May 15, 2022 • 4M

Weekly Rundown - May 15, 2022

End or beginning?

Open in playerListen on);
Episode details
1 comment

After crashing to $25,000, bitcoin’s price has gone back above $30,000.

Our rise since then has come with the largest number of short liquidations since July 26, 2021. While this type of short squeeze can mark a “dead cat bounce” or “relief rally” before another drop, we’ve seen these types of moves cement local and generational bottoms, too.

In those situations, the pump is artificial but the sellers have already left. As a result, the market goes up.

That said, we have nothing but air between today’s price and $21,000. No time for complacency.

Since January 2022, most of the price movements have come from traders getting liquidated. The direction depends on which side gets zapped. We don’t have a lot of buyers or sellers. It’s entirely possible the whole run from $33,000 to $48,000 came from Terra’s bitcoin buying spree.

Small movements of money can push the price up or down a lot more than you probably think.

As quickly as a small bout of selling can send the market into a panicked tailspin on low liquidity and excessive leverage, a small buy order can push it in the opposite direction, with the opposite result.

As I pointed out in my most recent update, now that we’ve gone a full year since April’s local high of $65,000, we can see some crazy coincidences that align with behaviors and patterns from 2014. See what I’m talking about in my most recent update, posted on May 12.

Get the Most Recent Update

In last week’s poll, I asked “will bitcoin’s price drop below $29,000.”

56% of responders said yes. They were right.

I’ll have another poll next week. For now, just a few bits of content. Scroll down for links.

Compound Treasury nabs credit rating from S&P

Bottom line: a yield farming company, Compound Prime LLC, got rated B- by one of the US’s top rating agencies.

My take: B- is not a good rating, but it’s higher than I would’ve expected. If that rating rises, that will build trust in cryptocurrency as a viable financial tool. Still, I find it odd that this press release has a positive tone. In its report, S&P said “major rating weaknesses include, in our view, the company's very low capital base, regulatory risk associated with cryptocurrencies, considerable operational risk and complexity, convertibility risk between private stable coins and fiat currency, and the potential hurdles to generate a 4% return.” Not bad for a crypto company, but not exactly something to brag about.

Why we care: lots of work left to do. It’s a long road to Tipperary.

(I agree with this sentiment.)

Will Terra’s UST and LUNA Crash Cause a Shift to ‘Cryptos that have Stood the Test of Time’?

Interesting question, especially with rumors that altcoins will drop another 90% lower and only bitcoin will survive.

Read the article. What do you think?

Leave a comment

Last, I’m hoping somebody with some insight can help me understand a pattern I found in USDT movements. I honestly don’t know whether these movements are normal or nothing remarkable, and it’d be great to get your insights and expertise.

Read this tweet thread.

Relax and enjoy the ride!

See All Crypto is Easy Content