Degenerate Macro Mind | Reading the Tape of a Broken System | On a Voyage to Critical Mass @gametheoryweb3
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Everyone keeps saying there won’t be an altseason this cycle.
“This cycle is different,” yadi yadi ya.
I think they’re wrong and the confluence is lining up.
Here’s what I’m seeing:
🔹ETH/BTC
ETH has historically been the barometer for altcoins.
This cycle, it underperformed and we haven’t seen a market wide altcoin run as a result.
ETH/BTC has bounced hard one of its biggest moves in years but it’s still in a macro downtrend.
This aint another deadcat bounce but the early innings of continued ETH outperformance.
🔹ISM & DXY = Hidden Drivers
The ISM has been in contraction for longer than usual.
That’s typically when capital avoids the edges of the risk curve, altcoins included.
Why has it dragged on? One reason: DXY has been stuck in a range since late 2022. Not enough dollar weakness to fuel the cycle.
Once DXY breaks lower and ISM flips 50 durably you typically get capital rotation into small caps, speculative risk, and you guessed it... Alts.
🔹Russell 2000 = TradFi’s Altcoins
Small caps (Russell 2000) are highly correlated with ISM turns.
Same behavior is visible in crypto. TOTAL3ESBTC (TOTAL3 / BTC) starts trending higher when altcoins risk is in favor.
It’s the best chart right now to show where we are structurally.
🔹 "Why This Cycle ‘Feels Different’ (But Isn’t)"
A lot of people are saying “this cycle is different.”
No altseason, too much altcoin dilution (which is fair), no big gains... and so they write it off.
What’s actually changed? Not much just the timing mechanics.
🌀 The ISM has stayed in contraction longer than usual.
📈 DXY hasn’t broken down meaningfully it’s been rangebound for almost 2 years.
💥 And in Q1 you’ve got tariffs which temporarily nuked the business cycle further.
These macro lags have stretched out the rotation and that’s why the market feels off.
But structurally, nothing’s changed.
When ISM turns, ETH outperforms and alts will follow.
🔹The Real Risk = Being Underexposed
You don’t need to call the exact day altseason starts.
The real risk isn’t being early it’s being unexposed when things move.
The ETH/BTC bottom + macro backdrop + ISM upturn = a high confluence setup.
So no, this isnt a dead cycle.
It’s a compressed spring.
Maybe (probably) i am be wrong short term. But not positioning at all feels like a bigger mistake.
ALT ISM overlayed onto TOTAL3ESBTC
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Watching 106.5-107k
If $BTC holds this level, we likely breakout this week.
If not, probability of a rotation to range low increases.
Base case: We breakout sooner rather than later.
Ill be looking to bid either way, any dip is a blessing.
$BTC confirmed a hidden bullish div on the 2D while simultaneously closing above a key high. The structure has shifted.
I don't expect BTC to fck around here. It should get going early next week by breaking out of this range.
We are technically at resistance and BTC starts closing daily candles below 108, the chances increase of another rotation down toward the range lows.
As of right now i think thats unlikely.
As part of this ongoing thread of analysis.
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$BTC confirmed a hidden bullish div on the 2D while simultaneously closing above a key high. The structure has shifted.
I don't expect BTC to fck around here. It should get going early next week by breaking out of this range.
We are technically at resistance and BTC starts closing daily candles below 108, the chances increase of another rotation down toward the range lows.
As of right now i think thats unlikely.
As part of this ongoing thread of analysis.
Bitcoin CME futures just closed the daily above 109.5K. Spot closing above the level is just a formality now.
Breakout loading...
Fire up the engines. Clear the runway.
Course set for: 160K. 🚀
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Long BTC
Now that the budget bill has passed Congress, we can see what the projections look like for deficits, government debt, and debt service expenses. In brief, the bill is expected to lead to spending of about $7 trillion a year with inflows of about $5 trillion a year, so the debt, which is now about 6x of the money taken in, 100 percent of GDP, and about $230,000 per American family, will rise over ten years to about 7.5x the money taken in, 130 percent of GDP, and $425,000 per family. That will increase interest and principal payments on the debt from about $10 trillion ($1 trillion in interest, $9 trillion in principal) to about $18 trillion (of which $2 trillion is interest payments), which will lead to either a big squeezing out (and cutting off) of spending and/or unimaginable tax increases, or a lot of printing and devaluing of money and pushing interest rates to unattractively low levels. This printing and devaluing is not good for those holding bonds as a storehold of wealth, and what’s bad for bonds and US credit markets is bad for everyone because the US Treasury market is the backbone of all capital markets, which are the backbones of our economic and social conditions. Unless this path is soon rectified to bring the budget deficit from roughly 7% of GDP to about 3% by making adjustments to spending, taxes, and interest rates, big, painful disruptions will likely occur.
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The macro backdrop for the next 6-12 months is crazy bullish.
