Overview:
- Market Insight: Are the market bottoming?
- Crypto Market Update |
- Major Crypto News
- NEWBIES lesson of the day: Cypherpunks pt. 3
“Bull Markets Make You Money, but Bear Markets Make You Rich.”
Crypto has been here many times.
I’ll remind you that digital assets are new and have never existed. Pricing the class amidst regulation uncertainties, world adoption, bans, and well-funded competition (everyone) will experience extreme volatilities.
Crypto acts as a complete disruptor to entities that have existed for hundreds of years. But, unfortunately, no one ever claimed it would be easy.
But, just like few predicted cars, electricity, or the internet would replace the old infrastructure, digital assets will eventually see an old era reluctantly adapt to it and not the other way around.
Meanwhile, Smart money will remove emotional retail investors from their positions.
My plea remains to accumulate with money you can afford to keep locked away for years, pick great assets to hold onto tightly, and we can all ride the disruptors into a new era.
Now, let’s look at the latest challenges in the market.
Market Insight
Amid a complete market sell-off and “risk-off” sentiment, Bitcoin broke to the downside of the infliction point my report mentioned on Thursday.
The sell-off affected all U.S. markets. For example, the SPY 500 fell -8.36 in the past two weeks. An 8% drop in the S&P 500 is significant for the $42 trillion asset class.
What are some many players said about the dip?
Coinbase Institutional: Market Intelligence
“We think there is still room for more downside in the very short term as the equity correction doesn’t appear to be over. The culmination of low liquidity, weak earnings, stretched valuations and Friday’s large option expiry likely led to forced systematic selling and triggered the Nasdaq’s convincing breach of the downside channel. We think this acted as a drag on crypto with the negative sentiment likely to carry over into early next week.”
“One of the bullish drivers for crypto over the last two years has been the surplus of pandemic-related fiscal and monetary stimulus globally, and much of that is coming to an end. Financial conditions are tightening not just in the U.S.”
“On the positive side, crypto positioning looks clean and valuations definitely appear much cheaper now.”
Woo Network
The NVT indicator invented by Wiley Woo, a Crypto Statistician, showcases Bitcoin entering a dynamic value range seen twice in three years, indicating an accumulation range and eventual reversal.
Goldman Sachs
Incoming Catalyst
- The blackout period for U.S. corporates, the largest buyers of stocks in 2021, will cease today.
- FED Press conference takes place Wednesday 26, January.
Quick Conclusion
It appears markets are not in the clear for sell pressure, and the market will be glued to the results of the Federal Reserve conference hearing on Wednesday.
The market will take a few months to digest the monetary tapering events, and the latest scheduled bond purchase reductions and rate hikes in March could prove an important catalyst.
Bitcoin performance historically shows no halt during rates hikes, but rapid policy changes have affected digital assets tremendously.
If a rebound occurs, the bottom will likely occur in the incoming months. A lot will depend on inflation results and reactions from the FED.
Market Update
Bitcoin fell as low as 32.9k today but aggressively recovered and closed the day at 36.6k. On a good note, volume appears to be entering Bitcoin after months of low liquidity exacerbated the move downwards. Chart above.
- Bitcoin Dominance (BTC.D) ran up 2.75% today to 42.48%, its most significant run-up since October.
- Dominance (ETH.D) fell -2.39%
- TOTAL3 (Total Market Cap minus ETH & BTC) fell -3.25%
- Stablecoin dominance (USDT.D) modestly rose 1.56%
The four indicators showcase evidence two possible scenarios are occurring today. First, new money is entering Bitcoin, AND funds are bypassing stablecoins to directly into Bitcoin from riskier altcoins.
Projects that held up relatively well during the weekend crash (7d).
- OSMO $8.90 -10%
- COSMOS $35.49 -10%
- MAKER $1890 -10%
- CRO $0.37 -17%
- LUNA $63.62 -18%
- OMI $0.006 -15%
Bitcoin Fear and Greed Index: 12 Extreme Fear
“Bitcoin” Google Trends: 40 (+6)
Bitcoin Options Max Pain (Mar 24): 45K
How to use The Fear and Greed Index for investing
Major Crypto News
JP Morgan has shut down the bank of account of Uniswap founder with no explanation. Hayden Adams, the CEO, and founder of Uniswap, responded by raising accusations that banks are targeting individuals employed in crypto.
Bank of Korea completes the first phase of the digital currency pilot. The second phase will onboard some financial institutions and is scheduled for completion in June.
El Salvador keeps buying the dip. The country added 410 more Bitcoins during the drop. The nation has accumulated 1,500 Bitcoin since making Bitcoin legal tender in September and plans to create a $1 billion, 10-year Bitcoin bond this year. President Nayib Bukele went as far as to add a McDonald’s hat to his Twitter profile in response to the recent weakness shown in Bitcoin.
Binance to Sponsor Argentina’s National Soccer Team and Professional League. The agreement will last five years to include the development of fan tokens. The action, nontypical to Binance, is likely a response to the successful advertising efforts of Crypto.com and FTX.
NEWBIES lesson of the day
lesson 7
Origins of Bitcoin: The Cypherpunks pt. three
Origins of Bitcoin: The Cypherpunks pt. one and pt. two
Directly from Blockonomi.com, written by Oliver Dale:
How the Cypherpunks may have created Bitcoin
By applying cryptography to personal computers and the internet, Cypherpunks launched a widespread movement of open-sourced cryptography research. This research took nearly 20 years but in 2009 it gave rise to the first public cryptocurrency; Bitcoin and introduced the concept of blockchain to a wider audience.
The true identity of the creator of Bitcoin Satoshi Nakamoto, is still unknown but it is obvious that he or she came out of the Cypherpunk movement. That gives rise to all sorts of speculation; including the idea that Nakamoto might be an employee or former employee of GCHQ or the NSA. Either way, Nakamoto’s creation has made the dreams of the Cypherpunks part of the wider culture and society.
Today, we are on the verge of a widespread crypto-revolution that might lead to the fulfillment of the Cypherpunks’ wildest visions; The simple desire to keep information private may just change the world for the better.
Thanks for reading fam!
Gabi
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