Markets took a real macro hit this week and mostly held together.
Oil moved back toward $95, the US 10-year pushed through 4.8%, and the odds of a September Fed hike rose sharply. Bitcoin had a mini sell off, but it held the level we cared about. AI orders are still growing. The memory cycle has not weakened.
Our base case remains constructive into year-end. Earnings are not rolling over, AI spending is still moving ahead, and the allocation channel into bitcoin is real. None of that makes the next few weeks easy. Rates are high, positioning is crowded in parts of AI, and September has started with less consistent crypto flows.
We want to stay with the larger move without paying any price for it.
1. Bitcoin: $76.6K did its job
Last week, we marked $76.6K as the level that mattered on the downside. When bitcoin traded back toward it ahead of the US open yesterday, we told Substack readers not to short directly into that support.
That was not a prediction that price had to bounce. The trade simply had poor odds. Support had not broken, the new cost base below the market was still intact, and the flow data had not weakened enough to confirm a larger move down.
The level held. Bitcoin is now back in the high $77Ks, where it has spent most of the week.
The latest cost-basis map shows a large amount of new supply formed between $75K and $80K. That gives the market a better floor than it had during the first squeeze higher. The largest visible cost-basis cluster is still between $80K and $82.5K.
A break above $78.6K to $79K would put price back into the upper part of the current range. It would not mean the supply has cleared. The harder test is $80K to $82.5K.
A daily close above $82.5K, followed by a retest that holds the low $80Ks, would be much better evidence that the market has worked through the price-sensitive sellers. A quick move to $83K or $84K that falls straight back below $81K would still be range trading.
The flow picture is good enough, but less clean than it was in August. US spot ETFs took in about $3.5 billion during August. September has opened with two-way flows, including roughly $237 million of net outflows on Tuesday. Retail activity has also cooled.
The downside rule is unchanged. A daily close below $76.6K becomes a real warning only if at least two of these weaken with it: ETF flows, Coinbase Premium, and the seven-day average of net realized profit and loss. Until then, we are not shorting support.
2. The macro test is here
Last week, higher rates were a risk to watch. This week they became the reason markets sold off.
The move came through oil and the long end of the Treasury curve. Brent traded near $95, the US 10-year moved above 4.8%, and the market pushed the probability of a September hike to around 70%. Crypto reacted in the usual order.
Bitcoin holding $76.6K through that move matters. It is one of the better signs we have that the recent spot demand was more than a short squeeze.
Friday’s payroll report is the next clean test. A hot number would strengthen the hike case and probably put $76.6K back in play. If bitcoin holds while yields remain high, the range gets more credible. If payrolls are soft and bitcoin still cannot reclaim $79K, spot demand may be losing momentum for reasons beyond macro.
We remain constructive into year-end, but the path depends on rates stopping their current acceleration. Risk assets can live with high yields. They have a harder time with yields that keep rising every week.
