Bitcoin Stable Amidst Coldcard Hack

Chart of the Day — Red Augusts
Trade of the Day — Longing Lighter [LIT]
Alpha Leaks — AMD, HYPE & SPCX
News Roundup — BTC Stable, Strategy Sells More & this Week's Economic Data

Red Augusts

From Coinglass, here’s Bitcoin's monthly returns since 2013. Now August has printed red 9 of the last 13 times. And notice that the drawdowns for the August months that are two years after their respective halvings are particularly rough. -17%, -9%, and -13%.

This historical data basically lines up with Bitcoin’s four year cycle, which we’ve discussed ad nauseam.

So take this as some helpful data when thinking about Bitcoin’s price action this month. It’s very possible that this time turns out to be different, but the historical data suggests otherwise.

Longing Lighter [LIT]

Longing Lighter [LIT] is your Trade of the Day. Now this entry isn’t open yet, but it’s close, so keep an eye on it.

So under SMC analysis: (1) LIT is in a bull structure (HLs and HHs); (2) we're getting a pull-back now, which means we're looking for price to enter into our optimal long entry zone (between $1.62 to $1.87); and (3) from there, we’ll be looking for more specific signals as to when to go long.

So go Premium for the full technical setup on LIT, with the recommended stop loss and take profit targets, and how to know when to go long. Inner Circle members have been stacking wins recently, with successful BTC, ZCash, and TSLA shorts generating real percentage gains. We’re taking positions regardless if the larger market is going up or down. Go premium today to catch our signals.

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Bitcoin Stable Amidst Coldcard Hack

Bitcoin is holding steady in the low-to-mid $60Ks despite an ongoing exploit targeting Coldcard, a popular hardware wallet amongst Bitcoin maxis.

The incident began last Thursday when attackers started draining wallets whose seeds were generated on Coldcard firmware (Mk3, Mk4, Mk5, and Q models). Galaxy Research has thus far identified 1,596 BTC stolen from about 7,300 addresses across three confirmed waves. Galaxy notes that a potential fourth wave could push total losses to 2K BTC, or roughly $130M in USD value.

Please understand that the attacks remain ongoing and are likely to continue until all affected addresses are either emptied by the attackers, or users move their funds to a safe destination. If you or anyone you know is holding Bitcoin on a Coldcard, that Bitcoin needs to be moved to a safe destination as soon as possible.

Now despite the scale of this attack, Bitcoin’s price basically hasn’t budged. Why? There’s two reasons.

The first is that the defect is specific to one hardware wallet manufacturer, and not the Bitcoin protocol itself. A properly generated seed phrase with sufficient randomness is effectively impossible to guess. Coldcard’s seed generation randomness was woefully deficient to the point that attackers were able to crack the addresses, likely with the help of LLMs (to better understand the technicals behind all of this, see this latest video from the Bitcoin Policy Institute).

The second reason is cycle positioning. We appear to be near the bottom of Bitcoin’s market cycle. Holders who were going to sell have largely exited already. So basically, we’re in diamond-hand territory, which is why this incident hasn’t triggered widespread panic selling.

Zooming back out, this Coldcard exploit is a reality check for anyone self-custoding digital assets. Review your security setup carefully. With great freedom comes great responsibility. And there’s nothing wrong with spreading holdings across self-custody, ETFs, and reputable custodians, to reduce exposure from a single point of failure.

Strategy Sells Another 1,638 BTC

Breaking as of an SEC disclosure released yesterday, Strategy sold another 1,638 BTC last week for $105M, and raised another $290M via new MSTR ATM sales. Additionally, the company bought back 912K shares of its preferred STRC stock for $81M.

Strategy now holds 842K BTC at an average purchase price of $75K.

Now make no mistakes about it, the company’s primary focus right now is defending STRC by getting the asset back to a $100 par value. STRC is currently trading around $92 on the open market, so expect the company to buy back even more shares (which likely means more BTC and MSTR ATM sales). Additionally, Strategy has also confirmed that they’ll keep the STRC dividend at 12% until the shares are back to par.

Now again, what’s interesting about all this is Bitcoin held steady despite last week’s sale and yesterday’s news of the sale. Just more confirmation that Bitcoin has bottomed or we’re close to it.

This Week’s Economic Data Releases

Last week, the Fed held rates steady amidst slightly cooling inflation and an expanding economy. But this week’s releases focus on the labor market and services sector. Here’s what to watch:

● JOLTS Job Openings for June (Today, 10:00 am ET): Measures the number of open positions across the US economy. A further decline signals softening labor demand. Forecast is 7.44M. Previous was 7.59M.

● ADP Nonfarm Employment Change for July (Tomorrow, 8:15 am ET): Provides an early private-sector jobs reading ahead of the official payrolls report. A softer reading signals a cooling labor market. Forecast is +68K. Previous was +98K.

● S&P Global Services PMI for July (Tomorrow, 9:45 am ET): Key services sector activity gauge (which makes up the bulk of the economy). Readings above 50 signal expansion. Forecast is 53.6. Previous was 51.2.

● ISM Non-Manufacturing PMI for July (Tomorrow, 10:00 am ET): Another important services-sector gauge. Forecast is 54.5. Previous was 54.0.

● Unemployment Rate for July (Friday, 8:30 am ET): Tracks the percentage of the labor force that’s unemployed. Both forecast and previous are 4.2%.

These releases will help markets assess whether the labor market is continuing to cool while the services sector expands. The data should be watched closely when thinking about the Fed’s next rate decision, which is slated for mid-September.

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