FOFA, Fear of Fireworks Again
Market Report: 2nd July 2019 — Subscribe to our newsletter.
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OUR TWO SATOSHIS
The daily view from our desk
As Glastonbury closes for another year, the highlight for many wasn’t The Killers or The Cure but Alex — who was invited on stage by the rapper Dave — and didn’t disappoint. Meanwhile in North Korea, Trump has been re-engaging with his friend Kim Jong-un, however, there were fears of an alien invasion during their recent meeting. And finally, are you struggling to afford your dream house? Amazon are now offering entire homes for less than $20k, free shipping too!
FEAR OF FIREWORKS AGAIN
THE MARKET SEEMS TOO CALM ABOUT THIS DIP. FIRST WEEK OF JUNE ALL OVER AGAIN?
The incentives to short bitcoin we described yesterday acted as expected and bitcoin did indeed drop below $10k — thrice! It’s now holding right above, having climbed 5% over the past hour. But this weakness doesn’t bode well for the week ahead — especially given the US won’t trade much over the Independence Day week. A hint of more disruptive fireworks over the coming days?
Well, in charts one tends to see what they want. If you’re carelessly browsing Crypto Twitter you might find claims the bottom is in. Even if it’s likely that now the bulls are scared we won’t descend further, with Panda of Binance explainingthat scenario, remember what matters is the strength of buyers and sellers, not diagonals. But, in case you like lines, Beasty Beast shows how there’s plenty of space to head down while still maintaining the bullish outlook.
DON’T BE DUMB™️
SO DON’T BE DUMB ABOUT WHAT CAN HAPPEN. EVEN IF IT’S JUST SIDEWAYS ACTION
So, unless you’re scalping, consider the downtrend isn’t broken until bitcoin successfully reclaims $10.6k — as of today, that is. Naturally, as Alex Krüger shows, you can try the difficult task of trying to buy the bottom. But be prepared to cut your losses, or else hold a heavy bag of corn in case the 30% retrace from $14 to $10k wasn’t enough. While it’s important to remember bitcoin’s past bull run saw eight of such similarly sized corrections, one can’t forget the gaps created by CME’s closing during the weekend “always” get filled, at least in the history of bitcoin futures, as Joe McCann explains.
In other words, this volatile market is a trader’s paradise. But, at this point, the short-term direction of the market is very difficult — if not impossible — to infer. Which means, if one is quick enough to change their bias, there are many opportunities to profit. And, because the market is so kind, there’s really no need for traders to sell you their services. That’s why Joe’s great Telegram channel we shared yesterday is free. If you missed it, then make sure you give it a follow.
WHAT YOU CAN’T MISS TODAY
DON’T LEAVE FOR THE WEEKEND WHAT YOU SHOULD READ TODAY
▪ CoinMetrics, an excellent cryptoasset data portal, provided the best explanation for why blockchains’ block reward reductions are typically priced-in.
▪ Dan Zuller, a partner at Vision Hill, wrote one of the best “plain English” pieces explaining distributed consensus algorithms and their most important features.
▪ Arthur Hayes, BitMEX’s popular CEO, is debating the cryptoshere’s favourite party pooper, the economist Nouriel Roubini, tomorrow! Decrypt explains here.
▪ The co-founder of the infamous exchange was also interviewed by Bloomberg. Surprise, surprise, BitMEX is launching a “Bitcoin Zero Coupon Bond” very soon.
▪ Kimberly Forsythe recently put a theory claiming Satoshi Nakamoto, Bitcoin’s creator, was Estonian. Adriana Hamacher explains the whole story at Decrypt.
QUOTE OF THE DAY
PERHAPS EVEN DISRUPTIVE
“The picture painted of crypto-use in the future could be impressive, compelling even captivating.”
- By Christopher Woolard
Executive Director of Strategy and Competition at the FC
Speech given today at the Cambridge Centre for Alternative Finance