thread about a hypothetical so over

(1) bitcoin fails to break the high again and rolls over into another multi-month slump where we retest the 50k low and potentially break it, bringing us back into a classic crypto bear forcing us to sit around for years waiting for good times (2) all the multi month consolidations (sol, eth, bnb, ...) that were perceived as mid-cycle bullish continuation patterns turn out to be distribution tops and initiate a markdown of 30-50% bringing sol <$100 and eth retesting its 2022 bear cycle low

To find the bottom in a capitulation event, forget about things like RSI, oscillators, divergences, moving averages, funding rates, etc. Even support levels.

Turn everything off except for naked price action and volume and watch the hysteria all day. /1 Do not rush to buy or fall into the trap of thinking it can't go any lower. It can, and it will.

Don't get suckered into simple consolidations, they can take half a day, or even several days. /2

Personally not interested in buying $UST for 70c to the dollar. The asymmetric risk/return is to the downside. Best case scenario you win 30%, worst case scenario the experiment fails and you lose it all. Best case scenario you win 42.86%*

The mathematical risk/reward of selling here is horrible.
The emotional risk/reward of selling here could be huge.

Let me explain... /1 Good trades have asymmetry: the reward if you win should be many multiples of what you risk losing.

For example, buying ETH at $2k if you think it's going to $20k is great - a R/R of 1:9 - assuming you never sell at a loss. You win 9 times what you risk losing.

/2

I tried to find a compelling project below $100m cap and this is the one I'm most excited about.

mStable $MTA

✅ DeFi
✅ $75m market cap
✅ revenue generating & governance
✅ liquidity pools
✅ staking
✅ backed by 3AC, Alameda & DeFiance

But what is it? 👉 /1 There are a lot of stablecoins in crypto: USDT, USDC, BUSD, GUSD, TUSD, cUSD, DAI, PAX,...

They all have different liquidity. Using Uniswap to buy $1M worth of ETH/USDT is easy, but buying it with TUSD or GUSD is kind of impossible. Even though they all represent the same $1. /2

1/ Summarizing the interview with @JeffBooth on @RealVision: The central bank's losing battle with deflation.

- Technology is a deflationary force
- Higher abundance at lower cost over time
- This accelerates exponentially
- Monetary stimulus fights this

realvision.com/shows/the-inte… 2/ Technological efficiency doubles every few years. People underestimate what exponential growth means because we extrapolate the past. This efficiency comes at the cost of jobs, because the majority of jobs are a function of our intelligence and AI will make those unnecessary.

ELI5: Open Interest is the total value of open short positions + open long positions. The higher OI, the more speculation is happening in the market through leverage. During #Bitcoin's run from $6k to $10k, Bitmex Open Interest grew to an all time high of $1.1 billion. (1/n) Due to the timing of the halving, an incredible amount of people recently got excited about $BTC because it is widely regarded as a bullish phenomenon. This was likely one of the primary drivers for traders to take on lots of long leverage. Confidence grows as prices go up. (2/n)