Buy Fear & Sell Greed: Last Round Of Discount.
Updated
With the collapse of Silvergate Bank and Silicon Valley Bank, the bears have took the upper hand in crypto market during the last few weeks. Even though the fact that USDC has depegged is troubling and their 3.3B deposit at SBV even more so. It will take a bit more convince me we have arrived in a new 2008 scenario.
In short SBV was mismanaged, they betted heavily on overvalued VC's and startups with Powell's QE money and ofcourse, they lost when the bubble popped. What can one say when they hired an ex-CFO from Lehman Brothers and a CEO who dumped millions worth of stock before this all unfolded. Circle has announced to fill any gap with corporate funds and with backing from BlackRock amongst other giants they should be able to manage the situation.
Yet, in the current environment I wouldn't vouch for any exchange or stable coin. With the exit of Silvergate and potential issues at Signature Bank I wouldn't trust an offramp (sell your crypto and initiate a withdrawal to your bank account) either. It leads me to one conclusion, probably you're safest bet is self custody of fundamentally strong crypto projects. For one simple reason: stable coins are replaceable, we've seen that already post-UST crash. They require capital and a relatively simple technical infrastructure. Yet, projects like Bitcoin, Ethereum or infrastructure crypto projects are not so easily replaceable. If you have a long term horizon, these projects will make their way back.
Technically, I see trend exhaustion here. A potential head and shoulders is forming and even though the massive amount of FUD, the crypto market hasn't really set a new low since June 2022. Money Flow divergence is positive and we saw massive amounts of volume on Bitcoin last Friday but price did not crash - corrected, yes - but no double digit flash crash. This means one thing only, there are buyers and likely, these buyers are not your average Joe who panic sold his crypto bags.
Personally, I bought the December bottom (see linked analysis) and I'm not planning to give away my macro bottom entry. Yes, nothing is for certain in the market and we could drop much lower, but that's the name of the game in investing or trading - nothing is for certain. Yet, I have a simple rule: buy the fear, sell the greed. Good luck, friends!
In short SBV was mismanaged, they betted heavily on overvalued VC's and startups with Powell's QE money and ofcourse, they lost when the bubble popped. What can one say when they hired an ex-CFO from Lehman Brothers and a CEO who dumped millions worth of stock before this all unfolded. Circle has announced to fill any gap with corporate funds and with backing from BlackRock amongst other giants they should be able to manage the situation.
Yet, in the current environment I wouldn't vouch for any exchange or stable coin. With the exit of Silvergate and potential issues at Signature Bank I wouldn't trust an offramp (sell your crypto and initiate a withdrawal to your bank account) either. It leads me to one conclusion, probably you're safest bet is self custody of fundamentally strong crypto projects. For one simple reason: stable coins are replaceable, we've seen that already post-UST crash. They require capital and a relatively simple technical infrastructure. Yet, projects like Bitcoin, Ethereum or infrastructure crypto projects are not so easily replaceable. If you have a long term horizon, these projects will make their way back.
Technically, I see trend exhaustion here. A potential head and shoulders is forming and even though the massive amount of FUD, the crypto market hasn't really set a new low since June 2022. Money Flow divergence is positive and we saw massive amounts of volume on Bitcoin last Friday but price did not crash - corrected, yes - but no double digit flash crash. This means one thing only, there are buyers and likely, these buyers are not your average Joe who panic sold his crypto bags.
Personally, I bought the December bottom (see linked analysis) and I'm not planning to give away my macro bottom entry. Yes, nothing is for certain in the market and we could drop much lower, but that's the name of the game in investing or trading - nothing is for certain. Yet, I have a simple rule: buy the fear, sell the greed. Good luck, friends!
Note
User deposits on Silicon Valley Bank currently being auctioned in the US. This week we have US CPI as well. I expect good news for both: SVB rescue plan / takeover and US CPI at or below estimate. Send it!Note
We did it again, frens. We did it again.
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