel breakout, either below support or above resistance.

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Markets Volatile on Middle East Peace Deal

Bitcoin ripped to almost $73K on Wednesday after Trump announced a two-week ceasefire with Iran, liquidating shorts as the Fear & Greed Index, which had dipped as low as 8, tilted back up to 15 (although that still puts it in Extreme Fear territory).

The market moved on expectations that Iran will agree to reopen the Strait of Hormuz, with oil plummeting instantly–Brent dropped from $110 to around $92–and the S&P gapping up to well above the 50-day EMA.

The JPMorgan Intel Desk flipped bullish too, stating, "we are moving back to Tactically Bullish. This ceasefire should trigger a re-risking potentially similar to the post-Liberation Day pivot".

However, later in the day there were reports that Iran is again stopping tankers passing through the Strait, oil is moving back up towards $100, and we now have tremendous uncertainty and a two-week window in which to trade around negotiations.

It looks like both crypto and stocks wanted higher, but markets can rip both ways instantly on headline news, and it seems unlikely–considering the parties involved–that talks will proceed smoothly.

New Anthropic AI Too Powerful for Public Release

Anthropic’s newest frontier AI model, Claude Mythos, is so powerful that it will not yet be released to the public. This is according to Anthropic itself, which reports that Mythos poses a serious security threat, stating,

“AI models have reached a level of coding capability where they can surpass all but the most skilled humans at finding and exploiting software vulnerabilities”.

In testing, Mythos “found thousands of high-severity vulnerabilities, including some in every major operating system and web browser”, doing so autonomously, and picking up on a 27-year old OpenBSD flaw, a 16-year FFmpeg vulnerability, and several Linux kernel vulnerabilities.

This has led to Anthropic establishing Project Glasswing, a group of more than 40 companies–including Amazon Web Services, Apple, Google, Microsoft, and NVIDIA–which is focused on bolstering infrastructure security.

Over on Polymarket, traders are now putting the likelihood of an April release for Mythos at just 6%, while a release before the end of June is coming in at 33%.

Stablecoins Get White House Boost

The White House Council of Economic Advisers has released a report on whether banning stablecoin yield would protect traditional bank lending, and the answer is a resounding no.

The report found that prohibiting yield-bearing stablecoins would increase bank lending by a negligible 0.02%, while imposing a net welfare cost of $800 million on consumers.

Fears that stablecoins could trigger mass deposit flight from banks were described as "quantitatively small", with the study noting that most stablecoin reserves remain within the banking system.

The report concluded that, "a yield prohibition would do very little to protect bank lending, while forgoing the consumer benefits of competitive returns on stablecoin holdings", providing a boost for stablecoin legislation as it moves through the Senate.

Credo Caught in a Range

Credo Technology (CRDO) provides high-speed connectivity infrastructure for AI computing, and with revenue rocketing 201% YoY last quarter, the fundamentals are strong.

And the price chart is showing an interesting pattern. CRDO is bouncing between a lower support line around $85, and the 50-day EMA at $113, repeatedly tagging the EMA and then dropping back to the trendline to bounce.

So, if price retests support again, then buy the bounce. If it then manages to climb back up and hold above the 50-day EMA, keep riding it; if it rejects again, take profit. On the other hand though, dropping below support means the setup has broken.

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