Crypto Weekly (Sept. 25th, 2019)
Weekly recap...
- The crypto market crashed and no one really knows why
- BTC SegWit adoption jumped to >50% = network throughput improving
- With BTC below $9.3k support level, the next key support is now $7.5-8k
Center Story
1. The Four Horseman visited crypto
The Four Horseman of a crypto flash crash seen passing through
This was a rough start to the week for crypto brought on by a confluence of "risk off" events, but it's hard to say what exactly sparked the crash.
Though, our Bitcoin Misery Index had been showing an overbought market and furthermore, our own Tom Lee has discussed the need for a a clear macro trend (S&P 500 breakout) before BTC performance improves.
These are at least four factors that we think contributed to the flash crash and destruction of the bull market that started in April (or least added fuel to the selling fire)...
1) The Bakkt launch, though a truly positive fundamental development for the space (first physically settled BTC futures contracts = improved liquidity and access to ), failed to bring a boost to the price that some may had been hoping for. This was an incorrect assumption based on the belief that institutions were simply waiting for a compliant product.
2) BitMEX marg...Reports you may have missed
Fiscal Dominance, Flows from China, Plus Some Thoughts on Global Conflict (Core Strategy Rebalance)
WHAT BTC SHRUGGING OFF CPI SAYS ABOUT CURRENT FISCAL SITUATION The most significant piece of macro data this week was the CPI. Headline CPI registered at 3.5%, surpassing the anticipated 3.4%, while core CPI remained steady from last month at 3.8%, also above the expected 3.7%. This increase was largely attributed to rising costs in auto insurance and shelter. Consequently, interest rates saw a sharp rise, with the 10-year Treasury...
INFLOWS RESUME On Monday, market sentiments were rattled by a surprisingly strong manufacturing PMI figure, marking the first expansionary reading in 18 months. This led to a rise in rates, with risk assets across the board experiencing selloffs amid renewed inflation concerns and fears that the Federal Reserve might need to implement further measures to cool the economy. However, in our crypto comments video on Tuesday, we outlined a couple...
Adding RON and IMX As a Different Flavor of ETH-beta and Gaming Exposure (Core Strategy Rebalance)
MARKET SHRUGS AT HOT CPI The latest Consumer Price Index (CPI) data indicated a hotter inflationary environment than forecasted for February. Despite the surprise in the numbers, market participants appeared largely unmoved, suggesting that the potential impact had already been factored into their calculations prior to the release. This resilience reflects a broader sentiment that a rates-driven selloff, in response to the CPI figures, is not a significant near-term risk....
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