Summing Up The Week

Could the Federal Reserve actually pull of a “Soft Landing?” It’s certainly starting to look that way. With last week’s jobs report showing rising unemployment potentially indicating a cooling economy, and both the CPI and PPI coming in cooler than expected this week showing disinflation – and even deflation – occurring, it looks like the Fed’s threading the needle.

As you might expect, stocks rallied throughout the week on the back of the news reports. Additionally, both gold and Bitcoin – two assets which rely on interest rate cuts – sold off when Federal Reserve Chair Jerome Powell announced there would be only one potential rate cut in 2024.

Let’s take a look at the news that moved the markets this week…

Market News

CPI cooler than expected, market rallies

On Wednesday, the Consumer Price Index (CPI) showed no increase in inflation in May contrary to expectations for 0.1%, and year-over-year inflation rose 3.3% versus 3.4% expected, reported CNBC. While objectively neither of those beats is truly significant, the market had priced in a hotter-than-expected CPI report. As a result, the markets including Bitcoin and gold, all rallied on hopes that the Federal Reserve might bump up the schedule for their rate cuts.

“Finally, some positive surprises as both headline and core inflation beat forecasts,” said Robert Frick, corporate economist with Navy Federal Credit Union. “There was relief at the pump, but unfortunately home and apartment costs continue to rise and remain the main cause of inflation. Until those shelter costs begin their long-awaited fall, we won’t see major drops in CPI.”

The Fed holds interest rates steady, one cut in 2024

On Wednesday, the Federal Reserve announced that they would be holding interest rates steady at the current range of 5.25% to 5.5% and revised its outlook for one cut in 2024, citing “modest further progress,” reported CNBC. Stocks and gold continued their rallies from earlier in the day, but Bitcoin gave a surprising reversal on the news and lost all of its gains and then some.

With just one nonfarm payroll report and this week’s CPI report under their belt, the Fed rightfully believes there simply isn’t enough evidence to rationalize cutting interest rates quite yet. “The question of whether it’s sufficiently restrictive is going to be one we know over time,” said Federal Reserve Chair Jerome Powell. “But I think for the reasons I talked about at the last press conference and other places, I think the evidence is pretty clear that policy is restrictive and is having, you know, the effects that we would hope for.”

Wholesale prices fell 0.2% in May

On Thursday, the Producer Price Index (PPI) fell in-line with the CPI from earlier in the week, falling -0.2% in May versus expectations for a +0.1% increase, reported CNBC. Wholesalers paying less for their goods provides another datapoint that inflation may finally be pulling back.

While the Fed will still likely not cut rates more than once this year, this ongoing data reinforces their plan to keep rates higher for longer to push down inflation.

Next Week’s Gameplan

We will see a slew of economic datapoints come out next week, however knowing if any of them will have a significant impact on stocks remains to be seen. On Monday, we’ll see the release of the Empire State manufacturing survey followed by the U.S. retail sales report on Tuesday along with business inventories. Wednesday is a holiday – Juneteenth Day – but the homebuilder confidence index will come out.

On Thursday, we get initial jobless claims for the week as well as housing starts and Philadelphia Fed manufacturing survey. Finally, on Friday, flash services and manufacturing PMI will be released along with existing home sales.

Like I said, there are a lot of economic datapoints coming next week, but none of them are as significant as CPI, PPI, or the Personal Consumption Expenditures (PCE) index when it comes out later in the month, so it’s hard to know how much the market will react.

This week was a busy one for me as the whipsaw volatility across markets saw me adding to my spot Bitcoin and Bitcoin ETF positions, taking profits in some high-flying AI names, and a whole lot more. If you’re interested in seeing the moves I made, consider subscribing to my premium memberships where I give you the play-by-play on everything I do in my Bitcoin account as well as all three of my stock portfolios.

In the meantime, I’ll see you back here next Friday, friends!

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Crytpo Corner

Bitcoin's Road to Nowhere - Get Irked
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Bitcoin Price (in USD)


Weekly Change

Bitcoin Price Action

Bitcoin must see something no one else sees…

Bitcoin was doing just fine this week before Tuesday. Sure, it pulled back last Friday to find support at $68,298.55, but, then, it was rebuilding and rallying right into the Federal Reserve meeting on Wednesday.

On Tuesday, Bitcoin slipped a bit and fell through the next level of support at $66,259.00 but it started to recover pretty well on Wednesday, regaining the $70,000 mark quickly. Then, maybe it was Fed Chair Jerome Powell saying there would only be one rate hike in 2024 or maybe Bitcoin didn’t like the color of Powell’s tie, but at 1:30 p.m. ET, Bitcoin rolled over and collapsed.

It fell back down to support on Thursday, and, then, on Friday, that support failed, leaving Bitcoin crashing to precarious psychological round-number support at $65,005.00 with the last ditch effort at $64,588.50 before an air gap leaves Bitcoin with nothing to hold on to until the low $60K region.