I believe this view still goes against the prevailing general consensus in many ways.
Skepticism lingers due to recession fears, the July 9 Tariff deadline and ww3 fears, causing many to hesitate and stay on the sidelines. ALL these risks are ones that you have to bet against.
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Bitcoin CME futures just closed the daily above 109.5K. Spot closing above the level is just a formality now.
Breakout loading...
Fire up the engines. Clear the runway.
Course set for: 160K. 🚀
$BTC did see some downside, as I has anticipated was likely. Nothing material. It’s basically getting ready for a breakout IMO.
In the short term, I'm looking to play the breakout above 109K. If we can stay above 106K, I remain short-term bullish. Below that, I expect we trade back to the range lows to likely form a higher low before breaking ATH.
As for SPX, looks like it was compression which I thought was likely. Since my last post we have just kept grinding up, breaking ATHs on both SPX and QQQ last week.
I'm seeing that equity positioning is still well below the highs of February. Stocks are likely to grind higher as positioning reverts to levels from the beginning of the year. Many professional fund managers have been offside and will need to chase this thing higher, as they’ve severely underperformed performance benchmarks.
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When inflation is low and growth is picking up, you get a Goldilocks environment, which is where we are in the current macro regime.
An exceptional window to capitalize on upside momentum.
This comes on top of major financial easing with the dollar absolutely tanking.
I really didnt expect it to come down this fast and by this much. Im not complaining tho.
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Last week the Fed proposed easing of the supplementary leverage ratio (SLR).
The proposal aims to reduce eSLR for systemically important banks to 50% of their risk based capital, lowering requirements from 5% to 3.5-4.25%.
This means banks will need to set aside fewer dollars when issuing loans, freeing up capital and easing credit conditions. This could equal several months of peak QE, coming from private banks alone.
Keep an eye on how this unfolds and if it gets approved.
federalreserve.gov/newsevent…
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Trump not planning to extend deadlines, so reciprocal tariffs kick back in on July 9.
No major progress on trade deals yet, which raises downside risk for markets as they digest this news.
Headline risk remains elevated over the next week.
Fade the move down if it comes. Hopefully we will see some nice opportunities.
INTEL: DOUBT WE'LL HAVE DEAL WITH JAPAN- TRUMP
TRUMP ON JULY 9 DEADLINE- NOT THINKING ABOUT EXTENDING
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Bank of America’s Fund Manager Survey shows that fund managers are STILL heavily underweight US equities. In fact the most underweight since 2006.
It’s unbelievable. Honestly, it’s ironic.
The whole “end of US exceptionalism” narrative turned out to be complete BS as expected. Everyone who positioned for it has underperformed and will continue to underperform.
They will have to scramble to re-enter at higher levels and already are doing so.
Besides that sentiment still has plenty of room to recover, and I expect FMS investor sentiment to keep rising over the next 6 to 12 months. Chart posted in comments
Higher.
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Update on my rotation out of SOL beta to ETH
Since my previous post, what stands out is:
- $JOE up 200%
- $KEKEC up 44%
For the most part, the market hasn't been that interesting, as BTC has remained rangebound while the altcoin market has been bleeding.
SOL beta has underperformed, and I believe this trend continues. There’s simply much less to choose from in the speculative casino on ETH compared to SOL. It's simple supply and demand dynamics. There is just too many coins on SOL, making it a harder game to play.
Not all coins I mentioned have performed well, but they haven’t underperformed much either if at all. There have been laggards like $PEPE, but I think they are set to catch up. We haven't even seen ETH really take off yet, neither against SOL nor on the USD chart.
I think ETH beta outperformance becomes really evident as ETH makes its next leg up.
Last 2 charts are $JUP and MOGUSD/JUPUSD
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I’ve started rotating most of my SOL beta into ETH beta.
Might sound backwards with how strong SOL has been this cycle, but to me this feels like the asymmetry most people are ignoring.
@rektmando has been speaking on this too, and I think he’s absolutely right.
I’m not bearish on SOL still think there’s plenty of upside there.
But I’m trying to position for maximum upside for what I believe will be a very strong few months ahead, based on the macro setup.
SOLETH looks like it still has room to unwind.
If that continues, I think ETH beta plays will start catching serious bid, even if SOL holds structurally.
Here’s why I’m leaning this way
There are WAY fewer tokens for liquidity to rotate into as ETH pumps.
Btw we’re basically just talking ETH memes as I see those as the purest ETH beta. The rest doesn’t interest me much.
I’d advise everyone to take a look beyond the tickers i listed below.
These are just some I like, some are low cap and extremely high risk. Keep it simple: stick to $PEPE, and if you want higher upside, I’d lean toward adding $MOG, NFA.
$PEPE
$MOG
$SPX
$APU
$BITCOIN
$JOE
$KEKEC
$GONDOLA
ALT SOL/ETH
ALT PEPE
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