22
Willy Woo thinks that we’re only halfway through this bull run. And although BTC price still looks healthy, he notes that we could be in for a few months of painful re-accumulation as all this recent dumping needs to be absorbed by the market.
This dovetails with Ran’s opinion is that the market ran up too quickly and he’s also looking at a possible 2-3 month consolidation. Ran postulates that it’s going to take 2-3 alt coins to rocket upwards before the bull run restarts.
Ran notices that there is one thing different from previous years’ corrections: there is a feeling that crypto is here to stay. Defi in particular has come of age - AAVE, Maker and Compound held up relatively well through all the liquidations while centralized exchanges like COINBASE and BINANCE had trouble during the last week. Defi’s resiliency only helps bolster it’s case not only to replace centralized exchanges, but also to disrupt another centralized financial system: banks
Solana Added To Coinbase
As Ran predicted 2 weeks ago, Solana is now listed on Coinbase
The IRS Wants Its Cut of Your Crypto
The US is now requiring any crypto transfers of $10K or more need to be reported to the IRS. They would also require exchanges to report any inflows or outflow larger than $10K. The treasury is looking to tax unreported income and they’re now sniffing around crypto as an untapped revenue source.
So who’s going to benefit in this environment of increased government regulation? Uniswsap and Sushiswap could benefit being non-kyc decentralized exchanges, and the privacy coin Monero (XMR) could also benefit from people looking to escape government scrutiny. Ran sees a couple more coins that could do even better when government starts cracking down on crypto transactions.
- Thorchain (RUNE) - RUNE is the only totally decentralized cross-chain protocol. Ran calls it one of the most important projects to own going forward.
- Tornado Cash - PHOON allows you to deposit money to an anonymous address and then “pick it up” from another address, which effectively obscure the source of the transfer. Furthermore, the devs have burned their private keys to the protocol. This ensures that there’s no longer a privileged user for their protocol and all addresses are equal.
Panel Discussion
Panel guests:
- Coach K: https://twitter.com/coachkcrypto
- Lisa Edwards: https://twitter.com/LisaNEdwards
- Mr Business: https://twitter.com/Adouble212
- Winston Wolf: https://twitter.com/wolfcryptogroup
Question: What does the market look like from your POV?
Lisa notes that too many people were taking loans to go into leveraged crypto investments. Greed was way too high and that needed to be flushed out of the market.
Winston Wolf says that this market isn’t like years past when BITMEX was the only crypto exchange offering leverage. There’s so many exchanges offering leverage in today’s crypto market, and anything that’s more available will get used more often.
Coach K has some suspicions that there was some coordination between major market exchanges to drop prices. He thinks it was fishy that Binance, Coinbase and Kraken going down one after another and the various pricing APIs going down without backup APIs kicking in. The net result of exchanges and price reporting going offline was that it pushed prices down further, triggered more stop-losses and began cascading liquidations. It’s a bit concerning that there have been multiple high-liquidation days over the past week.
He thinks we are still macro bullish, but he’s nervously waiting for the weekly close. He wants to see BTC maintain support on the weekly time frame.
Ran mentions that it’s quite concerning that we had big liquidations around May 14th. Yet people decided to take even more leverage after that event and got liquidated a second time in a matter of days.
Winston notes that this is a sign that crypto traders are still using the old strategy of longing the dip which works until it doesn’t, and that strategy broke down spectacularly this past week. This cool off is going to take some time to sort out. It’s still too early to say whether this is still a bull market, but Winston says that he is short-term bearish until he sees different (e.g. he is, for now, not buying the dip).
Mr. Biz notes that it’s hard to have any bullish momentum when you’re getting fud tweets everyday.
Winston agrees that these latest nosedives are not predictable by chart patterns but are instead caused by negative market sentiment. More and more fud news reports = bearish investor sentiment.
Question: What (if anything) are you buying?
Lisa is mostly sitting on the sideline and only looking to buy some spot positions (no leverage) as they enter her buy zone. She’s looking to dca into her favorite projects:
- ICP (ETH-rival narrative, sees a similar $3k price runup in the future).
- Some exchange tokens (BNB & Kucoin’s KCS).
- Dot ecosystem: KSM & DOT.
- Other favorites include MATIC EGLD LINK XRP & AVA.
Winston is chilling in USDC and waiting. He’s not looking to get in at the very bottom but will start buying again when he’s sure the market is moving up again.
Panel Sees Sentiment Turning Negative Towards Small Caps
Mr. Biz thinks small cap cryptos are dead. He thinks the low cap cycle ended in April, and the 15x-20x-100x moonshots of January - April are now fading in the rear view mirror. The people who bought small caps recently have mostly gotten rekt. There are now far fewer market participants willing to shill these bags (“If Crypto Twitter’s not shilling these bags, that means they’ve already dumped”).
Winston also notes that liquidity on smaller cap coins greatly contracts during market corrections making them harder to sell.
Mr. Biz thinks that investors will look for large caps with narratives: Polkadot has parachains, Link has Arbitrum, ETH has EIP and Cardano has smart contracts coming up.
Coach K implores crypto investors to dump any project that is a copy of something else. If it’s not innovative, there’s no reason to hold it.
Question to panel: How are you playing the crypto market going forward?
Coach K is still a buyer during these corrections. He notes that this is a normal market correction in a bull market, and only the second correction during this bull market run. He recommends taking a break from the charts and going outside to get some fresh air if the market is stressing you.
Winston believes that the major alts will recover first, and it’ll be safer to focus on these instead of small caps. He also reiterates the importance of selling Uniswap coins’ profits into ETH. Market-wise, he thinks we’re more likely to grind down lower than have any more huge drops in the short-term like we had the past week.
Lisa thinks this is a healthy correction and thinks we will stay in a sidewise accumulation range for a while. Her BTC target is still north of 6-figures at $124K.
Mr. Biz is looking forward to major protocol milestones coming up: Chainlink has Arbitrum on the 28th and Ethereum has EIP-1559 in July. He is still bullish and notes that the biggest projects with the biggest communities will continue to hold through market corrections.
