40% BELOW Fair Value 🚨 Extreme Divergence + Macro Chaos

Hello everybody. It's a crazy Friday.

Everything is all over the shop. We're

going to break it all down. It's Friday

fire and we're going to talk a lot about

Bitcoin and where we are because we've

had other stuff going on this weekend.

Crypto markets, some new records, some

new winners, some new losers, and so

much more. So, thank you all for coming.

Thank you to the best mods in the world

in the chat too and everybody else being

there. By the way, we have a little

survey going as well if you are live.

It's about what is your optimal length

of video that you like 10 20 30 40

minutes. So let me know because if you

want shorter I can do a lot less where I

can make that happen. But the story like

today we read about 300 articles. We

pick the best and we weave together a

great tapestry that you may have missed

of all the good stuff during the day.

So, let's go as they say and make sure I

haven't broken anything. Okay. Yeah,

this one's called 40 below because it's

winter time and it's cold in different

places and never financial advice. And a

big thank you to Rick and Patreon.

You're the Patreon equivalent of an Iron

Man. I've done about 70 half iron mans.

Never did a full iron man. Never had the

time. But I appreciate that and I can

relate to it. Let's get into sentimental

signals. First of all, crypto is still

at seven. Extreme fear. We did fall as

low as five about 10 days ago. Now it's

back up to seven. It hit nine two or

three days ago. Back down to seven.

People are terrified. People are

worried. People are anxious.

People are bored.

The sentiment is very low. But remember

everybody, and I say this a thousand

times, billions are made in the bear.

Okay? This is not the time to lose

interest. It's very difficult to make

money in a bull market. Very easy in a

bear if you're patient. So please

everybody don't don't lose faith. This

is the most important time. We we went

to this before, okay? Not the time to

lose faith. Stocks, fear and greed is at

40, so not too hot there either, but

there's a lot of weird macro stuff going

on. We'll break that down, too. Let's

talk about Bitcoin and crypto. Yeah,

look at the results so far. February is

down 14%. It's been a nasty fab. And

that's why I understand why people are

like, "Oh my god, Bitcoin sucks." Yeah,

especially after Jen down 10% and

everything else. But here we are, five

months of hell. It's ugly and it

happened fast. Got a lot of people with

their pants down. Let's look at some

charts. Let's look at uh this is our

mean reversion from IDs. We are at the

lowest level on the mean reversion. That

little dip at the bottom, little blue

thing is the lowest level since November

2022. By the way, guess what happened in

November 2022? That was the low of the

Bitcoin bare market.

Is there a pattern here that we can look

at? Maybe. Maybe. But we'll see. Either

way, a lot of people are chatting about

how this could be a It was definitely a

quicker dip,

could it be a shallower dip?

Could it be a quick recovery? It all

depends on the money coming in. Let's

look at some other charts that are

important to take into account as well.

Bitcoin's fair. Bitcoin, this is from

Andre, by the way. Bit, not Bitcoin's

not fair. Bitcoin's current price is 40%

below the model fair value implied by

the global ETP flows. So something funk

is going on because given ETP ETFs the

money coming in etc.

it it's really way way way off where it

should be considering how much money has

come into the space through these tools.

Now, what Andre Drago says is once the

risk appetite returns, Bitcoin could run

it back turbo. So, I keep saying money,

money, money, no money, no fun. If the

money starts coming back into ETFs, we

could run it back real fast. And

remember, it just takes, you know, the

price drives a narrow. When the price is

down, negative and stable, people get

bored and they move on to different

shiny new objects. Once the price if it

does rebound a lot of people will come

back real fast. Let's look at the

another chart here. This is the gold

Bitcoin divergence from Deran BTC

is according to him Bitcoin is trading

at 51% below its gold relative moving

average and this divergence is 64%

off where it typically should be and

that's in the first percentile of

events. So basically only 1% of the time

it's ever this low. And this is

basically the other way to interpret

this. This is the most extreme

extreme

Bitcoin underperformance versus gold in

the history of Bitcoin. We're going back

16 years. Wild. Now there's some other

weird stuff happening with Bitcoin. We

had that massive dip a couple weeks ago

in the hash rate. The bottom chart here

is from the tabby model and the top one

is the Bitcoin price. Now we always go

back to the age old thing is does price

follow the hash or hash follow the

price.

