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It's All Relative

Jan 13, 2022 • 6 Min Read

Key Takeaways

  • On Wednesday, the global crypto market experienced some partial relief as the Labor Department released a December CPI figure that met analyst expectations. Consumer prices increased 7.0% over the prior 12 months, up 0.5% from last month.
  • Funding rates in the perpetual futures market turned negative leading up to the CPI print, reducing the near-term risk of a long squeeze.
  • Open interest continues to climb, as we are now well beyond the leverage ratio achieved in early December before the liquidation frenzy across the broad crypto market.
  • The Crypto Fear & Greed Index indicates that market sentiment remains low. We discuss the implications.
  • We revisit the concept of "TINA."
  • Bottom Line: As Bitcoin's price rebounds and funding turns negative, the crypto market is in a better position for a rally in the latter half of January. Given the current leverage in the system, it is wise to stay positioned for volatility. We deliver our annual outlook in a couple of weeks, but as a spoiler, we think people are underestimating cryptoassets, specifically Bitcoin, in 2022.

It's All Relative

After a tough start to the year for the global crypto market, investors experienced some partial relief on Wednesday as the Labor Department released a December CPI figure...

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