BIG PICTURE
Remember Elon’s Candle? It’s the super long, bright-green daily candle from everyone’s favourite chart, dated Feb 7, 2021. It opened at $38.8K and closed at $46.8K, with an amplitude of 22.5%. One might say it’s elongated. (Most sincere apologies–can’t/won't promise to never do it again.)
Well this week, Tesla sold 75% of their BTC holdings and… *Crickets*. Times have changed.
Sure, the market didn’t love it–Bitcoin corrected a little. (Assuming they began accumulating during the correction preceding the announcement, their average cost is ostensibly around $29-35k US–putting their brief dalliance with bitcoin at a not-insignificant loss. You do you, Tesla.) But more interestingly, what does this say about the markets receiving the news?
MARKET FUNDAMENTALS
In a bull market, good news is typically amplified (see Elon’s candle above). Likewise in a bear market, bad news should be amplified as well (see tiny candle below):
What gives? Has the world grown numb to this visionary’s near-constant tweeting absurdities and repeatedly ‘omitting’ any type of basic due diligence on any and all large purchases? (Remember when Tesla retracted their acceptance of bitcoin as payments because of its alleged poor environmental track record?* Even during a ferocious bull run that news had an outsized effect. Had Elon really not known how bitcoin was produced when he put $1.5B of the stuff on Tesla’s balance sheet? Due diligence!--To speak nothing of the current Twitter bot fiasco, Doge, the SEC, the list goes on.)
I reinvented electric cars and I'm sending people to Mars on a rocket ship… Did you think I was going to be a chill, normal dude? - Elon to SNL
This all begs questions… Is this a case of the flibbertigibbet mogul who cried wolf? Or–more interestingly–is Bitcoin really (like really) in a bear market–or something perhaps less severe?
*Stay tuned for a forthcoming discussion of whether Bitcoin is in fact ESG: Spoiler Alert–It is. (And probably quite a bit more than Tesla…)
WHICH LEADS US TO THE CURRENT RALLY. IS IT FOR REAL?
What is your gut telling you? I know mine’s saying something like this: “There is more macro uncertainty/headwind than we have seen in a generation–probably more. The odds that this rally signifies an end to this bear market–for the first time in its history that Bitcoin has ever printed lower lows in the midst of cataclysmic global pandemic-induced debt creation, and a resulting economic hangover from a panic-level fed-tightening–just feels absolutely absurd.” Plus, Bitcoin mining difficulty just adjusted down for its second 2-week period in a row. Not exactly bullish.
But the rally’s here, and we’re not kicking it out of bed… So why suggest that Tesla announcing its Bitcoin sale to an empty room could signify that bitcoin isn’t in a bear market?
TECHNOLOGICAL INNOVATION VS. THE FED.
Is the Fed’s calculated demand-destruction a match for the epochal innovation that Bitcoin represents, at a global adoption level of anywhere between 0.75% and 3.5% of the world’s population? We patently don’t know. But Bitcoin's global game of chicken (Game Theory) is definitely on and what goes on behind the scenes is any internet (or on-chain) sleuth’s guess. It’s just very interesting to think about.
BTC and ETH had a week!
- BTC went as high as 17.2% before losing a little steam. (It’s still up about 8% WoW)
- ETH however, on news from Tim Beiko proposing a tentative Sep. 19 date for the Merge, shot up nearly 36%
- This signals somewhat of a return to optimism in crypto markets…
- As you know, however, our optimism is cautious.
The DOJ brings a suit to 3 (ex-Coinbase) insider traders… The SEC follows suit with their own suit, which prompts the CFTC to comment on said SEC suit, as Coinbase responds.
- You can’t make this stuff up, friends. This writer works in Film & TV, this writer knows!
- We wish we could cover at greater length, but suffice it to say, you’ll find these links below.
If you are planning on attending next month’s Futurist Conference…
- NDAX is a title sponsor
- Our own COO Tanim Rasul will be one of the keynote speakers
- Use code NDAX25 for a 25% discount on tix, thank us in person at our booth
WEEKLY SNAPSHOT
MARKET UPDATES
LAWSUITS:
- The DoJ Sues 3 Insider Traders (re: Coinbase) - DoJ
- The SEC Follows in the DoJ’s Footsteps - SEC
- The CFTC Claps Back at the SEC - CFTC
- SEC Calls 9 Cryptos 'Securities' in Insider Trading Case - CoinDesk
- Coinbase Claps Back at SEC, “does not list securities–End of Story” - Coinbase
INDUSTRY NEWS:
- Stablecoin Provider Circle Eyes Public Listing in Q4: CFO - Decrypt
REGULATORY:
- Congress People Troll Bitcoin Miners - US Congressman Jared Huffman
- Lawmakers Near Deal on Tougher Rules for Stablecoins - WSJ
- US Treasury Open to Nonbanks Issuing Stablecoins, Official Says - CoinDesk
FOR FUN
- Have you read the headlines above? This is fresh–not microwave–popcorn level worthy!
THE TAKEAWAY
After a low of C$22,950 BITCOIN began consolidating, trading in a range from C$24,500 to C$29,500.
- And finally breaking out to a weekly high of C$31,307
- It failed to sustain above C$30,000 however due to profit booking and low volumes
- On a daily time frame, the 3 recent bottoms are forming ‘Higher Lows and Higher Highs’, indicating a reversal.
- As BTC tries to turn its 20-Day Moving Average into support…
- We can expect prices to surge further up to C$35,500 if this support holds, or
- Down to C$22,500 (strong support) if it does not.
KEY LEVELS:
COIN SENTIMENT
As mentioned above, an overwhelming number of NDAX users continue to accumulate bitcoin. Half of this week’s transactions on Canada’s favourite Crypto Platform were BUYS.
- BTC sentiment is strong: About 3/4 of orders were BUYS
- FTM, RUNE, SAND & COMP were weaker: Over half their orders were to SELL
- While GRT, HBAR & ALGO were the opposite: Over half their orders were to BUY
DISCLAIMER: THIS BLOG AND WEBSITE ARE NOT INTENDED TO PROVIDE INVESTMENT, LEGAL, ACCOUNTING, TAX, OR ANY OTHER ADVICE AND SHOULD NOT BE RELIED ON IN THAT OR ANY OTHER REGARD. THE INFORMATION CONTAINED HEREIN IS FOR INFORMATION PURPOSES ONLY AND IS NOT TO BE CONSTRUED AS AN OFFER OR SOLICITATION FOR THE SALE OR PURCHASE OF CRYPTOCURRENCIES OR OTHERWISE.