🥛 Will CLARITY kick off the bull run? 📈

GM. This is Milk Road, the newsletter that always brings clarity to noise.

Here’s what we’ve got for you today:

✍️ Will CLARITY kick off the bull run?
🎙️ The Milk Road Show: Dan Tapiero: Crypto Is Entering a Much Bigger Bull Market.
🍪 Jordi Visser: BTC, ETH, and SOL are the three horsemen of crypto.

Prices as of 2:00 p.m. ET. Powered by CoinGecko.

WILL CLARITY KICK THE BULL RUN INTO GEAR? 📈

The CLARITY bill has had one helluva ride so far, and it looks like the gods are finally shining their grace upon it.

But before diving into all the gossip from the Capitol, let’s talk BTC.

Last Monday, Milk Road’s in-house crypto-whiz, John Gillen, was hoping for a BTC close above $79K by Sunday, which he would have seen as a vote in favor of the crypto bull market's return.

Well… Sunday happened, and we didn't get it. Bitcoin fell from ~$80K to ~$76.5K over the weekend and is trading at ~$78.4K as of this writing.

So right out of the gates in this morning's meeting, we asked him: is the bull run on pause?

John told us that we’d gotten a little too black and white with our interpretation of his price targets - $79K was a ‘nice to have,’ in the near term, but just because we didn’t finish the week above it, doesn’t mean he’s all of a sudden bearish.

The level that he’s focused on (outside of a fixed price) is the 50-week moving average, and it's coming down to meet us.

As of this writing, the 50W SMA is ~$78.7K, about $300 above the current price.

The 50W SMA smooths the daily noise and is a line traders treat as one of the strongest indicators of price action, marking the break from a bear trend to a bull rally.

Source: TradingView

John says, when in doubt, zoom out. BTC’s recent price action has been one violent move up, then sideways action for the last four weeks straight.

This is what we in the biz call ‘a bull flag.’ A sharp rally up, followed by a sideways grind while the market digests everything - before it breaks up or down decisively.

(For bull flags in established uptrends, there’s typically a ~55-65% chance that break is to the upside.)

"It's a chop," John says. "But that's not bearish."

While technicals alone can’t explain the full story. What was missing in the market was a reason to really break out.

This week hands us two of those required reasons...

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WILL CLARITY KICK THE BULL RUN INTO GEAR? (P2) 📈

Tomorrow at 2:15 pm ET, the Senate is going to a cloture vote on the CLARITY Act.

To be clear: the cloture vote, in and of itself, doesn’t mean CLARITY will pass. It decides whether the bill moves forward to the Senate for formal debate.

All it needs is 60 votes. Republicans hold 53 seats, so at least seven Democrats need to cross the aisle and vote in favor.

John feels this is tremendously bullish. Chatter on the Hill suggests Democrats are aligned with the revised bill draft submitted by Sens. Lummis, Boozman, and Scott.

Long story short, the amended copy introduces:

1. A Treasury oversight via a “circuit-breaker” to step in and pause any deposit flight from community banks to payment-stablecoin providers doling out rewards.

2. Amendments to the ethics provisions that keep Trump, other elected officials, and Judges from engaging in crypto activities while holding office.

The thing is - sixty votes to start talking is a higher bar than the 51 needed to pass the thing.

So John believes that clearing the cloture vote tomorrow could be an indicator that votes to pass the final bill in the Senate are already in place.

Source: Yahoo Finance

The second date to watch is Wednesday, when the Fed meets.

John doesn’t think we get a rate hike, but acknowledges that the market indicators are against him.

CME FedWatch now puts a 25bps hike near 86%, up from 69% on Friday. That would lift the target range from 3.50-3.75% to 3.75-4.00%.

But despite the odds flipping, John’s primary argument still holds true:

Monetary policy is no longer the main lever to drive markets into a rally.

We're in a phase of fiscal dominance, which means deficit spending and the bond market push the economy around more than the Fed's rate decisions do.

Don’t believe us? Just look at the BTC chart. An 86% hike is staring Bitcoin in the face, and Bitcoin is still holding green while equity futures are red.

If both dates break in our favor, John believes we’re poised for a close above ~$83K - aka: the “we’re back baaaaby!” level.

On top of that, if CLARITY passes and ETH holds ~$2.5K, John believes alts could catch a major rally too.

Hell yeah!

If anyone needs us, we’ll be making a blood sacrifice at the altar of the crypto gods.