It's very difficult to say. There's

different theories on both depending on

the weather depending on the markets.

The more hash the more secure the

network the more money it should attract

is one theory. Also the higher the price

goes up the more miners come into the

space and the higher the hash goes up.

So it's somewhere in between and it's a

very fine balance. But what's really

cool about this chart though is the hash

rate has shot up nearly 40% since the

bottom about 25 days ago and that is big

a very big move. So it's getting harder

once again for the miners to make money.

Anyh who, moving on. We have another

cool chart here which is not so cool and

it reflects the overall sentiment and

this is the risk appetite for Bitcoin

index and basically it's hammering on

the all-time low which we saw back in

2021 and 2022 etc. Nobody is going risk

off into Bitcoin. Now despite it being

so low,

the price is still holding up there

around that 67k level which is actually

a positive sign. But again, nobody is

thirsty for Bitcoin yet. Some smart

people are doing their little DCA stuff,

you know, guilty of that myself. Uh, I

think it's a pretty good riskreward

here. And considering the amount of

money printing and debasement

scarcity AI, you've heard this story

before.

It's got to it's got to return back up.

But another weird chart which is also

from Duran BTC and shout out to um

Bitcoin long for this by the way brought

it to my attention. Uh this is the worst

performing having cycle in Bitcoin

history by a factor of 100x. The 2016

cycle at this point was up 3,000%. The

2020 cycle at this point was well over

350 360%. this current cycle flat flat

basically uh the having price was 64908

we're at 66920 so give or take 2 or 3%

we're basically haven't moved since the

having which is nearly 650 days ago

it'll be 2 years in April

so that's quite disappointing it was not

the cycle that we expected nothing was

same as before so moving on. Also, today

we've been waiting for the so-called

Clarity Act in the US to bring a lot of

money into crypto. And the banks don't

want to give up their gravy train, which

I've covered many times before. They

take your money, they pay you 0.01%.

Like literally, no joke, you could drop

a million dollars into a big top five

American bank, and they'll pay you 0.1%

on your million bucks. 10 million, 0.1%,

100 million, 0.1%.

And then they lend it up in a fractional

way. and they make 6% on that or 8% or

if it's a credit card maybe even more.

They don't want to give that up and

that's where they're afraid of these

stable coin things and the you know if

they do

why how else will they make profit? So

there was a separate meeting. They're

trying to get this thing pushed through.

The banks have lobbied hard against it

over competitive fears because if you

can get yield on your stable coin,

everybody will drop their cash into

stable coins on chain and take them out

of their banks from the banksters and

then the banks won't be able to make

their gravy train. It's very simple.

This is what they're fighting against.

Will they win? We shall see. They're

looking at doing other things with

incentives or trading fees or I don't

know. Anyway, it's terrible. I think

either way when when you try to prevent

progress,

you'll eventually shrivel up and die. So

why prolong the inevitable as they say?

Also another cool chart with lots of

charts today on Bitcoin. Did promise you

that. This is a one-mon TA which is

pretty cool. This is from um

I think it's psycho psycho something.

really cool little chart and I grabbed

it because it makes a lot of sense. Let

me try to walk you through what it

means. The chart is on the one monthly

uh and you see a huge secular uptrend

every single cycle. You got a breakout

and then a retest of the prior all-time

high. The prior all-time high bit for

Bitcoin was 67K in April 2022 and then

69K in in November 2022. Then the bare

market kicked in. But between let's say

67K which is exactly where we are now

which is exactly where we were in April

2022

got that green box. Okay. So that's the

first thing. The tags are the one month

50 EMA also the old all-time high. And

historically this is an important piece.

