As “Triple Put” unfolds, Bitcoin will trade at a 40% discount: founder of hedge funds:

Bitcoin is changing its hands at a price that is nearly 40% below the modelled “energy value,” but the extraordinary confluence of technical, fundamental and policy signals suggests that markets may be changing. In his latest newsletter, Edwards argues that the newly formed “triple put” (a coincidence backstop from the White House, the Federal Reserve and the US Treasury) has altered the risk profiles of all risk assets and macro indicators to make the Bitcoin flip crucial.

Bitcoin turns bullish

Edwards starts with emotion and describes it as “in the pit.” The spread of the American Investor Bull Association is “as bearish as the lowest in 2009 and 2022, significantly worse than the 2020 Covid Crush.”

The CNN Fear & Greed Index has registered the darkest reading, “In Years,” while Capriole’s own active manager, Sentiment Gauge, shows an under-recorded equity manager. “Simply put, investors are in panic today,” he writes, warning that such extreme measurements “usually match at the central stage of major prices.” The combination leaves behind what Edwards calls “blood (and terror) on the streets,” repeating the Rothschild maxim that he fully cites.

Related readings

Technically, Bitcoin made a sharp reversal a few days ago. The $94,000 breakout candle has regained the entire $91,000-$100,000 range that closed the market from February. Edwards classifies the move as “a massive range of recovery,” adding that “for Bitcoin, such bullish ranges rarely look back at prices.”

Unless the market offers “daily closings under $91,000”, he writes, “it’s harder to get a more bullish tech chart than this.” The breakout coincides with his company’s basic machine learning model, Bitcoin Macro Index, and is positive in the neutral realm after a few months. The index fuses over 70 on-chain, macroeconomic and stock market variables. Prices are intentionally excluded to avoid feedback effects. Last week, the model “reset to ‘fair value’ and resumed its bullish trend,” ShiftEdwards calls it “a very promising basic data reading.”

“Triple Put”

Policy development provides a third game of the story. April 2 (the so-called “liberation date”) imposed global tariffs that the US cleaned, halving them, adding a 90-day suspension after the stock sold about 15%, VIX exceeding 30 and expanding credit spreads.

Edwards describes the rapid reversal of “Trump Put” as the first “Trump Put.” A day ago, on April 1st, the Federal Reserve began reducing the pace of quantitative tightening to 95% (“Fed Put”), effectively ending its four-year balance sheet contraction. CME FedWatch Tools’ derivative traders are now allocating base cases to three rate reductions by the end of the year.

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Meanwhile, Treasury Secretary Scott Bescent told reporters that the failures in the Treasury are driven by delaboration rather than foreign sales, and the department “has the tools to mitigate the situation, such as expanding buybacks if necessary” (“Treasury)).

“There are currently three major financial markets in place, and everyone is ready to sprint through the financial markets. The US President, the Federal Reserve and the US Treasury represent Triple Put,” Edwards said.

Is BTC underrated?

Capriol’s own “This Week’s Chart” highlights the review debate. Bitcoin’s energy value (an internal metric that the network prices using total minor power consumption) exceeds $130,000 for the first time this month.

So, with spot market trading close to $94,000, Edwards calls it “very rare” after a “nearly 40% discount” that is the depth of underestimation and Harving and “a very welcome sight.” Historically, energy value has acted as a subtraction of price gravity. This size gap narrowed with each previous cycle.

Edwards softens the bullish painting with warnings. “Political and volatility risk remains, and new policy changes are the biggest risks to derail the market right now,” he writes, adding that Capriol will monitor Bitcoin protecting $91,000 at the end of the week and keeping the macro index growing.

However, his overall tone is undoubtedly optimistic. “Today, the outlook for Bitcoin is very bullish and we’re joining together across technology, basics and emotions,” he concludes. If the week ends above its current level, Edwards said, “We’ll soon push the new all-time high with Bitcoin.”

At the time of pressing, BTC traded for $93,723.

Featured images created with dall.e, charts on tradingview.com