The Bullish Case

Bulls have mostly gone silent as of Friday with many of them in shock. The bullish narrative for the past few weeks was nothing but upside with even the most conservative bulls believing Bitcoin would hit new all-time highs before the end of June. Some are still making the argument that this pullback is simply price consolidation to shake out weak hands before the big ol’ orange crypto regains its highs, but the momentum has shifted decidedly bearish.

The Bearish Case

Bears have the upper-hand at this point. If Bitcoin is inversely-correlated to the interest rate like gold is, this means a rate cut is needed for Bitcoin and gold to head higher. With inflation coming down and the economy cooling, it’s starting to look as if the Federal Reserve may be threading the needle of the “soft landing” scenario which will leave Bitcoin and gold out in the cold until rate cuts come… and that’s not happening before December. Bears are predicting lower-lows are in store for Bitcoin with some believing we’ll see sub-$60K pricing this week and others claiming Jamie Dimon’s $42K target is now in play.

Bitcoin Trade Update

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Not Your Keys, Not Your Crypto…

In light of brokerage failures in 2022, I no longer keep any of my crypto on an exchange and I only keep enough USD on the exchanges I use to execute my next few buys. I use multiple cold wallets from the brands Ledger and Trezor to hold my crypto (click the links to access the direct sites, and I receive no affiliate benefits from these links).

Additionally, I have now divided my allocated USD between two different exchanges – Gemini and Coinbase – in case one (or both) becomes insolvent. Disclaimer: We both receive a bonus if you use my Gemini referral link to open an account.

I do not trust anyone in the space, even with Coinbase (COIN) being publicly traded (and one of my own Investments in Play positions).

No price target is unrealistic in the cryptocurrency space – Bullish or Bearish.

While traditional stock market investors and traders may think the price targets in the cryptocurrency space are outlandish due to the incredible spread (possible moves include drops of -90% or more and gains of +1000% or more), Bitcoin has demonstrated that, more than any speculative asset, its price is capable of doing anything.

Here are some of Bitcoin’s price movements over the past couple of years:

  • In 2017, Bitcoin rose +2,707% from its January low of $734.64 to make an all-time high of $19,891.99 in December.
  • Then, Bitcoin crashed nearly -85% from its high to a December 2018 low of $3128.89.
  • In the first half of 2019, Bitcoin rallied +343% to $13,868.44.
  • In December, Bitcoin crashed -54% to a low of $6430.00 in December 2019.
  • In February 2020, Bitcoin rallied +64% to $10,522.51.
  • In March , Bitcoin crashed nearly -63% to a low of $3858.00, mostly in 24 hours.
  • Then, Bitcoin rallied +988% to a new all-time high of $41,986.37 in January 2021.
  • Later in January 2021, Bitcoin dropped -32% to a low of $28,732.00.
  • In February, Bitcoin rallied +103% to a new all-time high of $58,367.00.
  • Later in February, Bitcoin dropped -26% to a low of $43,016.00.
  • In April , Bitcoin rallied +51% to a new all-time high of $64,896.75.
  • In June , Bitcoin crashed -56% to a low of $28,800.00.
  • In November, Bitcoin rallied +140% to a new all-time high of $69,000.00.
  • In November 2022, Bitcoin crashed -78% to a low of $15,460.00.
  • In April 2023, Bitcoin rallied +101% to a high of $31,050.00.
  • In June, Bitcoin dropped -20% to a low of $24,750.00
  • In July, Bitcoin rallied +29% to a high of $31,862.21.
  • In September, Bitcoin dropped -22% to a low of $24,900.00.
  • In January 2024, Bitcoin rallied +97% to a high of $49,102.29.
  • Later in January, Bitcoin dropped -22% to a low of $38,501.00.
  • In March, Bitcoin rallied +92% to a new all-time high of $73,835.57.
  • In May, Bitcoin dropped -23% to a low of $56,500.00.

Where will Bitcoin go from here? Truly, anything is possible…

What if Bitcoin’s headed to zero?

The only reason I speculate in the cryptocurrency space is I truly believe Bitcoin isn’t headed to zero. I am prepared for that possibility, however, by knowing I could potentially lose all of the capital I’ve allocated to this speculative investment. Professional advisers recommend speculating with no more than 5% of an investor’s overall assets. Personally, I’ve allocated less than that to speculating in crypto. I feel that anyone who doesn’t fully believe in the long-term viability of cryptocurrency would be better served not speculating in the space. On a good day, this asset class isn’t suitable for those with weak stomachs. On volatile days, the sector can induce nausea in the most iron-willed speculator. If a speculator isn’t confident in the space, the moves will cause mistakes to be made.

DISCLAIMER: Anyone considering speculating in the crypto sector should only do so with funds they are prepared to lose completely. All interested individuals should consult a professional financial adviser to see if speculation is right for them. No Get Irked contributor is a financial professional of any kind.

Suicide Hotline – You Are Not Alone

Studies show that economic recessions cause an increase in suicide, especially when combined with thoughts of loneliness and anxiety. If you or someone you know are having thoughts of suicide or self-harm, please contact the National Suicide Prevention Lifeline by visiting or calling 1-800-273-TALK. The hotline is open 24 hours a day, 7 days a week.