Flash crashes and All-time highs

Thoughts of the Day

Recent days have been marked by Bitcoin’s relentless ascent to new highs. Last week, after surpassing $69K, it quickly plummeted nearly 15%, and took 3 days to recover. Yesterday, after failing to breach $70K, a fall of <5% ensued, triggeringg concerns of another crash. But with funding rates not especially high (meaning that the short-term punters were not holding on to big long positions). As such, the correction was shallow and the rebound swift. BTC surged above $72K by end of day, reaffirming the upward trend.

This is an abridged version of our CIO’s daily writeup for the day, to view the full version, please login or subscribe to a membership plan.

Trading Tip

Daily trading tips are for members only, please subscribe to a membership plan to view.

Day Ahead

The US Consumer Price Index is expected to show that prices rose +3.1% Year-on-Year in Feb as it did in Jan. The core index is expected to show that prices rose +3.7%, lower than the previous print of +3.9%.

Our Trading plan is only available for members, please subscribe to a membership plan to stay updated on Vee’s trades.

What Happened Yesterday

Market Movements as of New York Close 11 Mar 24

The US Treasury Yield curve inversion narrowed to 0.41% as the US 2-year bond yield rose +0.03% to 4.51% while the 10-year yield inched +0.01% to 4.10%. 

The US stock futures drifted through the Asian and London trading session on Monday with the S&P 500 futures down -0.21% when the New York session began.

The US stock market opened lower from Friday. It then traded sideways within a range through the New York session due to the lack of market drivers. Towards the end of the session, the market managed to trim the losses to close with just minor changes on the day.  As a result, the S&P 500 fell -0.11% (high: +0.02%, low: -0.64%), the Dow Jones edged +0.12% higher (high: +0.19%, low: -0.62%) while the Nasdaq slipped -0.37% (high: -0.09%, low: -0.81%).

Oracle (NYSE: ORCL, +14.43% in after market trading) rallied on better than expected earnings results. Earnings: $1.41 vs $1.38 expected, Revenue: $13.28 billion vs $13.3 billion expected. The increased earnings were due to new “large cloud infrastructure” contracts formed during the quarter. Additionally, the database giant is set to make a joint announcement with chip-giant Nvidia with regards to its partnership, possibly on new offerings regarding Gen-AI.

The crypto market continues to break to new highs with Bitcoin crossing the 72,500 mark and Ether crossing 4,080 yesterday before settling slightly lower on the day. However, the crypto market saw a flash crash in the early Asian hours with Bitcoin falling as low as 67,100 (-2.83%) after trading near (but failing to break) 70k briefly and Ether falling as low as 3739.50 (-3.65%). However, the bounce was swift, as the market steadily rose for the rest of the day before breaking to new all-time highs as the day progressed.
This is a partial analysis of what happened yesterday, for a more detailed analysis, subscribe to a membership plan.

Headlines & Market Impact

China’s valuations are ‘way too low,’ strategist says — here’s why

Notable Snippet: Valuations of Chinese stocks are “way too low” and investors should be looking to cautiously re-enter the world’s second-largest economy, according to Shaun Rein, founder and managing director of the China Market Research Group.

“We are still seeing that Chinese consumers, especially the wealthy ones, are quite nervous — they’re still trading down and skipping big ticket items,” Rein told CNBC’s “Squawk Box Europe” on Monday.

“They’re cautious about whether or not the government is going to launch a bazooka-like stimulus — clearly they’re not going to.”

Although the near-term headwinds mean the investment landscape remains tricky, Rein argued that measures taken to reconfigure the Chinese economy away from its traditional reliance on real estate and infrastructure were starting to have an impact, and the longer-term picture is more promising.

“China’s economy is weak but it’s not that weak. If you’re a multinational, if you’re looking to drive growth over the next three to five years, the next China is China. It’s not India — India’s only a sixth of the GDP of China — it’s not Vietnam. These are small markets, so I actually think investors should be looking long-term at China again, it’s definitely investible,” he said.

We have further analysis of our headlines! Subscribe to a membership plan to view them.

China’s annual parliamentary meeting has ended. Here are the key takeaways

Notable Snippet: Along with the extensive discussions on environmental protection, the Government Work Report (GWR) explicitly pledged to lower energy consumption per unit of GDP by around -2.5% in 2024

China has set a 2024 growth target of around 5%, Premier Li Qiang at the start of the meetings on Tuesday when he released the much-anticipated government work report.

Industrial support clearly ranked first on Beijing’s priority list for the year ahead, according to three major plans released as part of the parliamentary meetings.

This year, the National People’s Congress rubber stamped changes to revise the structure of the State Council, which has been the government’s top executive body led by the premier. At the ceremonial closing on Monday, the amended State Council Organic Law passed with 2,883 delegate votes — with eight rejecting the amendments and nine abstentions.

The changes include vice premiers and the head of the People’s Bank of China among the council’s top leadership group.

We have further analysis of our headlines! Subscribe to a membership plan to view them.

Bernstein Is ‘Now More Convinced’ That Bitcoin Will Hit $150K After Massive Rally

Notable Snippet: Bernstein analysts said on Monday that they were now more convinced about bitcoin (BTC) hitting $150,000 by mid-2025 after the largest digital asset rallied to reach a new all-time high this year.

The analysts also predicted that bitcoin will ‘break out’ after the next halving event, reiterating its bullish call in some of the miners despite falling share prices.

The broker repeated its $150,000 price target for the world’s largest cryptocurrency, citing booming exchange-traded fund (ETF) inflows, and said investors should buy bitcoin mining stocks to gain exposure to the coming rally.

The rising bitcoin price and transaction fees will provide a cushion for the miners into halving, even if production costs double post-halving, the report said. Outperform-rated Riot Platforms (RIOT) and CleanSpark (CLSK) “will clock ~70% and 60% gross margin respectively,” the analysts added.

Mining stocks have underperformed the bitcoin rally as investors are “long bitcoin and short miners.” The thinking behind the trade is that it’s safer to buy spot ETFs rather than mining stocks that are exposed to risk from the upcoming halving.

We have further analysis of our headlines! Subscribe to a membership plan to view them.



Stock Indices

Phan Vee Leung
CIO & Founder, TrackRecord