Cryptic ball: 12 is a great number.
Crypto continues leading global markets, having started to fall earlier than US equities futures - which only felt the gravity once the US market opened. More worryingly, bitcoin and alts followed the dump, even if with less intensity.
- That's another sign that the correlation between these major asset classes still exists, even if it's fading a bit. After all, stonks are already below yesterday's lows, whereas bitcoin bounced after hitting $20.5k, as it did Monday.
- However, this is not entirely healthy. There's only so much bidding interested buyers can do at $20k. Without a proper bounce, this level will be further weakened and, with a clear dip below it, we'll likely be stuck until help comes.
- What do I mean by that? During proper bear markets, bottoms take a long time to form as patience wanes and capitulation hits even the strongest hands. So, unlike dips that occur during bull markets, we won't see a V-shaped recovery.
- Still, the last chance for bulls is tied with a change in the positioning of the Fed. If the central bank considers inflation under control - which it can well be, as Michael Antonelli argues in today's chart - then the tide may rise again.
- But you can't forget the timing for such change, even if it comes soon, it may not come soon enough. As always, keep monitoring the orange coin - if it conquers $21.9k then the bounce may continue. If not, $20k may start to fail.
Before that, it's time to stay patient, waiting to deploy your hopefully preserved capital at the right moment. If you don't think you can time the market - and that's a wise thought to have - then recall yesterday's extra lesson from Jeff Dorman!
Chart art: 8 is a great number.
Three things: 3 is a great number.
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