Morning‌‌ ‌‌Update—May 21st—Macro and Crypto Markets

Morning‌‌ ‌‌Update—May 21st—Macro and Crypto Markets


Traditional markets are up, crypto markets are up as well. Yet, there’s a different ambience in the crypto sphere. For all the people who held on amidst the crash, congrats, you’re at least higher now than when things dropped to 30,000.

 

But we’re not back to elevated levels by any means. BTC is just holding on in the lower 40K’s now, and that’s after rallying a whole 10%. While traders are still licking their wounds, we can see messages popping up asking if this ‘was’ it or if this ‘still is’ the crash. 

 

Onchain transactions (and the fees paid for transfers) show an urgency and jump in depositing coins to exchanges. People from 2017 aren’t waiting for 2018. This leads me to believe we might see another leg down, maybe in the mid 34K’s or again at 30K, as a retest before moving back up.

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It’s worth noting that the open interest on BTC futures dropped more than 50%, from $27 Bn to $12 Bn. That indicates pain but also that a lot of the leverage positions got taken out (and therefore some of the risk of further violent moves).

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We all know someone who wanted to buy at 40K, ended up buying at 60K and then sold at 30K… that’s not the way to invest. Exchange data shows that most of the selling was done by short-term holders and at a loss. We’re now trading at almost 40% discount from the all-time high, for longer-term investors (and I suspect institutions) this is actually a good time.

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My next point of focus is alts. Depending on how well -or not well- things go, we will see the BTC dominance edge down or up. Right now, as we feel stronger, alts are outperforming again; they are not back to before, even in BTC terms, but getting there.

 

Amongst the best performers in the past 24 hours: ZEC (privacy), ADA and VET, also NANO that has been holding on and outperforming throughout this down trend.

 

By the way, to still mention some news, did you see that the U.S. Federal Reserve plans to publish a discussion paper on the potential issuance of a CBDC? While I don’t think that’s really affecting prices, it does show a growing interest and acceptance for blockchain technology. Let’s see how this grows.

 

 

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Justin d'Anethan
Justin d'Anethan

Sales Manager at Diginex and EQUOS. Passionate about financial markets, long-term investments, the occasional short-term trade and disruptive technologies.


Daily Market Update
Daily Market Update

A quick market update (1-2min read). Every week day, morning in Asia, I go over major moves in macro and crypto markets, linking fundamentals to price action.

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