Overview
- Institutional investors are buying
- Fear and Greed at cycle low
- Portugal to soon abandon crypto haven status
- Are we bottoming out?
Weekly asset flows
When markets are in ultimate fear, what do large investors do? They buy! The weekly digital assets funds flow from CoinShares shows US$274m worth of inflows into stock market crypto proxies, the largest inflow of the year. Bitcoin continues to be the crypto of choice, seeing US$298m in inflows. The report additionally noted blockchain equity investors panicked, outflowing US$51m in total. Full report by CoinShares.
Market update 🌍
The bitcoin Fear and Greed Index fell to 8 (extreme fear) today, a level last touched in the March 2020 crash. More and more signs are pointing towards capitulation which ultimately just means fuel the upside. But considering the looming threat of a prolonged bear market, I consider these levels good for dollar-cost-averaging not necessarily for getting aggressive. Not financial advice.
Source: alternative.me
The bitcoin chart has looked the same for the past week and we’ll likely have to get used to a 30k BTC for the time being. Many signs such as volume, RSI and the fear and greed index, highlight the importance of the current price.When important levels are tested, once usually isn’t enough. Expect prices to retest the levels a number of times, even if we get a temporary jump.BTC completed the US session down -4.64% to $US29,874.
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Source: Trading View
A chart I’d like to revisit is the BTC options probabilities chart I created in late March. The chart noted the price probabilities options were pricing in for BTC up to the June monthly expiration. The options market, typically considered extremely efficient, did a poor job in pricing in the current downside to bitcoin in March. So, whoever bought puts at these times likely made off like a bandit. What’s important to highlight, is bitcoin’s two standard deviations move to the downside. The markets only gave this move a 10% probability in March (double the probability to calculate touch probability) . So if you’re down big on BTC, you’re not alone.
| US markets close | Gain |
| S&P 500 | -0.63% |
| Nasdaq | +0.31% |
| Dow | -0.11% |
| VIX | +2.27% |
| Protocol (Coin) | Price ($) | Gain (%) |
| Songbird (SGB) | 0.03 | +43 |
| PLEX (PLEX) | 0.94 | +15 |
| Render (RNDR) | 1.03 | +14 |
| Ethereum Name Ser. (ENS) | 10.80 | +12 |
| eCash (XEC) | 0.0000048 | +9 |
| Maker (MKR) | 1065.00 | +6 |
| IOTA (MIOTA) | 0.38 | +4 |
| Bitcoin Fear and Greed Index | 8 Extreme Fear |
| “Crypto” Google Trends 90d | 63 (-18) |
| “Bitcoin” Google Trends 90d | 56 (-21) |
Newswatch 📰
Japan’s big investment bank eyes crypto. Nomura, the largest investment bank in Japan, looks to launch a company arm focused on cryptocurrencies and NFTs for institutional clients. The company plans to transfer 15 employees and hire up to 100 people by 2023 for the new company section.
Portugal crypto tax haven days numbered. The Portuguese Ministry of Finance, Fernando Medina, is considering a capital gains tax for crypto. Portugal remains one of the few countries where crypto is viewed as a currency as opposed to an asset. The move would disembark Portugal from crypto tax haven status. Details and dates are yet to be announced but the regulations seem certain.
Come this way. Some of Terra’s competing blockchains look to lure away some of the collapsed ecosystem’s protocols. Additionally, other protocols on Terra appear to be advertising themselves for the task.
Tidbits:
- Celsius to take mining subsidiary public.
- Fatman post “Terra Ecosystem Revival Plan 2”….Here’s why its a bad plan.”
- Vitalik Buterin post “Some contradictions in my head.”
- Peter McCormack writes an article for Financial Times
On-chain ⛓
Coinbase wallet now with web3 access. Coinbase’s latest wallet version integrates access to Ethereum Dapps and NFTs. Users will be able to trade NFTs on Opensea or use Ethereum Dapps such as Curve and it could place the wallet in direct competition with wallets such as Metamask.
Tidbits:
NFT & metaverse update 🐵
Spotify to trail NFTs. Music app giant Spotify, looks to trail NFTs for a select number of artists on its platform in the US. Although, the NFTs will not be sold directly on the app but instead would require users to purchase them on a separate marketplace. This marks the first steps into web3 for the music platform.
| Project | Type | Mint price | Date of mint | Time |
|---|---|---|---|---|
| Sixth Reseau | pfp | 0.16 ETH | 18 May | 8:00 AM UTC |
| Chimpers | pfp | 0.07 ETH | 20 May | 4:00 PM EST |
Banter’s take
According to the Coinshares report from above, while everyone appears to be selling there’s a cohort of professionals that are taking the plunge of buying during the market collapse this past week. So it begs the question, bottom signal?
Here’s some other signs that we may be nearing a bottom.
- Fear and Greed hits a cycle low (8 extreme fear)
- Arkk invests post their largest week of inflows in year
- Capitulation event: Terra Luna Collapse
- Major Exchange outflows in ETH and BTC
Although promising, we must remember the market is unpredictable. There are no guarantees in this game. When everyone thinks it should do one thing, it does the other, And some analysts are still pointing toward a major recession ahead.There’s a lot to weigh considering direction but the best course of action is not trying to guess tops and bottoms. Instead use these opportunities to dollar-cost-average the low prices. WAGMI.
Gabri
