The Crypto Comms #50; Sink or.. Float?
It’s hard to believe Bitcoin only needs to increase a little over three times to reach 6-figures. The market tends to take the long route when it means business, but the destination is the same regardless. We’re living through a generational paradigm shift, and one can either sink or float.
In this issue
- Bitcoin analysis
- Cryptofinance
- Twitter-eToro partnership
- Latest happenings
- Listeing material
Bitcoin analysis
- Bitcoin is on a tear. Shallow corrections are a hallmark of market strength, and Bitcoin/Dollar has been exhibiting this behaviour. Price moved above the 2021 yearly open ($28,800), closing a strong week on depreciating weekly volumes.
- Decreasing weekly volumes are evident on major exchanges, Coinbase, Binance, Bitfinex and the TradingView Bitcoin Index. This is characteristic of a market with relatively thin order books, and low participation. In both March 2019 and 2020, the same volume-trends could be observed in the run up to the actual bull market cycle.
- While this is merely historical price-juxtaposition, price similarities between the March 2020 black-Thursday crash and the FTX meltdown are certainly comparable and noteworthy.
- BTC/USD executed a text-book reversal signal as it flipped the long-term realised price into technical support in the second week of March. Realised price measures average price weighted by the supply of what market participants paid for their coins. The metric rests at just under $20,000 and will begin to creep higher as the bull market progresses.
- While the broader trend of declining volumes since the FTX collapse is in play (monthly/weekly trend), the local picture has changed (daily trend). Specifically, aggregated Spot CVD is on the rise, while both stablecoin and coin-margined futures contracts are on a steady decline, per data from Coinalyze. This both limits and cushions potential cascading downside liquidations.
- The ‘realistic’ levels of interest where one could expect a pullback are $32,000, $45,000 and $52,000, with downside levels of interest being $24,000-$25,000 and $20,000. However, there’s a non-zero chance that price will not respect these upper-bound levels if the described market environment holds and historical precedent does the dance.
That said, I do not expect Bitcoin to hit new all time highs without one or two weeks of panic selling. When it happens, lots of side-lined investors will have another chance to say “I told you so” before Bitcoin hits 6-figures, and Litecoin hits 4-figures. Bear in mind, $100,000 per coin is less than a 2x from previous all time highs, and the traditional banking crisis has coincided with a global sovereign debt crisis, for which CBDCs are being positioned. The US treasury balance of payments issue is here. The Fed will continue adding liquidity to the system, but it won’t call it QE. The BTFP program was just the beginning. And here’s the kicker: the United States is the cleanest dirty shirt in the laundry. If you think Bitcoin is a $10 trillion asset in the making, this is the kind of situation where that’s likely to happen.
As a side note, I’m sometimes asked when I will cash out. The truth is, I don’t want to ‘cash out’. Why trade superior monetary technology for something inferior — to be controlled by a bunch of people I have nothing in common with, and whose job description might as well be to fleece everyone outside their circle of savings? Also, come what May, the only attribute which makes cash sort of attractive will be gone; the fact that it’s physical. My inclination is to very calmly and very politely, tell those people to fuck off.
Cryptofinance
With that slight detour out of the way, it’s becoming increasingly clear that as traditional finance bifurcates in a post Russia-NATO conflict world, crypto is set to essentially turn into the rails upon which finance 2.0 runs, for better or for worse.
In an April 10th blog post, Hong Kong’s Financial Secretary, Paul Chan, wrote that while crypto markets are very volatile, it is the right time to promote the adoption of Web3 technologies in the Chinese Administrative Region. He identified Web3 as one of the three focus areas to target in planning Hong Kong’s budget. Chan compared the crypto sector to the early days of the internet in the 2000s, when the dotcom bubble burst and eliminated participants, resulting in a quiet market and the proliferation of real-life applications.
It goes without saying that China is not doing this because the CCP has seen the error in its ways and now seeks redemption. When the regime feels it is strong enough relative to the US, it will flip the switch. It’s also prudent to restate that technology is amoral — it can and will be used by both the ‘good’ and ‘bad’ guys.
As such, creating proper minimalist guidelines for cryptofinance in the West is all the more important, and certain private sector players might be better suited to take on this role. A radical culling of the Western bureaucratic machines is necessary, however, so don’t hold your breath. As they sit on their high horse, citing the same lazy ‘necessary evil’ nonsense they’ve touted for decades, regulators continue to demonstrate their contempt against those seeking financial freedom. In fact, it’s not a stretch to say that every piece of financial news that comes out of the UK and the EU state-organs is bad news for normal people.
Regardless, HK’s accommodating stance is in contrast to the United States, the UK or the EU, which are engaged in a crusade to choke out prosperity for current and future generations. Indeed, this is a battle between geriatrics clinging to the edifices of a decadent past and present, and younger generations, the latter of which are recorded as being financially worse off than their parents at the same age on aggregate. The magic fiat money tree has reached the end of the road, and after fleecing you of your future prospects, these geriatrics are inadvertently, or intentionally making matters worse. It’s no wonder that the general expectation among young people today is to be worse off than their parents.
Twitter partners with eToro
Meanwhile, Twitter entered into a partnership with eToro to allow users to trade crypto and stocks directly. According to eToro CEO Yoni Assia, the partnership, would allow the company to reach new audiences and better integrate Twitter and eToro. It expands Twitter’s ‘cashtags’ feature which allows users to observe real-time data from TradingView and index funds such as the SPX and Tesla.
The collaboration is a rare and significant deal for Twitter since Elon Musk took over as CEO after purchasing the network for $44 billion last year. Twitter’s personnel has been culled from 8,000 to 1,500 since Musk took over in order to minimise costs and achieve profitability. At the same time, Facebook is still busy placing ‘fact-checking warning’ signs on posts which are factual. I’ve half a mind to just exit the clown show all together.
Cheers.
Latest happenings
- How much BTC does Billionaire George Soros Own?
- Bankrupt Exchange FTX Recovers $7.3 Billion in Assets as BTC Doubles.
- Sweden Levies Tax Hike on Proof-of-Work Miners as EU faces Energy Concerns.
Listening material
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 analysis a signals service or financial advice. While I cannot promise perfection I do my best to be honest and transparent.
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