Here are some points from the Fundstrat Crypto Indices Weekly Performance Review
Over the past 7 days, the FS CryptoFX Agg Index decreased by 19.7%, compared with a 1.0% decrease for the S&P 500 (Slide 6). Bitcoin traded 19% lower than the prior week.
- Two major drops on Tuesday and Thursday afternoon caused BTC to fall 15% and 7% respectively. Compared to its recent high in late June, Bitcoin has retraced/retracted ~40% to $8,000 from $14,000. According to JPM, the price drop last week was likely due to the launch of Bakkt and expiration-day effect of Bitcoin futures.
- We had previously pointed out that the short-term risk/reward was not favorable for BTC in late July when our proprietary Bitcoin sentiment indicator – Bitcoin Misery Index (BMI) – fell below 66. Furthermore, a weakening BMI reflects a risk-off signal, and our work has also shown a trendless macro environment is not supportive of Bitcoin. Therefore, we believe Bitcoin is still a waiting game – i) waiting for BMI to bottom and ii) waiting for a clear macro trend (e.g. an S&P 500 upside breakout).