🔻 CRYPTO DUMP: How Bad Did Things Just Get?
💎 The Recipe For Altseason Is Brewing!
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📰 How Bad Did Things Just Get?
💎 The Recipe For Altseason Is Brewing!
💥 Best Alpha Posts of the Day
🐸 MEMEoirs of a Degen!
📢 Biggest Announcements
💭 Banter’s Take
GM Degens,
The crypto market is red, and people are worried!
Let's see what caused this and what might happen next. Is this the end, or is this normal?
Let’s dive in!
🌍 Market Catch-Up
Top 100 coins Daily Performance - Banter Bubbles
Source: CoinMarketCap
📰 Question of the Day
How Bad Did Things Just Get?
The market climbed onto the plank last night and took a deep dive down. We saw $780 million worth of crypto liquidations, but also the traditional stock markets wiped out a big chunk. This was a market-wide event. The question is, how bad is it, and what is going to happen next?
Source: CoinGlass
First off, let's briefly touch upon why this happened. There are two main reasons, especially for crypto:
The Federal Reserve's dot plot showing only two rate cuts for 2025 as opposed to the initially expected three.
Jerome Powell saying that they are not allowed to own Bitcoin and they're not looking for any laws to change that.
We actually talked about this yesterday with our three possible scenarios for how the FOMC meeting could turn out. We said that if the dot plot showed less than three rate cuts, the market would dip, and that's what happened. When it comes to Bitcoin and crypto, the second statement is highly specific to it, and that's why Bitcoin dumped further.
As expected, a lot of people are now scared, and it's likely that newcomers to crypto will be exiting swiftly as they expect this thing to go to 0. But we are more patient than that and understand that this could all just be normal. Let's explore:
Point 1 - Rate Cuts Still on the Way
Even though there are now two instead of three expected cuts, there are still two rate cuts on the way! And this is not something static, as the Federal Reserve could change their minds on the number of rate cuts at any given moment according to the data they are watching.
Point 2 - They Can't Own Bitcoin… Yet
Jerome Powell stated that they are not allowed to own Bitcoin and they're not looking for any law to change that. But it's not just up to him; this is something that the future US president has said he is going to put into action, and if he and his admin decide upon it, things can change and get done swiftly. It's like Powell is just trying to state the present rather than speculate on the future in order not to upset anyone. Basically, his words are likely just diplomatic. We will see how this plays out when Donald Trump takes office and his admin starts making moves post January.
Point 3 - FUD and Noise
A lot of this is probably just the market overreacting because people can't instantly digest a change to what they had been expecting. Time is needed for this shift to sink in; let's not forget that the crypto market is drowned in bots which trade in a heartbeat as soon as news comes out. All the above statements would've likely caused those bots to short. When it comes to non-bot traders, everything that Jerome Powell said showed uncertainty, and the market does not like uncertainty. Can you hear the domino effect of liquidations…?
Point 4 - A Correction Was Needed
The US stock market and crypto have been rallying for a long time—especially some major tech stocks—and there's nothing that is needed more in a bull run than a healthy correction. I'm actually hearing a lot of people say this isn't the real correction yet, and there's a bigger one to come. At the same time, I hear people saying that things have now changed and bigger 30% corrections will not come to fruition again on Bitcoin. We actually looked at this a few issues back. It relies on the fact that institutions, banks, and major companies are buying up so many coins that the price cannot dip swiftly and deeply as it has done in previous bull markets.
Final Thoughts
The fact that Bitcoin is still above $100,000 is a good sign as it's a major psychological level which a lot of people don't want to see lost; however, it could do so. Nothing is certain, and nobody knows the future, and as usual none of this is financial advice; you all need to do your own research.
I don't want to sound ominous, but below is something to consider. We looked at it a few weeks back: this is the global M2 money supply chart overlapped with the Bitcoin price chart. According to Joe Consorti: “Bitcoin is still tracking global M2 with a ~70-day lag”. The room is now split in two as to whether Bitcoin will decorrelate from the M2 or whether it will actually follow it, dropping down to lower levels.
💎 Degens’ Den
The Recipe For Altseason Is Brewing!
The drop was also really brutal for altcoins. But crucial levels are still holding!
Below you can see the OTHERS chart posted by IncomeSharks. A crucial level is being tested, and the clue is in that sentence: it's being tested, it hasn’t broken… at least not yet. The OTHERS chart tracks all crypto between the 11th-100th coins by market cap, so this is a strong altcoin indicator.
If you combine that with this Bitcoin dominance chart below from Eric Crown, you start to get a picture of what could be about to happen. If Bitcoin dominance drops, it means altcoins will likely have a bullish time.
If the first chart starts trending up while the second chart starts going down, it could be the perfect recipe for the altcoin season many have been expecting for some time now.
Even though it doesn't seem like it right now—with the market in the red—the tides could shift at any moment.
🐸 MEMEoirs of a Degen!
📢 Biggest Announcements
Deutsche Bank Developing Ethereum L2
Netherlands Pushed to Establish National Bitcoin Reserve
Public Companies Now Hold Over $100 Million in Bitcoin
U.S. Bitcoin ETFs Overtake Gold ETFs
Phantom Wallet Expands Social Features
Fuel TGE Launching with Massive Airdrop
💭 Banter’s Take
Below is the second Arweave Today article to engage with to have a chance at winning a DumDumz NFT on Arweave. It's a giveaway from the article poster and it's absolutely free (we are not running this competition and are not affiliated with it).
We initially talked about the competition yesterday. Go check it out here for more info.
See you all tomorrow!
Will Bitcoin hit a low of $70,000?