The gurus are calling for rate cuts in a US economy that has historically low unemployment, positive job growth, a booming stock market, and core inflation that’s persistently above preferred targets and likely to rise. 80% likelihood next month, according to some.

When the Fed cut rates last year, these same people said the cuts would take 6 to 9 months to hit the financial markets. Now, they’re telling you financial markets will boom as soon as the cuts happen.

This is all very confusing. Macro is hard! Let’s stick to crypto, where things are much clearer, though no more predictable.

Topics for today’s update:

• TL;DR

• Peak signals

• Wall Street Cheat Sheet

• Live by the ETF, die by the ETF

• Live by the M2, die by the M2

• Altcoins

Note, I do not have a video to go along with this update. I will go back to video with the next update!

TL;DR

If you’re following the easy plan, you will buy when Bitcoin’s price goes below $74,000, with the option to start buying at $103,000. You’re constantly setting aside fresh cash for that opportunity.

If you also followed my deviations, you have a lot of cash generating 4-10% annual yield while you wait for the market to settle down.

If you haven’t sold any crypto, it’s not too late.

You may not need to, anyway. It’s more important to make sure you’re prepared for what comes after the hype dies down, especially if that happens sooner than people expect, or if the market peaks at a lower price than you expect.

If you took the long position from the July 3, 2025 update, play it tight in case we get that 2021 scenario or revert to our previous path, one that matches most closely with 2014.

While a drop of 9% over three weeks may seem scary, it’s very mild. Almost not even worth mentioning. In fact, Bitcoin’s price can drop to $107-ish in the coming days as a re-test of the bull flag from June without breaking market structure.

I’d pay more attention to the larger concerns we’ve discussed at length for months, as well as the technical patterns mentioned in the July 31, 2025 update, for example, the ones below.

Those patterns suggest momentum isn’t as strong as Bitcoin’s price makes it seem. We’ll need wait until at least next week to see how they play out—more on that in a future update.

If you’re feeling antsy, it may reflect a mismatch of expectations. When everybody tells you banana zone / altseason / retire your bloodline and that doesn’t happen, you start to wonder if it ever will.

Bottom line:

• We’re buying dot.com investments in 2000, playing for whatever is left of the tail end of a multi-year, parabolic bull run.

• It’s a race to see whether legacy entities can buy faster than smart money can sell.

• Treat every new all-time high as potentially the last.

• For altcoins, think “crypto casino,” not “retire your bloodline.” You can come back later at lower prices.

If you don’t know what I’m talking about, catch up on recent updates. Start with last week’s update and work your way backward.

Peak signals

Many say we can’t end the bull market until we see signs of FOMO, e.g., crypto apps at #1, google searches, extreme fear/greed, etc.

We’ve already seen all of those things. Long-time subscribers saw it earlier this year. Here are a few examples:

You can say we’ll see those signs again, as in, we’ll see these extremes or higher in the future. “The best is yet to come.”

You can’t say we haven’t seen these extremes therefore price has to go higher.

Wall Street Cheat Sheet

Following up on last update’s discussion of psychological models, let’s look at the Wall Street Cheat Sheet:

Why is complacency circled?

Because that’s what I see. Every time the market goes sideways or down, the response is universally “it’s ok, we need to cool off before altseason/Q4” or some version of “this is the calm before the storm.”

Keep in mind, I talk to people all the time, from people asking me about crypto at social events to paid consultations and portfolio reviews. This is not a scientific or objective assessment.

People got fully invested and took out margin. Euphoria hit earlier this year.

Institutional capital and Bitcoin treasury companies have changed the path of capital flows and propped the market up. We don’t know how much more will come. We need those sources of inflows to keep people from moving to the anxiety stage because, as we’ve discussed at length, OGs and diamond hands have sold a lot and won’t come back into the market until prices go much lower.

Mark, Bitcoin’s price doesn’t match this model at all!

Like the other psychological models, this chart has nothing to do with Bitcoins’ price, though sometimes the price movements overlap. It’s an insight into the emotions that go into each phase of the market and what that tells you about the opportunity you have ahead of you.

Live by the ETF, die by the ETF

Net ETF inflows have trended down since the start of the year, albeit from a very, very high level.

In July, they pumped to break their most recent downtrend (within a larger downtrend)—then dropped off so fast that the flows went back into a downtrend. You can see this in the 7-day rolling average of ETF flows.

Was last month’s pump a brief deviation from the larger trend? Is our recent drop a momentary pause while legacy investors reload? Or is it a sign that legacy investors are running out of ammunition?

Let’s revisit this topic in a future update. We can’t read too much into two soft weeks.

Live by the M2, die by the M2

People still make a big fuss about M2, one measure of liquidity. When you overlay this metric with Bitcoin’s price, it looks like a close fit. Something like this:

Visually, the scales play tricks on your eyes. The squiggles blend together.

When you look closely and outline the contours of the movements, you get a different view. Often, M2 and price have diverged since May, both for the 80 day and 108 day offsets.

This is easier to see when you isolate the movements rather than overlap them.

Those shapes are different. Sometimes they match, sometimes they don’t.

Ideally, somebody will run a correlation analysis. I don’t have the skills to do that, nor have I seen anybody try.

If you remember, this divergence was one of the shifts we saw in the transition from bull to bear in 2014, 2018, and 2022. We discussed the similarities at length as they played out from April to July—a long period of time where M2 and price aligned, then diverged. This divergence happened at roughly the same stage of the transition, with similar on-chain, technical, structural, and behavioral shifts.

(I won’t overcomplicate the update with more charts. You should already know what I’m talking about 😀.)

Altcoins

I still have not filled my sell orders for SWTH while I wait for altcoins to get back to one of my three “blood in the streets” allocation zones, shown on this chart of the altcoin market minus ETH and the big stablecoins:

Altcoins remain in the ideal zone relative to Bitcoin on my chart of altcoin dominance, which strips out ETH and the big stablecoins.

When they’re in the ideal zone on this chart, you’ll capture more upside when BTC goes up than you might lose when BTC goes down, on average.

As always, when BTC drops alts drop harder. It’s a relative advantage, not an absolute one.

I still worry about the structure of this chart, for reasons stated in the July 18, 2025 update.

That said, we have to go with it until we have a better alternative. Continue to play it tight. If you see your token pumping, you’ll feel the urge to let it go higher. Maybe sell a little just in case it doesn’t.

Two resources to help you pick altcoins:

• Top 10 of the Top 100—tokens you can HODL if things don’t work out

• Altcoin Reports—small projects with big upside

An AI-written haiku based on this post:

Relax and enjoy the ride!