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Bitcoin's All Time High Ain't Accidental
Daily Update on SPY, QQQ, TLT, USO, BTC, COIN, Mag-7, Gold, PLTR
Yimin Xu
May 22, 2025
Hi YXI friends,
Following a poor 20-year US Treasury Bond auction, we saw yields dramatically higher in the long-duration bonds. Equities turned from green intraday highs to close in the red.
As the Congress debates the latest tax bill, investors remain anxious in the near-term towards the government’s rising budget deficits. This has the impact of driving term premium higher, meaning investors want more yields on their 10-30 year bonds to compensate for the supply risk of government issuing too many bonds.
Perhaps the long-awaited pullbacks have finally begun, as they were due after a full month of relentless rallying. But It may be still too early too tell.
At the same time, Bitcoin is shining brightly. At $110k, Bitcoin is now at a new all time high, recovering from the crash faster than SPY or QQQ.
It turns out that, when the government can try raise as much money as they want through debt and eventually inflate that debt away, people want protection from immutable properties with limited supply.
One can own Gold physically, which has worked for centuries. One can now also own Bitcoin digitally, which is young and less proven, but is welcoming increasing institutional and retail adoption with a $2 trillion market cap.
Thankfully, our BTC Systematic Signals have captured the entire rally since launching on April 14, up 29.6% to date. That’s a whole year’s return of an extremely bullish equities market in just 6 weeks, due to Bitcoin’s volatility but also its directional relationship with the expanding global money supply.
If you are looking for our Systematic Signals directly, you can find them in our dedicated morning note on SPY, QQQ, BTC, AAPL, AMZN, GOOGL, MSFT, META, NVDA, TSLA (free), PLTR (free), and TLT.
Let’s dive in!
Table of Contents
DISCLAIMER: This newsletter is strictly educational. Any information or analysis in this note is not an offer to sell or the solicitation of an offer to buy any securities. Nothing in this note is intended to be investment advice and nor should it be relied upon to make investment decisions. Any opinions, analyses, or probabilities expressed in this note are those of the author as of the note's date of publication and are subject to change without notice.
1. YXI Daily Dashboard
Observations from today
Bonds and equities both fell on Wednesday, with the exception of GOOGL, which rose by 3%. Growth stocks were hit the hardest as the 10-year yield hit 4.6%.
Gold and Bitcoin both rose as investors feared greater budget deficit over the new tax bill.
US Dollar weakened, suggesting investors could be moving money out of US Capital Markets.
SPY, QQQ
We include SPDW (Developed World equities) every Monday.
SPY turned down for a pullback at the 1.236 extension of wave (i). It is moving through a lower volume region. This means SPY could quickly test the 200 EMA next.
However, I remain bullish for SPY to reach $610 before it sees a 7-10% drawdown.
QQQ has also turned down from its highs into a lower volume region. The latest rally surpassed the 1.236 extension but failed to reach the 1.382.
I favour QQQ to reattempt the 1.382 target at $527 still, but if it breaks through the 200 EMA first, we could be seeing the wave iv correction already.
FOMC Projections
We use the Fed Funds futures market to understand the market expectations of future FOMC interest rate decisions.
FOMC Date | Before Meeting | Post Meeting | Hike/ Cut in % |
|---|---|---|---|
06/11/25 | 4.33 | 4.33 | 0 |
07/30/25 | 4.33 | 4.23 | -0.1 |
09/17/25 | 4.23 | 4.08 | -0.15 |
11/05/25 | 4.08 | 3.93 | -0.15 |
12/17/25 | 3.93 | 3.78 | -0.15 |
01/28/26 | 3.78 | 3.68 | -0.1 |
03/18/26 | 3.68 | 3.58 | -0.1 |
05/06/26 | 3.58 | 3.48 | -0.1 |
06/17/26 | 3.48 | 3.43 | -0.05 |
The front end rate cut projections barely moved overnight. The market sees 3-4 cuts in the next 12 months.
3-month SOFR Futures Yields
2. Summary Of Today’s YXI Signals
SPY, QQQ, BTC, TLT, AAPL, AMZN, GOOGL, META, MSFT, NVDA, TSLA, PLTR
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