Thread by @TerribleQuant

Another cool flow idiosyncrasy that may interest those flow nerds out there. Cryptocurrency markets have more momentum in the short term, which is usually dominated by mean-reversion effects. This is basically all driven by over-levered degens and algorithms that...
1/idk lol

get access to these 100x leverage futures or 20x levered futures, and unlike most would think it actually gets used. Especially if you are some sort of HFT algorithm and now you can lever up as much as you want in a super volatile market. Plus with the sorts of...
2/n

profits some of these guys make, who wouldn't lever this thing up to capacity and get in while it lasts. I will probably still attribute most of the momentum still to retail guys getting liquidity cascaded out of positions. i.e. takes loss, gets out, price moves down...
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and the cycle repeats for another investor. Then suddenly we get some mean reversion algorithms or just finding a general floor and the market settles, but that's a large part of why markets for crypto are so volatile. The idea that it is because there is nothing holding...
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it down to the real world in terms of value is BS and everyone knows it. Stocks can do whatever they want, the volatility complex has shown it where "hey you want low index vol bc institutional selling, but still crazy vol idiosyncratic bc liquidity is fucked, yeah sure...
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have it" and that's just dispersion. (not that institutional selling is the only reason - lots of it is MM, or that liquidity is all of it, shift to passive is a big one too), but the market clearly just does what it wants. We saw that with AMC as well. They just issued...
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new shares and got hundreds of Ms richer and now they aren't bankrupt and instead the C-suite is loaded. Stocks can entirely be away from reality if the market will let them, and so can cryptocurrencies. When leverage decreases and institutional buying comes into place...
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then we will see cryptocurrencies settle down in terms of volatility. It has nothing to do with their lack of fundamentals. They have plenty of fundamentals, just look at blockchain data/ wallet data/ coin velocity... etc there are like 30 different figures, much like...
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earnings for a company. There are growth prospects as well, such as Solana blockchain / underlying tech etc. Anyways that's my second thread on niche flow shit for the day, and hopefully you learnt some cool stuff about crypto momentum existing short term, and flow > fundamental

yes, I said there are fundamentals, yes I still believe it is multi-level marketing for nerds. No, I do not HODL, only HFT in case you are wondering.