Absolutely essential
4 min read

Absolutely essential

Cryptic ball: tamed expectations.

US markets just reversed this week's gains, with the major equity indexes falling 1.5% to 2%, a significant percentage in that asset class. And it seems bitcoin bulls also lost their balls, having failed to overcome $42k. As usual, what's next?

  • While the original cryptoasset is only down 3% on the day, which is relatively normal, it fell up to 8% since noon UTC this Thursday! And this daily close proved to be eventful, with bulls and bears fighting hard for $40k. So far, it seems bulls survived the round, but the weekend ahead will be key.
  • As explained Tuesday, if we were to lose that level then my newfound optimism would need to be revisited - or at least contextualised. To be fair, similar failures of comparable breakouts also happened in January and February and bitcoin eventually recovered. And, as argued yesterday, it's all a matter of how priced in the bearish news are, and of understanding its short-term impact.
  • In other words, not all is lost for now. But this clear rejection at such a key level, even if justified by the stock market correlation, doesn't bode well for bulls - who need to prove they have the stamina to spring back up.
  • Conversely, if bears manage to push the orange coin to $39k again, then it will be tough to save us from the carnage. Maybe Terra's LFG fund can continue to buy cheap bitcoin and provide support for all of us. But how long can that go?
  • After all, on the other side of the trade we need bulls to show up with consistency. And with Powell threatening to hike interest rates by 0.5% in May it's unclear how many market participants will be comfortable buying soon.

Chart art: tamed breakouts.

Bitcoin erased most of this week's gains. Will Friday see further losses? Impossible to tell, we're currently in a major limbo so it's better to wait and see, ideally while sitting in the sidelines.

Three things: tamed apes.

Tweet tip: tamed hopes.

It's all about perspective. But what if the LFG buys stop? Will bitcoin lose its floor?

Meme moment: tamed careers.


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Our newsletter offers opinions and insights from analysts in the cryptoasset space. It is not intended to be investment advice, and should not be treated as such. You must not rely on its information as an alternative to financial advice from a qualified professional. Without prejudice, we do not undertake or guarantee that its information is correct, complete or non-misleading; or that the use of the guidance in the report will lead to any particular outcome or result.