What Are the Risks?
(Please note that our senior digital analyst David Grider, who writes our weekly crypto column, is sitting in for Tom Lee for this particular note. This is part three of a three part series. Tom will return to writing Tom’s Take shortly) Part 1 is available here. Part 2 is available here.
What are the Risks?
Following March lows, the global macro picture has improved, and crypto prices have risen by nearly 55% in tandem. Our calls for bullishness near the market bottom came with the recognition of current uncertainties at the time, but our caution in several of those areas has since diminished. But risks remain and we’re are keeping an eye on them.
In terms of market structure:
(1) crypto remains afflicted with lower but improving liquidity for now, compared to levels of February and early March. According to Coinmarketbook, Bitcoin buy support within 10% of the orderbook has risen to $160 million from mid-February lows of $55 million but remains off the $225 million to $500 million levels seen in the month prior to the sell off. Bid/offer liquidity on futures contracts paint a similar but somewhat better picture, with spreads well off March highs and almost back near prior levels, according to Skew.
(2) Crypto miner capitulation risks have abated now ...Reports you may have missed
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