“An Insult”: Powell U-Turns on Fed Exit

Chart of the Day — Is this what an AI bubble looks like?
Trade of the Day — LINK has to move
Alpha Leaks — Pump.fun burns buyback tokens
News Roundup — Fed drama, OpenAI issues, DeFi hacked
Degen Play — GRRR pushes at resistance

AI Concentration Hits Extreme Levels

If you’re wondering about the state of the AI bubble, then take a look at this Bank of America chart. It compares historical stock market concentration levels, and the AI sector (represented by ten relevant companies) now makes up 41% of the market.

That’s right around the same level (40% or more) as peak concentration levels in previous decades, with the tech bubble peak of the very early 00s as the most recent comparison.

Remember that mega-IPOs at enormous valuations are lined up for Anthropic, OpenAI, and SpaceX, and these may plausibly mark a top for the AI investment cycle. Also, cracks are becoming apparent at OpenAI, as we’ll see in the news below.

LINK Range Tightening

LINK has been compressing into an extremely tight range, as shown by the Bollinger Bands narrowing, and this typically precedes an expansion, although there is a lack of directional momentum for now.

However, the broader structure is bearish until proven otherwise, so the default bias remains to the downside. If price breaks lower and closes below $9, then shorts can target $7.50. If there’s a breakout and hold above around $9.60, then we might be looking at a trend change and longs can target $11.50 and higher.

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Dissent at Fed as Powell Stays in the Building

Jerome Powell yesterday gave his last ever FOMC statement as Chairman of the Fed, and with rates remaining unchanged at 3.5% to 3.75%, the key points from the day were:

● The Iran war and rising global energy prices are causing uncertainty, and contributing to inflation.

● At 3.5%, inflation is inflated to well above the 2% target.

● There were four dissenting opinions–the highest level of dissent since 1992–one of which wanted a rate cut, while three leaned hawkish as they “did not support inclusion of an easing bias in the statement”.

● Powell also explained that he will be staying on at the Fed as a governor, stating that he will maintain a “low profile”.

So essentially, the Fed remains in neutral mode but with some hawkish stirrings, while markets continue to hinge around geopolitics and energy volatility.

At the same time though, Kevin Warsh is coming in as the new Fed Chair, so there is further uncertainty: Trump is expecting rate cuts from his new appointment, but traders currently have the probability of a cut at the next meeting at just 1.2%.

And then there is Powell’s decision to remain as a governor, another wildcard in the macro mix at a time of huge volatility.

This move is–in the words of Scott Bessent, commenting on the matter–”highly unusual” and “an insult”, but it appears from Powell’s point of view to be a way of trying to ensure that the Fed maintains political independence.

OpenAI Misses Key Targets

The landscape is shifting around the major AI players, as OpenAI’s latest earnings showed it missing its own targets on both revenue and user growth. Additionally, it was reported in the Wall Street Journal that OpenAI CFO Sarah Friar is concerned about the AI firm’s capacity to pay for computing deals.

Friar subsequently released a joint statement with Sam Altman stating that they are “totally aligned on buying as much compute as we can”, but this is fuzzy, as the issue was not whether they will buy to their maximum capacity, it was how much capacity they actually have.

So, this can all be viewed as ominous for AI when, as mentioned at the top, AI concentration is very high. However, painting a substantially more bullish picture, several other AI-related companies just posted some impressive YoY revenue numbers, with Meta up 33%, Amazon up 17%, and Google up 22%.

Additionally, those three firms plus Microsoft are committed to a combined $650 billion of AI infrastructure spending in 2026.

25 DeFi Hacks This Month

After exploits yesterday at DeFi protocols Aftermath and Sweat, the number of DeFi hacks this month has now reached a total of 25, the most ever in a single month, meaning we’re averaging almost one a day.

Now to be fair, it appears that users are not taking any losses this time, as although Aftermath initially stated that the damage came to $1.14 million, it later in the day clarified that “all users will be made whole”.

Additionally, move-to-earn platform Sweat announced that account balances had quickly been restored and the protocol was functioning as usual again.

However, as shown at DeFi Llama, the amount stolen across DeFi this month now comes to almost $630 million, with the majority of that coming from the earlier attacks at Drift and Kelp.

Can Gorilla Break Its Cage?

Gorilla Technology Group (GRRR) is a speculative AI infrastructure name that’s currently pressing into a key chart area after months of downtrend.

Price is testing the descending resistance line and the EMA200, and if a clean breakout confirms, the move can extend up into the $16 to $18 region, with room longer-term to head back above $20.

RSI is pushing into the 60s and trending up, which supports a breakout scenario, but it’s also where prior rallies have stalled, so rejection is still on the table, and invalidation would come from a failure to hold above the breakout zone.

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