We wrote on Thursday about how the reaction to recent macro data has been quite underwhelming. Crypto broadly rallied in response to a cool CPI number, but indicators such as a muted Coinbase premium and low exchange volumes suggest animal spirits are still lacking. Muted volumes relative to market prices, and low social interest as proxied by Google search trends further evidence a lack of risk appetite in the market.

With the above in mind, we are selling some alts within our core strategy to raise cash and position for a potential dip over the next few weeks. To be clear, this is a more tactical view and is more about risk management than positioning for a prolonged bear market. For those that achieve their crypto exposure via equity markets, this would be a good time for the more tactically minded to take some gains in crypto equities, which have rallied quite impressively as of late.

The Muted Response to Falling Rates

Despite falling rates and rate expectations, we have seen BTC on Coinbase trade at a discount to Binance.

We have also witnessed net outflows over the past 5 days, with over $200 million in net outflows occurring yesterday.

Stablecoins are also showing a net inflow over the past 7 days, but this metric is also trending lower.