Clarity Act Progress Boosts Bitcoin | Trading the Markets w/ Kris Bullock

Bitcoin rallied on increased odds of the Clarity Act passing, then both the prediction market odds and Bitcoin's price pulled back. Bullock still views the setup as constructive: Bitcoin has broken back into a prior range and held for roughly two days, a Traities indicator flipped green recently, the weekly megatrend signal is on the verge of flipping positive pending two consecutive weekly closes above the line with momentum, and the DMARC count sits at only three, suggesting the rally is not overextended. He does expect Bitcoin to run up to the 20-week or 200-day moving average and get rejected, consistent with a prior rejection at that level.

Despite the near-term technical setup, Bullock argues the conditions for a durable bull market are absent. Bitcoin ETF flows are negative by approximately five and a half billion dollars year to date, and over the last three weeks flows have been barely flat after several consecutive negative weeks, indicating institutions dumped Bitcoin and have not meaningfully bought back. The Coinbase premium index is in negative territory, signaling US retail buyers are not actively participating, and Bullock considers sustained retail buying from outside the crypto ecosystem a historical requirement for a genuine bull market. He believes the current rally is being propped up by money rotating out of stablecoins rather than fresh capital entering from outside crypto, which is preventing a drop to the 40,000 range but is insufficient to drive a significant move higher.

The macro obstacle centers on real yields. Real yields across the one-year to 30-year range currently sit between approximately 1.83 and 2.9 percent, giving large institutional investors adequate inflation-adjusted returns in bonds and money market accounts with no incentive to move into Bitcoin ETFs. Real yields were favorable for nearly the entirety of Bitcoin's history from 2015 through 2022, and since early 2023 they have never returned to that favorable zone, representing a full regime change. Bullock characterizes the ETF approval and Trump election rallies as narrative-driven rather than fundamentally driven. The dollar broke out of a long sideways range around end of June and remains entrenched above that range, adding further pressure, while global M2 has largely trended sideways since approximately April. He is waiting for at least the first neutral candle on the financial conditions indicator on a weekly basis before beginning to dollar-cost average, views the DXY falling back below 100 as a positive entry signal, and expects a better Bitcoin entry opportunity around a September to October timeframe. He considers the latest CPI report showing lower inflation a step in the right direction, noting that falling inflation could mechanically reduce real yields even without a rate cut.

On Ethereum, Bullock argues the protocol has made changes that are technically impressive but have structurally damaged it as an investment. The ETH to BTC pair peaked on the exact week Ethereum switched to proof of stake in September 2022 and has been in a sustained downtrend since. EIP 4484 gave further incentive favorability to layer twos and accelerated that downtrend. Because layer two transactions cost a fraction of a penny and base chain transactions now cost around six cents, the competition for block space that drove gas fees as high as hundreds of dollars during the NFT era no longer exists, eliminating the economic pressure that previously incentivized holding ETH. Real world asset tokenization, equities trading, and major institutional activity from entities like Robinhood and Hyperliquid will run on layer twos, not the base layer, so ETH does not directly accrue that value. Solana DeFi and other competitors have also taken meaningful market share from Ethereum DeFi. Bullock expects speculative buying to drive short-term price appreciation but says the structural downtrend against Bitcoin will continue unless another major fundamental change occurs.

On the Clarity Act, Bullock frames it as necessary for long-term regulatory stability. Failure to pass it would leave the industry exposed to a future administration rewriting the rules entirely. If it does pass, he expects Bitcoin to follow the same sell-the-news pattern seen around the ETF approval and the Trump election bump, with initial euphoria giving way to price reversion. He views the period after that dust settles as the more actionable window but describes the call as a gut read rather than a live strategy.

Bullock identifies moving averages as the single most useful indicator in her toolkit, specifically a 10-bar and 20-bar combination applied across weekly, daily, and hourly timeframes. A cross of the 10-bar over the 20-bar signals a trend reversal and confirmed breakout into an uptrend. She waits for a full daily candle close below the 20-bar before treating any move as a genuine breakdown rather than reacting intraday.

On individual assets, Robinhood is described as having a larger total addressable market than Coinbase and pursuing it aggressively, with a relative chart showing Coinbase in a straight downtrend against Robinhood. Hyperliquid has been in a strong uptrend since the start of the year without once touching its 20-week moving average, now sitting near 52 to 53 dollars, and a mean reversion back to the 50 dollar range is flagged as plausible before any resumption of the uptrend.