We never close on the monthly. We can

peak beneath it with a candle but on the

monthly we never close below the old

all-time high. And the RSI resets to

similar levels. And the cycle difference

is the RSI has never ever entered over

expansion. Right now RSI is at the

bottom just like mean reversion is at

the bottom since November 22 and 22. And

will that level hold up? So this is you

know I'm so weary if if we do break

through that say close the monthly below

say 614 that would be the first ever

time in history that this has happened.

We don't know if it's going to repeat

and I don't want to jinx myself by

saying it's a sure thing but it would be

unusual if it does that means pretty

much everything is broken now in other

news too Salana TVL's keep on rising

despite the crappy Salana price action

total value locked on chain it keeps on

going up Jupiter nearly 2.1 billion

Camino 2 billion Sanctum 1.2 billion

1.1 billion Jetto 1.047 047 billion. By

the way, there was a time where Jetto

was number one. Now Jupiter is number

one. And I still have a Jupiter position

waiting for that thing to come back to

life as well. Now, it was also another

bad week, not just for the for the all

the ETFs except for one, by the way.

We'll get to that. But the Bitcoin ETFs,

again, still down for the week. 400

million out of Bitcoin. About 350

million out the week before, about 320

million out the week before that. And

before that it was billions and

billions. Five weeks drainage.

This is what Andrea is talking about. If

the money comes back into the space, we

could go very high very fast. But we

need the money to come back. ETH has

been following the Bitcoin ETF lows as

well almost perfectly to a tea. The ETH

ETF so far this week has drained $123.38

million. The week before was higher and

the week before that was higher again.

The week before that was higher again.

The week before that was about

uh I don't know a lot uh a lot indeed.

So it has been a very ugly 5 weeks for

ETH too. Let's check in on Salana see

how they're doing. Well positive this

week 11 million the week before about

134 million and they had two red weeks

before that but since then overall it's

been pretty much up which is breaking

the trend with Bitcoin and Ethereum. So,

somebody is trickling their money into

Salana. Somebody sees something from a

fundamental perspective. Let's talk

about markets real quick. It has been a

quiet market despite the crazy macro

stuff which we'll get into in a second.

Some very important micro stuff. But

Google up 2%, Microsoft down 2%, Nvidia

up 1%, Apple half a percent, Amazon up

5%, but remember Amazon was clobbered

last week, Tesla down 1%. The rest kind

of pretty humbho. Pounder recovered,

Broadcom recovered. It's just but

nothing nothing nothing too big to write

home about. Also, we saw a new record

too. Amazon became the largest seller,

the largest revenue generator, the

largest company on the earth with the

largest number of sales. And that was

always held by Walmart for the last 13

years straight. Guess what? The

31-year-old Amazon just knocked Walmart

off the throne and they started as a

bookstore and I believe soon it'll get

to a trillion dollars. The currently

their sales are about

717

billion. So not far to go. They're

growing at a 20% clip. They should be

there in 2028 trillion dollar in sales

of which they make good margin onto.

Interesting to watch. That's probably

why they can afford to invest so much in

capex as well. Also, for those who are

looking for a new utility truck, best

car I've ever driven, I have one.

Cybertruck has a flash sale for 10 days

according to Elon Musk. You can buy now

one for $599.90. These were over 100

grand not too long ago. So, uh, again,

it's America's bestselling electric

truck, and all the other electric truck

companies have departed the market,

except for Rivian, but, uh, it's a lot

better than Riv. It's bulletproof,

four-wheel steering, all that good

stuff. Fast as hell, too. Way quicker

than Riven. So, if you need if you are

somebody like me who has to do a lot of

lugging stuff around, and, you know,

it's worth going for a test drive. You

will not look back. AI. Let's get into

AI, which dovetales into crypto as well.

Phantom came out with their multi- aent,

multi-chain capability with their

Phantom MCP server. So, agents can swap,

sign, and manage addresses across all of

Phantom supported chains. So, basically,

it's multi-chain, multicurrency,

multi- aent. It's all happening. And

remember, remember this is the most

important thing. Crypto is the only

platform that can support this

egentification of the planet that's

happening. And this will blow your mind

and you're not even going to believe

this news when I say it, but it's true.

