The sentiment is so negative in Crypto that it is enough to make a contrarian buy in. The chart is making a good case for this being the bottom.
Here it is.
Why is this a good chart for bulls? Its because all the volatility has gone and this means so has the uncertainty.
An optimist would see this as a signal for the bottom but actually the truth is different.
The loss of volatility means that any move away from this level is a sign that something important has changed. That can be bullish or bearish, which might not seem useful. However, it is very useful because a breakup or down will be big.
With the game up for many dicey crypto outfits it seems very unlikely the prices will move on up, but it wouldn’t be the first time this has happened in financial market, but now the Crypto market has been educated in the classic financial services scams that Crypto companies like FTX adopted, you can imagine there might not be a stampede back into Crypto.
Meanwhile the Crypto winter contagion rolls on and will keep going for a long time until regulators are choking of the sheer quantity of targets. Make no mistake regulators and governments hate crypto currencies in the same way as all monopolies hate competition and it is not hard to justify their loathing when you see the mess the financial predators have made of the scene. However new technology never gets uninvented and crypto is not about crypto-currencies, it is about the tying of databases to distributed computing and the huge value that unlocks.
So what is going to happen?
Valueless Crypto worth hundreds of millions of dollars.
2023 and even 2024 are going to be tough economic times with large amounts of cash proposed to be drained from the financial system by global central banks to rein in inflation. Recession is broadly predicted and it seems unlikely that Crypto will go on a bull run with cold financial headwinds blowing in many peoples faces. Large crypto firms are tottering on the brink of collapse and others apparently sound appear to be under investigation in the US on all sorts of serious matters. That seems to provide a very strong argument for a continuation of the Crypto winter, with plenty of scandal to come.
So a sudden rally would certainly be a surprise while few would marvel at another leg down.
I expect a slow motion wreck in 2023 but right now Bitcoin is doing a remarkable job remaining stable. However the utterly valueless Celsius coin, the token of the bankrupt Celsius CeFi platform still has a market cap $125m and the calamitous Terra Luna $175m which underlines a fact that the Crypto-madhouse still has a long way to go to normalise and get back on track.
Yet the sentiment is so negative in Crypto that it is enough to make a contrarian buy in. The chart is making a good case for this being the bottom too.
Here it is.
Why is this a good chart for bulls? Its because all the volatility has gone and this means so has the uncertainty. This can often signal a bottom.
To me it signals an equilibrium but that equilibrium can be broken to the bullish or bearish tack. As a bear I await the break down because I expect plenty of default and distress and uproar to come and the contagion that brought FTX down and has flooded on to DCG and many others is far from over. We will not see the bottom till these have been brought to a conclusion and all the dominos have fallen. It going to take a lot of time for this storm to blow over.
Meanwhile Crypto enthusiasts still look to the moon for help as if a Crypto Santa must appear any minute and shower everyone with erupting prices. This lack of capitulation is yet another sign that worse is to come. The bottom of markets is when everyone has surrendered and discounted the market as dead. There is a drumbeat of that but not the clarion call of doom you normally get after a market capitulation.
Once the DCG, Genesis, Greyscale situation is resolved it will be time to consider buying in, but if there is yet more contagion undway it will remain a time to hold off.
If you think it’s the bottom, it isnt, if you know it’s the bottom it is. There is a big difference.