‍#每周来晒 #WCTCS9

The long-term oil short was stopped out. What’s next?

I woke up to Brent crude having surged to $110. The long-term crude oil short I’d been telling everyone to enter around $105 was also stopped out in spectacular fashion😂. This rally isn’t simply the result of a supply-demand gap; it’s being driven by a combination of geopolitical risks, shipping disruptions, and tight inventories. If oil prices stay above $100, high-valuation U.S. tech stocks and crypto assets will remain under pressure. As for crude oil, I, Little God of Wealth, remain bearish over the long term. The reasoning is much like my long-term bullish view on Bitcoin: it starts with the fundamentals. Let’s look at how to position for what comes next:

I. First, the key drivers behind this sharp rally

First, the geopolitical risk premium in the Middle East has risen rapidly. The Strait of Hormuz, a major artery for global crude transportation, handles nearly 30% of global crude exports. Tankers have recently been attacked and caught fire in the strait one after another, increasing the likelihood of regional conflict escalating. The market has begun pricing in the risk of partial disruptions to shipping routes. Even as Gulf crude exports have recovered somewhat, markets remain concerned that a sudden incident could cut off crude transportation at any time, keeping the risk premium elevated. Continued Houthi attacks on Saudi energy facilities have further heightened concerns about the Middle East energy supply chain.

Second, OPEC+ is maintaining production cuts, while inventories remain tight. Producing countries continue to implement output cuts, and global refined product inventories remain low. With the winter heating season approaching, demand for precautionary restocking is increasing, providing strong support to spot prices. Shipping insurance and tanker freight rates have also risen, driving up the cost of delivered crude and further lifting spot prices.

Third, inflation expectations are reinforcing one another. U.S. CPI data came in higher than expected, already raising concerns about persistent inflation. A sharp rise in oil prices will feed through from the energy sector, directly pushing up U.S. inflation readings. Trading funds have begun repricing the Fed’s rate path, while long-term U.S. Treasury yields are rising alongside oil prices, creating a negative feedback loop: “oil prices rise → inflation expectations increase → Treasury yields rise.”

II. Key resistance and support levels to watch

Resistance: The first resistance is $110, a key psychological level for this geopolitical rally and the intraday high early this morning. A decisive break above it would put the $114–$116 range in sight. This is the area of the 2026 yearly highs, where significant profit-taking is likely.

Support: The first short-term support is $104–$105, the launch platform for this rally. Strong support is at the $98–$100 psychological level. If geopolitical tensions ease quickly, oil prices could pull back to this range. A break below $100 would likely mark the end of this geopolitically driven rally, at least for now.

III. Strategy going forward

The defining feature of this rally is that it’s driven by geopolitics, not a surge in fundamental demand, so I think it could come and go quickly. I don’t recommend chasing longs here; going forward, the strategy is still to sell into strength. I believe this is also the strategy of most traders in the market right now. The key is deciding how high to wait before shorting. If oil gaps up on Monday and rises above $112, I’d decisively open an initial short, then add at $114. If it breaks above the previous high of $116, I’d cut the position without hesitation.

IV. What does this mean for crypto?

Applying the negative feedback loop mentioned above, high oil prices could increase expectations of Fed rate hikes, putting pressure on Bitcoin as a risk asset. That’s also why Bitcoin dropped yet again last night. But since oil prices are already elevated, if the news shifts and oil prices pull back, Bitcoin is bound to rebound on the move.

The Fed also enters its blackout period next week, and there’s no economic data due, so I expect the market to trade mainly sideways with a rebound bias. Key Bitcoin support and resistance levels to watch: 87550/85150/81000/78425 $XBRUSD $BTC