And it's also a little bit of silver

lining, too, cuz people are saying,

"Well, AI is going to take up over all

the jobs." Well, no. No. AI is actually

creating jobs. There's a new website

called rent a human.ai, AI. And this is

where agents go to rent humans and you

can charge

one guy here, I think Patricia Tanny,

she charges $420 for her services. And

what do they do? Well, what what the

hell do AI agents need humans for? Well,

there are some things that software or

an agent out in the wherever they are

can't do. for example, um be a power of

attorney or sign documents or get

notaries or verify locations or take

pictures or so need some type of warm

body. I don't know, warm warm body

presence in a meeting. It's crazy. Maybe

some field work. I don't know. But the

machines are taking over and they're

giving back. They're hiring humans.

It's a crazy world. Absolutely crazy.

Speaking of AI too, uh Google Gemini has

just legged anthropic claude opus 4.6

which was a smoking hot LLM. By the way,

this does not include XAI's Grock for

some reason in their evaluations. They

don't want to embarrass themselves, so

they don't include it. But the data that

I've looked at shows Grock is cheaper

and faster, etc., etc., more capable,

more honest as well. But here, Gemini

3.1 Pro preview leaprogs everything with

a score of 57, which is quite a bit

above 53. And of course, GPT is way in

the distance. So, that was a big big

jump as well. And other crazy news as

well regarding AI. And remember, you

have to lean into AI. It's big. It's an

asteroid that's going to hit this

planet. But here, this this took me by

surprise. Shout out to Sunj2. This is

what I call the fear versus excitement

for planet Earth. Asia is absolutely off

the charts in terms of AI enthusiasm.

The bottom axis there is how excited

people are. Goes up to 80%. China is the

most excited. Also, China is the least

fearful. The vertical axis on the left

is how nervous people are about AI, how

afraid they are. Japan, it seems like

they're not excited and they're not

afraid. They just don't give a damn.

It's like it's not impacting their

culture. And there are many people, you

know, I speak to people all over the

world and sometimes people in Europe and

Scandinavia and stuff and I ask them,

"Do you care about AI?" They say, "No,

no, it's it's nothing. It's not

impacting your life." So, for some

reason, there are parts of the world

that believe AI is a nothing burger or

they haven't actually taken time to

understand what it does. Place like

Poland, Japan, Italy, Argentina, etc.,

Switzerland. Or maybe they're not

excited, but they're also not that

afraid. Now, if you go to the United

States, they have extreme anxiety. So

does Ireland, Great Britain, New

Zealand, Australia, Canada, they're all

very worried about AI. I'm not sure why,

but they're not excited about it. So,

what I conclude from this is Asia is

very excited about it because they see

the potential for it. And sometimes when

humans see things that are new and

different, they are afraid, nervous, and

they back off because it's fear of the

unknown. That's not a good way to be in

this time. You got to lean into AI hard.

And that's why the Chinese probably are

so good at it because they're both

excited by it and not afraid of it. So

that's what you need to do when things

get disrupted. Do not stick your head in

the sand, my friends. Let's get into

macro. This is going to be a little bit

of a wild macro Friday. We'll go through

it in four minutes or less. First of

all, the PCE is up. This is the Fed's

preferred indicator to see what's going

on in the economy and inflation. Okay,

their preferred gauge head P head

headline PC rose to 2.9% year-over-year

and that was above expectations at 2.8.

Not a big burger, but they thought, you

know, the peak was kind of way back when

late 2024 and then all of a sudden it

goes back to 3%. That has them a little

bit nervous. Again, a core PC, as a

reminder, excludes food and energy and

it shouldn't be this high. Not at all.

