Market commentator “Madman” said the latest price action in stocks and crypto has diverged from what many would expect after hot PPI and CPI readings. He pointed to a rebound in risk assets alongside a sharp drop in long-dated Treasury yields, arguing that the bond market is now pricing in a slowdown in economic activity. Looking at the underlying data, he cited a 0.8% rise in September retail sales, but said the core figure was only 0.1% after excluding gasoline, which he took as a sign that consumption has already weakened.
On crypto, he said spot ETF flow data remains weak and has stayed in outflow territory, with $261.4 million leaving the previous day. He also said Bitcoin tested support at the $80,000 psychological level, wiping out a large number of long positions above that mark. According to his reading, the long-short ratio has fallen again while open interest has increased, suggesting short positions are still being built during the rebound. He added that resistance remains in the $83,000 to $84,000 range, with around $200 million in short fuel between $82,700 and $83,500. Given weak ETF flows and an unclear macro picture, he does not expect the market to move straight up from here.
Market commentator “Madman” said stocks and crypto both rebounded after PPI and CPI came in hot, while long-term Treasury yields fell sharply. In his view, that combination points to a bond market that is already betting on an economic slowdown.
He pointed to September retail sales, which rose 0.8%, but said the core reading was only 0.1% after excluding gasoline. Based on that, he argued that consumption has already weakened. He also said “Chuanzi” may not be able to tolerate elevated oil prices for much longer.
ETF outflows continue as Bitcoin tests $80,000
Madman said ETF data remains weak, with continued outflows. The previous day saw $261.4 million in outflows, he said. Bitcoin also tested support at the round-number $80,000 level, triggering liquidations of a large number of longs above $80,000.
He added that the long-short ratio has declined again while open interest has increased, which in his reading means shorts are still building during this rebound.
Resistance remains between $83,000 and $84,000
According to Madman, the resistance wall between $83,000 and $84,000 is still in place. He said there is roughly $200 million in short fuel between $82,700 and $83,500. After moving sideways for around 10 hours, the market could still be at risk of another round of liquidations on both sides around “Huaxu’s 11:30 speech,” he said.
With ETF data still weak and the macro outlook still unclear, Madman said he does not believe the market will move straight higher from current levels. He said repeated back-and-forth trading is more likely. In his view, a better time to look for a breakout may come only after oil prices post a sharp drop for several days.
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