The Crypto Comms #30

4 min readNov 15, 2022

In the real world, the words ‘too big too fail’ actually translate to ‘so big it must fail’. FTX’s downfall is a story of fraud, deception, and a harsh reminder of why first principles matter.

In this issue:

First principles
Bitcoin analysis
Confluent charts
Latest happenings
Listening material

First principles

Much has been said about the mess caused by Sam Bankman Fried and his backers, so I’ll be brief.

I was wrong and mistook the signal for noise. To everyone’s amazement, FTX blew up in the worst possible way as layers of fraud came to light, ravaging crypto markets.

The downfall of the second largest crypto exchange is a solemn reminder on the importance of decentralisation and first principles, which dictate a non-reliance on centralised entities. This disintermediation is mission-critical to crypto’s long-term success.

Granted, it’s all fun and games to play around with ponzinomics and meme coins, but going back to our roots is *always* the end game of every market cycle.

There are no ‘good’ institutions, generally.

When regulators take a ‘high and mighty, benevolent’ approach, tell them to sit down. Regulators are just as much to blame for their refusal to allow SPOT ETFs to enter the market. Crytpo does not need self-serving regulators to create myriads of red-tape; to hoodwink the general population into a CBDC trap. We need self-policing through code, transparency standards, a reinvigorated vision of decentralisation and justice delivered in chains for Sam and Co.

Fraud on this scale must be punished, otherwise we’re no better than bankers — who never pay the price despite the fact that legacy finance is a racket in its entirety; far worse than anything we’ve just witnessed.

Regulators (SEC, CFTC) should focus on setting an example using FTX. At the same time, fast-tracking Grayscale’s ETF conversion instead of deliberately delaying it would be in accordance with their mandate of consumer protection.

In any case, nobody’s innocent. There are no ‘good guys’. That’s the whole point of Bitcoin; you don’t have to worry about a third party (if you self-custody). It’s all offset by the network.

Painful as it may be, this event will mark the beginning of the next chapter in a process of discovery. With each blowout, we’re inching closer to first principles. Everything we do is justified by absolute determination to pursue an open, censorship-resistant, decentralised financial system without intermediaries.

It starts with decentralised money. It starts with Bitcoin and Litecoin.

Bitcoin analysis

Bitcoin/Dollar currently exists in a limited-time bracket where it can confirm a bear trap of never-seen-before proportions.

But as long as BTC/USD trades below $18,300, there is an increased, non-zero probability for the top crypto to revisit the lows. Upon reclaiming $18.3k on a daily time-frame, expect a swift move to $21,000.

Conversely, losing key multi-year support ($15,100 — $15,700) opens the door to $12,000. It’s worth noting that the worst is probably behind us given that the market absorbed the worst possible news ever without Bitcoin nuking to $10,000. Two worse scenarios that would end everything would be Binance or Tether blowing up -highly unlikely eventualities (especially the Tether scenario).

BTC/USD potential low-time-frame trajectories, levels of interest

Funding rates have been negative since Wed. 9th, placing upward pressure on prices. On low time-frames, a sweep of Monday’s range is on the cards (Mon. high: $17,175, Mon. low: $15,700). Beyond these levels, higher-time frame targets mentioned earlier become relevant.

Provided multi-year support holds, there’s good evidence which indicates the low for this market cycle is in. Crypto just experienced another March 2020; a black swan event. The odds of another such event happening straight after is near zero.

Confluent charts

The Dollar index (DXY) has broken macro market structure for the first time in two years. Dollar weakness is good for assets valued against it (big brain moment here).

Gold has reclaimed $1,700; a tailwind for ‘sound money’ assets.

LEO/BTC also broke market structure and remains suppressed.

To my mind, the only reason Bitcoin did not rally given this macro confluence is because of an unpredictable black swan event. Regardless, the future belongs to Bitcoin, Litecoin and the various layers of cryptocurrencies.

There is no safety regulators can provide that trumps unbreakable code.

Peace.

Latest happenings

Listening material

FTX: beyond Ponzi with Dr. Saifedean Ammous.

Dear readers,

The purpose of this newsletter analysis is to provide context to current events and cryptocurrency markets. It is released every Tuesday. I am not perfect and this is not a science — nor is this newsletter a signals service or financial advice. While I cannot promise perfection I do my best to be honest and transparent.

Thank you for reading.

Feel free to contact me with feedback on contact@chrisoncrypto.com.