Some market views
I believe crypto market participants as a whole have overstated the impact of fed rate cuts and China stimulus
Fed Rate Cuts
Fed Rates are only one of the factors that impact global liquidity and global liquidity itself is only one of the factors that influence crypto prices. It seems nonsensical to see btc rally 4.5x during a period where rates were going to and at multi decade highs - showing little correlation between rates and btc, and then expect a strong inverse correlation to present itself as soon as rates start going down. You can argue that rates in 2023+ were priced in, but if you make that argument then you would have to make it about rate cuts as well. This is not to say that rates are not important, but rather that they are well overweighted by most market participants.
Equities have a stronger tie to rates because of discount rates used to value cash flows, mature corporate debt markets used to finance growth, etc. which is why
China Stimulus
is much more bullish stocks than crypto. Its not surprising to see that the people extrapolating China stimulus as being extremely bullish for crypto are primarily non-Chinese. While those in China have noted a migration from crypto to A shares. The data backs this up - since Chinese stimulus was announced, USDT has traded to a discount to CNY. Still at 3% as of recent
What's it mean
This is not to say I am bearish, I just think that some people have gotten over their skis a little. I still believe we are in a 50-72k range until there is a meaningful catalyst for crypto
The constant rotation of capital and new projects being developed means there will still be coins to buy to generate returns as a bull
And the market will still be prone to smaller corrections if leverage gets too high (decently high right now)
I believe crypto market participants as a whole have overstated the impact of fed rate cuts and China stimulus
Fed Rate Cuts
Fed Rates are only one of the factors that impact global liquidity and global liquidity itself is only one of the factors that influence crypto prices. It seems nonsensical to see btc rally 4.5x during a period where rates were going to and at multi decade highs - showing little correlation between rates and btc, and then expect a strong inverse correlation to present itself as soon as rates start going down. You can argue that rates in 2023+ were priced in, but if you make that argument then you would have to make it about rate cuts as well. This is not to say that rates are not important, but rather that they are well overweighted by most market participants.
Equities have a stronger tie to rates because of discount rates used to value cash flows, mature corporate debt markets used to finance growth, etc. which is why
China Stimulus
is much more bullish stocks than crypto. Its not surprising to see that the people extrapolating China stimulus as being extremely bullish for crypto are primarily non-Chinese. While those in China have noted a migration from crypto to A shares. The data backs this up - since Chinese stimulus was announced, USDT has traded to a discount to CNY. Still at 3% as of recent
What's it mean
This is not to say I am bearish, I just think that some people have gotten over their skis a little. I still believe we are in a 50-72k range until there is a meaningful catalyst for crypto
The constant rotation of capital and new projects being developed means there will still be coins to buy to generate returns as a bull
And the market will still be prone to smaller corrections if leverage gets too high (decently high right now)
Leverage on $ETH is back to ETF news highs
Is there a good explanation for this to be driven by non directional long positions?
If not, then this would be a weight on ETH
Is there a good explanation for this to be driven by non directional long positions?
If not, then this would be a weight on ETH
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