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Morning‌‌ ‌‌Update—May 24th—Macro and Crypto Markets

Morning‌‌ ‌‌Update—May 24th—Macro and Crypto Markets

Do repost and rate:

Rated:114

In traditional markets, both the S&P and the Dow closed last week in the red (as they did the week before). The Nasdaq closed just barely higher. The coming days will be interesting to watch as more economic data should be coming out of the US, on inflation and consumption numbers. While crypto suffers, gold seems to be rising steadily.

In the crypto space, while last Friday gave us hope that we would hold -if not rise- from the 40K level, BTC dropped a second time, almost as violently, to retest the mid 30K’s. On Saturday prices held on and then, on Sunday, things continued down to retest the lower 30K’s. We’re now closing the session just above $34,000.

The BTC Dominance index has risen in no uncertain way. With fear, the predictable flight to safety has started -people transitioning from more volatile alts to bitcoin. The index touched 48 and is currently at 46, coming from 39 just last week.

The above means that alts are underperforming. ETH remains constrained more than 50% away from the all-time high. SOL, AAVE, ADA and so on are down about as much, or, in the case of LINK and DOT, more than 60% down.

I’ve talked about it before and will reiterate, if you’re confident about the future of the crypto space and have a long-term focus, the above is a beautiful opportunity to load up on more alts, not the opposite. With conservative buy orders denominated in BTC, you can actually be buying alts during volatile time and when BTC totally outperforms (and then choose to sell back when things quiet down).

This weekend, two pieces of news rocked markets, in DeFi and more broadly:

1) a project called DeFi100 blatantly scammed and exited with about $32 million of investors funds, leaving a message on the website to make fun of gullible buyers.

2) Maybe more impactful was the news that Huobi stopped hosting crypto miners in China. While they announced that, Huobi and OKEx also mentioned limiting services for Chinese customers ahead of a government crackdown. Naturally, you can see the effect in prices.

On a more fundamental basis, it’s interesting to see that the aggregated funding rates across all exchanges seems to have almost reset and maybe hints at a strong bounce (to clear all the leveraged shorts, this time?).

While on-exchange reserves of coins seem to be increasing slightly these days, the stablecoin supply also reaches all-time high, suggesting a lot of dry powder to buy (back) more crypto.