Now, this could be for a number of

reasons. The government doesn't know how

to measure stuff or they're very late,

etc. Who knows? But I know things like

uh what is in there? uh rent is affect

affecting this too because very few

people can afford to buy a home and

that's actually driving up the prices of

rent which is a big impact on this too

probably other factors too I know food

shout out to our friends in Canada I

read somewhere the price of food in

Canada went up 7% in January alone that

is pretty extreme anyhow who knows how

they measure this stuff either way it's

laggy and probably wrong because

trueflation says something different

then this is the bad news too the US is

expecting the government grow by a lot.

This is the GDP growth

and last time they measured it the month

before was 4.4%.

And the expectation was 3% and it came

in at 1.4%.

So somebody's going to get spanked

because that's not good. That's not good

at all. And the economy is slowing. Now

there is good news about this. First of

all, when this news gets released, the

markets get rattled and get really

afraid and futures drop and prices drop.

And then they think, "Oh, hey, guess

what? If inflation is going up, that's

bad. But if the economy is slowing,

that's good for maybe a rate cut." So

now people begin to think, okay, maybe

the rates will go down and that'll help

the economy. Who knows? It's all it's

all nonsense. Anyway, and then we had

this whole thing today as well. After

them spending months and months and

months trying to determine what to do

with the tariffs, you won't believe this

story. It's kind of mad. The US Supreme

Court struck down President Trump's

tariff authority 6 to3. That was big.

How can it be so large and it take so

many months to decide when the

difference is so large, 6 to3? And then

they believe when this first came out,

they believe the US would have to refund

150 billion. But then

it's all theater, ladies and gentlemen.

And then Scott Passen comes out and he

says, "Nope, don't worry. We're not

going back. There will be no changes.

There will be no changes in 2026."

Absolutely crazy. Because the six judges

simply ruled that the EA, I think it's

called, cannot be used to raise even a

dollar of revenue. But don't worry, the

Treasury has a whole bunch of other

plans to do that. They can raise tariff

revenue using different tools. Here is a

couple that I showcas. You got section

232, section 2011, 301, 122, 338. They

have many ways in which they can

not do tariffs. So all of this drama

across PCE inflation and GDP growth and

striking down the tariffs and then

bringing in new tariffs, it's nonsense.

Just stay the course. Don't be rattled

by this short-term hour to hour news

cycle because it'll rattle you out of

position. And finishing up, Ila Musk is

being sued for freedom of speech in

Europe. Nothing else. Our European

friends, we know everybody here from

Europe is pro- freedom of speech. We

love it. But the powers that be do not

like it. And I love this little meme.

And by the way, he's trying to sue them

back. Give me your name and address if

you want to speak freely. That is not

freedom of speech, my friends. So

anyway, make sure if you are in a

nation, you have the ability to speak

freely. It's the most important thing.

It's the pillar of democracy, my

friends. Hope you all learned something

new today. And by the way, I'm going to

check that little poll. Thank you to the

team who ran it. Uh the preference on

duration of videos,

39% 20 minutes, 31% 30 minutes. So

somewhere between 20 and 30 minutes is

optimal. 20% want 40 minutes plus. The

Q&A on the weekends is always very deep

and long, so that tends to be 40 42

minutes. Uh, but this is really good to

know. I thought people were getting a

shorter attention span. Only 10% wanted

a 10-minute video. Good. 10-minute

videos would be easy to do. I come up

here, talk freely for 10 minutes on

anything, any time, but doesn't require

10 hours of preparation. But I'm glad

people want more information. And that's

what we do here. KPM, knowledge per

minute, every single piece of

information I put out there. You learn

something new every 60 seconds. That's

always been my goal from the beginning

because that's the way I like to learn

too. Grateful to everybody here. Thank

you to the mods in the chat and the

whole team that's out there. And a shout

out to Jean D&D

K8 Hala Swiping and Swiping Piper and

DBF430.

Appreciate you from all over the world.

God, Canada, Hawaii,

Swiper, I don't know where you're based,

and DBF in Australia. All over the

world. Love it. Thank you. Have a great

great Friday night. See you all

tomorrow. Bye.