Three arrows in the knee
3 min read

Three arrows in the knee

Cryptic ball: $1 billion hurts.

As anticipated, stocks continued to go down into new yearly lows, even if bitcoin's $20k support and ether's $1k meme level are still holding. However, contagion from the 3AC's downfall could spread more fear in the next days. Is the end near?

  • It's still unclear as there's not enough information regarding the exposure various crypto players had to one of the largest cryptoasset funds out there (3AC, aka Three Arrows Capital), which seemingly is also insolvent.
  • What was known today is that the fund, managed by crypto OGs Su Zhu and Kyle Davies, had its account with BlockFi - a crypto lender - liquidated as it failed to meet a margin call. In other words, they aren't very liquid right now.
  • The big question is how much more they can still be forced to unwind to meet their obligations, after losing at least $600M in Terra's LUNA blow-up and at least $400M more in various other margin calls!
  • Personally, and as said yesterday, I'm inclined to believe that what was there to liquidate has already been liquidated and the current sentiment indeed feels like capitulation, as Joe McCann philosophically explains here.
  • However, as Jason Yanowitz aptly reminds us, after this forced capitulation we still must go through the last stage of a bear market: aka "bottomless exhaustion". This means prices will remain depressed for a long time.

Lastly, there's another silver lining. As you can see in the second chart below, stocks are approaching a historical turning point - as the tide tends to turn once all members of the S&P 500 trade below their 50-day MA, which just happened!

Oh, and today is the first time in history bitcoin fell for 10 consecutive days in a row. Will we make it to eleven or is it time for some relief?

Chart art: the only thing that's real.

Max pain has been reached, now it's time to heal hoping we don't slowly bleed away.
Another sign of max pain in all sectors of the stock market, and not just tech.

Three things: everyone I know goes away.

Tweet tip: and you could have it all.

Time to truly open finance.

Meme moment: the old familiar sting.

Remember it's not yet time to be greedy, be patient.

FV Bank: back from Consensus.

I just came back from Consensus 2022 and it was a great experience!

Get started: download the B21 Crypto app!

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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.